Galena's Breast Cancer Vaccine Doomed to Fail

LAKE OSWEGO, Oregon (TheStreet) -- Galena Biopharma's(GALE) breast cancer vaccine NeuVax will fail when results of a phase III clinical trial are eventually announced in three years or so.

I can boldy predict NeuVax's failure this far in advance because Galena is making the same mistakes and taking the same sloppy shortcuts that Keryx Pharmaceuticals(KERX) did with its colon cancer drug perifosine. The warning signs with perifosine proved correct, as they will with NeuVax.

In early February, I called Galena (which was up 168% year to date at that time) a drug stock unworthy of the biotech bull market. This label still rings true, even more so given the stock's continued ascent. Galena's market value of nearly $80 million may seem puny but it's actually excessive when you consider that the company's only asset -- NeuVax -- is never going to reach the market.

NeuVax is a cancer immunotherapy, or vaccine, that works by stimulating a patient's immune system to kill cancer cells. More specifically, Galena claims NeuVax works by training a patient's T cells to recognize and destroy cells in the body that express HER2, a protein that works like an "on" switch for breast cancer cells.

Roche's(RHHBY) blockbuster cancer drug Herceptin works similarly, except it's not a vaccine but an antibody that attaches to HER2 receptors on breast cancer cells. In order for Herceptin to be effective, however, the breast cancer cells must overexpress HER2, meaning the cells need to have large numbers of HER2 receptors on their surface.

If NeuVax trains T cells to recognize and destroy HER2-expressing breast cancer cells, the vaccine should work best in tumors where HER2 expression is highest. This makes sense, right? After all, it should be easier for those newly trained T cells to find tumor cells if the target (HER2) is illuminated with the molecular equivalent of red paint and strobe lights.