Peregrine tested two doses of its drug, bavituximab, along with standard chemotherapy treatment as a second-line treatment in 112 non small-cell lung cancer patients.

These results come two months after data from another study showed that bavituximab did not fare significantly better than a placebo when used as a first-line treatment for non small-cell lung cancer.

Peregrine's shares, which have fallen 35 percent since the first-line trial data was announced in March, were up 18 percent at $0.51 on Monday.

In the second-line treatment study, both doses met the secondary goal of stopping cancer progression for more than 4 months, compared with 3 months for those treated with a combination of the standard therapy and a placebo, Peregrine said in a statement.

"We are impressed by the strong clinical data for the primary overall response rates endpoint as well as the current indications of a survival benefit," Roth Capital analyst Joseph Pantginis said in a note.

Peregrine is also testing bavituximab as a treatment for pancreatic cancer. However, the company is targeting a much bigger market with non small-cell lung cancer.

Non small-cell is the most common type of lung cancer. The American Cancer Society estimates lung cancer claims the lives of more than 160,000 people every year, representing about 28 percent of all cancer deaths.

The analyst said the positive results could potentially move partnering discussions to the next level and expects Peregrine to discuss the study details with U.S. health regulators in the second half of the year.

Pantginis, who had cut his price target on the stock twice since the frontline study, raised it to $5 from $3.30 and said bavituximab has a broad therapeutic potential.

The drug did not show any significant safety issues when compared with the standard therapy in the study, Peregrine said.

(Reporting by Zeba Siddiqui in Bangalore; Editing by Roshni Menon)

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