The biology sector is one of those rarest sectors that aren’t valuated on its production because it simply has no products to sell off. Biopharma is measured by their capability of their drug development and production operations. However, this has been causing great distress to the investors of all biotech companies. The biotech stocks end up losing a lot of money and now the whole sector is on the verge of going completely broke.
There are a couple of ways by which the biotech companies can generate money. Let’s look at a small end biopharmaceutical company, Galena Biopharma Inc (NASDAQ:GALE), so we can get a vivid perspective regarding what the situation looks like. Galena Biopharma Inc (NASDAQ:GALE)’s main focus is developing immunotherapy vaccines to battle cancer.
These vaccines work upon increasing the immunity of the patient. The company’s main vaccine currently is NeuVax- which is being tested for breast cancer with results due in 2016 or early 2017. Initial results have found NeuVax to be 78.4 percent effective against cancer cell recurrence. This means NeuVax holds the key to get good revenue, but will it be completed within the available resources?
By the end of the second quarter Galena Biopharma Inc (NASDAQ:GALE) made around 39.2 million in cash; and cash equivalents on hand made up around 10.1 million in debt, resulting in 29.1 million overall. In March of this year, Galena Biopharma Inc (NASDAQ:GALE) had 55.3 million at that time. So where did 14 million go? Some of it went to the Zuplenz licensing by the U.S., a medication for the treatment of the side effects of chemotherapy such as nausea and vomiting, which is due to release next year. The remaining cash went to the administration and marketing operations.
One way Galena Biopharma Inc (NASDAQ:GALE) can increase its capital is by acquiring ready-to-sell medications. Galena Biopharma Inc (NASDAQ:GALE) acquired Abstral and got licensing for Zuplenz, which hopefully will sooth their costs on administrations and marketing atleast, if not anything else. Galena Biopharma Inc (NASDAQ:GALE) might not reach its annual goal of 11-15 million revenue but the acquisitions of such medicines will ease off some pressure. Galena Biopharma Inc (NASDAQ:GALE) can also partner with a bigger company in order to boost sales and increase production.
Galena Biopharma Inc (NASDAQ:GALE) still holds 4.9 million in a revolving credit facility but it just might not be enough to keep Galena Bioparham sailing for another two years. So as of now, it is safe to say that Galena is losing cash. It isn’t going bankrupt, it can still offer stocks to investors to raise some cash but that might not be enough for the longer run. Galena must do something substantial to get returns that ensure the company a safer future, if not a formidable one; at least they should be there to see how NeuVax plays out. If the success of the developing cancer drug continues, it just might be the big break for Galena Biopharma Inc (NASDAQ:GALE).