Shares of Peregrine Pharmaceuticals Inc. (NASDAQ:PPHM) jumped more than 30 percent at Monday's opening bell before settling back to a 20.5 percent gain on positive top-line results from the company's randomized, double-blind, placebo-controlled Phase IIb study evaluating two dose levels of bavituximab plus docetaxel compared to docetaxel plus placebo in patients with second-line non-small-cell lung cancer (NSCLC).

The stock closed at 53 cents for a gain of 9 cents on the day.

The Phase IIb data suggested Peregrine's lead compound doubled overall response rates (ORR) – the primary endpoint – in its initial indication and showed improvement in a secondary endpoint of progression-free survival (PFS) in both bavituximab-containing arms. The company said median overall survival (OS) – a data point frequently targeted by the FDA – was less than six months in the control arm and was not reached in either treatment arm.

The trial enrolled 121 patients with second-line Stage IIIb or IV nonsquamous NSCLC following one prior chemotherapy regimen, who were equally randomized to one of three arms, with 117 patients included in the top-line analysis. Tumor responses were determined in accordance with Response Evaluation Criteria In Solid Tumors (RECIST 1.1). Patients received up to six cycles of docetaxel (75mg/m2) plus 1 mg/kg bavituximab, 3 mg/kg bavituximab or placebo until disease progression.

The treatment arms showed ORRs of 15 percent for 1 mg/kg of bavituximab and 17.9 percent for 3 mg/kg, and median PFS of 4.2 months and 4.5 months, respectively. In comparison, the placebo arm showed an ORR of 7.9 percent and a median PFS of three months.

"We were happy with the consistency of the data between those two groups," said Steve King, president and CEO of Tustin, Calif.-based Peregrine. The company is eager to see whether OS data from the treatment arms will allow it to move forward with the 1 mg/kg dosage, he added.

An independent data monitoring committee found no significant safety issues between the treatment arms and placebo.

Even before OS data arrive, Peregrine hopes to schedule a meeting with the FDA to begin planning a pivotal Phase III study in second-line NSCLC.

"The 50 percent increase in progression-free survival is a great number that certainly we can design a trial around," King told BioWorld Today.

Nevertheless, OS data will be important to support the eventual trial design – particularly the size of the study, King acknowledged. Other second-line drugs – including docetaxel, Alimta (pemetrexed, Eli Lilly and Co.) and Tarceva (erlotinib, Astellas Pharma Inc. and Roche AG) – received approval based on much larger studies.

Peregrine is looking to Rob Garnick, its director of regulatory affairs, to steer the course for Phase III. A 24-year veteran of Genentech Inc., where he served as senior vice president of regulatory, quality and compliance, Garnick helped to bring Avastin and more than a dozen other drugs to market.

In fact, Avastin has "sort of been our model" for designing the trials and managing the overall clinical program for bavituximab, King acknowledged.

Peregrine worked closely with the FDA to design a rigorous Phase IIb study as part of a registration package that, with a pivotal trial, would be sufficient for eventual product approval, according to King.

"We're right on track with that," he said. "We have more than enough data to start planning and thinking about what that Phase III trial will look like."

The findings also validated the bavituximab technology platform, King maintained. The phosphatidylserine (PS)-targeting monoclonal antibody is being evaluated in additional randomized Phase II trials in front-line NSCLC and pancreatic cancer.

PS is an immunosuppressive molecule usually located inside the membrane of healthy cells that "flips" to become exposed on the outside of cells that line tumor blood vessels, creating a target for anticancer treatments.

Peregrine also hopes the IIb findings in second-line NSCLC will attract a partner for ex-U.S. rights to help move the program into a global Phase III and enable Peregrine to push the drug forward in Phase II studies in additional indications.

"We have quite a number of interested parties and, quite frankly, [these are] the data they've been waiting for," King said.

In a research note, Roth Capital Partners analyst Joseph Pantginis reiterated his "buy" rating and raised his target from $3.30 to $5.00.

"We are impressed by the strong clinical data for the primary ORR endpoint as well as the current indications of a survival benefit as well," Pantginis wrote. "We believe important support of the robust data include 1) double-blind and randomized status, 2) independent reads of clinical responses, 3) control arm acted as predicted and 4) IDMC did not identify any safety issues with bavi. With these data in hand, we expect the company to discuss this international study (~50% enrolled in U.S.) with the FDA in 2H12."

Peregrine manufactures the drug through a wholly owned subsidiary, Avid Bioservices, "so we're set to move as quickly as possible into that Phase III study," King said.

In December 2011, Peregrine's stock enjoyed a similar uptick when the company reported a 50 percent improvement in ORR from topline Phase II data of bavituximab in patients with front-line State IV NSLCL. In that study, bavituximab was tested in combination with carboplatin and paclitaxel. (See BioWorld Today, Dec. 7, 2011.)

Nevertheless, shares continue to trade near the bottom of their 52-week range, and King admitted investors are taking a wait-and-see about additional data points expected from the company this year, including bavituximab data in the other Phase II indications and preliminary readouts of four investigator-sponsored trials.

But he's not worried. "Partnering is a huge aspect that brings a certain amount of validation with it," he said. "I think we'll see a lot of downstream benefits from this particular set of data."