Why Galena Biopharma Shares Soared

Galena goes shopping and investors applaud its purchase. Do shares still have room to run higher or are they now overvalued?

Jan 13, 2014 at 3:45PM

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 20% after the company focused on developing cancer therapies announced the acquisition of Mills Pharmaceuticals and received a price target upgrade from Roth Capital.

So what: According a Galena press release that did not mention any financial terms, the acquisition of Mills Pharmaceuticals gives Galena worldwide rights to GALE-401, a patented, controlled release formulation of anagrelide. Galena expects to pursue an expedited regulatory pathway for FDA approval of GALE-401 as a treatment for essential thrombocythemia, a rare bone marrow disease. Galena estimates the experimental therapy has peak market potential of $200 million. On the heels of this news, Roth Capital boosted its price target on Galena to $11 from $7.

Now what: If Galena can get GALE-401 on an expedited review path this will likely be a smart purchase, although we can never tell for certain without financial terms of the deal being disclosed. Ultimately, Galena shares are roaring higher at just the right time -- cancer immunotherapy treatments are a hot issue among investors at the moment, and the mecca of all health-care events, the JPMorgan Healthcare Conference, is going on this week. I would, however, still recommend exercising caution here with Galena, as many of its major catalysts, specifically as they relate to NeuVax, are still years away.

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Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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