Peregrine fails again and looks forward to phase III

At least this time the markets were not fooled. Yesterday’s statement from Peregrine Pharmaceuticals rambled on about plans to start phase III with bavituximab, burying news that the antibody had flunked in yet another setting – first-line non-small cell lung cancer.

The stock slumped 23%, and given bavi’s track record of failure it seems remarkable that Peregrine is still touting prospects of a pivotal study beginning this year. Smart investors will realise that phase III will never begin without a wealthy licensee, and while the company stalls, talking up a highly unlikely partnering deal, its $42m cash reserves will dwindle.

Of course the phase III plan is not really news at all. Peregrine had already announced in May that the FDA had signed off a pivotal design in second-line NSCLC – itself remarkable given the botched phase II study in this same setting (Now you see it, now you don’t: Peregrine’s bavi might work after all, January 8, 2013).

Peregrine had at first trumpeted a knockout result in this trial before admitting “major discrepancies” that meant this could no longer be relied on. It then astonishingly altered the design and claimed that an overall survival (OS) benefit did meaningfully favour bavi after all.

Front line

In the latest setback bavi plus chemo or chemo alone was given open-label to 86 first-line NSCLC patients, but after around 50 of them had died the two study arms’ survival curves had not separated. Median OS improvement had been the primary endpoint.

In February a third phase II study that Peregrine had sponsored, in advanced metastatic pancreatic cancer, also failed, showing non-significant and barely discernible numerical improvement in median OS favouring bavi. The company instead talked up a near doubling of overall response – a highly subjective secondary endpoint.

Undeterred, Peregrine has continued to clutch at the straws of the disastrous second-line NSCLC trial. The best that can be said of the latest cut of the data, after the result of one of the active arms had to be combined with placebo because of irregularities at a third-party contractor, is that there is a 4.4-month improvement in the secondary endpoint of OS with no statistical significance (p=0.217).

The double-blind phase III study, which Peregrine optimistically claims might begin by the year end, will add bavi to docetaxel versus docetaxel alone in 600 second-line NSCLC patients. The company’s stock spiked 19% when the FDA rubber-stamped this design in May.

Funding

But who will pay for this trial? Largely thanks to tapping an at-market issuance agreement Peregrine has $42m of cash, but this alone will not fund a large pivotal trial, and the company would surely not begin one without being certain of funding it to completion.

Indeed, Peregrine admits that current cash will be used “to prepare for the initiation”, rather than the actual running of, a pivotal bavi study. The clear meaning is that a deal is needed – and not just any deal, but one with a significant pharma player with oncology expertise.

Yet the truth is inescapable. Bavi, with multiple clinical failures and a badly bungled readout in its pivotal indication against its name, is a toxic asset. No deals of any significance were forthcoming before, and there will not be any now.

Peregrine’s management team is deeply discredited and should ditch bavi once and for all.

To contact the writer of this story email Jacob Plieth in London at [email protected] or follow @JacobEPVantage on Twitter