Maxim analyst Jason McCarthy provides insight on shares of Galena Biopharma Inc (NASDAQ:GALE) after the company posted second-quarter results. While McCarthy reiterates a Buy rating on GALE, he slashes the price target from $2.00 down to $1.00, accounting for a shift in pipeline focus for the drug maker.

Galena reported net income of $5.4 million, which McCarthy credits as the result of a combination of decreased warrant liabilities caused by a stock price decline, coupled with PRESENT termination leading to purchase price liability for innovative cancer immunotherapy drug, NeuVax. From McCarthy’s perspective, this combination caused an offset by $9.3 million in operating expenses. Having started the third quarter with $19.6 million in cash flow, adding to the $11.7 million Galena received on the back of equity financing in July, the firm to date has $29 million in cash.

Anagrelide-controlled release pipeline drug GALE-401 is about to go pivotal. With PRESENT over for the foreseeable future, Galena has re-geared towards driving GALE-401 to a pivotal study designed to treat “essential thrombocythemia.” Galena has a meeting with the FDA on the map, that if approved, would mean the study could initiate by 1H17. The analyst believes that in light of Galena targeting a 505B2 pathway, all that likely would be needed is a demonstration of non-inferiority to standard anagrelide in a relatively small trial size.

McCarthy asserts, “PRESENT is now the past. While investigator-sponsored studies will continue and Galena will evaluate a path forward post-PRESENT, focus has turned to a pipeline of assets with unlocked value, including a potential phase III-ready asset in GALE-401.”

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, one-star analyst Jason McCarthy is ranked #3,616 out of 4,110 analysts. McCarthy carries a 40% success rate and sees a loss of 3.1% in his average returns. When recommending GALE, McCarthy loses 53.5% in average profits on the stock.

TipRanks analytics demonstrate GALE as a Strong Buy. Based on 4 analysts polled in the last 3 months, 3 rate a Buy while 1 maintains a Hold. The consensus price target is $2.35, marking a 446% upside from current prices.

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