March 10, 2017
By Mark Terry, BioSpace.com Breaking News Staff
San Ramon, Calif.-based Galena Biopharma announced that it had hired Canaccord Genuity to help it develop a plan to sell the company or its assets.
This comes about five weeks after its chief executive officer, Mark Schwartz, stepped down over a civil and criminal investigation into the company’s marketing of Abstral (fentanyl). The company was under investigation by the U.S. Department of Justice, looking into several employees, as well as two high-prescribing physicians, over a rebate deal between the company and the two doctors.
Schwartz took over the job in 2014. At that time, the company was headquartered in Lake Oswego, Ore. Its then-CEO Mark Ahn resigned after Galena was, according to Xconomy,“accused of tricking potential investors by allegedly paying a publicity firm to inflate its stock. Galena settled a lawsuit for $20 million in 2015 (most of it was paid by insurance).”
The company indicates that it is reviewing options, including “a sale of the company, a business combination, a merger or reverse merger with another party, continuing to advance the clinical programs as a stand-alone entity, and a license or other disposition of corporate assets of the Company.”
The company’s assets include GALE-401, currently in a Phase III-ready program for essential thrombocythemia, and an immune-oncology franchise for prevention of recurrence in breast and ovarian cancer, that includes NeuVax (nelipepimut-S), which has three Phase II clinical trials, a Phase IIb trial that expects to complete enrollment in the second quarter, and GALE-301 and GALE-302, which completed early-stage trials in ovarian cancer.
The Phase III trial of NeuVax didn’t go well. The drug didn’t perform as well as placebo, which caused independent data monitors to recommend halting the trial, which was then officially closed on August 10, 2016.
“Although the Phase III PRESENT trial of the HER2 vaccine was terminated early, after unblinding the data, it appears that the trial failed due to a design flaw in the study and not due to lack of activity of the vaccine (data to be published soon),” wrote George Peoples to Xconomy. Peoples is the San Antonio-based scientist who developed NeuVax.
Galena, which was then known as RXi Pharmaceuticals and headquartered in Worcester, Mass., acquired the Arizona biotech company, Apthera, in 2011 that held the license for NeuVax. Apthera had licensed NeuVax from the MD Anderson Cancer Center in Houston and the Henry Jackson Foundation in 2006.
Not surprisingly, Galena has tanked recently. Shares are currently trading for $0.59. Shares traded at $45.40 on June 22, 2016, before they plunged to $7 on June 29, 2016.
The stock has a one-year high of $49.80 and a one-year low of $0.21. Its 50-day moving average is $1.09 and its 200-day moving average is $1.21. On February 6, FBR analyst Vernon Bernardino downgraded the stock to “Hold,” with a price target of $4. On February 2, Jason McCarthy, an analyst with Maxim, downgraded the stock to “Hold.”
