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Senior Biotechnology Analyst Provides Personal Perspective On Galena Biopharma, Inc. (GALE)

|Includes: Galena Biopharma, Inc. (GALE)

In a recent article published by The Life Sciences Report, Cantor Fitzgerald Senior Biotechnology Analyst Mara Goldstein shared her view of Galena Biopharma. The interview is provided below.

The Life Sciences Report: You are following Galena Biopharma Inc. (GALE:NASDAQ). We've discussed it before. Tell me your growth theory.

Mara Goldstein: Galena's clinical program is immunotherapeutic, and the technology is peptide-based vaccines. It is developing NeuVax (nelipepimut-S or E75) to prevent recurrence of breast cancer in women who have been treated for early-stage disease and are at risk for recurrence. The company opened a 700-patient, phase 3 trial called PRESENT last year, and is enrolling patients now. Some interesting data have been generated around this vaccine from earlier studies, but obviously, it needs to demonstrate efficacy in the phase 3.

Galena has another peptide-based vaccine, folate-binding protein E39, which is in early development for ovarian and endometrial cancers that overexpress folate-binding protein (NYSE:FBP). FBP is significantly overexpressed in the vast majority of ovarian and endometrial cancers, and to a lesser degree in breast, lung, colorectal and renal cell carcinomas. Because of limited distribution of FBP in healthy tissues, it is an interesting target.

Most recently, Galena purchased product rights to Abstral (fentanyl; sublingual tablets) from Orexo AB (ORX:STO). Abstral's target market is palliative care of patients with breakthrough cancer pain in the U.S. This provides Galena with the opportunity build a commercial organization, develop a marketing plan and begin to build relationships with oncologists, purchasers and payers.

TLSR: The sublingual narcotic Abstral doesn't really fit Galena's scientific model, but it fits the business model, with sales personnel set to get into the oncology office or clinic. Does this imply that the company wants to market NeuVax when and if the product is approved?

MG: I believe that Galena wants to capture as much value from NeuVax as possible for its shareholders. I wouldn't rule anything out at this point in time.

TLSR: The patients here are women who've had a brush with breast cancer, and you can imagine they are very motivated to prevent recurrence. I would presume that a great demand for NeuVax would exist if the product is approved. The immunization will occur in multiple doses. How much will it cost patients, or payers?

MG: Potential pricing for NeuVax has not been disclosed, and I imagine that Galena has and will continue to perform sensitivity analysis on pricing. But I would expect that if NeuVax is able to prevent cancer recurrence, particularly in distant spread of disease, it would alleviate a considerable burden on the healthcare system.

For example, take a drug like Kadcyla (ado-trastuzumab emtansine), which is sold by Roche and incorporates ImmunoGen Inc.'s (IMGN:NASDAQ) monoclonal antibody drug conjugate technology using Herceptin (trastuzumab) and a cytotoxic payload. Kadcyla was approved earlier this year for previously treated metastatic disease in women who have already received treatment with Herceptin. On an annual basis, the cost of Kadcyla is about $9,800/month, or more than $90,000/year. I think there's a big range of pricing that could occur with NeuVax, and it's a function of many factors.

TLSR: The phase 2 study of NeuVax did not show statistical significance. I understand that the phase 3 PRESENT study is designed a little differently, specifically to select out for the higher-risk patients where we should see some benefit if the product works. Could you talk about that just briefly?

MG: The standard of care for HER2-positive cancer changed during the NeuVax phase 2 study-namely, the use of Herceptin for the treatment of women with early-stage disease. Early studies also showed a waning immunological response over time. The program was amended to include booster dosing in women who were more than six months from completion of the initial vaccination schedule. Of the original group of patients receiving the vaccine in the phase 2 study, roughly half received booster doses at six-month intervals.

The work done so far does suggest there is activity with NeuVax, but a phase 3 trial is necessary to tease this out. There may be a level of risk that isn't quite the same as seen in other clinical programs, given the changing protocol. But we find the immunological response to NeuVax quite interesting, as well as data that seems to point in the right direction.

TLSR: When could we be looking at approval of NeuVax. Does 2017 sound reasonable to you?

MG: It depends on the pace of enrollment and when the data roll out. 2017 might be the earliest, if enough events occur to get the trial to read out. That would be a best-case scenario.

TLSR: Investors have been focused on that NeuVax phase 3 trial, but since that study doesn't have a near-term catalyst, do you think that FBP or perhaps even the investigator-sponsored trial with NeuVax + Herceptin could move shares?

MG: The phase 2 NeuVax + Herceptin trial has an opportunity to read out sooner than the PRESENT study, and could be a catalyst for investors.

But we also think that enrollment updates for the NeuVax PRESENT trial, as well as for the FBP trial, are catalysts for Galena. Another piece is that the company is planning to relaunch Abstral in Q4/13, which provides a different sort of catalyst-one pegged to revenue generation.

Source of the interview:

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