The inevitable failure of Galena Biopharma's (GALE) breast cancer vaccine NeuVax was apparent in shoddy clinical data presented four years ago. On Wednesday, the bear call on Galena and NeuVax was proven correct.

Galena stopped the phase III study of Neuvax after independent data monitors examining interim data concluded the experimental breast cancer vaccine was ineffective at preventing the recurrence of tumors compared to a placebo.

The failure of NeuVax, Galena's most advanced and most important pipeline product, sent shares of the company tumbling 80% to 42 cents per share in premarket trading. Galena closed Tuesday at $2.03 per share.

The brief letter written by the Independent Data Monitoring Committee to Galena regarding the futility analysis suggests NeuVax may have actually performed worse than placebo in the phase III study:

On 24 June 2016, the assembled Independent Data Monitoring Committee met to review the efficacy and safety data available for the aforementioned protocol. At this time the DMC recommends that the study be stopped for futility unless it is determined that there has been a systematic reversal in the study drug treatments in the two arms, in which case the IDMC should reevaluate the clinical evidence. The IDMC recommends that this be investigated as quickly as possible and, in the meantime, that this information be disclosed only to any individual(s) with a need to know about the procedures used to clarify the current situation. Finally, the DMC requests that Galena Biopharma inform the IDMC members of the outcome of this investigation and any decision with respect to discontinuation of the clinical trial as soon as possible.

Entering Wednesday's blowup, Galena's stock price was actually up 38% year to date, bucking the biotech bear market. Investors, mostly the retail variety, were under the mistaken impression that the NeuVax phase III study could have been stopped for overwhelming efficacy.

Bad mistake.

NeuVax is a cancer immunotherapy, or vaccine, which was designed to stimulate a patient's immune system to kill cancer cells. More specifically, Galena claimed NeuVax worked by training a patient's T cells to recognize and destroy cells in the body that express HER2, a protein that works like an "on" switch for breast cancer cells.

Except NeuVaX did no such thing. A phase II study of NeuVax conducted in patients with HER2-positive breast cancer showed no difference in tumor recurrence rates between the vaccine and placebo.

Undeterred by the negative findings, Galena did what many small-cap biotech companies do to keep the lights on -- dug around in the drug's failure to find a scrap of positive data on which to move forward.

For Galena, that tiny bit of hope was a subgroup of breast cancer patients with low levels of HER2 protein expression in their tumors. In these women, NeuVax appeared to be more effective, Galena claimed.

It didn't matter to Galena that its NeuVax theory was scientifically implausible. A HER2-directed cancer vaccine should work better in tumors with more HER2 expression, not less. On this flimsy post-hoc finding, Galena launched a large phase III study of NeuVax, even though the vaccine's failure was almost surely predetermined.

On Wednesday, four years later, NeuVax's futility was confirmed.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.