Peregrine Pharma (PPHM) Stock: Should You Be Concerned About the Declines

Peregrine Pharma (NASDAQ: PPHM)

Peregrine Pharma is having a rough day in the market today. However, you wouldn’t have guessed we would see declines following the strong movement we saw on the stock yesterday. Today, we’ll talk about why we saw gains yesterday, why we are seeing declines today, and what we can expect to see from PPHM moving forward. So, let’s get right to it…

Why PPHM Climbed In The Market Yesterday

Yesterday, Peregrine Pharma had an incredibly strong day in the market, and for good reason. The company provided an update with regard to operational strategies and latest developments. One of the updates that really jumped off of the page was with regard to Avid Bioservices, a contract manufacturing subsidiary of PPHM. According to the company, Avid Bioservices is continuing to experience significant organic growth. In fact in 2015, the subsidiary generated $26.7 million, in the fiscal 2016, it generated $44 million, and now, in FY 2017, PPHM is expecting for the subsidiary to generate between $50 and $55 million. The strong organic growth is causing tremendous excitement among investors. In a statement, Steven W. King, President and CEO at PPHM had the following to offer…

The past several months have been a busy and productive time at Peregrine as we work to optimally position the company for future success with both our contract manufacturing and drug development businesses. We are very pleased that Avid exceeded its revenue projections for fiscal year 2016 and excited for what we expect will be continued growth for that business… At the same time, we continue to work to advance our phosphatidylserine (PS)-targeting platform. In order to move toward overall profitability while continuing to generate valuable clinical data, we will focus our future development efforts on small, early stage clinical trials evaluating combinations of bavituximab and immuno-oncology (I-O) agents. This strategy will be supported through our current and future collaborations, which we believe will efficiently generate the clinical data required to identify and pursue the most valuable opportunities for bavituximab.”

Why We’re Seeing Declines Today.

While yesterday was an overwhelmingly positive day for PPHM, today isn’t so great. In fact, currently (11:45), the stock is trading at $0.48 per share after a loss of $0.02 per share or 4.02% thus far today. While many investors may be concerned about the declines, I am not concerned in the least. The reality is that price movements in the market tend to happen through a series of overreactions. Therefore, while the news that was released yesterday was overwhelmingly positive, the reaction in the market was a bit more than what should have happened. As a result, we’re seeing a correction today that’s bringing the value of Peregrine Pharma down to a more sustainable rate before growth continues.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from PPHM. The reality is that the company has done a great job growing its current products and seems to be headed on a b-line toward overall profitability. All in all, things are looking great for the stock moving forward.

What Do You Think?

Where do you think PPHM is headed moving forward and why?