This is not just a theoretical risk. Doctors are paid to enroll patients in clinical trials, and that cash is especially welcome in Eastern Europe and India. And patients in these countries will do just about anything to participate in clinical trials because they receive free drugs and medical treatment. Targacept ( TRGT), Cell Therapeutics ( CTIC) and Medivation ( MDVN) have all been torpedoed in the past by less-than-rigorous conduct of clinical trials outside the U.S. and Western Europe. The credibility of Peregrine's second-line bavituximab study will be bolstered if tumor response and the survival benefit are comparable between U.S. patients and those treated in Eastern Europe and India. The company can easily produce these data, but they were missing from Friday's presentation. Bavituximab might also win over skeptics if the drug can repeat its survival benefit feat in another lung cancer clinical trial. Thankfully, we only have to wait until the end of the year for the answer. Peregrine is conducting a separate randomized, controlled phase II study in treatment-naive, or first-line, lung cancer patients. The 86 patients in the study are randomized to receive bavituximab added to the chemotherapy "doublet" of carboplatin and paclitaxel or the chemo doublet on its own. Initial results from this front-line lung cancer study were released last March, and they weren't positive. The tumor response rate in the bavituximab arm was 25% compared to 23% for the control arm; progression-free survival was 6.7 months for bavituximab vs. 6.4 months in the control arm -- a difference of just nine days. Peregrine says wait for survival results before calling the front-line lung study a failure. Bavituximab works by attaching to a molecule found on tumor blood vessels that acts like shield against the immune system. By blocking this immune-suppressing molecule known as phosphatidylserine (PS), a patient's immune system is able to target and kill cancer cells. Broadly speaking, bavituximab is supposed to be an immune-stimulating cancer drug like Dendreon's ( DNDN) Provenge and Bristol-Myers Squibb's ( BMY) Yervoy. A common trait supposedly shared by cancer immunotherapies is a modest antitumor response followed by a delayed survival benefit. It takes the immune system longer to target and kill tumor cells.
In trading on Thursday, shares of Peregrine Pharmaceuticals Inc.'s 10.50% Series E Convertible Preferred Stock were yielding above the 12% mark based on its quarterly dividend (annualized to $2.625), with shares changing hands as low as $20.34 on the day. As of last close, PPHMP was trading at a 11.40% discount to its liquidation preference amount.