In a Seeking Alpha article
discussing the “pipeline potential” of Galena Biopharma, writer and trading
coach John Mylant begins with noting recent analyst actions stemming from the
company’s recent acquisition of Mills Pharmaceuticals, as well as notes Galena’s
transition into a revenue-producing firm.
“Galena Biopharma (GALE) is
presently trading at $4.22 a share after a favorable reactionary move in the
market when it announced a recent acquisition that has a potential for
generating good revenue in the years ahead. I will write more about that later,
but here is a company that is highly favored by investors and analysts alike.”
To read the full article
visit http://seekingalpha.com/article/1994641
Looking into Galena’s
balance sheet over the last four quarters, Mylant surmises that the company
should have enough working capital through 2015 and potentially longer, if the
company’s expectations for revenue growth are achieved. Also notable is
Galena’s lack of debt.
“In this type of industry,
the financial position is important, but so is the debt load. I believe one
thing analysts like about the company is its long-term debt is negligible
compared to its cash position. This is what gives it such a small debt-equity
ratio. According to MSN Money, it also has a very healthy “current ratio” of
1.55,” writes Mylant.
Galena’s pipeline currently
has one product on the market and two in research stage, each of which have
strong revenue generating potential.
“The one already brought to
market, I would conservatively say has a revenue potential of at least $40
million while the other two could conservatively top $120 million or more when
they come to the market. (combined),” pens Mylant before detailing each product
and relative markets.
Regarding Galena’s recent
acquisition of Mills Pharmaceuticals, which owned worldwide rights to GALE401
for the treatment of essential thrombocythemia (ET), Mylant writes:
“Presently the drug is still
in the trial phase, and Galena believes it will eventually be eligible for orphan
status which enhances its regulatory process. A Phase 2 study is expected to be
initiated in mid-2014 and the FDA indicated that only a single Phase 3 trial
will be required for approval. In a $200 million industry where many physicians
are unhappy with the current treatment for ET, there is great potential here
for Galena. … This is only in the Phase 2 study so it’s a long-term vision. If
the clinical trials continue to go well, physicians should embrace this therapy
quickly. It is not out of the question to conservatively see the company
capture 15% of this market which could translate into $30 million a year in
revenue.
Every investment carries
with it a certain level of risk and patience, and as Mylant notes, Galena is
not the exception. However, the company has positioned itself with a
high-potential pipeline and several other factors that many will find outweigh
the risks.
As part of his conclusion,
Mylant writes, “The company appears to be managed well, has minimal debt
compared to the industry as a whole and a strong asset to liability ratio which
is important for small companies like this. This would make a good long-term
growth investment for those who enjoy this industry. Its present drug, Abstral,
could potentially bring the company into profitability by itself before the
other two drugs are introduced to the market in the coming years ahead.”
For more information, visit
www.galenabiopharma.com
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