Why Galena Biopharma Inc. Shares Surged Higher

Galena shares are off to the races after reporting better-than-expected first-quarter results. Find out what investors should really have their eyes on.

May 7, 2014 at 2:01PM

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 primarily focused on developing therapies to treat cancer and cancer-associated pain, surged as much as 10% after reporting better-than-expected earnings results after the closing bell last night.

So what: For the quarter, Galena delivered $2.2 million in sales of breakthrough cancer pain medication Abstral, which was up from $1.3 million in the sequential fourth-quarter. Galena recorded no revenue in the year-ago quarter. Operating expenses, given Galena's push into later stage trials, jumped by 33% on the R&D front and nearly 350% from the perspective of selling, general and administrative expenses. However, a favorable change in warrant value resulted in a profit of $9.8 million compared to a loss of $5 million last year. The end result was a net loss of $2.5 million, or $0.02 per share, from $9.3 million, or $0.11 per share in the prior year period. Comparatively speaking, Wall Street was looking for a loss of $0.10 per share. Galena also issued Abstral revenue guidance of $11 million-$15 million for the year.

Now what: Overall this was a fairly positive report for Galena, although investors should take its earnings beat on the back of warrant revaluing with a grain of salt. Its phase 3 PRESENT trial for immunotherapy vaccine NeuVax is on pace to be fully enrolled by year's end, and Abstral is helping to partially counteract the company's negative cash flow. Make no mistake about it; Galena's future looks as if it'll live and die by the hands of NeuVax, so that's what shareholders should really be watching. However, today is all about higher Abstral sales and a favorable move in the valuation of its warrants.

Galena shares may have soared today, but they'll likely be hard-pressed to keep pace with this top stock over the long run
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information