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When I first began writing about Galena BioPharma (NASDAQ:GALE) I found a compelling pipeline of drugs for unmet needs. Specifically, breast cancer, which then happened to hit close to home ,and the company became even more important to me. Since that time, not only did I interview Mark Ahn, CEO of Galena (by the company's request by the way), but the stock has increased form under $2.00/share to $6.77/share as of yesterdays (1/15/2014) closing price.

As I have reported in a previous article, the potential legacy drug NeuVax is continuing in a positive direction in phase 3 clinical trials, and other drugs that are being developed are now beginning to show positive results as well.

NeuVax has been showing excellent results. The drug is a treatment for breast cancer patients so that a recurrence could be forestalled or defeated. The drug is given after regular breast cancer treatment, and when the patients are found to be cancer free. It has been filling the clinical trials and should be complete by the beginning of 2014.

At the same time, GALE is announcing some significant progress during Phase 3 trials of NeuVax already:

  • NeuVax induces a full immune response in treated patients and creates an immune memory to target residual cancer cells
  • Phase 3 PRESENT HER2 1+/2+ patients confirmed as optimal treatment population

These two findings are significant because it validates the vital use of the drug itself, especially for HER1&2 positive patients, which is what the drug is specifically designed for. In this way, those with this genetic marker will have an unmet need for breast cancer recurrence treatment, after traditional treatment has been completed.

Now the company has made some very impressive moves to build its business by partnering with other companies, and even buying them outright. As noted in this article, GALE recently bought Mills Pharmaceuticals, LLC.

Galena Biopharma (Nasdaq: GALE), a biopharmaceutical company developing and commercializing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care, today announced it has acquired Mills Pharmaceuticals, which has the worldwide rights to GALE-401 (Anagrelide CR), a patented, controlled release formulation of anagrelide. Galena expects to pursue the expedited 505(b)(2) regulatory pathway to seek approval of GALE-401 for the treatment of Essential Thrombocythemia (NYSE:ET). The Company also believes GALE-401 meets the qualifications for orphan drug status. GALE-401 has an estimated peak market size of approximately $200 million in the U.S.

With the additional drug (GALE-401) Galena will increase its market potential by about $200 million in revenues just in the USA and is seeking fast approval from the FDA....this is great news, because if this drug is approved and ready to be sold via both Galena and the newly acquired Mills, then the revenue stream will be added to the sales of the breakthrough pain drug, Abstral, which is already being sold, and has a US market potential of $400 million to start.

Here is what Mark Ahn had to say about GALE-401:

"This acquisition is an excellent fit for Galena's focused business strategy, adding another novel product to our pipeline which strengthens the depth and breadth of our hematology-oncology portfolio," said Mark J. Ahn, Ph.D., President and CEO of Galena Biopharma. "ET is a serious condition in which current agents often have very debilitating side effects. We believe GALE-401 can enhance the therapeutic index for ET patients-reducing the side effects of anagrelide while maintaining efficacy for these patients. With established guidance from the FDA on the development process, we are excited to initiate a Phase 2 study in mid-2014."

What this means to me, is that the added revenues can keep the money flowing into GALE as it keeps pursuing the phase 3 success and FDA approval of NeuVax.

If sales begin coming in more quickly, I feel that issuing additional shares of GALE stock might be able to be avoided. That of course, will be determined by the financial needs of the company to keep funding the pipeline of course.

Even if GALE does have another stock offering, my personal opinion is that there is now enough clout behind the entire company to withstand any small share dilution.

But Wait, There Is More News!

The announcement of a strategic partnership with Dr. Reddy's Laboratories Ltd (NYSE:RDY) now give NeuVax an additional global footprint in India. Keep in mind that GALE already has a strategic partnership with Teva Pharmaceuticals (NYSE:TEVA) for sales and marketing of NeuVax in Israel and other nations outside of the USA.

"This partnership with Dr. Reddy's is consistent with our strategy to expand the clinical utility of NeuVax in unmet medical needs while simultaneously increasing the commercial footprint of this innovative cancer immunotherapy," said Mark J. Ahn, Ph.D., President and CEO of Galena Biopharma. "Dr. Reddy's is a leading pharmaceutical company in India with significant commercialization and development expertise. The gastric cancer trial will add a significant indication to our pipeline for NeuVax, while doubling our potential patient population if approved."

G V Prasad, Chairman and CEO, Dr. Reddy's commented, "The partnership accelerates our strong commitment to innovation and efforts to bring newer options for cancer patients. We are delighted with our partnership with Galena Biopharma and we believe NeuVax can be a good potential treatment option to prevent the recurrence of breast and gastric cancer."

Wow, potential gastric cancer as well as breast cancer treatments with NeuVax? The market, if approved, has now grown exponentially for NeuVax!

A word about RDY per the article noted:

Dr. Reddy's Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Major therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infective. Major markets include India, USA, Russia-CIS and Europe apart from other select geographies within Emerging Markets. For more information, log on to: www.drreddys.com

And Now Some Analysts Are Taking Note

The stock has been a compelling buying opportunity for risk biotech speculators since I began covering Galena, and the list of analysts following the company is beginning to grow. The latest report came in this article.

Roth Capital boosts its price target on Galena Biopharma (Nasdaq: GALE) from $11 to $12, while maintaining a Buy rating on the name....Roth analyst Joseph Pantginis notes that Galena's announcement was a positive development. He commented, Management has indicated for last couple of years that it would be seeking regional partnerships for NeuVax to expand its potential global market penetration ... We believe that management continues to pursue a partnership in a major territory such as the EU or US and continues to deliver on our expectations. Galena continues to transform itself before our eyes, first as a leading cancer immunotherapy company with NeuVax and FBP vaccines but also as a revenue generating company with Abstral for breakthrough cancer pain and likely GALE-401 in 2017.

Even Jim Cramer weighed in on this tiny company just last week:

Galena Pharmaceutical (GALE): "That is a late stage oncology drug company. I'm willing to bless it. I'm willing to speculate."

Some might scoff at this, but Cramer does not generally weigh in on tiny companies folks!

The Bottom Line

It is my opinion that Galena BioPharma offers a very compelling risk/reward opportunity for the more aggressive investor. Keep in mind that anything can happen with the FDA; holds, rejections, delays, etc., that could impact the share price.

Also, if the company needs massive amounts of money to keep moving ahead, it could very well add shares which tends to dilute the value of existing shares.

That being said, it is my opinion that based on the most recent developments, Galena has a strong potential for outstanding growth and capital appreciation.

Disclaimer: The author is NOT a biotech expert and the opinions are not recommendations to either buy or sell any security. The risks associated with biotech stocks is that anything can happen prior to any drug approval by the FDA. Please remember to do your own research prior to making any investment decisions.

Disclosure: I am long GALE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I own shares of GALE as ITM LEAP OPTIONS

Source: Galena Partners With Other Companies And Offers Even More Strength Going Forward