March 10, 2017
By
Mark Terry
, BioSpace.com Breaking News Staff
San Ramon, Calif.-based
Galena Biopharma
announced
that it had hired
Canaccord Genuity
to help it develop a plan to sell the company or its assets.
This comes about five weeks after its chief executive officer,
Mark Schwartz
,
stepped down
over a civil and criminal investigation into the company’s marketing of Abstral (fentanyl). The company was under investigation by the U.S. Department of Justice, looking into several employees, as well as two high-prescribing physicians, over a rebate deal between the company and the two doctors.
Schwartz took over the job in 2014. At that time, the company was headquartered in Lake Oswego, Ore. Its then-CEO
Mark Ahn
resigned after Galena was,
according to
Xconomy
,“accused of tricking potential investors by allegedly paying a publicity firm to inflate its stock. Galena settled a lawsuit for $20 million in 2015 (most of it was paid by insurance).”
The company indicates that it is reviewing options, including “a sale of the company, a business combination, a merger or reverse merger with another party, continuing to advance the clinical programs as a stand-alone entity, and a license or other disposition of corporate assets of the Company.”
The company’s assets include GALE-401, currently in a Phase III-ready program for essential thrombocythemia, and an immune-oncology franchise for prevention of recurrence in breast and ovarian cancer, that includes NeuVax (nelipepimut-S), which has three Phase II clinical trials, a Phase IIb trial that expects to complete enrollment in the second quarter, and GALE-301 and GALE-302, which completed early-stage trials in ovarian cancer.
The Phase III trial of NeuVax didn’t go well. The drug didn’t perform as well as placebo, which caused independent data monitors to recommend halting the trial, which was then officially closed on August 10, 2016.
“Although the Phase III PRESENT trial of the HER2 vaccine was terminated early, after unblinding the data, it appears that the trial failed due to a design flaw in the study and not due to lack of activity of the vaccine (data to be published soon),” wrote
George Peoples
to
Xconomy
. Peoples is the San Antonio-based scientist who developed NeuVax.
Galena, which was then known as
RXi Pharmaceuticals
and headquartered in Worcester, Mass., acquired the Arizona biotech company,
Apthera
, in 2011 that held the license for NeuVax. Apthera had licensed NeuVax from the
MD Anderson Cancer Center
in Houston and the
Henry Jackson Foundation
in 2006.
Not surprisingly, Galena has tanked recently. Shares are currently trading for $0.59. Shares traded at $45.40 on June 22, 2016, before they plunged to $7 on June 29, 2016.
The stock has a
one-year high
of $49.80 and a one-year low of $0.21. Its 50-day moving average is $1.09 and its 200-day moving average is $1.21. On February 6, FBR analyst
Vernon Bernardino
downgraded the stock to “Hold,” with a price target of $4. On February 2,
Jason McCarthy
, an analyst with
Maxim
, downgraded the stock to “Hold.”