Peregrine Pharmaceuticals (PPHM)

Peregrine (PPHM) Downgrade & Termination 04-13-12

Interim Phase II 1st-Line Lung Data Confounded
Funding Headwinds Dampens Near-Term Catalysts
Downgrading & Terminating Peregrine Pharma

Download Full 43-Page Report with Important Disclosures:  PPHM Downgrade 04-13-12

Bavituximab 1st-Line NSCLC Data: On March 9, 2012 Peregrine announced interim results of their randomized Phase II trial for Progression-Free Survival (PFS) and Objective Response Rate (ORR) in Stage IIIB and IV chemotherapy-naïve, locally advanced or metastatic non-small cell lung cancer (NSCLC) patients. However, the results were somewhat confounded due to differences between the Investigator (PI) and Independent (IND) imaging reads and interpretation. Peregrine expects to report median overall survival (OS) from this trial in the second half of 2012. These results are roughly comparable with the previous single-arm Phase II bavituximab+paclitaxel+carboplatin study as well as the E4599 Phase III Avastin (bevacizumab)+paclitaxel+carboplatin trial. (see Lung Cancer-Phase II Controlled Study of Paclitaxel/Carboplatin With or Without Bavituximab in Previously Untreated Non Small-Cell Lung Cancer (NSCLC))

New PS Imaging Program: Peregrine has filed an Investigational New Drug (IDE) with the FDA to begin human testing of their radiolabeled phosphatidylserine (PS)-targeting molecular imaging candidate, 124I-PGN650, for the imaging of multiple solid tumor types. This marks Peregrine’s entry into molecular imaging agents as well as a potential companion diagnostic for bavituximab treatment. At AACR 2012, a poster titled “Tumor Detection and Measurement of Responses to Chemotherapy Using Human Phosphatidylserine Targeting Antibody Fragments” used near-infrared fluorescent NIR-PGN650 which showed increased exposure of phosphatidylserine (PS) following docetaxel treatment. Specifically, docetaxel enhanced the uptake of NIR-PGN650 in breast and prostate tumor mouse xenografts and that peak tumor uptake of NIR-PGN650 was when docetaxel was administered 24 hours prior to injection of NIR-PGN650. (see 124I-PGN650 Bavituximab for Imaging)

Downgrading on Near-Term Economics: The data for bavituximab, while thus far promising compared to trial controls and historical controls, has not been conclusive against historical controls that have contained a monoclonal antibody. While we continue to believe in Peregrine’s science, we recommend investors move to the sidelines until all of the results are in for 2nd line NSCLC, which is Peregrine’s lead indication. Furthermore, even though Peregrine had $20M in cash as of January 31st, we believe the near-term data catalysts will not provide enough upside momentum in light of their cash requirements during our forecast horizon. The new $150M shelf-registration, a $43M market capitalization and the risk of a reverse split (Nasdaq delisting notice received March 28th) combined with projected cash needs, make it unlikely in our opinion for the expected clinical trial data to result in a sustained increase in shareholder value over the near-term.

Finally, as Peregrine continues discussions with the FDA on a Phase III trial design for Cotara® (which we expect to be concluded relatively soon), we are not confident an upfront payment by a potential partner will be enough to materially change the projected cash outlook for the company in the near-term. We feel similarly toward Peregrine’s HCV program as well.

Therefore, we are downgrading Peregrine to Neutral with a $0.50 price target. In addition, we are also terminating coverage as we reallocate our research resources toward nearer-term investment opportunities.

