Galena Biopharma Releases Q4 Report Amid SEC Investigation

By Sarah Roden

Galena Biopharma (NASDAQ: GALE) reported fourth quarter and year-end 2014 results on March 5th. The biopharmaceutical company specializes in oncology drugs and saw significant advancements in NeuVax, a drug used to prevent recurring cancers in survivors.

The company posted net revenue of $3.2 million for the fourth quarter, more than doubled from the same quarter of last year and beating the analyst consensus of $2.5 million. Galena posted a loss per basic share of ($0.06) for the quarter, beating the analyst consensus of ($0.11). Galena was pleased with the performance of Abstral, a pain reducing drug for cancer patients, as the drug hit its revenue target and brought in $9.3 million in 2014. Looking forward, the company expects net revenue of $15 million to $18 million for 2015.

CEO Dr. Mark Schwartz was pleased with the substantial advancements achieved in 2014. He expects to “nearly double… overall commercial sales in 2015” with the continued sale of Abstral combined with Zuplenz; Galena’s second commercial product.

Aside from Galena Biopharma’s earnings report, the company is currently under investigation by the SEC regarding a shareholder derivative suit. CEO Dr. Schwartz acknowledged this on a conference call, stating, “Although the litigation matters take time to resolve, the company is committed to bringing these matters to closure in a timely manner. So we cannot say with certainty, we believe we will be able to resolve the outstanding matters in a way that will not materially impact our cash position by the fundamentals of our business.”

Analysts had mixed ratings following the release of Galena’s earnings report.

According to SmarterAnalystMara Goldstein of Cantor Fitzgerald maintained a Sell rating on Galena with a $2.00 price target even though the posted quarterly revenue of $3.2 million beat her $2.0 million estimate. Although Goldstein acknowledged that “Commercial dynamics improved,” she still expects “quarterly fluctuations.” She explained, “Given 3Q:14’s inventory de-stocking and the phase-out of the voucher program that inflated prescriptions relative to dollars collected, we expect that quarterly numbers will bounce around. Despite the strong 4Q:14 number, we have little conviction on persistence of growth, and that drives our caution.” Furthermore, Goldstein’s Sell rating stems from “concerns surrounding shareholder lawsuits/SEC investigation, patent challenge on ABSTRAL and lack of consistency from ABSTRAL sales, in the absence of meaningful clinical data from pipeline products, and the likely need for additional funding.”

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