6-28-13: ”Peregrine Note: Increasingly Immune to Downdrafts as Bavi Looks Promising” PRICE: US$1.20, TARGET: US$2.50 Charles C. Duncan, PhD, Sr. Research Analyst, Piper Jaffray & Co. http://www.piperjaffray.com/3col.aspx?id=103 EXCERPTS: • We are increasingly positive on the bavituximab (Bavi)-lead platform for modulating immune function in treating cancer. • We note that both carboplatin & paclitaxel can suppress the immune system, adding to the body of evidence that better defines Bavi’s mechanism and key considerations for future clinical trials • 2nd-line NSCLC remains on track for Phase III initiation this year • Progress with this and other clinical evidence-of-effect studies could solidify the platform as a new paradigm for immune modulation for cancer therapy and drive growing interest (both investor and partnering) for Bavi, particularly following the strong showing for immune-modulatory agents (primarily PD-1 targeting) at ASCO '13. • 1st-line NSCLC results. . . while the results could improve as the trial progresses, given only 60% of events had occurred at the time of the measurement, mgt indicated that the program will not continue forward. Rather than seeing this as an admission of defeat, we believe the decision to terminate this trial is savvy given what is increasingly being understood about the potential mechanism with which Bavi may be active. • 1st-line results provide potential lessons. . . Two studies of the CTLA-4 targeting antibody ipilimumab (Yervoy - BMS) in combination with CP in 1st-line SCLC found that treating with chemotherapy first then Yervoy produced an improvement in progression, whereas concurrent chemo and Yervoy did not. This suggests that the chemotherapy may somehow "prime" the tumor for the more slowly acting immunotherapeutic drug and, we believe, puts the 1st line data for Peregrine in context. . . We would not be surprised to see trials, possibly investigator sponsored, initiated in melanoma or renal cell carcinoma, indications that have benefited from immunotherapy-based therapy. We note that investigators presented convincing evidence on Bavi’s ability to counter the immunosuppresive effect of phosphatidylserine and activate immune cells at AACR in April [ http://tinyurl.com/cnqx9oh ]. • 2nd-line remains the primary focus - and it's "full steam ahead". . . . Recall that the company recently presented updated survival results (11.7 vs. 7.3 mos). . . suggestive of a survival benefit in a larger Phase III study which will use the 3mg/kg dose. The FDA agreed with Peregrine's proposed Phase III design in the EOP2 meeting and Peregrine intends the study to enable filing globally. We anticipate this trial to begin enrolling patients by YE13 and to include an interim look to determine target size at 30-50% of events. • Don't overlook Peregrine's deeper Bavi pipeline... it seems to us that melanoma (or renal cell carcinoma) are 2 indications that could emerge and perhaps supersede other efforts, especially given the growing evidence for immuno-modulatory mechanism of Bavi, and the validated role of the immune system in treating these cancers. • ...Or the non-Bavi pipeline. . Beyond Bavi, Peregrine is making progress with two candidates, Cotara and a PS radio-imaging agent (PGN650)… Research Disclosures: Piper Jaffray usually provides bids & offers for the securities of PPHM and will, from time to time, buy and sell PPHM securities on a principal basis.
Although hopes had not been high for the Phase II study in 1st-line NSCLC to begin with, and the company – after talking with the FDA – still plans to go ahead with a Phase III trial, investors looked askance at Peregrine Pharmaceuticals Inc.’s latest snag with the cancer drug bavituximab.
The Tustin, Calif.-based firm’s shares (NASDAQ:PPHM) sank 23.1%, closing at $1.20, down 36 cents, after trading as low as $1.11. Bavituximab, when combined with carboplatin & paclitaxel, failed to improve survival rates for patients with Stage IIIb and Stage IV NSCLC in the Phase II trial, as compared with carboplatin & paclitaxel without the add-on.
Still, Peregrine intends to start a Phase III trial for 2nd-line NSCLC by the end of the year, having reached an agreement with regulators on trial design. Full results from the Phase II trial will be offered at a future scientific meeting or through publication.
