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Why Galena Biopharma Shares Jumped

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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.

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  • 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

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Related Tickers

9/26/2016 4:00 PM
GALE $0.35 Down -0.02 -4.75%
Galena Biopharma CAPS Rating: *