Roth Capital analysts weigh in on the small-cap biotech company Galena Biopharma Inc (NASDAQ:GALE) and drug delivery company BioDelivery Sciences International, Inc. (NASDAQ:BDSI) after both companies released their third-quarter financial results and provided updates on their clinical progress.

Galena Biopharma Inc

Yesterday, Joseph Pantginis of Roth Capital maintained a Buy target for Galena Biopharma, lowering his price target to $6.00 from $8.00. For the third-quarter, the company reported a loss of ($0.11) per share and $34.8 million in cash.

Along with the results, Galena also announced the divestiture of its commercial business to focus on its core immunotherapy pipeline. The company’s commercial business comprised of Abstral, a treatment for cancer pain, and Zuplenz, a treatment for preventing chemotheraphy-induced nausea and vomiting (CINV). Pantginis believes the divestiture is a wise step because “it allows the company to focus solely on its core competency, which is immunotherapy.” He adds, “We also believe that now investors will not be distracted by struggling sales figures of Abstral and Zuplenz and will be able to focus on the core clinical development pipeline and the progress achieved.”

While he’s lowered the price target, Pantginis believes the company has a strong fundamental thesis. The company has an impressive late-stage development pipeline in the cancer recurrence prevention setting with NeuVax, GALE-301 and ‘302. Galena also has some promising earlier stage candidates

According to TipRanks statistics, out of the 3 analysts who have recently rated GALE’s stock, all 3 have given a unanimous Buy rating with no bearish sentiments surrounding the stock. The average price target for the stock is $6.50, marking a 324.84% upside from where shares last closed.

GALE Consensus

BioDelivery Sciences International, Inc.

On the same day, Scott Henry from Roth Capital Partners reiterated his Buy rating for BioDelivery Sciences, with a 12-month price target of $14. Henry stated that BDSI’s reported EPS was at the low end of his expected range. Also, the company’s Q315 revenues of $1.2 million were lower than his target of $1.8 million. The company’s lower than expected Q3 revenues stemmed from low sales of 2 of the company’s products. These products include Bunavail, used for treating opioid dependence, and Breakyl, a drug used to treat cancer related pain. Bunavail revenues of $1.16 million were lower than Henry’s target of $1.34 million. According to Henry, while Bunavail sales are “finally gaining positive traction,” post Tennessee Medicaid coverage, he is lowering the sales target for the drug because of lower revenue/script expectations. Henry is decreasing his revenue per script assumption for Bunavail to $80, from $110, assuming higher category discounting.

For 2016, the key focus for BioDelivery remains the launch of Belbuca, a drug used for treating chronic pain, which is being developed with Endo Pharmaceuticals. In the context of Belbuca, Henry says, “We view this as the key driver for shares. We further believe that improved DEA scheduling (Schedule 3 controlled substance versus 2 higher is better) can make this a significant product with $500 million+ peak revenue potential.”

Henry points out BDSI’s cash balance is robust with $50 million coming in from Endo Pharmaceuticals post the approval of Belbuca. The analyst states that the company’s proforma cash of nearly $100 million “extends the runway into mid 2017.” Henry concludes that the “shares of BDSI are undervalued – particularly based on the potential of Belbuca.” Scott Henry has an overall success rate of 43%, based on 146 ratings. His average return per recommendation stands at 13.1%.

According to TipRanks’ statistics, out of the 5 analysts who have rated BioDelivery Sciences in the last 3 months, 4 have rated it as Buy while 1 remains on the sidelines. The average 12-month price target for the stock is $14.20, marking a upside of 140.27% upside from where shares last closed.

BDSI Conesnsus