This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Biotech Stock Mailbag: YM Bio, Infinity, Delcath and Galena

This is bad news for Delcath because it sharply decreases the pool of patients eligible for ChemoSat treatment.

There are about 1,300 cases of ocular melanoma diagnosed each year in the U.S., according to the National Cancer Institute. A French study published in 2005 found 10% of ocular melanoma patients develop liver metastases. (Hat tip: @JFMoriarity.)

This implies about 130 eligible patients for Delcath's ChemoSat each year. If Delcath were to treat all these patients, projected ChemoSat revenue would be $2 million to $5 million, depending on the pricing assumption used ($20,000 to $40,000 per patient).

As I said, tiny sales. Irrelevant sales relative to Delcath's $100 million-plus market value.

Even if the 75% of ocular melanoma patients were diagnosed with liver mets, Delcath is still only looking at a $20 million to $40 million revenue opportunity with ChemoSat. Not enough.

Delcath may grow ChemoSat sales eventually by receiving expanded indications from FDA but that will require the company to run clinical trials costing money and time. No guarantees.

Sales of ChemoSat in Europe are minimal because Delcath hasn't been able to nail down reimbursement. On Wednesday, Delcath essentially admitted to investors not to expect significant revenue contribution from Europe when it announced a new $35 million equity financing agreement. This sits on top of a $21.5 million at-the-market equity sales facility already in place. Delcath needs to raise money.

It's entirely possible to see Delcath shares trade higher next year as we approach an expected FDA advisory panel in May or the June 15 FDA approval decision date. We see plenty of bio-pharma stocks "run up" into regulatory events.

But I believe the debate about the market opportunity for ChemoSat has been settled. Critics of the company, including myself, who have long argued ChemoSat sales would be small -- were proven right this week.






Will writes, "What do you think of Teva's (TEVA) recent investment in Galena Biopharma's (GALE - Get Report) NeuVax? I am a Teva long, and all that I know about Galena is from your articles, so it sounds like it's not very promising. But what do you think Teva's business-development people see in NeuVax and what are the detailed terms of this deal? Is it really a bona fide investment/partnership on Teva's part? Or is it basically like a lottery ticket for them tied only to a small region (Israel) where Galena would get tiny royalties if it ever worked out? Based on how much risk is taken on, sometimes these deals reflect a very limited interest in the molecule by the partner, and sometimes a very strong interest. I don't know how to judge them."

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
DCTH $1.23 2.50%
GALE $1.85 2.21%
INFI $15.96 0.00%
PCYC $216.76 -2.04%
AAPL $129.36 0.21%

Markets

DOW 18,203.37 -85.26 -0.47%
S&P 500 2,107.78 -9.61 -0.45%
NASDAQ 4,979.9010 -28.1950 -0.56%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs