Is It Time To Buy Penny Stock of Peregrine (PPHM)?

Shares of Peregrine Pharmaceuticals Inc. (Nasdaq: PPHM), a bio-pharmaceutical with a portfolio of cancer and infectious disease antibodies in clinical trials, has until September 24 to get their penny stock price above $1 or face being delisted from the Nasdaq. PPHM hit a 52 week low but managed to gain nearly 2% in the last trading session to close at $0.426 on volume of 858 thousand. We love these delisting threats like the penny stock PPHM is under as they tend to work out in favor of the speculative investor more times not not.

Peregrine had their Phase II oncology programs lead product candidate bavituximab bombed its clinical studies in March which sent the shares plunging from 90 cents to 68 cents on the news, down -24.43%.  Wall Street analysts at Roth Capital cut their price target on the penny stock, PPHM, to $7 from $10 on the news. So basically, the delisting threat comes form Nasdaq but the analysts still are willing to look for $7. Hmmmm………..

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PPHM Stock Snap Shot:

Market Cap: 42.09M
Price/Sales (ttm): 2.60
Price/Book (mrq): 3.00
52-Week High
(Apr 26, 2011): 2.59
52-Week Low
(Apr 20, 2012): 0.39
Avg Vol (3 month): 1,242,070
Avg Vol (10 day): 578,638
Shares Outstanding: 98.87M
Float: 90.62M
% Held by Insiders: 5.51%
% Held by Institutions: 15.60%
Shares Short
(a/o Mar 30, 2012): 4.08M

PPHM is on pace to report fiscal 2011 revenues of around $16 million with bottom line net losses of around $42 million. One of the Director’s of Peregrine Pharmaceuticals, Eric Swartz, saw no issue with the clinical studies setback as he purchased 16,000 shares of the penny stock on March 14th at 62 cents per. (see here)

On April 4th, the company reported that the American Association for Cancer Research would be evaluating the potential of bavituximab when combined with standard approved therapies in breast, liver and prostate cancers. In a Phase I trial of bavituximab with paclitaxel in 5 evaluable patients with HER-2 negative metastatic breast cancer, 2 patients achieved a complete tumor response and 1 a partial response.

To view the SEC filings for PPHM, click here.

Bottom Line: Having hit 0.39 on Friday, you wont find shares in the penny stock of PPHM much cheaper than they are right now. Add PPHM to your list of penny stocks to watch if you enjoy playing FDA bingo. RSI indicates the stock has been living in oversold land for weeks now.

With cancer drugs the long term is much better than the short. Volatility and momentum tends to be coupled with FDA and clinical study dates announcements. If you have the patience and PPHM has “the motts,” you could see a 1,543% profit if the penny stock hits the $7 price target.


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