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TheStreet Open House

Galena Biopharma (GALE) Drops Despite Analyst Upgrades

NEW YORK (TheStreet) -- Galena Biopharma  (GALE) was falling 10.99% to $6.23 on Tuesday despite two analyst upgrades.

Needham & Company reiterated a "buy" rating and boosted the target price to $9 from $3.50.

"Galena has been off to a galloping start in 2014," the report notes. "Since the beginning of the year the company had initiated a Phase II program for its ovarian cancer vaccine GALE-301, signed an agreement with Dr. Reddy's to fund development of lead drug NeuVax in gastric cancer, and acquired a Phase II ready specialty pharma product for essential thrombocytopenia (ET.) All of this progress comes on the heels of a sucessful 4Q:13 launch of Galen'a first commercial product, Abstral. We believe Galena is rapidly transforming itself into a multi-product oncology-focused company."

Maxim Group also raised its target price on the stock to $11 from $9.

Jim Cramer preached caution with regard to Galena on Thursday's Mad Money

TheStreet Ratings team rates Galena Biopharma a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate GALENA BIOPHARMA INC (GALE) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 48.3% when compared to the same quarter one year ago, falling from -$6.26 million to -$9.29 million.
  • Net operating cash flow has significantly decreased to -$7.98 million or 91.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • GALENA BIOPHARMA INC's earnings per share declined by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GALENA BIOPHARMA INC reported poor results of -$0.62 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$0.62).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, GALENA BIOPHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, GALE's share price has jumped by 320.22%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GALE do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: GALE Ratings Report

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