TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

In after-hours trading on Thursday, shares of Peregrine Pharmaceuticals (PPHM) fell by 62% after the company announced that it had to stop the SUNRRISE trial. The SUNRISE trial was a phase 3 trial that recruited up to 600 patients in the second-line setting of non-small cell lung cancer -- NSCLC.

Patients in the trial either took Peregrines investigational immunotherapy drug bavituximab together with docetaxel -- chemotherapy agent -- or were given a placebo together with docetaxel. The trial was stopped due to the recommendation of the independent data monitoring committee -- IDMC. The IDMC is responsible for evaluating data for biotechnology companies to determine if efficacy is achieved. They then make a determination whether or not the company can continue with the trial or if they should halt the trial early due to lack of evidence that a drug is not working. 

The IDMC took a preliminary look at data when 33% of targeted events -- patient deaths -- was reached. The committee noted that bavituximab group did not improve overall-survival -- OS -- compared to the docetaxel group. If that wasn't bad enough Peregrine has also decided to put other combination trials that use bavituximab together with docetaxel as part of the treatment. The company is doing this to determine where the trial went wrong, and that way it can see if it can fix any discrepancies in other trials. 

The company has cash and cash equivalents of $67.5 million as of January 31, 2016. Even so, the company has been around for 35 years and has yet to establish a product in the market. Investors should be cautious investing in such a security because it carries a high-risk profile. In addition, it is a micro-cap company therefore it can have wild swings depending upon how the market moves. The company does have other trials in the process but they are a long-shot at best.