Just over two weeks ago Peregrine Pharmaceuticals Inc. (NASDAQ: PPHM) reported a statistically significant improvement in the company’s bavituximab lung-cancer treatment. Shares jumped nearly 50% and eventually posted at more than two-year high.
It’s all coming unraveled today as Peregrine’s shares have already lost 75% of their value following an announcement from the company that it “discovered major discrepancies between some patient sample test results and patient treatment code assignments.” The company explained:
Due to the double-blind nature of the trial, Peregrine was not permitted to have access to either patient group assignments or related product coding information. As part of the trial’s execution, Peregrine contracted with independent third-party contractors to execute treatment group assignments and oversee clinical trial material coding and distribution according to established procedures. A subsequent review of information has determined that the source of these discrepancies appear to have been associated with the independent third-party contracted to code and distribute investigational drug product. …
[I]nvestors should not rely on clinical data that the company disclosed on or before September 7, 2012 from its Phase II bavituximab trial in patients with second-line non-small cell lung cancer or any presentations or other documents related to this Phase II trial.
Peregrine noted that the discrepancy is specific to this trial and has not impact on other bavituximab trials. The company also said it would provide more details “as soon as it is able to determine the impact of this issue.”
At the very least today’s disclosure will delay next year’s planned start of Phase III trials for the drug.
Shares of Peregrine are down 74.8% at $1.37 in a 52-week range of $0.39 to $5.50.