With Abstral already in the market with proven market potential, planned Zuplenz launch in early 2015, Neuvax phase 3 trial and multiple phase 2 trials lined up or in progress, Galena management has set the company up well for a balanced long term growth approach. This makes it a stock with immense upside potential which can reward investors well in coming months and years.
Thesis & Catalyst For Galena Biopharma, Inc. (NASDAQ:GALE)
Galena is one of the better picks in the market with the following promising products in its pipeline:
Abstral sub-lingual treatment for Break Through Cancer Pain. It is a proven best seller in the European market already. Paladin labs in Canada also has experienced reasonable success with Abstral. The prospects look promising in the US too. Time will tell if there are any reasons why the cancer patients in the US have a compelling reason to not embrace Abstral.
Zuplenz - Not much is known about this product except three things - Nausea and vomiting are a real issue for patients undergoing chemotherapy or radiation therapy; independent research estimates it to be a market over $ 1 billion and lastly, the fast absorption Pharmfilm technology makes sense for patients who have trouble keeping in what they swallow. This product launch will be helped by the fact that Galena established a key patient and provider help service capability - Galena Patient Services last year. The same Oncology channels in use for Abstral should make it easier to bring the product to market.
Anagrelide CR - The short duration (3-6 months) phase 2 and phase 3 trials mean this product candidate could advance rapidly. This should be a key candidate for 2015 approval and 2016 launch. Phase 1 has already proven the safety profile.
Neuvax - Multiple trials are underway. The reason Neuvax seems like it is destined to succeed is that Oncologists have seen it work. They started broadly by administering Neuvax to all breast cancer patients and have progressively narrowed down to a group where Neuvax has shown to be effectively over multiple trials. This is the long term future of the company undoubtedly. Interest from Dr. Reddy's lab and Teva and others is additional confirmation that Neuvax has potential. It should be a matter of time before the right statistical hypothesis (primary and secondary endpoints) and trials are proven. Skepticism about Neuvax, while understandable, seems to be more prevalent amongst short investors than the medical community.
With Abstral already generating revenue and Zuplenz slated to add to that, Galena seems well positioned to grow enough revenue to offset any cash burn related to current and planned clinical trials. Dilution seems likely but only to the extent it might help pay for the recent acquisitions of product or licensing arrangements. This dilution is far more preferable to dilution related to funding new product research, whose returns are harder to estimate.
GALE's revenue has the potential to grow exponentially in the next 12-18 months as Abstral matures and Zuplenz is launched. This along with Neuvax results in 2016 make it a good addition to a biotech investor's portfolio for a multi-fold gain in a couple of years.
The management erred in the sale of their stock earlier this year following some good announcements and the stock run-up. Until the results of the SEC investigation are announced, there will likely continue to be an overhang on the stock price.
The management so far, has shown intent to think outside the box and add innovative oncology products to their pipeline. It is important they commit sufficient resources to commercialize these products for GALE to grow from a research company to an oncology product company
Disclosure: The author is long GALE.
Additional disclosure: I have not received any remuneration for writing this article from anyone nor do I expect to receive any.