Boston, MA 02/04/2014 (wallstreetpr) – Does Galena Biopharma Inc. (NASDAQ:GALE) represent just another drop in the ocean trying to become the next big thing in the biopharmaceutical field? Or, there is something more in the company that meets the eye? The stock market history contains innumerable names of companies who showed great potential but then fizzled out.
The Positives:
There is a lot of positive press about Galena Biopharma Inc. (NASDAQ:GALE). They have announced that they have started Phase 2 trials in GALE-301 and have already enrolled one patient. The drug has the potential to treat endometrial and ovarian cancer patients. Galena also acquired Mills Pharmaceuticals in January, 2014. Mills specializes in developing and commercializing treatment for oncology. Galena will be able to take up the development of Gale-401, to be used in the treatment of essential thrombocythemia. Estimates suggest that the drug could yield revenues of $200 million per year. Galena also announced a strategic partnership with Dr. Reddy’s Laboratories Ltd. (ADR) (NYSE:RDY). The partnership focuses on the commercialization of NeuVax in India. D Reddy’s will hold the commercial rights in India for use of the drug in breast and gastric cancers and Galena will be entitled to royalties on the net sales.
These positives are definitely beneficial to the company but some doubts remain.
The Doubts:
Biopharmaceutical companies always provide for a good scope of upsides. A good clinical trial result can send the stock prices zooming upwards and a successful commercialization means profits in multiples of the investment. But such investments are also fraught with risks. Not all clinical trials are successful. A failure in just one trial can also see the share prices crash. And if the company does not have enough liquidity or cash reserves, it may not be able to recover. Valuations are also difficult. Galena Biopharma Inc. (NASDAQ:GALE) has been recommended by several analysts recently. But when the COO dumps shares, investors tend to sit up and take notice. The COO of Galena, Mark Schwartz, recently sold 100,000 shares of the company’s stocks in the open market. He still owns about 409,665 shares valued at $2.28 million but the timing and the value raise some red flags about the company.
