Why Galena Biopharma Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Galena Biopharma (NASDAQ: GALE  ) , a biopharmaceutical company focused on developing cancer therapies, advanced as much as 13% following the announcement of its first official product launch -- Abstral, for the management of breakthrough pain in patients with cancer.

So what: As a refresher, Galena acquired Abstral sublingual tablets from Orexo in March for sale within the United States. Abstral is approved as a breakthrough cancer pain treatment in patients in the U.S. and in Europe; it is most often prescribed as a therapy measure in cases of advanced breast cancer and for patients who have solid tumors. Peak sales estimates in the U.S. vary wildly but are generally around $50 million, compared to the $54 million in sales that Abstral delivered in Europe last year.

Now what: The commercial launch of Abstral in the U.S. today is certainly good news by adding revenue to reduce Galena's cash burn rate. But all eyes are really on the company's cancer vaccine NeuVax, which is currently in late-stage trials for HER2-targeted breast cancer. Abstral alone likely doesn't offer Galena enough to make it to profitability, so the company will likely need positive results from NeuVax if it hopes to continue heading higher. One catch: We're about three years from getting those phase 3 results. I would personally prefer to wait on the sidelines until we have those concrete results rather than chase this stock higher or lower on news like we're witnessing today.

The two revolutionary biotechs you should be watching instead
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.


Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 03, 2013, at 1:41 PM, carolcoggins wrote:

    The company anticipates revenues between $1.5 million-$3 million in 2013, $8 million-$12 million in 2014, and peaking at $40 million-$60 million in revenues in three to five years, assuming a 10-15 percent market share.

  • Report this Comment On October 04, 2013, at 2:41 PM, BrianNichols wrote:

    I definitely don't think it's best to wait. This isn't a one billion dollar company. It has a market cap of $200m with a product that could create $2b annually. The risk/reward ratio is favorable, and NeuVax will limit dilution (hopefully). I hardly consider GALE to be pricey

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2667408, ~/Articles/ArticleHandler.aspx, 9/18/2014 5:52:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement