Why Galena Biopharma Inc. Shares Roared Higher

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  )  advanced as much as 28% after the biopharmaceutical company focused on developing cancer therapies received two price target hikes from Wall Street firms and announced the first patient enrollment in a phase 2 clinical trial for its GALE-301 treatment.

So what: GALE-301 is a cancer immunotherapy that targets the folate binding protein that is overexpressed in breast, ovarian, and endometrial cancer. Immunotherapy research (teaching the body's immune system to recognize and fight back against cancer cells) was very popular among investors in 2013, and the start of a pivotal phase 2 study is certain to excite shareholders. Two price target hikes following this news are also giving shares a lift. Maxim Group raised its price target to $9 from $6, while Piper Jaffray boosted its price target to $7 from $2.75.

Now what: Although shareholders are clearly excited about its FBP immunotherapy, much of Galena's valuation is baked into the success of NeuVax which is currently in phase 3 trials. Unfortunately, the breast cancer trial involving NeuVax is going to take years, so investors will be waiting quite some time without many catalysts. I'm not saying NeuVax won't be successful, but this mammoth rally in Galena's share price is likely unwarranted until we get to see that top-line phase 3 NeuVax data.

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Read/Post Comments (6) | Recommend This Article (1)

Comments from our Foolish Readers

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  • Report this Comment On January 08, 2014, at 3:54 PM, blazinw418 wrote:

    Not a single sentence about one of the biggest catalysts coming in a few short months is better than expected sales from Abstral!!!!

    Nice try, You are a Joke!!! Not even a Blip on the share price post article.

  • Report this Comment On January 08, 2014, at 4:21 PM, JMHEIN wrote:

    Abstral sales? Preliminary trial results? There are multiple large catalysts in 2014...

  • Report this Comment On January 08, 2014, at 4:46 PM, bigmac7406 wrote:

    For more Accurate info visit: Clinicaltrials.gov (Search NeuVax or Galena Biopharma)

    Phase 3 NeuVax trials are set to be completed and FDA decision made by mid-2015. By the time that announcement is made Gale will likely be trading at $40 per share. The share price will likely skyrocket from there.

  • Report this Comment On January 08, 2014, at 10:09 PM, ftwitty wrote:

    I just came across this article. Was going to comment about Abstral, but see a few others beat me to it! What I will add, however, is that NeuVax is most certainly not baked in. Investors know that final results are awhile away (unless something unexpected happens, of course) -- however, there is some level of anticipation regarding interim data on both NeuVax and FBP. I believe the current PPS, even with the rapid rise, does not factor in Abstral fully. Guidance from management is relatively low as compared to how the product does in Europe. So, there is speculation that there will be a surprise to the upside where Abstral is concerned. In fact, it was noted in one of the upgrades. There is a $9 price target for a reason -- and I expect even that is low. PJ raised its target to $7 after it had already touched $6 -- not exactly putting it on the line! At least $9 is more ambitious and probably closer to the where it will be in the next few weeks, IMO.

  • Report this Comment On January 09, 2014, at 4:00 AM, drama99 wrote:

    I think you were baked when you wrote this drivel..

  • Report this Comment On January 09, 2014, at 8:17 AM, PoolSkunk wrote:

    Nice feedback from the day-traders above, I see.

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