Peregrine Pharmaceuticals (NASDAQ:PPHM): Partnership Is Next In Play

At the end of last year, we published this article, highlighting Peregrine Pharmaceuticals (NASDAQ:PPHM) as being a company to watch. The article was rooted in this conclusion: there is only so much time Peregrine can spend at its then-current market cap, and that it must start to rise in value near term.Fast forward a couple of months, and it looks as though this rise is upon on. The company traded from a little over $0.25 early January. At latest close, this has rise to $0.35 – a 40% gain across the period. This run doesn’t change the conclusion we drew previously, however. We still thing this one has farther to run, and that it should realize this potential sooner rather than later.The latest release from the company strengthens this bias, so let's take a look at what was reported, and what it means going forward.By way of a quick introduction, Peregrine is a biotech company that operates a development pipeline under the Peregrine name, but also concurrently operates a contract manufacturing arm under the name Avid Biosciences. This is especially important, as it allows the company to fund a large part of its development activity. This removes the risk for shareholders of repeated and toxic (read: dilutive) financing rounds, and makes the company a far more attractive proposition as a long term play.Of course, even with long term plays, it's nice to have some near term catalysts stoking the fire and injecting near term value boosts; and Peregrine has plenty of them.The latest, and the main focus of this discussion, relates to a cancer diagnostic platform and a study of said platform that was just completed out of the University of Texas (UT) Southwestern Medical Center. The platform is called a novel exosome-based cancer detection platform, and it's basically trying to show that a physician can use exosomes to both detect cancer, and highlight the severity and stage of the cancer detected. We'll get into the numbers in a second, but for those looking for the in depth discussion, it's available as part of the peer-reviewed journal, Oncotarget, in a paper titled, “Detection of phosphatidylserine-positive exosomes as a diagnostic marker for ovarian malignancies: a proof-of-concept study.”So, an exosome is basically a fragment of a cell that has broken off and is carried through the bloodstream. Exosomes that have come from cancer cells express phosphatidylserine (PS), and it is this PS that the company's platform can measure. Basically, if PS is present, it indicates cancer, and the more PS present, the more advanced the cancer. When investigated as part of a blinded study looking at three groups of patients (tumorous, benign and healthy), the results demonstrated that those patients with malignant ovarian cancer displayed significantly higher blood PS exosome levels than those with benign tumors, and further, that the malignant and benign groups displayed significantly higher blood PS exosome levels than the healthy subjects. In other words, it's not just proof of concept, but strong evidence that the platform works as hypothesized.So what's the next value driver associated with this technology?The company (as far as we can tell) isn’t going to bring this technology to market on its own. Even with the contract manufacturing operations, doing so would likely demand an equity raise, and in turn, bring dilution to shareholders. Instead, we expect Peregrine to look for a bigger name to partner up on the platform, and carry it forward collaboratively. As such, we're looking for any information that clarifies the potential for said partnership as potentially injecting upside momentum into Peregrine's market capitalization.We will be updating our subscribers as soon as we know more. For the latest updates on PPHM, sign up below!Disclosure: We have no position in PPHM and have not been compensated for this article.