Download Full 43-Page Report with Important Disclosures:  PPHM Downgrade 04-13-12

Peregrine (PPHM) Note 03-09-12

Bavituximab Encouraging PFS in 1st-Line Lung – Survival Expected H2’12
FYQ3 Conference Call Today at 4:30pm Eastern

Download Full 5-Page Note with Important Disclosures: Morning Note 03-09-12 PPHM

Note: Peregrine will hold their FYQ3 conference call at 4:30pm Eastern today – Dial-in (877) 312-5443

Peregrine announced interim results of their randomized Phase II trial demonstrating a 26% improvement in Progression-Free Survival (PFS) in Stage IIIB and IV chemotherapy-naïve, locally advanced or metastatic non-small cell lung cancer (NSCLC) patients. Specifically, patients treated with bavituximab plus carboplatin and paclitaxel currently demonstrate a PFS of 5.8 months versus 4.6 months in patients treated in the control arm with carboplatin and paclitaxel alone. Independent central imaging review of eligible patients, patients treated with bavituximab plus carboplatin and paclitaxel demonstrated an Objective Response Rate (ORR) of 25%, versus 23% in patients treated with carboplatin and paclitaxel alone. Peregrine expects to report median overall survival (OS) from this trial in the second half of 2012. These results are roughly comparable with the previous single-arm Phase II bavituximab+paclitaxel+carboplatin study as well as the E4599 Phase III Avastin (bevacizumab)+ paclitaxel+carboplatin trial as shown below:

PHASE II INTERIM RESULTS

Stage IV NSCLC Chemo-Naïve
Locally Advanced or Metastatic

Bavituximab +
paclitaxel + carboplatin1

Historical
Bavituximab +
paclitaxel +
carboplatin2

Historical
Standard of Care
Avastin (bevacizumab) +
paclitaxel+carboplatin3

Number of Patients

n=86

n=49

n=434

Objective Response Rate

25%

43%

35%

ORR Control Arm: paclitaxel + carboplatin

23%

no control

15%

Progression-Free Survival

5.8 months

6.1 months

6.2 months

PFS Control Arm

4.6 months

no control

4.5 months

Overall Survival

H2 2012

12.4 months

12.3 months

Overall Survival Control Arm

H2 2012

no control

10.3 months

1 Peregrine Pharmaceuticals
2 DigumartiR., et al., “Phase II study of bavituximab plus paclitaxel and carboplatin in untreated locally advanced or metastaticnon-small cell lung cancer (interim results)” ASCO 2010 and Peregrine Pharmaceuticals
3 Sandler A, Gray R, Perry MC, et al. N Engl J Med. 2006;355:2542-2550

Download Full 5-Page Note with Important Disclosures: Morning Note 03-09-12 PPHM

Peregrine (PPHM) Note 03-01-12

Peregrine to have 7 Posters at AACR Including 3 with Clinical Data
Bavituximab 1st-Line and 2nd-Line Lung Cancer Data in Coming Months

Download Full 6-Page Note with Important Disclosures: Morning Note 03-01-12 PPHM

Peregrine announced that 7 posters have been accepted for presentation at the 103rd Annual Meeting of the American Association for Cancer Research (AACR), to be held at McCormick Place in Chicago, Illinois, March 31st – April 4th, 2012. Investors should pay particular attention to the 3 poster presentations that cover human clinical trial results as shown below:

Abstract Number: 1744
Presentation Title: A phase Ib study of bavituximab plus carboplatin and pemetrexed in chemotherapy naive stage IV non-squamous non-small cell lung cancer
Presentation Time: Monday, Apr 02, 2012, 8:00 AM -12:00 PM
Location: McCormick Place West (Hall F), Poster Section 27
Poster Section: 27
Poster Board Number: 4
Authors: Juneko Grilley-Olson1, Jared Weiss1, Thomas E. Stinchcombe1, Anastasia Ivanova1, Maureen Tynan1, Joseph Shan2, Mark A. Socinski3. 1Univ. of North Carolina, Chapel Hill, NC; 2Peregrine Pharmaceuticals, Inc., Tustin, CA; 3Univ. of Pittsburgh, Pittsburgh, PA

Background: Bavituximab (B) is a novel chimeric IgG1 phosphatidylserine-targeting monoclonal antibody. B selective binds to phosphatidylserine complexed with β2-glycoprotein I exposed on tumor vasculature resulting in enhanced immune response and inhibition of existing as well as novel tumor vasculature. Pre-clinical data suggest a synergistic action using phosphatidylserine-targeting antibodies in combination with chemotherapy. B has previously been reported to be safe and well tolerated when given in combination with paclitaxel and carboplatin (C) in non-small cell lung cancer (NSCLC) and has produced a promising 43% overall response rate (ORR). Here, we report on the currently enrolling trial of B in combination with pemetrexed (P) and C, in treatment naïve locally advanced or metastatic non-squamous NSCLC.

