Since October 31, shares of biopharma company Galena Biopharma have surged nearly 100 percent. Wall Street Cheat Sheet contributor Tom Meyer recently wrote an article defining four factors that he believes will spur shares of Galena Biopharma to continue their ascent.
To read the full article visit http://wallstcheatsheet.com/stocks/4-reasons-why-galena-biopharma-is-headed-higher.html
1. Analyst Coverage
Research firm Oppenheimer on November 26 initiated coverage of Galena, issuing an Outperform rating on the stock with a price target of $6. Oppenheimer placed heavy consideration on the commercial potential of Galena’s NeuVax.
Aside from prior ratings, Meyers also notes that since June 2012 five other firms have issued a positive rating on the company.
2. Institutional Holdings
“One of the best ways for retail investors to determine the potential of a company is to determine if institutions are holding shares of the company. In Galena’s case, they certainly are,” writes Meyers.
Institutions own about 17 percent of Galena’s outstanding shares, according to most recent SEC filings, representing a total value of nearly $70 million and signaling high confidence that the company is well-positioned for success.
3. Abstral® Potential
Abstral is the company’s fentanyl sublingual tablet for the management of breakthrough cancer pain in patients that have developed opioid tolerance. Galena acquired the drug in March 2013 and officially launched the product this fall.
“Breakthrough pain is known to interfere with daily living, which is why Abstral has the potential for massive success. … Although the official launch didn’t occur until October, the company did have some minimal sales of Abstral during the third quarter that totaled $1.2 million. Galena has now fully commenced its promotional efforts for Abstral so investors can expect sales to increase exponentially going forward,” Meyers states in his article.
4. Valuation
Taking into consideration the other products in Galena’s pipeline, Meyers estimates that Galena can capture 25 percent of the TIRF (transmucosal immediate-release fentanyl market), expected to hit $700 million by 2018, for annual sales of approximately $175 million.
“Oppenheimer determined that Galena Biopharma was worth $6 per share based simply on the potential of NeuVax,” writes Meyers. “However, given the above market analysis of Abstral, I think it is likely that Galena could get a large bump in valuation over the coming years.”
In conclusion Meyers writes, “Galena Biopharma certainly has a lot going for it. It is technically strong and has maintained its price level despite soaring nearly 100 percent since the beginning of the month. With lots of catalysts coming over the next 12 months and increased awareness by both research firms and institutions, investors should strongly consider getting in now before it’s too late.”
For more information, visit www.galenabiopharma.com
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