Biotech Stock Mailbag: Peregrine, Arena, Dendreon, NPS Pharma

BOSTON (TheStreet) -- The Biotech Stock Mailbag is back for its seventh year!

Seth T. writes: "I checked your site but couldn't find anything on Peregrine Pharmaceuticals (PPHM) and the update on the bavituximab data. How do you judge the company's conclusions in regards to this matter? I'm hesitant to give them the benefit of the doubt after what happened but perhaps bavituximab has a future role to play in lung cancer. I appreciate your thoughts."

I didn't get a chance to write about Peregrine's bavituximab update because I was busy covering the JPMorgan Healthcare Conference. I did tweet my thoughts (snarkily):

"Wow, I'm really excited about $PPHM," said no one at #JPM13.— Adam Feuerstein (@adamfeuerstein) January 7, 2013

Peregrine's attempt to resurrect the bavituximab second-line lung cancer data is a colossal waste of time. The data are corrupted and nothing the company says or does will change that fact. Peregrine claims drug vial coding discrepancies were isolated to placebo and the 1 mg bavituximab dose, leaving the 3 mg bavituximab vials pristine.

Peregrine believes a "conservative" approach to resurrecting the lung cancer study results will be to combine the placebo and 1 mg bavituximab doses into a single control arm, which can be compared against the 3 mg bavituximab dose.

Nonsense. For starters, the evidence by which Peregrine concludes only the placebo and 1 mg bavituximab vials were corrupted is ridiculously flimsy. The company has only managed to obtain full pharmacokinetic (drug blood level) data on 18 of 120 patients in the study, according to an investor who met with Peregrine executives last week.

Pharmacokinetic data is the only way to determine which patients truly received drug or placebo. Peregrine also has antibody data on patients but this information can't distinguish between the 1 mg and 3 mg bavituximab dose, so it's not helpful.

Even if we buy into Peregrine's spin, the consolidation of the placebo and 1 mg bavituximab dose into a single control arm is absurd. Peregrine doesn't have the right to write its own rules governing data analysis. Again, if you believe the 3 mg bavituximab data are clean (which I don't), then the best Peregrine can do is throw out the placebo and 1 mg bavituximab data entirely, turning the phase II study into a single-arm, uncontrolled trial from which no conclusion on a survival benefit can be made.

"With the results of this review in hand, we are now in the process of updating potential partners and moving the program forward," said Peregrine CEO Steven King, in the company's Jan. 7 statement.

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