Joseph Shan, VP of Clinical & Regulatory Affairs for Peregrine, said he was “a little surprised at the market reaction that was so extreme today,” but added that the company will “keep focused on moving the program forward.” The situation, he said, may resemble last year’s, “when we had the phenomenal 2nd-line results, after unblinding. People didn’t pick up on it at first, and this might be a similar situation. Somehow, people might be confusing front line & second line.”
Analyst Joseph Pantginis, of Roth Capital Partners, wrote in a research report that “perception is working against the company at this point, beyond the failed 1st-line NSCLC study. While there were very low expectations for this study, we believe investors will continue to use it as a proxy for the overall bavituximab program.”
Bavituximab is designed to work by activating the maturation of dendritic cells and cancer-fighting macrophages, thus leading to the development of cytotoxic T cells that fight solid tumors. Specifically, the compound targets phosphatidylserine (PS), an immunosuppressive molecule present in the membrane of healthy cells. In the cells that line tumor blood vessels, PS turns over and becomes exposed, letting the tumor fly under the radar of the immune system. Bavituximab blocks the unhealthy PS signal. There’s also an antiviral program with the compound. Peregrine has conducted randomized Phase II trials that combined the candidate with ribavirin vs. pegylated interferon alpha-2a with ribavirin in patients infected with genotype-1 HepC virus. But the focus lately has been on cancer.
Pantginis speculated that the chemo combinations and their timing in the comparison arm may have affected the failed Phase II trial’s outcome. Shan agreed. “Not all taxanes are equal, in terms of immunostimulatory effects,” he said. “As it turns out, docetaxel does appear to be more immunostimulatory than paclitaxel. Go figure.” The choice by Peregrine researchers “made sense from a clinical standpoint, at the time, from the information we had,” he said.
Pantginis wrote that “the other prominent perception is the continuing view that the 2nd-line NSCLC study is ‘tainted,’ based on the prior 3rd-party coding errors,” even though the company has handled that problem. (See BioWorld Today, Sept. 25, 2012, and Jan. 8, 2013.)
Shan said he hopes investors are not still hung up on the vials issue. “We’ve moved past it; the medical community has moved past it; and the FDA has moved past it,” he told BioWorld Today. “We have conducted as thorough an investigation as possible, learned what we could learn and analyzed the data in an appropriate way. The FDA accepted that as a basis for moving into Phase III.”
Another complaint investors may have relates to the manner of funding, Pantginis wrote. Peregrine said it had increased its cash balance to $42 million by way of an existing, at-the-market (ATM) financing. “We do have a very highly retail-held stock,”Shan said. “It’s a tool in the toolbox, not something we rely solely on. Whether you do a financing deal or sell some shares on the ATM, there’s going to be some dilution.”
Peregrine’s bavituximab data at the ASCO meeting recently, along with the agreement with the FDA on a Phase III trial, could together provide the trigger that would engage a partner, Pantginis wrote, and management already has been in discussions with potential suitors.
“We’re optimistic,”Shan said, citing the “huge” potential of a therapy that uses bavituximab’s approach. “It could be bigger than Avastin [bevacizumab, Roche], for example, because now you can combine immunotherapy with almost anything, in theory,” he said. “Especially if you have an upstream target like ours, which reactivates T-cell immunity, we think.” *end*
= = = = = = = = = = = = = 6-27-13: Updates on Bavituximab Pgm. & Cash Position http://tinyurl.com/pmcgsgp …“primary focus remains on the init. of the PhIII trial in 2nd-Line NSCLC by y/e; recent data supporting an immunotherapy moa for bavituximab opens many new development opportunities including new combinations not previously planned and has created a lot of excitement around the potential of bavituximab in combination with other immunotherapeutic agents…"
4-2013 AACR'13: Peregrine's 3 preclin. posters http://tinyurl.com/cnqx9oh ..."data on the immune stimulating moa of Bavi, anti-tumor & imaging potential of other PS-targeting constructs"
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