With the recent publication of an article here on Seeking Alpha, questions were raised with the concerns about Galena (NASDAQ:GALE) as a company as well as its drug pipeline.
I have had the opportunity to reach out to my contacts, specifically the EVP/COO, Jason Rando, at Tiberend Strategic Advisors, the PR firm that handles Galena. My contacts at Tiberend have enabled me to interview the CEO of Galena, Mark Ahn, once back in August I believe, and again last night. The interview should help clarify where Galena has been, is headed, and its goals.
The questions are brief, to the point and specific. Mark Ahn's responses are direct and fact based.
As Seeking Alpha states: Read, Decide, Invest
RS: Hi Mark, thanks for taking time to do this interview and responding to as many questions that you can. All any investor can ever hope for is the truth and the facts and hopefully you can shed some light on issues that I feel need to be addressed. With that, let's get right to my questions: There has been a lot made of the recent insider selling of options, realizing that you can only speak for yourself can you shed some light on why you chose to sell your options?
MA: Of course Alan, I've been a board member since 2007 and CEO since 2011, and invested my own money in the company at inception and have purchased shares along the way. We've grown the company from $20 to $500 million market cap. I sold less than 20% of my equity position to diversify for my family. I'm contracted as the CEO and fully committed to the company's success and building significant further value for all shareholders.
RS: Thanks Mark. There have been allegations that Galena is under investigation by the SEC. Is that true or false?
MA: There are no ongoing SEC investigations. Period.
RS: Let me ask this, after the Seeking Alpha article came out, there were several other articles and blogs written about the marketing of the drug Abstral. The "free" giveaway and specifically Bronte Capital calling Galena "hitting a new low in the pharma business". Can you give us a clear picture of the marketing of Abstral?
MA: Absolutely, as an oncology focused company, Galena Biopharma's first priority is patients. Abstral is approved for cancer patients suffering from breakthrough pain. Breakthrough cancer pain is an often debilitating condition caused directly from a patient's cancer, or from their treatment to fight the disease. Breakthrough cancer pain significantly impacts a patient's quality of life, both physically and emotionally. Abstral is an important treatment option to provide supportive care for these patients to help them go about their daily lives. Abstral is only available through a prescription from a physician.
The diversity of insurance carriers in the United States requires very specific systems to be followed in order for patients to receive coverage for their prescribed medications. As a result, Galena has established a Patient Assistance Program to help patients who need financial assistance to receive their medication. This effort is consistent with our research-led, patient-focused strategy, to ensure everyone who can benefit from Abstral, receives the therapy for their condition.
The Company remains dedicated to our mission of developing and commercializing innovative, targeted treatments that address major unmet medical needs to advance cancer care. Galena's corporate strategy is to build a full-scale commercial organization led by Abstral, with three additional products in the pipeline in five ongoing or planned clinical trials.
RS: Another issue that had been raised is perhaps a very significant one for potential investors and current shareholders. What patents does Galena hold pertaining to NeuVax and intellectual property?
MA: NeuVax has a broad family of patents that extend our intellectual property protection through at least 2028. In addition, we believe NeuVax is eligible for 12 years of data exclusivity under the Patient Protection and Affordable Care Act.
RS: Another point that has been brought up, and hopefully you can shed some light on this for me in particular, is whether or not the FDA needs to approve Phase 3 clinical trials?
MA: I believe this should explain much of that Alan: The planned Phase 3 patient population as defined in the FDA-approved Special Protocol Assessment (SPA) includes breast cancer patients who are node positive, have low to intermediate HER2 expression (HER2 1+ and 2+ by IHC), are HLA A2+ & A3+ and who are disease free following standard of care therapy.
RS: Staying with clinical trials, much was made in that negative article about the results of NeuVax in Phase 2, and that they were insignificant. What is your response to those allegations?
MA: Of course, there have been five separate Phase 1 and 2 clinical studies conducted with NeuVax. All of these studies shaped the dose, schedule, and target patient population for the randomized, double-blinded multinational Phase 3 registration study currently being conducted under a US FDA-approved special protocol assessment.
Key highlights from the Phase 2 trial include: Statistically significant increase in disease free survival (NYSE:DFS) at 36 months in the NeuVax treated group vs the control group for the planned Phase 3 patient population (p=0.035). The vaccine treated group showed no recurrences of cancer (0% recurrence rate), while the control group demonstrated a 22% recurrence rate, which is consistent with historical norms.
Importantly, an excellent safety profile, with no serious adverse events (SAEs) related to drug reported to date. All adverse events (AEs) reported were minor and resolved within 24 hours.
In the ITT (intent to treat) population who received all ranges of doses and schedules, the low to intermediate HER2 expressers continued to show significant activity in improvement of DFS at 36 months (p=0.045), with the vaccine group demonstrating a reduction of 66% in relative risk for recurrence. This data demonstrates strong support for targeting of low to intermediate HER2 expressers, a group for which there is currently no HER2 directed therapies.
RS: Let me get back to the Abstral issue. Much has been alleged about this product, in a negative light, and I believe shareholders, as well as all cancer patients, should have some clarity about the efficacy of the drug compared to the Insys fentanyl product.
MA: There are no head-to-head studies of Abstral versus competitors. Instead, the reference product is Actiq, an earlier generation of rapidly onset opioids. In Europe, Abstral is the market leader with 25% market share because it delivers the analgesic power and increased bioavailability of micronized fentanyl in a more convenient sublingual tablet which rapidly dissolves under the tongue in seconds, provides relief of breakthrough pain in minutes, and matches the duration of the entire pain episode.
RS: Mark, I appreciate the time you have taken from your busy schedule, but one final question for you if I may: How about the other clinical trials of all other drugs in the pipeline...any updates and successes? Would you care to share anything with our readers?
MA: Alan, what I can say is that we have grown from only NeuVax in 2011 to having four products in five clinical studies in 2014. We plan to achieve our business strategy of transforming Galena Biopharma into a fully integrated, commercial-stage biopharmaceutical company in the oncology market. Our strategy is to build value for patients and shareholders by: (1) Commercializing Abstral® (fentanyl) sublingual tablets, which we acquired for the US in March 2013, and launched in the fourth quarter of 2013; (2) Advancing our lead product candidate, NeuVaxTM (nelipepimut-S) currently in its Phase 3 randomized, multicenter PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study in 700 patients under the FDA-approved Special Protocol Assessment; (3) Continuing enrollment in our ongoing Phase 2b randomized, multicenter clinical trial expected to enroll 300 patients to study NeuVax in combination with Herceptin® (trastuzumab; Genentech/Roche); (4) The Phase 2 GALE-301 (folate binding protein (FBP)) cancer immunotherapy trials in ovarian and endometrial cancers are ongoing; and (5) Initiating our Phase 2 trial with GALE-401 (anagrelide CR), which we acquired through the acquisition of Mills Pharma in Jan 2014, for essential thrombocythemia (ET) which we plan to pursue under the accelerated 505(b)2 regulatory pathway. In addition, we will continue to pursue strategic alliances and acquisitions of other cancer treatments to complement or add to our existing product pipeline.
RS: Thanks so much for giving some much needed clarity, in response to many of the issues that have been raised. That being said, I am looking forward to our next interview at some point in the future.
Folks, The bottom line to all of this is that rather than come from outside sources and opinions of others, the CEO of Galena has placed his responses for the public to read and decide for themselves. I believe Mr. Ahn has been candid, direct and straightforward in his responses. I am not here to tell anyone to buy the stock, sell the stock or short the stock. I myself have a long position in Galena, and have not sold anything.
The decision, as always, is yours to make.
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.