Peregrine Plummets After Unreliable Lung Cancer Results

Peregrine Pharmaceuticals Inc. plunged the most ever after the biotechnology company said the survival rates from its lung cancer study reported earlier this month were unreliable.

Peregrine declined 78 percent to $1.16 at the close in New York, the biggest drop since April 1994. The shares of the Tustin, California-based company had more than quadrupled in the past 12 months through Sept. 21.

Peregrine soared 47 percent on Sept. 7 after the company said non-small cell lung cancer patients who took the drugmaker’s experimental bavituximab lived twice as long as those on placebo. Peregrine said in a statement today that it “discovered major discrepancies” between patient test results and treatment code assignments by the independent contractor responsible for the distribution of the medicine in the study.

“Today’s news comes as a shock and we believe represents a major blow to confidence in the bavituximab program,” Joseph Pantginis, a New York-based analyst for Roth Capital Partners, wrote in a note to investors. “The level of uncertainty surrounding the stock at this point is a major hurdle needing to be addressed.”

Pantginis downgraded the stock to neutral, and lowered his price target to 70 cents from $9.

“Investors should not rely on previously reported clinical data,” Peregrine said in the statement. Christopher Keenan, a company spokesman, declined to comment beyond the release.

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