In my previous reports on Galena (GALE), I have already highlighted the potential of NeuVax and Abstral. NeuVax is a vaccine still underdevelopment that halts or delays the recurrence of breast cancer. The drug has already cleared Phase II trials and the induction of candidates in Phase III has already begun. Mark J. Ahn, Ph.D., President and Chief Executive Officer of Galena, presented a corporate update for the company at the Annual NewsMakers in the Biotech Industry Conference. The update contains some exciting news for investors and more reasons to invest in Galena.
Galena has recently gathered around $37 million from a share offering to get ready for the US launch of Abstral. For investors unfamiliar with the drug, Abstral is a sublingual tablet for break through cancer pain. Originally developed by Orexo Pharmaceuticals, Galena acquired U.S. sales and distribution rights for Abstral back in March. It is the first and only fentanyl sublingual tablet for the management of breakthrough cancer pain in opioid tolerant patients.
There is some reservation among investors that Galena might not be able to enter an already developed market for TRIFs. However, it should be noted that Abstral was the last drug of its kind to be approved for distribution in Europe but has still managed to capture a 25% market share (reiterated by Galena CEO in presentation linked above).
The U.S. market for TRIF's is around $400 million and Abstral can garner a reasonable share. The target market for Abstral is huge as this type of pain is a symptom for almost 33% of all cancer patients under treatment and sadly 80% of all late stage patients. Each pain episode can last anywhere from a few seconds to hours with an average time of 30 minutes. This type of pain can happen during any stage of the cancer is and is not restricted to late stages, but is more common in late stage patients. The frequency of episodes can be around 4-7 times in a single day.
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The wait for Galena investors is finally over; the company CEO has announced that it will launch Abstral this week (announced during the NewMakers in the Biotech Industry conference). The drug will be available all over the country and the company is using number different distributors to make it happen. The CEO seems pretty hopeful that Abstral's ease of use and ability to provide instant relief will help it improve lives of cancer patients. If Abstral is also able to get a 25% market share, in line with European efforts, the annual revenues of Abstral could cross $100 million (i.e., 25% of U.S. TIRF $400 million market). This product will reduce the reliability of Galena on share offerings to raise capital for NeuVax trials.
Galena has finally announced that it will be launching Abstral in United States next week. The drug will be available all over the country at once through a network of different distributors. This will be the first test of Galena and will test the ability of the company to commercialize its own products.
While the success of this product does not directly affect the trials of NeuVax, it does give Galena an opportunity to raise more capital for ongoing trials and reduce its dependency on share offerings. Eventually, this will play a major role in garnering a high acquisition bid. Long-term investors of Galena should listen to this CEO's presentation at the NewsMakers in the Biotech Industry Conference as it gives some interesting insight into the ability and prospects of NeuVax.
The valuations of Galena have already improved on the launch news of Abstral with shares rising from $1.94 to around $2.17 on Friday. The valuations will improve further on the drug's sales data. It should be noted that the shares were already trading close to $2.4 before the share offering was announced earlier this month. The valuations only plunged because the offering was priced at $2 per. With its first product already on the market, the shares should start climbing again. I believe Abstral sales will be pretty good and exceed market expectations, which makes this a perfect time to take a long position in Galena.