Methods: This is an ongoing open-label, single arm phase Ib study (standard 3+3 design) of B (0.3mg/kg, 1mg/kg, and 3mg/kg) with fixed dose CP. B is given weekly in combination with C (AUC 6) plus P (500mg/m2), given every 3 weeks, maximum of 6 cycles. Patients may elect to continue on maintenance B until disease progression. At the MTD, up to 16 additional patients will be enrolled to further characterize safety and preliminary evidence of efficacy, using an adaptive design incorporating an early stopping rule based on excessive proportion of DLTs observed. The study objectives are to determine the safety, tolerability and recommended phase 2 dose of B in combination with CP. We will also estimate ORR, progression free and overall survival. DCE-MRI at baseline and end of cycle 1 will be explored as a potential pharmacodynamics biomarker in up to 10 patients. Due to theoretical concern for prothrombotic effects of B, an optional but encouraged prothrombotic evaluation will be performed on all consenting patients, consisting of baseline and end of study Doppler ultrasound, and blood collection for evaluation of D-Dimer and tissue-factor microparticles.

Results: As of November 2011, Cohort 1 is complete with 3 patients (67% female, 100% white), median age of 59 (range 52-65y) at B dose 0.3 mg/kg. Safety data for cohort 1 is as follows: grade 3 thrombocytopenia attributed to CP was reported in one patient resulting in dosing interruption. No DLTs or SAEs have been reported. Currently 2 patients are evaluable for response, with both (100%) reporting partial responses.

Conclusions: To date, the first of 3 planned dose escalations has been well tolerated, with no unexpected safety events. Response rates reported to date are encouraging, although conclusions are limited due to the small number. Dose escalation is ongoing and results will be updated.

Abstract Number: 5591
Presentation Title: A phase I study of bavituximab and sorafenib in patients with advanced hepatocellular carcinoma (HCC)
Presentation Time: Wednesday, Apr 04, 2012, 8:00 AM -12:00 PM
Location: McCormick Place West (Hall F), Poster Section 28
Poster Section: 28
Poster Board Number: 9
Authors: Adam Yopp, Yull Arriega, Amit Singal, John Mansour, Glen Balch, Phillip Thorpe. UT Southwestern Medical Center, Dallas, TX

Background: HCC is the fastest growing cause of cancer-related deaths in the US, with the majority of patients presenting with advanced stage disease. Despite sorafenib being the only systemic therapy with proven efficacy in advanced HCC, the median survival for these patients is still less than one year. Sorafenib, in pre-clinical HCC models, upregulates phosphatidylserine (PS) exposure on tumor vascular endothelium. The phosphatidylserine (PS)-targeting antibody, bavituximab, given in combination with sorafenib has greater efficacy in pre-clinical HCC models than either therapy alone. Bavituximab acts by directing immune cells to destroy the PS-expressing tumor vasculature, and by reactivating tumor immunity.The aim of our study was to evaluate the maximum tolerated dose (MTD) of bavituximab in combination with 400 mg bid of sorafenib in patients with advanced HCC.

Methods: In this single institution, phase I study (NCT01264705), sorafenib-naive adult patients with measurable, advanced HCC, ECOG PS ≤ 2, and Child-Pugh (CP) class A cirrhosis received escalating doses of bavituximab weekly (0.3, 1.0, and 3.0 mg/kg) and sorafenib 400 mg bid for 28 days.

Results: Median age of patients was 61(range 43-76) years and seven patients were male. Five patients had CP A5 and 4 patients had CP A6 cirrhosis. The majority of patients had underlying HCV (7/9), one patient had HBV and one patient had NASH. Five patients (4 TACE, 1 resection) received prior treatment. Four patients had metastatic disease at initiation of treatment. No dose limiting toxicities were seen at any dose level. No grade 3/4 treatment-related events in the first 28 days were noted. Common toxicities at all grades were related to sorafenib and included hand-foot syndrome (33% grade I, 22% grade II), fatigue (33% grade I) and anorexia (22% grade I).

