Peregine Pharmaceuticals Inc. (NASDAQ: PPHM) sank in Friday’s regular trading session following the termination of a late-stage clinical trial. The company announced that it is discontinuing its Phase 3 Sunrise trial of bavituximab in patients with previously treated locally advanced or metastatic non-squamous non-small cell lung cancer.

Ultimately, the decision to stop the trial was based on the recommendation of the study’s Independent Data Monitoring Committee following a pre-specified interim analysis performed after 33% of targeted overall events (patient deaths) in the study were reached.

Results of the analysis demonstrated that the bavituximab plus docetaxel group did not show a sufficient improvement in overall survival as compared to the docetaxel group to warrant continuation of the study. The interim analysis showed that the bavituximab combination group is performing as expected according to the original trial assumptions in terms of overall survival, while the docetaxel group is dramatically outperforming overall survival expectations based on the original trial assumptions and as compared to recently published studies.

Steven W. King, president and CEO of Peregrine, commented:

While we are deeply disappointed by this early outcome from the SUNRISE trial, we plan to take a deliberate and detailed approach in reviewing and verifying all available data from the trial in order to understand what subgroups or other patient characteristics may have impacted the performance of the study. While we perform this analysis, we plan to put our other chemotherapy combination studies on hold until we have a clear understanding of the SUNRISE study results.

He added:

While this is an unexpected and disappointing setback for the bavituximab chemotherapy combination clinical program, we have not seen anything in this trial result that diminishes our enthusiasm for advancing our immuno-oncology (I-O) combination trials. The I-O combination studies are based on different mechanistic synergies that are clearly separate from the chemotherapy combination being evaluated in the SUNRISE study. In addition, it is important to note that in no way do these results have any impact on our contract manufacturing business conducted through our wholly owned subsidiary, Avid Bioservices. This business has shown consistent revenue growth and has been instrumental in maintaining a strong cash position and our plan is to continue growing this business.

At the beginning of February, Avid Bioservices had a revenue backlog in excess of $58 million under current contracts. At the end of the fiscal third quarter, Peregrine had $67.5 million in cash and equivalents.

So far in 2016, Peregrine has underperformed the market, with the stock down over 8% year to date. Over the past 52 weeks, the stock is down 16%.

Shares of Peregrine were trading down over 60% at $0.40 on Friday, with a consensus analyst price target of $3.83 and a 52-week trading range of $0.37 to $1.66.

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