The Cash Burn At Galena Biopharma Inc (Nasdaq:GALE) Rages On

[[tagnumber 0]][[tagnumber 1]]Ever since Galena Biopharma Inc (Nasdaq:GALE) presented its immunotherapy pipeline at the Sachs Immuno–Oncology BD&L and Investment Forum on May 28, GALE shares have been riding high on the charts, giving the stock a much needed breath of fresh air following tiresome months of unsatisfactory graphic performance.[[tagnumber 2]] [[tagnumber 0]]Whether or not this is the only catalyst behind GALE‘s resurgence is not evident for the time being given the lack of recent Form 4‘s. Yet, GALE stock is traded intensely with much greater volume than usual, with a record–breaking 16 million shares changing hands on June 5, four times bigger than the 30–day average volume.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]What is known for sure at this stage is that GALE‘s drug pipeline has already produced two fully–commercialized products already in circulation and a few product candidates in various stages of clinical development. The most advanced candidate, the NeuVax, is currently undergoing a series of phase 3 clinical trials and is targeted towards post–treatment breast cancer patients with the purpose of preventing the cancer from returning. We have yet to see if the FDA will give NeuVax the green light in due course. Until that time comes, GALE‘s revenue streams will remain largely dependent on the commercial success of its two current drugs, namely Abstral and Zuplenz.[[tagnumber 2]] [[tagnumber 0]]Speaking of the latter, the cash flows generated so far have been far from sufficient to turn GALE profitable. What is more, these cash flows have largely been due to Abstral rather than Zuplenz because the company responsible for the distribution of Zuplenz in the U.S. only did this for 18 months before its parent company filed for bankruptcy under Chapter 7. As a result, GALE‘s managers have now found themselves in a situation where they will either be able to relaunch the product or they will fail to do so. The fact that the company does not have internal manufacturing facilities and is therefore dependent on third–party distributors does little to weigh the odds in its favor, either.[[tagnumber 2]] [[tagnumber 0]]To ensure safe and sound business operations in the quarters to come, GALE will most likely resort to public offering of stock similar to the one that occurred in 2014. According to the most recent 10–Q report, the company‘s cash reserves amount to $53 million as a result of the $42 million raised from the issuance of common stock last year, which makes the company well positioned to face its expenses in the short run. However, the considerably thin revenue streams will most probably burn this cash within the next few quarters unless the Zuplenz makes a successful return to the American market later this year.[[tagnumber 2]]