Rationales for investing in Galena Biopharma- ( Gale).
" Of course there is some risk- but we are in stock market."
1. Adjuvant treatment of breast cancer is the single largest market in cancer chemotherapy market- it is larger than market for chemotherapy for many other cancer types combined.
2. Adjuvant treatment means treatment on patient whose cancer was completely removed- to reduce the chance of cancer coming back - for example- in high risk node positive breast cancer patient after cancer was completely removed, recurrent rate is around 70- 80% if no adjuvant treatment were given ! ).
3. Herceptin cover about 25 % of adjuvant market ( only for Her-2 3 + patient populations - Between PRESENT trial (Her-2 1+ and 2 + )and NeuVax + Herceptin trial ( Her-2 3+ ), NeuVax will cover 70- 75% of breast cancer adjuvant chemo market. ( that is after calculating HLA A2/A3 + patients who is in clinical trials)
4. Herceptin market share is around 7 billion- NeuVax is potentially 3 times that. In the best case scenario- potential price per share ( 3x market share - 7x3 x3 = 63 billion/ 105 million outstanding share = > $600 pps)- yes - it is outrageous - admit that this is the best case scenario- let's say- only half of this materialize- pps is >$300- if only a quarter materialize- pps is still > $150 ).
5. Can anyone be sure it is a given that NeuVax is going to be approved- of course not- otherwise Gale will be trading at least around $ 150 right now. But science is very sound and phase II data is very strong- current Phase III PRESENT trial is, if anything, optimized version of phase II trial.( optimized in several ways- dosing, patient selection, booster treatment, etc- ). Any logical person will get to conclusion that it is much, much more likely to be a positive study than a negative one.
6. Previously bashers had claimed that phase II positive result could be from just GM-CSF effect alone rather than from NeuVax- but - MD Anderson study of GM-CSF on breast cancer was a negative study- therefore it is a lie to claim that NeuVax phase II result is from GM-CSF effect.
7. After attacking these facts with some twisted, half truth arguments, recently another basher article try to scare away investor by twisting timeline of NeuVax study and FDA approval- implying nothing will happen at least until 2022 even if study is positive.
8. Let's review this here:
A. PRESENT trial will be completing 700 patient accrual in coming months which in itself is a major achievement- God knows how many ambitious phase III study has been stalled due to lack of accrual especially in large multi-institutional international studies. Without lots of collaboration and without a strong believe in underlying science it is impossible. Gale has achieved this.
B. Interim analysis will be done likely to be around/after mid 2014 and result out soon after this. Ahn was conservative and playing safe when he said it will be out before the year end.
It is extremely unlikely that study will be halted for poor outcome by interim analysis as there was no safety issues with 5 year follow up on phase II study. On the other hand, if result are profoundly good- you know what can happen- see what happened to PCYC drug Ibrutinib Chronic Lymphoid Leukemia trial- study was stop after interim analysis showed Ibrutinib was much better. All patients on comparison arm were switch to Ibrutinib for ethical reason. " www.medscape.com/viewarticle/818948 " ( see PCYC pps history over last 12 months - from < $20 to $ 130-150)
C. If study continue after interim analysis- the sizable number of the patients ( not all ) would have finished 3 year completion of booster treatment- hence completion of data collection on these patient group by late 2015/ early 2016- and people would have known/predict the final outcome of the study by then. If data is positive- one has to be really stupid to think he can still buy it less than $100 by then.
D. Presuming that after interim analysis study continue without crossing over patient from placebo arm to treatment arm - as primary endpoint of the study is 3 year disease free survival- the very latest time we will know final result for FDA review will be before mid 2017 ( not 2022 as SA article lied). But as mentioned above- one potential abrupt game changer is before end of this year when interim result are published and another very likely scenario is gradual continue rise in PPS as data continue to accumulate with leak information ( as it happen with many bio stocks).
Not only that future is bright, it is also not very far.
9. There is a lot of noise about Abstral sale ,market share , coupons and royalties due , etc, etc - But the bottom line is Gale will be cash flow neutral or have positive cash flow by mid 2014- this is said by Ahn in recent interview after Leerink Global Healthcare Conference meeting on 2/12/14 - one can listen in Galena website ). And I believe him- if anything , he is too soft in pushing the company value- very conservative - as oppose to several CEOs from other small biotech companies.
These are rationales for investing in Gale - this is not another bread and butter ordinary stock- this is one of those once in a life time opportunity- potential life changing stock. It is fit only for intellectually superior, patient individuals who can not be fooled by some manipulative articles.
Oh- I did not even mention FBP , NeuVax in Gastric cancer, Teva, Dr Reddy, Anagrelide CR ( probable FDA approval in 2015 or 2016). OR - is it necessary ? . . . . . . . . . . . . . . .
Disclosure: I am long GALE.