A Few Words, And A Few Charts, on Galena, World’s Worst Drug Dealers – GALE

Yesterday a post at the Bronte Capital blog pointed out that odious, hyper-promotional, Galena Biopharma (GALE) has a Direct-To-Consumer program that offers a free month of their super-fast-acting fentanyl, which they sell under the brand name Abstral.

Fentanyl is a synthetic opiate drug that is 100 times stronger than morphine and 20 times stronger than diacetylmorphine. What’s diacetylmorphine, you ask?

Heroin.

Yes, they are giving away a month’s supply of a drug 20x stronger than heroin. More than enough to addict their customers.

Obviously, this is a tried and true marketing strategy for opiates. On the street.

One might wonder why Galena would be doing such a thing, especially, given the claims of the rabid GALE longs that Abstral is some sort of wonder drug, when in fact it is just one of many forms of a common, albeit dangerous, generic drug.

Well, let’s find out.

Abstral was introduced to the US market around February 2011.

Abstral is the rather flat blue line on this chart:

The fentanyl market since Abstral launch.

The fentanyl market since Abstral launch.

By early 2013 two things are obvious. The first is that Abstral is hardly a success. The second is that the entire Fentanyl market (the dashed line on the chart) is shrinking. For calendar year 2012 Abstral sales were only 6/10s of 1% of the total, declining, market.

With a dud on their hands, the owners of Abstral looked to sell the US rights. And they found a buyer of their moribund product in Galena which acquired the US rights to the drug in March 2013, for $10mm in cash, a $5mm IOU, and royalty payments.

Now the bulls will say, the past is the past, and GALE management is so super-duper-amazing that they can turn a sow’s ear into a silk purse. So, lets look at Abstral sales in 2013.

The fentanyl market in 2013 by total retail $

The fentanyl market in 2013 by total retail $

The light green line is Abstral retail sales in $ .

Abstral sales are pathetic when compared to the leading branded product, Fentora, and equally absymal on a total dollars basis when compared against the generic, which is far cheaper.

But in pharma sometimes total dollars are not the whole story. Bulls love to talk about “scrips” and “scrip growth”. Lets compare Abstral against the competition in terms of prescriptions:

The fentanyl market in 2013 by "scrips".

The fentanyl market in 2013 by “scrips”.

Again, Abstral, in light green, is a miserable failure.

Oh, but wait, the GALE longs will cry out, what about the increase in scrips in mid December 2013?

True, Abstral scrips did pick up right before Christmas, but just the rise in generic prescriptions alone (192) in mid Dec was greater than Abstral’s total scrips for the same period (188). Plus, the rise that week is a purely seasonal artifact. It happens every year around the holidays.

Galena management cannot seem to even give away a massively powerful and addictive drug with any level of success. They would not last long working for Avon Barksdale, Stringer Bell, or Marlo Stansfield, but they do have one metric that has been going up and to the right.

GALE is a Dilution Machine

GALE is a Dilution Machine

They sure seem to have been able to print stock.

PS And if the above was not damning enough, the scum (MissionIR aka Quality Stocks aka DreamTeamGroup) that were promoting Kerr/Quiel super scam SEFE are promoting GALE.

GALE: MissionIR, an affiliate of DreamTeamGroup, received $50,000 from GALE for 240 days of advertising, branding, marketing, investor relations and social media services provided by MissionIR and affiliate DreamTeamGroup Business Brands. Please read entire MissionIR Disclaimer for FULL Compensation Disclosures.

Birds of a feather….

