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Galena Biopharma, Inc. Message Board

  • deanofstocks deanofstocks Nov 15, 2012 12:07 PM Flag

    ----PLEASE READ!---- Finely crafted analysis on the Propthink/Galena situation.

    Data will be the determining factor, not opinions!

    I found this very well composed and articulate comment posted online during my morning researching and perusing. It is quite a find! I wanted to share it with all of you:

    I feel compelled to address the recent insanity regarding PropThink and Galena Biopharma (GALE).

    On Tuesday, GALE’s loss proved to be a good buying opportunity, as the company announced earnings that beat expectations, Maxim reiterated its “buy” with a $5.00 price target, and investors braced themselves for upcoming data in three weeks. The stock has endured one crazy week, after being violently shorted following a bearish article, to being driven higher after its corporate earnings and the events that followed. However, as fundamentals and key developments have led the stock higher, the author(s) of the PropThink piece has struck again.

    Earlier this morning PropThink published an article on Seeking Alpha, entitled “The Other Side of Galena Biopharma”. The article provides no further analysis of the company, or its argument for the stock being a “sell”. In fact, the only inclusion of information is a letter to PropThink’s Managing Editor from Galena’s attorney, which I would think most bulls would find as encouraging and most short-sellers would find discouraging.

    The fact that PropThink would publish this piece, in my opinion, shows their malicious intent. Perhaps the stock didn’t quite fall low enough for all short sells to be executed? Either way, it disrupts investor confidence and is a danger to patients who are relying on the vaccine as a form of treatment to prevent breast cancer. As a result, I am not going to spend time addressing the bear case, as their point-of-view has been reported and has attracted the eyes of attorneys. However, I do find the “letter” to be encouraging and, in some ways, PropThink’s newest piece is a strong case for those bullish on the company. What’s more interesting too is the fact that the name of the managing editor, to whom the lawyer’s letter is addressed, is blacked out for the publishing of the article.

    In the attorney’s letter to PropThink, the following statements were included in regards to PropThink’s first article:

    “The article is rife with materially inaccurate statements, which constitute, among other things, trade libel.”
    “We are in the process of preparing the complaint and determining the depth and breadth of the inaccurate statements – we currently count nearly 50 statements that are obviously false or at a minimum misleading” “As a first step, and as I asked you on the phone today, we demand that PropThink immediately take the article down from its website.”

    The PropThink article was removed from Yahoo! Finance, and to me it means that there must be some legal grounds. The letter to PropThink suggests nearly 50 statements being incorrect, which are no doubt important statements in creating the selling pressure of the stock. Other than the letter to PropThink, the article contained no further information, but continued to make statements such as, “we've never seen a successful late-stage oncology product acquired for $6M and change.”

    Following the initial PropThink piece, I was curious to see if management would address any of the questions, or if it would issue a response. Clearly judging by the letter, Galena management has been dealing with the issue, but behind closed doors. And the fact that “nearly 50 statements” are false or misleading is a positive sign for bulls.

    At the end of the day, everyone is entitled to their own opinion. I personally do not own shares of Galena, but not because I don’t find it to be promising, but rather because I don’t own biotechnology companies in its phase. It’s a stock on my radar with all potential problems priced into its stock. And the developments that have led its shares higher during the last two days were legit; meanwhile an article is simply an opinion.
    In Galena’s Q3 press release, it made mention of “recent business highlights” and that final Phase 2 trial data will be presented at the 35th Annual CTRC-AACR San Antonio Breast Cancer Symposium (SABCS) held December 4-8. In earlier data, patients were at different stages in the study, and some patients were not included. Therefore, the “final” data remains very important and a major catalyst moving forward to give investors an idea of the product’s potential success in a larger trial.

    With data being less than three weeks away, it makes sense that Galena would rally into the announcement, seeing as how all data has been positive to date. Currently, there are no treatments for women with low-intermediate levels of HER2, who are in recovery from breast cancer. This indication is a large unmet medical need and could prove to be a highly profitable indication for the company.
    Right now with the company in a large 700 patient Phase 3 trial, the final analysis will be used as a gauge of future success. If Phase data is positive then expect yet another year of great returns in 2013, followed with several upgrades and initiations of coverage. If not, then expect profit-taking and a stock that trades with far less momentum.

    Aside from opinions, whether it is a bearish piece or me writing an article that lists the company’s achievements in 2012, the only thing that matters is data. With that being said, I do think that Galena is undervalued, but is subject to upcoming data. The issue of price-paid/potential has been argued up and down by both Galena bulls and bears. On one side there are those who agree with PropThink, and say that a product purchased for just $6 million could not possibly be worth “billions” nor could it be effective. But as others have pointed out, and as history has shown us, the price paid to acquire a product truly is irrelevant.
    Most people know the story of Zytiga, the product that was purchased for $1 million by Cougar Pharmaceuticals, a company which itself was then acquired for $1 billion by Johnson o& Johnson (JNJ) one year later. Others have also pointed to Questcor Pharmaceuticals (QCOR), a company that has been successful after purchasing Acthar Gel for $200k.

    The point is that the price paid to acquire a product really does not matter. Apthera did not have the funding to continue trials, which is a normal occurrence in biotechnology. At the end of the day after all opinions have been shared, the speculation will be put to rest with clinical data. Up until that point, people will speculate, and will try to determine if Galena could be the needle in a haystack. In my opinion so far, the data looks good, and we will learn more in the coming weeks.

    Okay…rant over!

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