Conclusions: Bavituximab and sorafenib can be given safely in patients with advanced HCC at 3.0 mg/kg weekly and 400 mg bid, respectively. Hand-foot syndrome, fatigue and anorexia were the most common adverse events and are consistent with known adverse events with sorafenib therapy. These doses are currently being evaluated in an ongoing phase II study in this population.

Abstract Number: 4404
Presentation Title: Microparticle generation and activation after treatment with paclitaxel and bavituximab combination therapy in metastatic breast cancer
Presentation Time: Tuesday, Apr 03, 2012, 1:00 PM – 5:00 PM
Location: McCormick Place West (Hall F), Poster Section 19
Poster Section: 19
Poster Board Number: 21
Authors: Marilyn T. Marron, Pavani Chalasani, Daniel Camacho, Maria Iannone, Kathy Schmidt, Alison Stopeck. University of Arizona, Tucson, AZ

Background: Breast cancer is the leading cause of life-threatening malignancy affecting women and the second leading cause of female cancer death in the United States. Weekly paclitaxel, alone or in combination with other chemotherapies, has proven to be an effective and well-tolerated therapy for patients with metastatic disease. Due to the tumor’s dependence on vascularization for progression, survival and dissemination, targeting a tumor’s vascular network is an important additional cancer management strategy. Bavituximab, a monoclonal antibody developed by Peregrine Pharmaceuticals against phosphatidylserine (PS), is a vascular disrupting agent designed to selectively attack tumor blood vessels already in existence. Under normal conditions, PS is localized to the internal surface of the plasma membrane. However, PS is preferentially localized on the outer surface of vascular endothelial cells in tumors, possibly due to stress conditions in the tumor microenvironment. Bavituximab is able to localize and bind specifically to PS in tumor vessels in a β2-glycoprotein 1 dependent manner, mediating the binding of host effector cells to the tumor vascular endothelium. This leads to vessel damage, vascularity reduction, necrosis, and growth retardation within the tumor. Microparticles are vesicles that are released from cells after activation, stress, death, or malignant transformation. Elevated levels of microparticles derived from platelets, endothelial cells, and/or leukocytes have been associated with several disease states, including cancer, however, the effect of anti-angiogenic or vascular disrupting agents on microparticle production is unclear. We investigated microparticle formation in our patients at baseline, in response to Paclitaxel chemotherapy, and after addition of Bavituximab.

Patients and Methods: We initiated a phase I clinical trial in patients with Her-2 negative metastatic breast cancer treated with paclitaxel (80 mg/m2) on a weekly schedule for 3 out of 4 weeks, and weekly bavituximab (3 mg/kg) for 4 out of 4 weeks. Each cycle was defined as 4 weeks of therapy. Microparticles were isolated from peripheral blood and examined by flow cytometric phenotyping. Leukocyte, endothelial cell, and activated platelet microparticles were quantified and longitudinal trends analyzed. Five patients have been enrolled to date with additional patients accruing. At presentation, the longitudinal trends in microparticle formation from platelets, endothelial cells, and leukocytes will be presented in response to weekly Paclitaxel versus combined Paclitaxel and Bavituximab therapy.

Download Full 6-Page Note with Important Disclosures: Morning Note 03-01-12 PPHM

Peregrine (PPHM) Note 12-29-11

Top-Line Data in HCV Shows Early Viral Response with Improved Safety
Final Data Expected 2012 As Well As 2nd-Line Lung Cancer

Download Full 5-Page Note with Important Disclosures: Morning Note 12-29-11 PPHM

Peregrine announced top-line data in their 66 patient, PhaseI/II trial of bavituximb in combination with ribavirin (0.3mg/kg and 3.0mg/kg dosing) for the treatment of previously untreated genotype-1 chronic Hepatitis C infection versus a control arm of pegylated interferon-α 2a (PEG-INF) with ribavirin. The primary endpoint is the proportion of patients achieving Early Virologic Response (EVR) defined as a greater than or equal to 2 log reduction in HCV RNA after 12 weeks of treatment.

