Teva Pharmaceutical Industries Ltd (ADR) (TEVA), Amgen, Inc. (AMGN): Is Galena Biopharma Inc (GALE)’s Big Break Just Around the Corner?

It wouldn’t be too much of a surprise if Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) or other bigger players expressed even more interest in Galena and Neuvax. Around 20,000 patients in the U.S. alone could be candidates for Neuvax. Zacks analyst Grant Zeng thinks that the drug could “reach a blockbuster status easily.”

Neuvax is in another phase 2 study for breast cancer in combination with Roche’s Herceptin. Galena is also exploring use of the drug with another indication — prostate cancer — in an early stage clinical study.

Foolish take
The phase 3 study for Neuvax isn’t expected to be completed until 2015. In the meantime, a lot can change.

Roche’s Herceptin currently claims a lead position, but biosimilars will hit the breast cancer market in Europe next year. Actavis Inc (NYSE:ACT) and Amgen, Inc. (NASDAQ:AMGN) are collaborating on multiple generic and biosimilar products, including a biosimilar for Herceptin. The partners gained rights to this biosimilar, trastuzumab, from Dutch pharmaceutical company Synthon. Trastuzumab is currently in a phase 3 trial needed for European approval.

Neuvax and Herceptin (as well as any forthcoming biosimilars) operate using different mechanisms. However, the introduction of lower-cost biosimilars could change the dynamic in the breast cancer market to some degree. That being said, I still think that buying shares in Galena could pay off in a big way eventually.

An alternative approach is to buy call options with expiration dates well in the future. This approach limits potential downside losses while preserving the opportunity to profit if the stock takes off. Galena Biopharma Inc (NASDAQ:GALE)’s big break just might be around the corner, but there’s no need to take great risks waiting for it to come.

The article Is Galena’s Big Break Just Around the Corner? originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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