Galena Biopharma Inc (NASDAQ:GALE), a biopharmaceutical company committed to the development and commercialization of targeted oncology therapeutics that address major unmet medical needs, today announced the Company has reached an agreement in principle to settle both the consolidated putative federal class action, In Re Galena Biopharma, Inc. Securities Litigation,and the federal consolidated derivative action, In Re Galena Biopharma, Inc. Derivative Litigation, pending in the United States District Court for the District of Oregon. The lawsuits were brought against the Company and/or a number of its current and former directors and officers following allegations of stock promotion and insider trading in early 2014. The agreement in principle was reached in connection with a voluntary mediation held by Judge Layn Phillips.
The settlement agreements contain no admission of liability or wrongdoing and include a full release of the Company and the current and former officers and directors in connection with the allegations made in the lawsuits. The Company believes the claims are without merit, but is settling the lawsuits to avoid potentially lengthy, costly, distracting and time-consuming litigation. The settlements are subject to definitive documentation, shareholder notice, and court approval.
The agreement in the securities action provides for a settlement payment to the class of $20,000,000, of which $16,700,000 will be paid by the Company’s insurance carriers, and $3,300,000 will be paid by the Company through a combination of $2,300,000 in cash and $1,000,000 in shares of the Company’s common stock. The shares shall constitute less than one percent of the total shares then outstanding.
The terms of the settlement for the derivative action include a payment of $15,000,000 in cash by the Company’s insurance carriers, which the Company will use to fund the class action settlement, and cancellation of 1,200,000 director stock options. Galena has also agreed to adopt or continue its implementation of changes and additions to certain corporate governance policies, protocols and practices. In addition, the Company’s insurance carriers agreed to pay $5,000,000 for plaintiff’s attorneys’ fees and costs, subject to Court approval.
Mark W. Schwartz, Ph.D., President and Chief Executive Officer, stated, “We are pleased to have reached an agreement with the plaintiffs and believe that settling the cases at this time is in the best interests of the Company and our shareholders. I look forward to closing this chapter for the Company and continuing our focused efforts on advancing our clinical development pipeline.” (Original Source)
Shares of Galena Biopharma closed yesterday at $1.45, down $0.02 or -1.36%. GALE has a 1-year high of $2.39 and a 1-year low of $1.10. The stock’s 50-day moving average is $1.60 and its 200-day moving average is $1.65.
On the ratings front, Galena has been the subject of a number of recent research reports. In a report issued on November 12, Oppenheimer analyst Ling Wang upgraded GALE to Buy, with a price target of $4, which represents a potential upside of 175.9% from where the stock is currently trading. Separately, on November 10, Roth Capital’s Joseph Pantginis reiterated a Buy rating on the stock and has a price target of $6.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ling Wang and Joseph Pantginis have a total average return of -0.5% and -3.0% respectively. Wang has a success rate of 41.2% and is ranked #2504 out of 3631 analysts, while Pantginis has a success rate of 37.9% and is ranked #3430.
Galena Biopharma Inc, is a biopharmaceutical company focused on developing and commercializing targeted oncology therapeutics that address medical needs across the full spectrum of cancer care.