Drug company stock drops after news that drug data was flawed
It was a great day for Peregrine Pharmaceuticals when earlier this month during a midpoint review of a clinical trial the company announced that lung cancer patients taking its experimental drug bavituximab were living twice as long as patients who were treated with chemotherapy alone. The company’s stock shot up and last Friday had reached a three-year high. Monday, however, the price of Peregrine stock plummeted after news of a major discrepancy between some patient sample test results and treatment code assignments.
Bavituximab is being studied as a second option for non-small cell lung cancer and as a primary treatment for lung cancer. It is also being studied in clinical trials as a treatment for cancers of the pancreas, liver, prostate, breast and for the viral infection hepatitis C.
The discrepancies with the clinical trial for small cell lung cancer were discovered when the company was preparing for a meeting with drug regulators. Peregrine says the source appears to be tied to an independent, third party that was contracted to code and distribute the product. Peregrine did not release the name of the company in question.
On Friday, shares of Peregrine reached $5.50, the highest it has reached since May 2009. On Monday, company shares fell 78.5 percent to $1.16.
News of the botched trial data prompted Roth Capital Partners analyst Joseph Pantginis to lower his rating on Peregrine shares to “neutral” from “buy.” He noted that there is no indication about the extent of the issue and whether it affects the drug’s survival benefit.
“Today’s news comes as a shock and we believe represents a major blow to confidence in the bavituximab program until the discrepancies can hopefully be worked out.
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