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.
Advertisements

16 comments

  1. You are misguided, my friend. Your touted knowledge of opioid pharmacology is seriously lacking. The patient population for transmucosal fentanyl (a group of medications of which Galena’s Abstral is a part of), have by definition already been treated with chronic opioids for some time, are opioid tolerant, and hardly ‘addicts’ as you call them. The breakthrout pain medication, therefore, must be more potent than the usual vehicles (i.e.; Morphine) due to the anticipated opioid tolerance the patient unvariably develops, and the aggresiveness and severe pain that invading tumors of cancer bring to the patient. I am a pain medicine specialist/physician on the advisory board of several pharma co’s and I can tell you that the increase in Rx for Abstral is real and pain and cancer specialists are changing over to Abstral from Fentora and Subsys in significant numbers and for really good reasons. It’s a much better product and the patients prefer it far and above the others! Fentora has major drawbacks for the patient – takes 30 minutes to take effect (versus 5 minutes for Abstral, 15 min for Subsys), has to be held in the upper check which is embarrasing to the patient if they are out and about in public vs. under the tongue which is rapid and very discreet for the cancer patient, and there is no incredibly bulky packaging with Abstral like there is with Subsys (a blister pack which fits in a shirt pocket vs. a virtual ‘shoebox’ size package for Subsys, that the patients dislike. The pharmacists and pharmacies hate Subsys because the product takes up considerable and valuable space in their pharmacy shelves and stock rooms. If the patients take a trip or go out of town, they have to carry a veritable suitcase size of packaged product with them with the spray. Abstral, by all accounts, was maketed and promoted miserably by the previous pharma owners. Galena hired a large sales force ( around 145 reps) nationwide and has spent considerable effort in educating practitioners on the benefits to the patient (and practitioners) in utilizing Abstral for treating and controlling severe breakthrough cancer pain. Just look at Insys Therapeutics and their product Subsys, which is the under the tongue spray. They utilized a very similar ‘one month free drug rebate’ coupon campaign last summer, soon after their IPO, and gave away ‘free drug’ for several months in 2013, and their sales went through the roof against the generic Fentora. Their stock price followed going from $6/share to $55+/ share today, 7 months later. Watch for Galena’s Abstral sales to follow a similar route against Insys’ Subsys fentanyl spray. Patients do prefer the sublingual tablet to the spray, in my experience, and also as there in no plastic single dose device to discard after use with the Abstral tablet. It may take 2 quarters of sales figures to reveal this trend, but it will come, nonetheless. Most everyone knows someone in their family or friend circle who currently suffers, or has suffered the terrrible plight of cancer related pain. I wonder how those patients would feel if they were told that the companies who provide the medication that eliminated that horrible pain were ‘drug dealers’. Hmmmmm.

    [@J Patrick – Insys did not IPO in the summer. Insys merged into a shell of dead and discarded Neopharm (NEOL) in October 2010. It has been publically traded ever since. Perhaps Insys is absurdly overvalued as well? Just not nearly as overvalued as GALE, and without some of the worlds scummiest stock promoters pushing the stock. Hmmmm, indeed. – Editor]

  2. buyersstrike: what is the program those screenshots are from?

    [@Patrick – The tell-tale color scheme gives it away. Market professionals know it by sight. – Editor]

  3. lol your only reply is about insys IPO? care to address anything else J Patrick said?

    [@abc – The bulk of what J Patrick said is clearly disproved by the prescription data. lol. – Editor]

  4. After looking at your charts, I don’t see Abstral sales as a “miserable failure”. I see them rising smartly in Q4. Also, how do you account for the big discrepancy in market cap between GALE and INSY? The only product INSY has is Subsys, the competitor to Abstral. Wouldn’t INSY be a better shorting opportunity?

    [@Samuel Spade – Abstral competes against all of those fentanyl drugs. It has been on the market since Feb 2011. It has never come close to the market leaders. The Q4 increase is partly seasonality, as explained, and partly a push from GALE. But a relatively UNSUCCESSFUL push. Generic fentanyl and brand name Fentora continue to crush Abstral. – Editor]

  5. Well, what’s not disproved is that Abstral is the #1 prescribed transmucosal Fentanyl product for cancer pain in Europe (with reason) and has not seriously ( as I mentioned above) been promoted and marketed in the United States until the last 4-5 months. But we shall see. And one thing that ‘market professionals’ should also know, is that “past performance is no guarantee of future results.” Generic fentanyl (Actiq) is awful, patients hate it because in takes 30 minutes to dissolve and take effect and no one wants to wait around for 30 minutes for a ‘lollipop’ to dissolve when they are experiencing sudden onset excruciating pain. The products are simply are not comparable, they have completely different delivery systems.

  6. Editor,

    I am looking for the objective side here, is it you?. If so, why do you call a sales line flat, that goes from what looks like zero to 250,000 prescriptions per week in about 2 months?
    It can only be seen by zooming way in on the graph.
    If you are going to be putting a slant on the data. Can you be trusted?

    Also you are writing for “https://buyersstrike.wordpress.com” I have not heard of this website before, is it a reputable organization?

