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: Galectin, Keryx, Navidea, Cytori

NEW YORK ( TheStreet) -- Let's kick off this week's Biotech Stock Mailbag with a few questions about Galectin Therapeutics (GALT), which until recently (and quite surprisingly) was one of the best-performing drug stocks this year.

On Oct. 25, Galectin announced an "At The Market" equity sales agreement through which the company's broker MLV & Co. will sell up to $30 million in stock. These ATM stock sales are opaque -- the timing of sales and the number of shares sold is known only by the company and its broker. Galectin is only obligated to disclose ATM sales in its quarterly SEC filings.

Galectin's ATM was announced a week after the stock hit an all-time high of $12.45 per share. You could say the company is being smart and opportunistic, but the market tends to view the dilution and opacity of ATMs bearishly. At Thursday's close, the stock is down 28% from its high. Galectin shares are under added selling pressure because its largest shareholder, 10X Fund, has been exercising warrants. The fund exercised 200,000 warrants on Nov. 1 on top of an warrant exercise in October.

I happened to have spent an hour on the phone with Galectin Co-Founder/Executive Chairman Jim Czirr and CEO Peter Traber on Oct. 25, the same day (but hours before) the ATM was announced. Neither executive mentioned the ATM but Czirr -- also a partner in 10X Fund, by the way -- did tell me he'd been fielding phone calls from "marquee" institutional investors.

Czirr didn't identify the names of these investors, but he assured me they were interested in Galectin as a successful turnaround story and the potential of the company's experimental liver fibrosis and cancer immunotherapy drugs.

Galectin's current cash runs out in the second quarter of next year. Czirr was upfront about the company feeling a sense of urgency to raise more money soon but he was definitely trying to sell me a rosy story with hints that a traditional follow-on stock offering was in the works with some A-list (B-list at a minimum) investors. Instead, Galectin decides to dribble out shares via an ATM.

Institutional investors own just 5% of Galectin, according to S&P CapitalIQ. Wall Street disinterest in owning Galectin is a significant risk factor.

1 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
AMRN $1.54 0.00%
CYTX $1.20 0.00%
GALT $3.37 0.00%
KERX $13.04 0.00%
NAVB $1.64 0.00%

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