The waiting game
The tables are clearly stacked against small biotech companies developing cancer drugs. History has shown that few (if any) have successfully had the Food and Drug Administration approve a late-stage cancer drug. While mid-stage trials of Galena Biopharma's (NASDAQ: GALE ) HER2-targeting breast cancer vaccine have been promising thus far, the chances of an approval seem a long way off.
In phase 1/2 trials the recurrence rate was reduced to just 5.6% in the NeuVax arm compared to a 25.9% recurrence rate in the control arm after a 60-month period. However, the split patient pool for these vaccines was relatively small (187 people) and it will take an additional three years to determine whether NeuVax meets its primary endpoint of disease-free survival once the phase 3 study is full. Including an FDA panel review and FDA PDUFA decision, we could be looking at 2017 before NeuVax even has the slightest chance at hitting the market.
Also, nearly Galena's entire pipeline is made up of some trial involving NeuVax, so a failure here could be a potentially big blow to shareholder confidence. This is a situation where I'd like to believe NeuVax could succeed, but there are viable reasons -- and a three-year wait -- to believe that this valuation is far from deserved."
Sentiment: Strong Sell