    The name “buyer strike” makes it sound like it is against buying. Are you trying to attack buyers? Is it the name of a shorting bias entity?

    Also, is stock manipulation legal?

    Thank you,

    Brandon

    [Pretty sure the poster above is a retail broker, CRD#4492900 in St Ignace, MI. Would hate to be a client of this idiot. – Editor]

  7. Editor,

    I think Brandon brings up some good questions…none of which you answered other then calling him an idiot. With your credibility on the line, you just call the guy an idiot. Are you Adam Feuerstein or a relative?

    Thanks,
    Matt

    [@Matt – Gosh, well if YOU think Brandon brings up good questions….credibility is not an issue, the data in the charts speaks for itself. As for your question about Adam Feuerstein. He is a writer for TheStreet.com, not for BuyersStrike! No relation. You should try reading and understanding his articles some time, doing so will help you avoid getting into bio-dreck. – Editor]

  8. Schedule II drugs, such as Fentanyl, have a high abuse potential with severe psychological or physical dependence liability, but have accepted medical use in the U.S. Schedule I drugs, such as heroine, have no accepted medical use in the United States (U.S.), are not accepted as safe for use under medical supervision, and have a high abuse potential. So, right off we see there is a marked difference between “street” drugs and a drug like Fentanyl which is prescribed by a physician for a legitimate medical purpose.

    However, BuyerStrike, Bronte Capital, and Mr. Feuerstein, with their comparison of Fentanyl with street drugs and street addicts, would apparently like you to believe otherwise. Else, why compare Fentanyl with street drugs, and call Galena Biopharma the world’s worst drug dealer?

    The purpose of Fentanyl is to medically treat the patient who is experiencing break through pain, generally caused by cancer. The purpose of heroine is to feed an addicts habit. There is no legitimate medical purpose for using the heroine. A physician must prescribe Fentanyl for the patient. A street addict simply pays a sum of money to his dealer for his “fix”.

    It’s easy to understand that there is a legitimate purpose for the prescribing of Fentanyl for a patient, but no legitimate purpose for the use of heroine. This author and the others mentioned would like to convince you otherwise, that’s why the title of this thread is “Galena-World’s Worst Drug Dealers”.

    In seeking to discredit and condemn Galena Biopharma, the author uses an illegitimate, reprehensible argument that the prescribing of Fentanyl is no different than getting a fix from an illicit street drug, like heroine. He makes himself a hypocrite, judging and condemning Galena Biopharma for unethical behavior for which he himself is guilty of.

    [@Don – 1. Heroin, no ‘e’. 2. Fentanyl is faster acting, has a shorter duration and is stronger than heroin. If heroin has no legitimate medical use, it is hard to make a case for DTC advertising of a drug 20x stronger. 3. There are serious ethical issues with Direct-To-Consumer marketing of drugs, which is why for so long pharma did not do it. DTC marketing of opiods as strong as Fentanyl is simply reprehensible, and reeks of desperation on the part of Galena to goose prescriptions of a poorly selling product. One can use the euphemism “opiod tolerant” but what that really means in layperson terms is “addicted”. – Editor]

  9. [Note: The following comment came from a sock puppet IP address 72.182.153.32 and email dp19032k12@sw.rr.com – Editor]

    Buyerstrike.

    Thanks for the correction of spelling on heroin. Here is the link stating that Schedule I drugs, such as heroin, have no medical purpose and that Schedule II drugs do. If you want to argue as to whether Fentanyl should be classified as a Schedule II, I suggest you take it up with medical professionals. For now, this is the law:

    “(1) Schedule I.—
    (A) The drug or other substance has a high potential for abuse.
    (B) The drug or other substance has no currently accepted medical use in treatment in the United States.
    (C) There is a lack of accepted safety for use of the drug or other substance under medical supervision.

    (2) Schedule II.—
    (A) The drug or other substance has a high potential for abuse.
    (B) The drug or other substance has a currently accepted medical use in treatment in the United States or a currently
    accepted medical use with severe restrictions.
    (C) Abuse of the drug or other substances may lead to severe psychological or physical dependence.”

    http://www.law.cornell.edu/uscode/text/21/812

    As far as Direct To Consumer marketing, Schedule II drugs still are under strict DEA regulations, require a written prescription form a physician with no refills, require the Physician to be registered with the DEA, and require the script to be written for a legitimate medical purpose. Until dispensed, Schedule II drugs must be locked up on premises. There is no change in how Fentanyl is distributed with this marketing, NONE. Schedule II drugs are tightly controlled at every step of distribution.

