What: Shares of Galena Biopharma , a predominantly clinical-stage biopharmaceutical company focused on developing cancer immunotherapy vaccines, exploded higher by 16% in May (per data from S&P Capital IQ)after the company announced new study results ahead of the American Society of Clinical Oncology's annual meeting.
So what: Based on Galena's press release, which it issued before the market opened on May 27, the company has completed two new abstracts -- one concerning immunotherapy candidate GALE-301 and the other concerning a companion diagnostic test for NeuVax, an adjuvant vaccine undergoing late-stage trials as a recurrence deterrent for patients with low-to-moderate HER2 breast cancer.
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The most striking results came from its phase 1/2a dose finding study involving GALE-301 as a vaccine to prevent the recurrence of ovarian and endometrial cancers. In total, 51 patients were enrolled in the trial (22 in the control group and 29 in the intent-to-treat cohort), with the 1,000 milligram cohort showing early signs of efficacy. Based on 9.8 months of median follow-up, there was just one recurrence in the 1,000 mg cohort (which totaled 15 patients), compared to 11 of the 22 in the control vaccine group. Overall, the complete response was 38% for GALE-301 and 50% for the vaccine, but if you focus solely on the 1,000 mg group GALE-301 performed much better. Additionally, the estimate for disease-free survival at two years was 85.7% in the 1,000 mg cohort compared to 19.2% in the vaccine group -- a 78% reduction in relative risk of recurrence.
The company's second abstract noted that the Leica Bond Oracle HER2 immunohistochemistry system was able to "discriminate HER protein expression at the low and intermediate levels in breast cancer tumors," meaning it could be a promising companion diagnostic for qualifying a patient to receive NeuVax.
Patient receiving NeuVax injection. Source: Galena Biopharma.
Now what: These abstracts are certainly good news for Galena, which has been reeling for more than a year now following allegations of hiring a third-party stock promoter, the departure of its CEO, and subpar Abstral sales relative to management's expectations after the drug's first quarter on the market in 2013.
Of course, what will really matter is whether NeuVax hits the mark. NeuVax is Galena's most advanced therapy, and it's where the majority of its valuation is tied up. Although the study is not expected to be completed until 2018, Galena is expected to deliver a interim analysis in the fourth quarter of this year or first quarter of 2016. This should give investors some idea of NeuVax's efficacy, although we are not likely to get the fully story until 2018.
Though GALE-301's five-year midstage trial demonstrated a remarkable 78% reduction in the risk of recurrence, my lack of faith in Galena's management team, as well as its shaky cash position (even with a recent common stock offering) give me enough reason to stick to the sidelines for the time being. If NeuVax works, investors should have plenty of opportunities to make money beyond the initial data pop, such as with partnerships or actual sales of the drug.
The article Why Galena Biopharma Inc. Exploded Higher in May originally appeared on Fool.com.
Sean Williamshas no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, track every pick he makes under the screen nameTrackUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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