The writing is no longer just on the wall for Peregrine and others

By M.E.Garza

Wednesday, 07 December 2011 07:22

When one of our colleagues wrote in late November that "Lipid Signaling Could Shake Up Biotech in 2012," he certainly knew what many others are finally starting to grasp.

For many, outside of biotech, the big, game-shifting headlines involving this unique platform are still- for the most part- only written on the wall. But as we've begun to see this week, once they make it to print they make big splashes across the entire market.

First up was Tuesday's big news that preliminary results involving Peregrine Pharmaceuticals' (NASDAQ: PPHM) drug candidate Bavituximab showed a 50% improvement in overall tumor response rates in non-small cell lung cancer patients who were participating in a randomized Phase II trial.

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Shares of the company broke-out but are still trading over 60% from their 52-Wk High ($ 3.10). When the rest of Wall Street starts to hear the inevitable accolades and "key to cancer cure" opinions, shares of Peregrine should continue heading higher.

The fact that Peregrine plans to report on secondary endpoints, including median progression-free survival (PFS) and overall survival (OS) once reached during 2012 ensures that speculators will continue to move in on shares, but an additional even on the horizon may help guarantee that volume won't soon dry up.

In late September, an event mentioned by the firm in a news release was noted and is being tracked as a catalyst in our BioMedReports FDA Calendar. While some of the new investors may not yet realize it, Bavituximab is also being tested and developed as a first-in-class monoclonal antibody that represents a new approach to treating not only cancer but viral infections as well.

In this case, the firm is looking forward to assessing its use in combination with ribavirin for patients chronically infected with hepatitis C virus (HCV) infection. Once all of the patients in the ongoing study have completed therapy, doctors will be looking for an early-virologic response and we can expect to hear Bavituximab Phase II data by the end of 2011 or early 2012.

Surely, I don't have to remind biotech investors how blazing hot hepatitis stock plays continue to be.

"These first randomized clinical data indicate bavituximab is an active anti-tumor agent and heightens our enthusiasm for the bavituximab program, including the upcoming results from seven ongoing trials in different oncology indications," said Kerstin B. Menander, M.D. Ph.D., head of medical oncology at Peregrine Pharmaceuticals.

After incredibly positive news like this for the field, investors seeking the next big Lipidomics play aren't likely to limit their bets to Peregrine.

Earlier this fall, we told readers about Lpath (OTCBB:LPTN), a small San Diego based firm, whose shares were trading under $1 and whose advancements in the same space have apparently marked it as a potential acquisition target.

Already Pfizer (NYSE: PFE ) has an established partnership with the firm for their ocular drug iSONEP and if upcoming study results with iSONEP™ are successful, Pfizer has the right to license global rights to the drug in exchange for development, regulatory, and commercial milestone payments, along with double-digit tiered royalties on net sales of iSONEP™. Those milestone payments potentially due Lpath are worth nearly $500 million. The firm’s market cap is only $63 million now and as such, volume and interest in the stock has been on the rise since our initial report.

Another one of the firm’s drug candidates, ASONEP™, had previously caught the eye of Big Pharma.

Shortly after Lpath reported positive summary results of its dose-escalation Phase I trial of that drug in cancer patients with a wide variety of solid tumors. Lpath reached the achieved objective established by Merck KGaA and bagged a $2 million payment according to the terms of that license agreement.

Merck proposed continuing its partnership with Lpath via an extension of the Initial Development Period, but the terms were rejected by Lpath‟s board as not being in the best interests its stockholders and consequently the firms terminated their collaboration; Merk thereby relinquished all rights to the ASONEP™ program.

LPath believes that further investigation of ASONEP for efficacy in Phase 2 clinical trials is warranted and they are moving ASONEP into Phase 2 clinical testing, and are collaborating with Harvard Medical School on plans to conduct one or more Phase 2a clinical trials.

As industry observers note, some of the world’s most expensive and successful biotechnology-based drugs are monoclonal antibodies and they have proven to be indispensable in the war against cancer and Autoimmune diseases. The fact that many antibody-based platform firms have been acquired for significant premiums by Big Pharma right after some of these same stage trial results is but one reason analysts who cover these types of firms are so bullish with buy recommendations and price targets.

Both of these stocks have seen 30% jumps recently, but those with positions in Lpath, Inc. or Peregrine are likely to see continued price increases as those upcoming clinical results catalysts move closer.

Disclosure: None

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