    You simply can’t compare cancer patients in excruciating pain from physical illness with a street drug addict, unless you have a cold, cold heart that is not able to distinguish between a legitimate use for the drug versus an illegitimate one. Your argument is reprehensible, and totally, completely without merit.

    “The CSA further provides special control mechanisms for licensed practitioners and pharmacists who dispense
    controlled substances in Schedules II-V to patients for legitimate medical purposes. Because controlled substances classified as Schedule I drugs are deemed to have no accepted medical purpose in the United States, they may only be used for research, and practitioners may not prescribe them to patients. Under the CSA, only licensed medical
    practitioners are authorized to prescribe controlled substances listed in Schedules II-V to patients. A prescription for a controlled substance must be “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” Accordingly, practitioners have a responsibility to ensure that the controlled substance is properly prescribed and dispensed.”

    The Direct to Consumer marketing program changes none of this.

    [@ Don Petty – Fentanyl can be compared to other opiates and opoids regardless of scheduling in the US, I suggest you find yourself an equianalgesia chart. You may be surprised to learn that in some countries heroin is still a prescription drug.

    Any patient being prescribed fentanyl is “opiod-tolerant”, but this is simply a euphemism for “addicted”. Are you surprised to learn that addiction by prescription is a very real phenomenon? Perhaps you have heard of a prescription drug called Oxycontin?

    You should try doing some research on diversion. There are plenty of examples of illegal fentanyl use in the US. Which product would be easier to divert, sublingual tablets or a spray?

    It is the DTC nature of Galena’s marketing of Abstral that is reprehensible.

    Lastly, the fact that you are a sockpuppeting moron makes me chuckle. Go take your Soma. – Editor]

  10. No, I am not a sock puppet. I see my disclosure wasn’t sufficient. I said I was Bryce in TX on SA on a post here that used a Bryce in TX sig. My bad. The intent was good. If you go to my SA account, look up my blog about the 1967 state basketball game and view the first 5 minutes or so, you will see I use my real name there, Don Petty, but Bryce is my middle name. I was not trying to deceive you.

    I had to change my email today because you have posted my old email address on your blog. Hackers could have potentially broken into my email and stolen my bank/insurance info, and my credit card info. While changing the email with my ISP, I noticed that my first and last name are there to post when I send an email. I assume that is how my first and last name showed up on the first posts here. I didn’t type them in. I thought it would be better to use my pseudonym name from seekingalpha, so I switched names on later posts. I thought I had disclosed this on the Don Petty posts, but it shows up under a Bryce in TX post. No deceit intended. i knew the same email address was being posted with both names. Live and learn. i’m done. I won’t be posting anymore on this blog for obvious reasons. And I have never used any name on seeking alpha other than Bryce in TX.


    [@Don/Bryce – Your email and IP address were posted because you were caught commenting using two different aliases. Your posts under the alias ‘Don Petty’ never stated you were Bryce. Your posts under ‘Bryce-in_TX’ never stated you were Don. If you provide a sincere apology for doing so, the info will be redacted. – Editor]

  11. As I said in the other thread, I am a bag holder GALE. Have learned much about this mistake, thanks for your blog and DD. Obviously, I can use some help.

    [@Stockman – Thank you very much for your kind words about the blog. If reading it can help someone learn, it makes the whole thing worthwhile. Good luck! – Editor]

  12. thinking about getting into galena this morning and i must say this guy who wrote this up is obviously ” short ” on gale, when does all this bashing end? this whole lawsuit thing is an obvious planned PART of the SHORT ATTACK that has been happening for MONTHS, its pathetic . this is sort of like what happened to ariad pharma, they have a great product and people NEED it and want it, so the shorts attack, who care what the sales were when the other company owned it, its galenas now and its OBVIOUS the are doing VERY WELL with sales and scrips ! am i wrong?? heres a bit of info september 2008 SHORT TRADING BANNED dow rises 300% in first 45 minutes look it up. this guy has an agenda and it is to short everything, attack everything. i am sick of guys like this.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s