San Antonio — Galena Biopharma, a San Ramon, CA-based biotech that is developing a cancer vaccine created by a San Antonio researcher, has hired Canaccord Genuity to see if it can sell or merge the company, license its assets to another business, or make some other move to keep the drug research going.
The news comes weeks after Galena’s CEO Mark Schwartz decided to abruptly resign on Jan. 31. Schwartz took over the top job at Galena in 2014, when the company was based in Lake Oswego, Ore., after then-CEO Mark Ahn resigned when the company was accused of tricking potential investors by allegedly paying a publicity firm to inflate its stock. Galena settled a lawsuit for $20 million in 2015 (most of it was paid by insurance).
Shares of Galena’s stock (NASDAQ: GALE) have been trading under $1 since early February, and fell 2 cent to 58 cents per share as of 12:05 p.m. in New York on the news of a potential deal, which was hinted at after Schwartz left. The company’s stock fell 83 percent from $40.60 to $7 per share on the day it announced one of its lead drug candidates had failed. As of Sept. 30, 2016, the company had about $44.5 million in current assets and $42.5 million in current liabilities. It recorded an $18 million net loss for first nine months of 2016.
Galena has been developing a breast cancer vaccine called NeuVax that’s meant to prevent the occurrence or reoccurrence of cancer. Galena has three ongoing Phase 2 clinical trials—including two of which that test NeuVax in combination with monoclonal antibody trastuzumab.-The company stopped a Phase 3 study of NeuVax last summer.
A planned interim analysis of the Phase 3 trial found that Galena’s NeuVax performed worse than a placebo at preventing the recurrence of tumors in breast cancer patients, causing independent data monitors to recommend to Galena in June to halt the study. The trial was officially closed on Aug. 10.
“Although the phase 3 PRESENT trial of the HER2 vaccine was terminated early, after unblinding the data, it appears that the trial failed due to a design flaw in the study and not due to lack of activity of the vaccine (data to be published soon),” George Peoples, the San Antonio-based researcher who developed NeuVax, wrote in an e-mail.
In 2011, Galena, then known as RXi Pharmaceuticals and based in Worcester, MA, acquired an Arizona biotech that had licensed NeuVax in 2006 from the MD Anderson Cancer Center in Houston and the Henry Jackson Foundation, a nonprofit that supports military research. Galena also has a drug for a blood disorder that it wants to bring into a Phase 3 trial.
Peoples is also a cancer surgeon who has held various roles at MD Anderson over the years, including his current post as an adjunct professor of surgical oncology. He was the chief surgeon at Brooke Army Medical Center in San Antonio before leaving in 2014 to dedicate himself to cancer research.
Peoples’ research on experimental vaccines has also been licensed by Elios Therapeutics. Last summer, he received the BioMed SA 2016 Award for Innovation in Healthcare and Bioscience, which was previously known as Julio Palmaz Award, from the local San Antonio life sciences community.
“I’m hopeful that regardless of the type of strategic transaction that occurs with Galena that the acquiring party will appreciate the potential value of the vaccines and their potential benefit for cancer patients,” Peoples wrote.