A few days ago, Peregrine Pharmaceuticals (PPHM) was a $500 million company. Yesterday, it fell below $80 million. Today, it is worth $177 million. Needless to say, investors are feeling the whiplash, and they certainly have a fair share of questions.
Yesterday, Peregrine Pharma dropped sharply in pre-market trading due to serious problems discovered in its bavituximab trial data. The company told analysts that there were “major discrepancies” between treatment code assignments and patient sample test results. It further instructed analysts to not rely upon the data until clarifications could be provided. Bavituximab is a candidate for lung cancer treatment.
Joseph Pantginis from Roth Capital Partners lowered his price target to $0.70 from its prior heights of $9.00 while slashing his rating from Buy to Neutral. Yahoo Finance republished his comment from the report, “Today’s news comes as a shock and we believe represents a major blow to confidence in the bavituximab program until the discrepancies can hopefully be worked out.”
Peregrine placed blame for the trial data on errors allegedly committed by a contract researcher. George Zavoico, a senior equity research analyst at MLV & Co., said that some patients likely either received the drug or placebo by mistake. On an optimistic note, he added a remark about the company’s larger pipeline: “They have multiple trials going on right now with this drug, and any one of these trials could play out positively.”
Although far from its prior price levels above $5 per share, Peregrine nevertheless rebounded +46% from yesterday’s close of $1.16. At last check, Peregrine was trading at $1.70, providing the above mentioned market capitalization figure of $177 million.
Trading volume today far exceeded the norm, with over 55 million shares trading hands today versus the average 8 million.
Today at 8:30am ET, law firm Bronstein, Gewirtz & Grossman, LLC announced that it was looking into potential violations of federal securities laws on behalf of Peregrine investors. Likewise at 3:33pm ET, law firm Robbins Umeda LLP announced that it had commenced an investigation into “possible breaches of fiduciary duty and other violations of the law” related to the trial data and the sudden drop in share price. Law firm investigation announcements are typical after sudden drops in share prices.
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