While the PEG-INF/ribavirin arm showed the highest percentage of EVR between weeks 4 and 8 and at the end of the 12 week trial, the Bavituximab/ribavirin arm showed the highest percentage of EVR at week 12. This indicates that Bavituximab may be slower to act and a new, longer clinical trial may show Bavituximab/ribavirin with a higher percentage of EVR past the 12 week point. It should be noted that the low-dose 0.3mg/kg arm showed more antiviral response than the high-dose 3.0mg/kg arm. The Bavituximab/ribavirin arm reported fewer side-effects than the PEG-INF/ribavirin arm.

Peregrine will present full results at a medical conference in 2012 and they are actively seeking development partners to conduct a longer HCV trial as well as other PS-targeting antiviral programs. More information on the trial design can be found at: http://www.clinicaltrials.gov/ct2/show/NCT01273948

Download Full 5-Page Note with Important Disclosures: Morning Note 12-29-11 PPHM

 

Peregrine (PPHM) Update 12-19-11

Phase II 1st-Line Lung Cancer ORR Data Q1’12
Phase II HCV 12-Week EVR Data Expected Q1’12
Avid Biosciences Sales Guidance Increased

Download Full 43-Page Report with Important Disclosures: PPHM Update 12-19-11

1.) Phase II 1st-Line NSCLC Primary Endpoint Data Expected Q1’12: Peregrine is expects to announce objective response rate (ORR) from their randomized, open label, Phase II trial of bavituximab in combination with paclitaxel and carboplatin for the 1st-line treatment of metastatic, non-small cell lung cancer (NSCLC). Recently they announced interim results demonstrating a 50% improvement in preliminary ORR. Specifically, patients treated with bavituximab plus carboplatin and paclitaxel currently demonstrate an ORR of 39%, versus 26% in patients treated in the control arm with carboplatin and paclitaxel alone. These results are roughly comparable with the previous single-arm Phase II bavituximab+paclitaxel+carboplatin study as well as the E4599 Phase III Avastin (bevacizumab)+paclitaxel+carboplatin trial. (See Table in Bavituximab for Cancer – Human Clinical Trials) Once final ORR is reported in Q1’12 Peregrine expects to report secondary endpoints including progression free survival (PFS) and overall survival (OS) by the end of 2012.

2.) Phase II HCV Data Expected Q1’12: On September 26, 2011 Peregrine announced complete enrollment of their 66 patient, Phase II trial of bavituximb in combination with ribivirin for the treatment of previously untreated genotype-1 chronic HCV infection. The primary endpoint of the study is the proportion of patients achieving early virologic response (EVR), defined as a greater than or equal to 2 log reduction in HCV RNA after 12 weeks of treatment. Peregrine expects to report these results in Q1 2012.

3.) Avid Bioservices FY 2012 Sales Guidance Increased: Peregrine reported $4.2 million in contract manufacturing revenue through their wholly-owned contract manufacturing subsidiary Avid Bioservices in FY Q2’12. Given the pipeline of committed projects scheduled for the second half their fiscal year, they have increasing their guidance for contract manufacturing revenue to $12-$14 million for FY 2012, compared to previous guidance of $10-$12 million. The increased guidance is due to both organic growth with existing customers as well as new customer contracts.

4.) We are maintaining Peregrine Pharmaceuticals with a Strong Speculative Buy rating and 12-18 month price target of $5.00. We continue to believe Peregrine’s anti-phosphatidylserine monoclonal antibody Bavituximab, with dual action against both tumor and viral targets, is a unique and exciting drug candidate in an era of “me-too” drugs and that their Iodine-131 monoclonal antibody Cotara® for glioblastoma also represents a unique approach in a very difficult to treat cancer. Our 12-18 month target price of $5.00 is based on 30x estimated 2015 EPS discounted 50% for cumulative risk. (see Financial Model Assumptions)

Download Full 43-Page Report with Important Disclosures: PPHM Update 12-19-11 

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