Share in Galena Biopharma (GALE) plunged nearly 25 percent to begin trading Friday on heavy volume as the fallout from the company’s stock promotion scandal appears to continue. The sell-off appeared to break through a major technical barrier that had developed in recent months, causing the drop to pick up steam as the morning wore on.

GALE Hammered Again on Heavy Volume

Shares of Galena were moving fast on Friday morning as the stock went into freefall soon after the opening bell. Without any specific news appearing to drive the drop, the sell-off appears to be motivated by speculators, residual negative sentiment from Wednesday’s revelations that the company was paying a marketing firm to pump its stock, or some combination of both.

The fall paused briefly at 10 am after the stock reached $4 a share, a price that had been acting as a support level since mid-December. However, after circling the drain for about 15 minutes, the selling resumed and Galena appeared to break through said support level firmly. Shares then kept falling, reaching $3.30 a share before starting to bounce back just after 11 am.

Pipeline Must Produce

The good news for Galena investors is that the company currently has what appears to be a robust product pipeline in place. Oral pain treatment Abstral has already been approved for use in the market and was officially launched in October. However, some Galena shorts estimate that the drug’s 5 percent market share will ultimately only net $20 million to $30 million for Galena.

Meanwhile, the company also has three different drugs currently in various stages of development: NeuVax, GALE-401, and GALE-301, a Folate Binding Protein vaccine for ovarian and endometrial cancer patients. NeuVax is currently in two separate trials to test its efficacy in treating breast cancer (one is testing the drug in combination with Herceptin), with a third trial in planning to test its effect on gastric cancer patients.

Galena’s website describes NeuVax as follows: “NeuVax consists of the E75 peptide derived from HER2 combined with the immune adjuvant granulocyte macrophage colony stimulating factor (GM-CSF).  Treatment with NeuVax stimulates cytotoxic (CD8+) T cells in a highly specific manner to target cells expressing any level of HER2.  NeuVax is given as an intradermal injection once a month for six months, followed by a booster injection once every six months.”

Herceptin, which is only available as a treatment to a quarter of women affected by breast cancer, had revenues of $5 billion in 2010, giving Galena hope that sunnier days are around the corner. However, the recent revelations of stock promotion may place extra pressure on future clinical results for the company.

Noble Financial’s Endorsement Not a Timely One

The plummeting share price for Galena comes just two weeks after Noble Financial reiterated its buy rating on the stock and raised the price target from $4 to $6 a share.

“With improved pk metrics GALE-401 may be more effective without the tolerability/safety issues of Anagrelide-IR; could capture larger market share over HU; US sales potential of $150 to $200M; 8K new cases of ET each year and 80-100K prevalence in US … Company has discussed with FDA, GALE-401 will be developed under 505b2 path for ET with Anagrelide-IR as reference drug; Phase 2 studies to begin shortly; could be on the market late 2017 or early 2018,” Analyst Rahul Jasuja noted.

Analysts have been kind to Galena in 2014, with two other analysts weighing in on Tuesday, Jan. 21. Maxim Group rated the stock a buy and raised its price target from $9 to $11, while Needham & Company increased their own price target to $9 a share. That makes five different research analysts rating the stock a buy, and the average price target for the company is $7.64 a share.