Galena Biopharma Inc (GALE) Enters into Merger Agreement with SELLAS Life Sciences


Galena Biopharma, Inc. (NASDAQ:GALE) and SELLAS Life Sciences Group announced they have entered into an all stock definitive merger agreement under which SELLAS will merge into and become an indirect, wholly-owned subsidiary of Galena. The combined company will be renamed SELLAS Life Science Group, Inc. The merger will result in a combined company focused on the development of novel treatments for cancer.

The combined company will feature a late-stage pipeline led by novel immunotherapies targeting a broad range of indications in hematology and solid tumors. SELLAS licenses the rights to its lead asset, galinpepimut-S, (GPS), a novel WT1 antigen-targeting immunotherapy. GPS is initially being developed for the treatment of acute myeloid leukemia (AML) and is Phase 3-ready in this setting. SELLAS has also successfully completed a Phase 2 study of GPS in malignant pleural mesothelioma (MPM), and its end-of-Phase 2 meetings with the U.S. Food and Drug Administration (FDA) for GPS in both indications. For both AML and MPM, SELLAS has been granted orphan drug designation from the FDA and the European Medicines Agency (EMA) and been given FDA fast track status. In addition, SELLAS is currently conducting two Phase 2 trials of GPS in multiple myeloma, as well as a combination trial in ovarian cancer with nivolumab (OPDIVO®; Bristol-Myers Squibb), and is currently preparing for additional combination trials for GPS in combination with another checkpoint inhibitor. Galena’s lead immunotherapy program, NeuVax™ (nelipepimut-S), is currently in three, Phase 2, investigator-sponsored clinical trials in breast cancer, and these trials will remain ongoing. Galena’s other development programs, GALE-401, a controlled release version of anagrelide that is Phase 3-ready, and GALE-301/GALE-302, an earlier stage cancer immunotherapy program targeting folate binding protein, are currently being evaluated for potential internal development or strategic partnership.

“This transaction with Galena is an important step for SELLAS and the advancement of our lead product candidate, GPS, through important development milestones,” said Dr. Angelos Stergiou, SELLAS’s Chief Executive Officer. “We believe GPS has the potential to benefit a wide range of cancer patients and become an important piece of the cancer immunotherapy treatment landscape as both a monotherapy and in combination with other agents, particularly checkpoint inhibitors. NeuVax strengthens our platform and may provide important value inflections as the clinical trials progress. The combined pipeline, with significant near term milestones, creates multiple development and partnering opportunities to create value as these programs evolve.”

Stephen F. Ghiglieri, Galena’s Interim Chief Executive Officer and Chief Financial Officer, added, “Following a thorough review of strategic alternatives and extensive search for a merger partner, we selected SELLAS due to the depth of their cancer immunotherapy pipeline which is clearly complimentary to Galena’s development programs. In evaluating many alternatives, SELLAS stood out in terms of its vision, strategic alignment with Galena’s cancer immunotherapy programs, and near term opportunity for value creation for our shareholders. We are encouraged by the GPS data generated to date and the potential advancement of that program into clinical trials in several indications. I, and our board of directors, believe that patients and our shareholders have the opportunity to benefit greatly from the clinical development efforts that the combined companies will undertake.”

Shares of Galena are down nearly 1.5% to $0.55 in pre-market trading Tuesday. GALE has a 1-year high of $10.20 and a 1-year low of $0.52. The stock’s 50-day moving average is $0.57 and its 200-day moving average is $0.69.

On the ratings front, Galena has been the subject of a number of recent research reports. In a report issued on May 11, Raymond James analyst Reni Benjamin assigned a Hold rating on GALE. Separately, on April 20, Berenberg Bank’s Batuhan Karabekir assigned a Buy rating to the stock and has a price target of $7.90.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Reni Benjamin and Batuhan Karabekir have a yearly average loss of -8.4% and -4.2% respectively. Benjamin has a success rate of 36% and is ranked #4493 out of 4628 analysts, while Karabekir has a success rate of 0% and is ranked #3398.

Galena Biopharma, Inc. is a biopharmaceutical company committed to the development and commercialization of hematology and oncology therapeutics that address unmet medical needs. It focuses on identifying and advancing therapeutic opportunities to improve cancer care from direct treatment of the disease to the reduction of its debilitating side effects. Its products include Abstral sublingual tablets and Zuplenz oral soluble film.