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  • JMP Securities Provides Detailed Valuation Of Galena Biopharma, Inc. (GALE) 0 comments
    Aug 5, 2013 5:54 PM | about stocks: JMP

    JMP Securities recently initiated coverage on Galena Biopharma, Inc. with a market outperform rating and a $5 price target.

    Key upcoming milestones for Galena include the commercial launch of the company's Abstral drug during the fourth quarter of 2013, along with initial results from Phase I/II trials of the company's FBP vaccine. Completion of enrollment in the Phase III PRESENT trial of Galena's NeuVax vaccine is anticipated to occur by year-end 2013, and interim analysis of the PRESENT trial is expected in the first half of 2014, with results from the trial expected between the fourth quarter of 2016 and the first quarter of 2017.

    A biopharmaceutical company based in Portland, Ore., Galena was formed with a focus on the cancer immunotherapy assets originally developed by Apthera and internationally recognized breast cancer academic Dr. George Peoples. NeuVax, the company's lead development candidate, is a vaccine designed to train the immune system to recognize and destroy breast cancer cells. JMP Securities believes this vaccine - with positive results from the ongoing Phase III trial in the Herceptin-ineligible adjuvant breast cancer setting - can provide an important treatment option for a patient population with a 25% risk of disease recurrence and a current therapeutic paradigm of "watch and wait." The analysts see potential for expanded use of NeuVax in combination with Herceptin in the established adjuvant breast cancer market.

    In the view of JMP Securities, the two investigator-led Phase II trials of NeuVax have provided valuable information for the design of the Phase III PRESENT trial. Encouraging signals of efficacy were demonstrated in the Phase II trials on the disease-free survival (NYSE:DFS) endpoint (also the primary endpoint in Phase III), and the trials also defined the patient population, dose and dosing regimen for Phase III development. The trials specifically demonstrated that the best responses to NeuVax were in patients with node-positive breast cancer who have a high disease-recurrence risk, which includes those with low- to intermediate-level HER2 expression. DFS was further sustained in patients who received booster vaccinations in addition to the six months of initial treatment - a factor that has been included in the ongoing Phase III trial. Though the analysts acknowledge that NeuVax's Phase II trials were not fully controlled randomized trials, JMP Securities believes results from the trials demonstrated compelling efficacy evidence and informed the optimal design for maximizing an opportunity for Phase III success.

    The Phase III PRESENT trial is being conducted under an SPA with a primary endpoint of DFS at 36 months. If the PRESENT trial yields positive results, JMP Securities is confident that the SPA and regulatory precedent for Herceptin in the adjuvant breast cancer setting will provide a regulatory pathway that is measurably de-risked. Considering the patient population's currently limited treatment options, analysts believe NeuVax's commercial potential is significant. Aimed at the 50%-60% of breast cancer patients with tumors expressing low to intermediate HER2 levels - not suitable candidates for treatment with Herceptin or other HER2-targeted antibodies, including Perjeta and Kadcyla - NeuVax could benefit 30,000-40,000 women in the United States and a similar number in key European markets. This takes into consideration the other patient characteristics defined within the Phase III enrollment criteria (such as HLA serotype, nodal status, etc.).

    JMP Securities additionally believes that Galena's recent acquisition of Abstral should provide cash flow to offset some of the company's developmental cash burn. Abstral is the only available sublingual tablet formulation of fentanyl for the breakthrough cancer pain market. The drug's key points of differentiation, compared with market leaders Fentora and the generic Actiq, are convenience, rapid absorption, increased bioavailability, and improved gastrointestinal tolerability. Analysts believe Abstral's clinical profile affords an opportunity to take market share away from Fentora and potentially increase the current $390 million market through greater adoption in oncology centers, as most prescriptions in this market are currently written by pain specialists.

    Overall, the outlook is positive for Galena Biopharma as the company continues forward toward profitability.

    For more information about Galena Biopharma, visit galenabiopharma.com

    Please see disclaimer on the MissionIR website

    www.missionir.com/disclaimer.html

    Stocks: JMP
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