Peregrine Pharmaceuticals, The Little Biotech With The Golden Goose Of Immunotherapy

The annual conference of The American Society of Clinical Oncology (OTC:ASCO) is currently less than a few days away, and what is the buzz for this year's conference? Immunotherapy is the buzz word for this year's conference. Bavituximab is a phosphatidylserine (PS) binding monoclonal antibody (MAB) produced by Peregrine Pharmaceuticals (NASDAQ:PPHM), which appears to be "The Golden Goose" when it comes to Immunotherapy approaches to fighting solid tumor cancers. Other agents in this new and exciting class of cancer therapies, such as PD-1 and PD-L1 from the large pharmaceutical companies in the oncology space; Merck (NYSE:MRK), Roche (OTCQX:RHHBY), and Bristol-Myers Squibb (NYSE:BMY), do not compare to Bavituximab regarding how the innate immune system is activated. PD-1 and PD-L1 block the downstream "off-switch" for killer T cells, but do nothing to block the "off switch" for upstream PS, which is a much more important and far-reaching immune response "off-switch". By increasing the number of killer T-cells, PD-1 and PD-L1 causes tumor shrinkage, but does nothing to enhance the body's "innate immunity" to cancer and viral pathogens as does Bavituximab.

The key to understanding Bavituximab's advantage over PD-1 and PD-L1 can be seen in the abstract from this year's AACR poster that got so much attention last month.

This poster shows how Bavituximab reactivates tumor immunity, therefore enabling the body's own immune system to recognize and destroy cancer cells infinitely. The following are the key statements from the abstract of the companies AACR poster in April 2013.

Quote: "Antibody treatment reduced the presence of myeloid-derived suppressor cells (MDSCs) in the tumors and caused macrophages to repolarize from the immunosuppressive, proangiogenic M2-like state into a tumoricidal M1-like state..Thus PS-targeting antibodies appear to reactivate innate immunity in tumors which could hold tumor development in check."

Unless you block PS, the tumor environment will keep producing MDSC's, which in turn produce the M2 like state, which includes the "off-switch" for killer T-cells. Because PD-1 and PD-L1 impact a downstream "off switch", you'll have to keep using more and more of it because it never stops the source of the problem, which is the M2-like state caused by MDSC.

Here is where the goose "lays the Golden Egg". Bavituximab blocks a very upstream immune suppression switch, which induces an M1-like state where there is no need to block the T-cell "off switch" because this "off switch" never develops.

PD-1 and PD-L1 do not produce an M1-like state. All they do is block an "off-switch" that results from the M2-like state.

Moreover, and perhaps more important, the AACR abstract points out that Bavituximab caused the MDSC to differentiate into M1-like macrophages and dentritic cells (DC). These are the cells that trigger our innate immune system to unmask and recognize the cancer cells as foreign pathogens and destroy them. This innate immune response created by Bavituximab has also been shown to have application to other pathogens such as viral infections. Bavituximab also has a very low side effect profile compared to PD-1 and PD-L1, which is important because many patients can not tolerate cancer therapies.

In summary, Bavituximab teaches our body's own immune system to continue to kill cancer cells, and has evidence of complete responses (CR) in many of its previous and current clinical trials, and has a very low side effect profile. Studies to date have only included late stage, very sick cancer patients where the immune system is not very robust. One has to ask what the outcome would be if Bavituximab is given to early stage cancer patients, where their immune system is highly functional? New trials will answer these questions.

When comparing Immunotherapies in the Oncology space, Bavituximab's superiority over other agents currently being developed, such as PD-1 and PD-L1, makes Bavituximab the clear winner.

Peregrine has just received FDA approval to advance Bavituximab into a pivotal phase III trial in second line non-small cell lung cancer (NSCLC). In a previous phase II trial in second line NSCLC, Bavituximab doubled survival over the standard of care chemotherapy before third party coding discrepancies were noted. As a victim of a third party error, Peregrine handicapped themselves and placed the Bavituximab low dose patients into the control arm of the trial, then went head to head with the high dose arm. The result was a sixty percent (60%) improvement in survival, even though it was clear the high dose arm improved survival by over a hundred percent (>100%) compared to the standard of care chemotherapy. Bavituximab has also showed impressive results in breast cancer trials with complete responses , and promising results in stage IV pancreatic cancer patients, both to be highlighted at this year's ASCO conference on June 1st. Investors are also anxiously waiting on results from the current phase II front line NSCLC trial, as well as the liver cancer trail. Bavituximab is a true broad spectrum Immunotherapy oncology agent indicated for potentially all solid tumor cancers.

Peregrine owns all rights to Bavituximab, and with possible indications across all solid tumor cancers, the potential revenues are in the billions once approved. Peregrine is at the stage of development in the biopharmaceutical space when mergers and partnerships occur. Peregrine is currently not partnered with any large pharmaceutical company, and is positioned well to bring Bavituximab to market on its own with its fully owned manufacturing company, Avid. If Bavituximab is the "Golden Goose" of Immunotherapy, will it be acquired by one of the large pharmaceuticals companies, or possibly one of the midcap pharmaceutical companies, such as Gilead (NASDAQ:GILD), Celgene (NASDAQ:CELG), Amgen (NASDAQ:AMGN), Regeneron (NASDAQ:REGN), and Biogen Idec (NASDAQ:BIIB)? Only time will tell.

To be continued after ASCO...

Disclosure: I am long PPHM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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