# Here’s Why Galena Pharmaceuticals’ NeuVax Is the Real Deal

Galena Pharmaceuticals’ NeuVax is the real deal.

I have been following the **Galena Pharmaceuticals** (NASDAQ:GALE) saga for a few weeks now, having opined on the company twice. From my original perspective, I was examining the stock as an independent market research analyst and writer. In this article, I will tap my skills in epidemiology (I hold a master’s degree in epidemiology and biostatistics, and am completing a PhD at the University at Albany, SUNY in epidemiology this May).

I feel compelled to share this because I have been questioned by the bears on how I am qualified to write about this company. Well, there you have it. In my first piece, I gave a timeline of the issues that have been occurring surrounding the company, its stock promotion scandal, and the insider sales. I then presented a synopsis of what the company actually has going for it and recommended that investors who could handle the volatility ignore the drama because the company and its stock has real long-term potential.

In the second piece, I took a long hard look at the company’s acquisition of **Mills Pharmaceuticals**. The acquisition is being completely discounted by the market despite the desperate need for new drugs to come to market for essential thromboycthemia. The stock is down 50 percent since this promising acquisition. That is reason alone to justify a trade as shares normalize back to the $5 level where a stock of this nature should trade.

After a lot of contact with readers on my new page and despite the risks of the company being a pharmaceutical stock mostly in the trial stages, Neuvax may be the real deal.

## NeuVax has more potential than I originally thought

According to one oncologist’s view, NeuVax has true life-saving potential. He discussed the data a little bit but focused on the clinical side. As an epidemiologist by trade, I decided to spend time reviewing the data. The truth is that NeuVax does not seem to work for everyone and can make conditions worse in some patients.

However, in a subpopulation of participants, NeuVax can greatly reduce and eliminate recurrence of breast cancer altogether. NeuVax consists of the E75 peptide derived from HER-2 (human epidermal growth factor receptor 2, which has a 1, 2, or 3 positivity associated with it) combined with the immune adjuvant granulocyte macrophage colony stimulating factor (GM-CSF). Treatment with NeuVax stimulates cytotoxic (CD8+) T cells in our immune system in a highly specific manner to target cells expressing any level of HER-2.

Approximately 173,000 women are diagnosed each year with HER-2 positive breast cancer, or around 75 percent of all female breast cancer cases.

Currently, only one-quarter of all breast cancer patients, those with HER2 3+ disease, can receive Herceptin, which is made by **Roche**. NeuVax targets the remaining patient population whose cancer makes it to remission with the current standard of care but have no available HER2-targeted treatment options to maintain their disease-free status.

Chemically, the science is sound, but I want to talk about the epidemiological science and the data a bit more. The first set of meaningful phase one and two data came out in 2010. In that study, 97 breast cancer patients who had varying degrees of HER-2 positivity were randomized to a treatment (combination NeuVax and standard care) and a control group (standard care only). Figure 1 has the Kaplan-Meier survival curves documenting the data.

*Figure 1. Kaplan-Meier survival curves comparing treatment with NeuVax versus control group, Galena Pharmaceuticals, 2010*

When we compare the survival curves of the data from that study, there is a marked difference between the two groups, but due to a small sample size, the study did not have adequate power to detect statistically significant differences. In general, we defined statistical significance using p-values, which represent the probability that the observed outcome is completely by chance.

In biostatistics, we generally use the 0.05 cutoff for determining significance. We also use confidence intervals for comparisons. Generally, when a p-value is below 0.05, a confidence interval of the point estimate (such as the relative risk, odds ratio, hazard ratio, etc.) will not contain the null value (which is 1.0 on a relative scale). All of the jargon can be complicated for the lay audience, but is important to have a working knowledge of it when examining clinical data.

So, what you need to know is that the more data points we have, the more power to detect differences. The study only had 97 participants. That’s a very small sample size. The survival curves were visibly different but did not come in below 0.05. The bears cite this as proof it doesn’t work. I fundamentally disagree. Although it was not statically significant with a p-value of 0.12 given the small sample size, most epidemiologists would contend that the results approach significance,* *and given the small sample size, further study is warranted.

Why? The point estimates are meaningfully different, even though they are not statistically significant. The disease-free status at two years came in at 91 percent for those in the NeuVax group versus 79.5 percent for the control group. At five years, those in the NeuVax group were 85 percent disease free versus 77 percent disease free for the control group. But that’s not all. Where key data exists are in the subset analysis.

## The subset analysis: proof is in the pudding

As is often conducted in clinical trials, a subset analysis was performed, looking at all patients that had HER-2 protein positivity, with both 1+ or 2+. They excluded those with HER-2 protein positivity with 3+ because they had received Herceptin treatment and would confound the results.

The subanalysis thus only had 45 patients, which crippled statistical power. Thus something truly impacting the risk for recurrent illness would have to be taking place to have and chance at hitting significance. In lay terms, the data would have to be completely one-sided. I present for your consideration Figure 2, the Kaplan-Meier survival curves for risk of disease recurrence in the subset analysis.

*Figure 2. Kaplan-Meier survival curves comparing treatment with NeuVax versus control group among only those patients with HER-2 1+ or 2+, Galena Pharmaceuticals, 2010*

Examination of the subset analysis is critical. To the naked eye, we definitely see a difference in the curves. Clearly the NeuVax group is performing better than the control group. What you notice in the figure is a little “HR=0.00.” This refers to the hazard ratio. The hazard ratio is defined as how often a particular event happens in one group compared to how often it happens in another group, over time.

In cancer research, hazard ratios are often used in clinical trials to measure survival at any point in time in a group of patients who have been given a specific treatment compared to a control group. A hazard ratio of 1 means that there is no difference in survival between the two groups. A hazard ratio of greater than 1 or less than 1 means that survival was better in one of the groups. As we see, the hazard was 0.00.

This means there was absolutely no recurrence in the NeuVax group. Thus, not one patient relapsed in the NeuVax compared to 22.2 percent in the control group. Remember the landslide data I mentioned would be need to reach statistical significance? Well the statistics came in with a p-value of 0.035. This hazard ratio and statistical significance held at 24 months and 36 months.

## Phase IIb and III trials will determine whether GALE goes to $50 or possibly 50 cents

OK, $50 is a stretch, but not outside the realm of possibility in the biotech/pharmaceutical sector. If the trial flops, the stock will plummet. That’s the risk. If it does well, it gets closer to achieving a Food and Drug Administration approval years down the road. Enrollment is ongoing in the next trial, which will involve many hospitals in many areas of the world. It’s a tall order to set up, which has resulted in a delay, but getting everything in place is necessary to ensure a valid trial.

News releases and data from these trials will move the stock in the coming months and years. Until then, the company can focus on other trials and selling and marketing Abstral to maintain revenues. I believe the company has cash reserves to sustain operations into 2016. By then, the stock could be much a higher, and an offering may take place. That would dilute shares but help raise cash — it remains to be seen. For now, NeuVax seems to be the real deal. It has real potential.

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