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Peregrine Pharmaceuticals (NASDAQ:PPHM) might have stumbled onto something big in the war on cancer. In the beginning Phase II trials, Peregrine’s drug Bavituximab improved the patient lung cancer tumor reduction rate by 50% over standard chemotherapy.

During the study, 39 percent of the patients treated with a combination of Bavituximab and the standard chemotherapy drugs carboplatin and paclitaxel found tumor reduction, compared to a 26 percent of patients using only the chemotherapy drugs alone. That’s a 50 percent improvement when adding Bavituximab to the treatment.

Bavituximab is a unique antibody and represents a new approach to treating cancer. Bavituximab targets a specific marker on tumor blood vessels but not on healthy vessels, thereby enabling the immune system to recognize and fight the tumor.

Bavituximab might one day compete with Roche’s top-selling cancer drug, Avastin. Avastin had $6.2 billion of sales in 2010. Bavituximab has a very similar clinical program to Avastin, but has a different mechanism of action. It could be a great alternative to some patients that don’t have a great reaction to Avastin, or could be used for different types of cancer that Avastin isn’t as effective with.

Avastin was rejected for use in breast cancer on November 18, 2011, but is still on the market to treat some colon, lung, kidney and brain cancers. "Each type of cancer is very different from another in important ways, and in the end it's no surprise that Avastin's effectiveness may not be equivalent against all types of cancer," said Dr. Neal Meropol of University Hospitals Case Medical Center in Cleveland, who has long used Avastin for colon cancer.

Maybe Bavituximab would be better suited than Avastin for breast cancer? Bavituximab’s great results are only from the first stage of the Phase II trials, and only done for one kind of cancer. The trial was done correctly using 86 patients, was randomized, and used the most updated RECIST (Response Evaluation Criteria In Solid Tumors) rules.

Although Bavituximab has a long road ahead and many hurdles to overcome before reaching FDA approval, this beginning is a positive start. Trading at $100 million market cap, Peregrine Pharmaceuticals might have a home in the lottery section of your portfolio. Each positive piece of news about Bavituximab from here on out should bump the market cap a few 10s of millions, and if it becomes a marketable drug, we could be looking at a 10- to 20-bagger from here.

Source: Peregrine's Lung Cancer Drug Has Promising Trial