What: Shares of Galena Biopharma , a cancer immunotherapy company, nosedived today following the company's third quarter earnings release. What appears to have struck a sour note with investors is the company's decision to jettison its current product portfolio, consisting ofAbstral sublingual tablets and Zuplenz oral soluble film, in order to focus on the clinical development of experimental stage products like the breast cancer vaccine NeuVax and thefolate binding protein immunotherapy, GALE-301, for ovarian cancer.
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So what: While this decision isn't exactly ideal, Galena's deteriorating financial situation appears to have forced management's hand on the matter. After all, Abstral's sales have never made much of an impact on the company's bottom-line, presumably because of stiff competition from Insys' Subsys in the breakthrough cancer pain setting. Insys, for example, reported Subsys sales in the third quarter of $91.1 million, although the drug's particularly strong sales have recently attracted the attention of regulators. Abstral's sales, on the other hand, were on track to come in at around $12 million to $15 million for the entire year.
Now what:According to the earnings release, the company exited the third quarter with only $34.8 million in cash and cash equivalents. And with its share price now barely hovering above $1, Galena can't readily tap the public markets without running the danger of failing to meet the Nasdaq's listing requirements. So, NeuVax's forthcoming interim data analysis for its ongoing PRESENT trial (now expected to be released in Q1 of 2016) will probably be a make or break event for this struggling biotech. As such, you may want to play it safe with this small-cap biopharma for the time being.
The article Here's Why Galena Biopharma's Stock Tanked Today originally appeared on Fool.com.
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