StreetInsider Rating Du Jour 11/28: Aegis Capital Sees an Easy Triple in Galena Biopharma (GALE)

November 28, 2012 9:58 AM EST
Get Alerts GALE Hot Sheet
Price: $0.21 --0%

Rating Summary:
    6 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Join SI Premium – FREE's Rating Du Jour for November 28, 2012 is Aegis Capital's new call on emerging biotech Galena Biopharma (Nasdaq: GALE).

Aegis' Raghuram Selvaraju launched coverage Wednesday on Galena with a "Buy" rating and 18-month price target of $6.00, which suggests 280 percent upside from Tuesday's closing price.

Selvaraju is positive on the company's breast cancer treatment, NeuVax, a novel immunotherapeutic approach to combating the recurrence of breast cancer in patients with minimal residual disease.

The analyst notes that NeuVax is a peptide vaccine that is derived from the extracellular domain of the HER2/neu cell surface receptor protein. HER2/neu protein is one of the world's most recognizable oncogene products, used widely in blockbuster
monoclonal antibody product Herceptin (trastuzumab), marketed by Roche/Genentech.

"In our view, Galena represents an attractive investment opportunity because it is focusing on a validated target, possesses a solid data foundation showing that its vaccine is active in human subjects, and is conducting a Phase 3 trial of the vaccine that is slated to report interim data in late 2013 /early 2014," Selvaraju said.

Not only does Galena have a promising drug, it has "Street Cred," the analyst said. Roche/Genentech is funding a Phase 2 trial that is aimed at assessing the impact of combining NeuVax and Herceptin. "From our perspective, this is a very encouraging sign and shows that some of the most knowledgeable experts in oncology-focused drug development see promise in Galena's lead program."

Valuation is attractive at its currently $100 million market cap as other firms at earlier stages of development in the oncology field trade at multiples of this valuation, the analyst also argues.

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