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Galena falls on latest data for cancer treatment

NEW YORK (AP) -- Shares of Galena Biopharma Inc. slumped Friday, but analysts say the latest clinical trial for the company's cancer treatment NeuVax is positive.

THE SPARK: Galena is testing NeuVax as a treatment for breast cancer. Five years after their treatment started, the company said 5.6 percent of NeuVax patients had had a recurrence, compared to 25.9 percent of patients who received only standard treatment. The Lake Oswego, Ore., company said 89.7 percent of patients treated with NeuVax were disease free after five years, compared to 80.3 percent of patients who hadn't received NeuVax.

Patients in the study were disease-free after completing standard treatment for the disease. Galena said 94.4 percent of the NeuVax patients were disease-free after five years, compared to 74.1 percent of patients in the control group.

THE BIG PICTURE: NeuVax is Galena's most experimental drug, and it is intended to induce immunity to breast cancer recurrence in certain patients. NeuVax is intended for women who are not eligible for treatment with Roche's breast cancer drug Herceptin because they have lower levels of the HER-2 gene.

The drug is given by injection once a month for six months. After that, booster shots are given every six months. In 2012 Galena started a late-stage trial where patients will be treated for three years, receiving a total of 11 injections.

THE ANALYSIS: MLV & Co. analyst Megan McCloskey Dow said Friday that data from the late-stage trial is a long way off, as the company should finish enrolling patients in the middle of 2013, and results will be available in 2016. However she said the results the company reported Friday are "phenomenal."

"The data are really great," McCloskey said in a telephone interview.

In a note to clients, Dawson James Securities analyst Michael King said NeuVax had "an exceptionally favorable safety profile and an impressive reduction in the risk of disease recurrence in women with node-positive disease."

Both analysts rate have Galena shares at the equivalent of "Buy." McCloskey Dow has a price target of $6 per share and King's price target is $3 per share.

SHARE ACTION: Shares of Galena Biopharma lost 12 cents, or 5.5 percent, to $2.06 on Friday. The stock has more than quadrupled in value over the last year after closing at 46 cents on Dec. 8, 2011.