5 Things Peregrine Pharmaceuticals Wants You to Know

It should be noted by investors that the first readout won't occur until 33% of adverse events have been reached (and in this instance an adverse event is death). Therefore, it's impossible to predict with any accuracy when that initial interim analysis will occur, although management seems to believe it will be in the first-half of 2016.

Source: Peregrine Pharmaceuticals.

Clinical data may be coming your way sooner rather than later

Based on commentary from Joseph Shan, bavituximab's best potential is not as a monotherapy vaccine, but instead as a combination therapy designed to improve the effectiveness of other drugs. Further, with Peregrine focusing its deal-making in such a way that it retains full rights to the drug in the U.S., it looks as if Peregrine will have ample opportunities to expand bavituximab into new labels in the future.

Source: Peregrine Pharmaceuticals.

Our contract manufacturing sales could double

Source: National Institute on Drug Abuse.

Last, but certainly not least, Peregrine's contract manufacturing subsidiary Avid Bioservices is on pace to open its new manufacturing facility within the next couple of weeks. The new facility, which is geared at phase 3 and post-approval production, and will handle the commercialization of bavituximab if it's eventually approved, should be able to add $40 million in extra revenue per year to Peregrine's top-line once it's fully operational.

If there's one small knock I have against Peregrine, it's that Avid appeared to be just a few weeks away from opening the facility when it reported its Q4 results just eight weeks prior. The longer shareholders wait for this new revenue-generating facility to open, the further Peregrine's stock could drift lower.

Of course, the silver lining is that Avid could almost push Peregrine into the black single-handedly if it's at full capacity inclusive of its ongoing clinical studies. But, keep in mind that it could take a few years to ramp up to full capacity.

What should you do?

You've read the earnings report, and you now have the important points of Peregrine's conference call. Now it's time to answer the toughest question of all: what should you do with Peregrine?

I still believe that the best course of action with Peregrine is to remain on the sidelines until we at least have the first or second interim data release from the SUNRISE study. Bavituximab makes up a substantial portion of Peregrine's valuation, and the failure of this immunotherapy in late-stage studies could demolish this stock. In my opinion, even if you miss the initial pop in Peregrine's stock (assuming it hits the mark in SUNRISE) you'll be able to take advantage of future sales of the drug, label expansion opportunities, and possible collaborative partnerships.

There's no need to rush into Peregrine right now, but I'd certainly suggest that keeping it on your radar is worthwhile.

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The article 5 Things Peregrine Pharmaceuticals Wants You to Know originally appeared on

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy .

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