Updated with closing stock price. Tustin, Calif. ( TheStreet) -- Peregrine Pharmaceuticals ( PPHM) is either desperate or stupid if blowing dust off the ancient Cotara brain tumor program is the company's next great idea. The U.S. Food and Drug Administration agreed to a design for a phase III study of Cotara in patients with recurrent glioblastoma multiformae (GBM), Peregrine said Wednesday. Of course, Peregrine made the same exact announcement in December 2001. Eleven years ago, Peregrine announced plans to start a phase III study of Cotara in GBM patients following a meeting with FDA. The Cotara phase III study of 2001 never happened. In September and November 2002, Peregrine met with FDA again. This time, agency officials raised concerns about the planned Cotara phase III study and told the company additional information and Cotara clinical data would be required. This is where Peregrine's Cotara program ran off the rails and why today's announcement about a new FDA agreement on a phase III study design is far less significant than the company claims. Following the November 2002 meeting with FDA, Peregrine was forced to essentially re-start Cotara's clinical program from the beginning. Over a five-year period from 2005 through 2010, Peregrine conducted a phase I and phase II study of Cotara in order to 1) find an appropriate dose; and 2) to measure how much of the drug was being absorbed into brain tumors and where else in the body it might go. Cotara is a monoclonal antibody linked to radioactive iodine. It must be injected directly into a patient's brain tumor. How or why Peregrine thought it could start a phase III study of Cotara in September 2001 without having data on the appropriate dose or information on whether the drug reached tumor cells in the brain is a bit mind-boggling (pardon the pun.) But then, Peregrine has a history of making promises it can't keep and hyping the spectacular potential of experimental drugs that end up embarrassing flops (see: bavituximab in lung cancer.) Peregrine began a phase I dosing study of Cotara in 2005, planning to enroll 28 GBM patients.
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.