Chris Lau
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Chris Lau in Value Stocks,

​Galena Gets a Second Life

Sure, the direct placement of its shares for just $0.45 per share is bad news for shareholders, but the sale gives the company much- needed cash. Galena will sell 28 million shares to institutional investors. It is also including warrants that allow for the purchase of up to 14 million shares at $0.65. The total value of proceeds is $12.6 million.

The timing of the placement is unfortunate. Prior to discontinuing the NeuVax™ (nelipepimut-S) Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) clinical study, the stock traded at above $2.00.

The company must now pursue its other promising treatment studies in its pipeline. Further, the NeuVaxsetback may only be temporary. IDMC’s recommendation is irregular. On a conference call, management said:

“Let me just say that the IDMC did not do a full efficacy analysis. They did a prospectively defined interim analysis that was a very limited bio-statistical review looking at futility. They did not do a full efficacy analysis. So their futility analysis, based on what they said obviously failed. However[,] they appeared to indicate that there may have been a reversal of the course. That's all that we know and I think it's incumbent upon us to do as a[n] extensive investigation find out if there is a reason for, or that is in fact the true performance of the drug.”