|Written by GSCR Staff|
|Tuesday, 19 November 2013 08:14|
Sunday and early Monday there were some highly unusual storms with devastating winds and tornadoes in the Midwest causing a lot of damage and human casualties. Every time these events occur, all one can do is be grateful it was not you and provide any support for those affected. Let’s hope the recovery is swift and effective.
In yesterday’s Goldman Guide we discussed the major headwinds facing President Obama’s Affordable Care Act as well as some of the latest IPO offerings to hit the market as the year winds down.
We decided to look at a stock that is a combination along the lines of both themes, which is a biotech stock that got beaten down after the initial IPO that may offer a good value going forward.
Galena Biopharma, Inc. (NASDAQ – GALE - $3.04) was just in the wrong place at the wrong time when the Company went public in March 2008. The stock shot up to $13.60 on the second day of trading, then proceeded to get beaten down, along with the rest of the market to $0.39 in December 2011.
Galena Biopharma focuses on late stage oncology treatments that are currently unmet in late stage cancer treatment. The lead product candidate includes NeuVax (nelipepimut-S or E75), which is in Phase 3 clinical trials for preventing the recurrence of breast cancer. It also develops Folate Binding Protein-E39, a targeted vaccine that is in Phase 1/2 clinical trials for the prevention of recurrence in gynecological cancers, such as ovarian and endometrial adenocarconimas.
The Company’s breakthrough cancer pain pill, Abstral, has been FDA approved and is set to be marketed and sold. The drug is already generating approximately $55 million annually in revenue in Europe, and even at low estimates could generate $60 million per year in the U.S.
With a market cap of only $320 million, a drug about to be sold on the U.S. market and two others well along the clinical trial phase, GALE maybe is a solid acquisition target as big pharma looks to add late stage cancer treatment drugs to its platforms. A 57% rise in price level with an average of 3.5 million shares traded per day over the last three months indicates a strong accumulation has begun and may not be over. The Daily Moving Average technical analysis gives the signal that the bulls are still running very strong and have plenty of tailwinds left for at least 50 days.
Look for GALE to hit north of the $4.00 mark sometime in early Q1 2014.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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