Galena Biopharma Inc (NASDAQ:GALE)
Galena Biopharma Inc (NASDAQ:GALE) stock is off over 27% after the company announced merger plans with privately-held SELLAS Life Sciences Group Ltd in an all-stock deal. The new company will be named SELLAS Life Science Group, Inc. Bothe Galena and SELLAS focus on developing late-stage, novel cancer treatments.
In late January, Galena Biopharma Inc (NASDAQ:GALE) was trading under $2.00 after having been above $45 earlier that same month and class-action law firms were seeking plaintiffs. They alleged that Galena made false and/or misleading statements and/or failed to disclose that: (1) Galena’s sales of Abstral were based on unsustainable sales and marketing practices; (2) such sales and marketing practices could subject Galena to a criminal investigation; and (3) consequently, Galena’s statements about its business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
Subsequently, Galena Biopharma Inc (NASDAQ:GALE) announced that they were seeking strategic alternatives that would maximize shareholders value. As time went on, GALE shares slid to less than $1.
Under the terms of the merger agreement, existing SELLAS shareholders will receive newly issued shares of Galena common stock. Assuming that the merger is consummated, Galena stock and warrant holders are expected to own approximately 32.5%, and SELLAS shareholders will own approximately 67.5% of the combined.
The SELLAS board of directors unanimously approved the terms of the merger and a majority of SELLAS shareholders have voted in favor of the transaction. The proposed merger is expected to close in Q4 2017, subject to the formal approval of Galena Biopharma Inc (NASDAQ:GALE) stockholders and other customary closing conditions.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.