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Peregrine Pharma rises on cancer drug study plans

NEW YORK (AP) -- Shares of Peregrine Pharmaceuticals Inc. moved higher Wednesday, after the company said it reached an agreement with regulators about the design of a late-stage clinical trial of its cancer drug Cotara.

THE SPARK: Peregrine said the Food and Drug Administration accepted its proposed designed for a trial of Cotara as a treatment for glioblastoma, the most common and aggressive type of brain cancer. Peregrine wants to compare two dose levels of the drug in up to 300 patients. The Tustin, Calif., company said the trial will include interim analyses so it can be stopped early if it is clear Cotara will meet its goals of if the drug is not working.

THE BIG PICTURE: Peregrine does not have any approved drugs. Its most advanced experimental drug is the cancer treatment bavituximab. In early September Peregrine said patients who were treated with bavituximab lived twice as long as patients who received only chemotherapy in a clinical trial, and the shares rose to a three-year high.

A few weeks later the company said it had found problems with the reported trial data and its initial analysis couldn't be relied on. Peregrine said the problem appeared to be tied to another company that was contracted to code and distribute the product.

The company said Cotara has received orphan drug status in both the U.S. and the European Union, which means that similar drugs will be barred from the market for years if Cotara is approved. The FDA also agreed to conduct a faster review of the drug.

THE ANALYSIS: Roth Capital Partners analyst Joseph Pantginis said the company's agreement with the FDA is important because it gives investors more information about Peregrine's strategy. However he kept a "Neutral" rating on the company's shares, saying he is still concerned about the status of bavituximab.

SHARE ACTION: Peregrine shares rose 1 cent to $1.30 in afternoon trading. Earlier the shares rose as much as 19.4 percent, to $1.54. The stock is down 76 percent since Sept. 24.