Galena Is Stirring Traders' Passions

 | Jan 17, 2014 | 11:07 AM EST
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There are a lot of GALEs out there right now. I'm talking about Galena Biopharma (GALE), a biotech that's gone from $2 to $7 and change in a very short time. Galena has a potential vaccine for some forms of breast cancer, among other drugs, and it has become the latest stock to be bid up on hope and on tests that may or may not conclusively show whether the vaccine works.

Gale has a lot of boosters, including people who write on websites without disclosing their names. The stories are very compelling. They make you want to buy it. Adam Feuerstein, who writes for us, has been as critical as you can be about the company, so when someone called about it and I said it seemed to be an interesting spec -- which it most surely is -- the stock jumped another 18%.

So I said I wanted to learn more, and the company's CEO, Mark J. Ahn, came on the show.

After asking about a big partnership with Dr. Reddy, the huge Indian pharma concern, I asked about Adam's issues and about a University of Pennsylvania study that questions the efficacy of vaccines like the one for which Galena is trying to win approval.

No sooner did I do that than the supporters of Galena turned on me. I had broken the cheering chorus by asking tough questions.

Immediately, I was hailed as someone owned by the shorts or who wanted to break Galena's stock. I had to laugh at that. I have been a reporter for 38 years. The goal of a reporter is to try to be skeptical. I did my job.

More important, though, you can see how people are desperate right now for momentum stocks to go higher. This group would have loved me if I said, "Buy GALE." But that wasn't my job. My job was to find out more.

I did

Now it is up to people to make up their own minds. But I am worried that here is another cult stock. It's one where the science better be right or it is going right back where it came from.

And maybe it is right. We just don't know yet. But we do know there are a pro and a con, and that's what matters, not just the pro.

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