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After cancer drug developer Peregrine Pharmaceuticals (NASDAQ:PPHM) told analysts they should not rely on clinical trial data released on its new lung cancer drug, bavituximab, the company’ stock collapsed, falling by more than 75 percent.
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In a statement released Monday, the company disclosed that “major discrepancies” were discovered between patient sample test results and treatment assignments. The discovery was made while reviewing trial data in preparation for a meeting with the U.S. Food and Drug Administration. According Peregrine, any data released on or before September 7, could be inaccurate.
On September 7, Peregrine released mid-trial data that showed patients treated with the experimental cancer drug bavituximab plus the chemotherapy drug docetaxel lived twice as long as patients who were treated with only the chemotherapy drug. As a result, shares in the company rose more than 40 percent to $4.59, tripling what the stock traded for in May. Previously, the company had been struggling; during the summer, Peregrine narrowly missed a NASDAQ de-listing.
Overall, it has been a difficult for many drug manufacturers to remain profitable as generic brands scoop up market share. However, on Monday, Moody’s Investors Service upgraded its outlook for the global pharmaceutical industry, saying the multi-year wave of patent expirations that have lowered profits should subside next year. Shares of Pfizer (NYSE:PFE) and Merck (NYSE:MRK) benefitted.
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