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Is Drug Development Being Compromised By Wasteful Spending?

Peregrine Pharmaceutical's February 19th press release detailed updated results from its Phase-II trial with bavituxumab in second-line NSCLC (NCT01138163). The data was updated to include the results of an earlier review of trial discrepancies and recent survival data. The company stated that its "updated results indicate a meaningful improvement in median overall survival of 11.7 months in the 3mg/kg bavituximab + docetaxel arm compared to 7.3 months in the control arm (HR=0.73; p value=0.217)". The company went on to say that "these compelling results strongly support advancing the 3mg/kg bavituximab plus docetaxel combination into Phase-III development in second-line NSCLC".

To set the record straight, this was a failed trial, the results were not compelling and no improvement in median overall survival was observed. Peregrine has conducted 16 Phase-I and Phase-II studies with bavituximab and treated 735 patients since initiation of clinical development in 2005 and has nothing to show for their efforts. Now they will squander additional resources by conducting a Phase-III trial that is also very likely to fail.

How many other biotech's are engaging in similar practices? Consider the collective resources being wasted and, perhaps more importantly, the potential impact on healthcare if these resources where directed towards the development of assets with higher potential. Unfortunately, this will not occur until investors are able to look beyond management presentations and better understand the nuances of clinical trials and statistical analysis.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.