I laid out a strong bull case for Sarepta Therapeutics ( SRPT) and its Duchenne muscular dystrophy (DMD) drug eteplirsen in this July 24 article describing the positive results from the small phase II study as well as in this follow-up Mailbag column on July 27. My colleague Nate Sadeghi, however, thinks I'm overlooking some important risks to the Sarepta story. He likes the stock but advises more caution. Sadeghi raises valid concerns and you should definitely read what he has to say, if you haven't already. One point where I continue to disagree with him is over the scenario by which FDA would grant accelerated approval to eteplirsen based on positive results from the phase II study, even if it comes from just a handful of patients. Sadeghi insists the phase II study is too small; no way FDA will be comfortable enough with the eteplirsen data to approve Sarepta without running a larger phase III trial.
D. Jones asks, "Do you have an opinion on Delcath Systems ( DCTH)? They are submitting their NDA
Alfred Y. asks, "Since your last article on Peregrine Pharmaceuticals ( PPHM), it has been on fire. What is behind the shoot up in the price?" Stock promotion. Speculation. Momentum trading. Hype. Short-covering. Low-volume summer trading. Take your pick. What hasn't changed about Peregrine since my July 20 Mailbag is the company's fundamental outlook. It's still poor. That's what I focus on, not short-term movements in the stock price in either direction. Peregrine is presenting updated overall survival data from bavituxmab's phase II study in second-line non-small cell lung cancer on Sept. 7. At best, we'll likely see a non-statistically significant trend in survival favoring bavituximab. I won't be surprised or impressed considering the mediocre data released from this study already, combined with the outright failure of bavituximab in the first-line lung cancer trial. Remember what I've said about paying more attention to what biotech executives do rather than what they say. Peregrine sold 3 million shares of stock through its At-The-Market (ATM) financing vehicle between April and June at an average price of 49 cents per share. Peregrine sold this stock in the dark while telling investors publicly how excited it was about the bavituximab lung cancer data and boasting about all the interest the company was receiving from potential partners. --Written by Adam Feuerstein in Boston. >To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: firstname.lastname@example.org. Follow TheStreet on Twitter and become a fan on Facebook.