Sell Side Shills, Chad Messer Edition, Part 1 – GALE

Why do we here at BuyersStrike! HQ think so poorly of sell-side analysts? Those sober-looking investment bank employees whose job is to, supposedly, give out insightful investment advice?

Because that is not really their job. Their job is to sell you, the investing public, something. That is why smart professionals ignore them, and call them by another name, “banking whores”.

Care for an example? Let’s deconstruct just the beginning bits of the dreadful Galena Biopharma (GALE) missive from Needham’s Chad Messer.

(Why Chad? Because we love The Chappelle Show here at HQ, and especially the Mad Real World skit, watch it again and again here, it sort of sums up Chad perfectly.)

Chad opens with a whopper:

Fundamentals Are Strong Despite Stock Promotion Overhang; Maintain BUY Rating

To which fundamentals could Chad possibly be referring? Galena has only one shipping product, the me-too fentanyl product Abstral. The consensus net revenue estimate for Q4 was $1.825mm. GALE reported net revenues of only $1.317mm, a miss of 27.84%. Only in the world of banking whores can a miss of almost 30% be considered a strong showing.

Revenues are not the only fundamental metric of course, there is also profitability. The mean estimate for Q4 EPS was a loss of 9c. GALE came through with a loss of 46c, a 400% miss to the downside. Maybe Chad doesn’t understand negative numbers? Moving on…

INVESTMENT HIGHLIGHTS: Galena currently holds $55.3 million in cash and expects ~$8 million/quarter in operating burn during 2014, leaving the company well capitalized.

Instead of going off of the audited financials in the 10K, Chad is hanging his hat on an odd figure that GALE trumpeted in the press release, mid-March cash of $55.3mm, Looking just at a single line item, unaudited cash, without examining the rest of the balance sheet is irresponsible.

A more fair, but still simplified, assessment would be as follows:

Audited cash of $47.8mm – debt of $9.9mm (ST + LT) = Net cash as of 12/31/13 $37.9mm. Given their stated burn of $8mm a quarter that gives the company just about 5 quarters of life left. In what fever-dream is that well-capitalized? Even that is a very brief, and irrationally optimistic, look at the balance sheet which skips over some glaring red flags which we will examine further.

One would like to think an analyst at a Wall Street bank would know how to read financial statements, and certainly could spot red flags. Here’s one a first semester accounting student could spot: Galena has Accounts Receivable (AR) of $3.7mm on only $1.3mm in sales, which gives a Days Sales Outstanding (DSO) calculation of a whopping 256 days. Lesson for you Chad, DSOs < 90 are good, > 90 are bad. C’mon, didn’t George teach you this?

Chad also fails to mention this red flag line item from the 10K:

Fair value of warrants potentially settleable in cash:  $48,965mm

A warrant liability greater than Galena’s audited cash balance, one which is potentially settleable in cash, and not a mention. Should the worst happen, settling this debt would leave Galena destitute. Still well-capitalized?

Nor does he mention the $5mm deferred tax liability, nor the contingent purchase price consideration liability of $6.8mm.

Chad is awfully silent about the Stockholder’s Equity line which dropped precipitously from $27.7mm at the end of 2012 all the way down to $5.9mm at the end of 2013.

Does anyone still think Galena is “well capitalized”?

More on Chad Messer’s intellectual musings next time, including his thoughts on Abstral, NeuVax, and his bizarre claim that “management has executed well”.

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.

Are they still the world’s worst drug dealers? – GALE

Soon the world should finally see an earnings release from our favorite purveyor of highly addicitve opiods, and developer of highly suspect cancer vaccines, Galena Biopharma (GALE).

Readers might recall that we examined the sales of Abstral, Galena’s sublingual fentanyl citrate tablets, in this post. We then drilled down into the sales numbers in this post, and discovered that GALE was essentially buying their own product.

So, in anticipation of the upcoming earnings release, lets look at independent sales data for the first two months of 2014.


Galena and the Epsilon Sock Puppets – GALE

A number of comments have recently been submitted for approval to the recent posts on bio-dreck Galena Biopharma (GALE), by commenters “Don Petty” and “Bryce in TX“. [Similar comments have been posted to other articles on other site, like Seeking Alpha, by Don and Bryce as well.]

Both seem to be stubbornly stupid GALE bulls.

It turns out that all 6 comments are from the exact same email address and posted from the same ip address. Nice try.


A Look Inside Their Black Hearts, Part 2 – GALE Edition

Recently, The ran an excellent piece exploring the relationship between bio-dreck Galena Biopharma Inc. (GALE) and a sleazy stock tout shop that goes under many names (DreamTeam Group, MissionIR, Quality Stocks, etc.), you can read it here.

We first ran into this crew during the SEFE promotion in the springtime of 2012. And back then an enterprising reader sent in pictures of the vacant SEFE offices. Read that piece here.

The DTG stock touting swine have removed the disclaimer about GALE from their website, but a captured image was posted on Twitter (see here) and copied below:

Captured Disclaimer on GALE

A BuyersStrike! reader, @FranklinForward made a great suggestion to visit DTG HQ. And so we decided to take a field trip. But to where, exactly?


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?


Naughty Naughty Nanoviricides (NNVC)

Nanoviricides (NNVC), a hype-drenched bio-dreck reverse merged into a shell called, no joke,, is located in leafy New Haven, CT. Run by septugenarian Eugene Seymour, and recently debunked by reporter Teri Buhl (see here and here), NNVC has been touted in the past by the memorable Patrick Cox, and currently by the disgraced Tobin Smith, fired by FOX (see here) over his pumping of Petrosonic Energy (PSON).

Patrick, as many may remember, was one of the Agora stable of “writers”. So it was not a huge surprise to find a reference to Agora in NNVC’s SEC filings.

The text of the filing, however, was a huge surprise. From the July 8, 2013 8K: