Galena Biopharma, Inc. (NASDAQ:GALE), a biopharmaceutical company
committed to the development and commercialization of hematology
and oncology therapeutics that address unmet medical needs, today
reported its financial results and provided a corporate update for
the quarter ended September 30, 2016.
“Over the past several weeks we have collaborated
with regulatory experts and world leaders in the treatment of
myeloproliferative neoplasms on key elements of the trial design
for our pivotal, Phase 3 trial that we expect to initiate in the
second quarter of 2017,” said Mark W. Schwartz, Ph.D., President
and Chief Executive Officer. “Essential thrombocythemia is a
chronic condition in patients presenting with elevated platelets
and the limited available treatment options often include
challenging side effects. We believe that GALE-401, our controlled
release version of anagrelide, could be both effective at lowering
platelets and improve the side effect profile from the immediate
release version currently available.”
As previously announced, Galena discontinued its
NeuVax™ (nelipepimut-S) Phase 3 PRESENT
(Prevention of Recurrence in
Early-Stage, Node-Positive Breast
Cancer with Low to Intermediate HER2 Expression
with NeuVax Treatment) clinical
trial due to futility in accordance with the recommendation from
the Independent Data Monitoring Committee (IDMC). On today’s call,
management will present the top-line data from the trial and its
assessment of the results.
Dr. Schwartz continued, “With a better
understanding of the interim data in the PRESENT trial, we have the
knowledge and experience to guide our immunotherapy programs
through clinical development, reinforcing my belief and confidence
in our pipeline. As the cancer immunotherapy field focuses on
combination treatments, we continue to advance our NeuVax plus
trastuzumab clinical trials and evaluate additional indications
where NeuVax may benefit patients in combination with other
agents. Similarly, our GALE-301 and GALE-302 trials remain
ongoing with two additional data presentations this year.”
Galena will host a webcast and conference call
today at 2:00 p.m. P.T./5:00 p.m. E.T. to discuss its financial and
business results. The live webcast will include slides that
can be accessed on the Company's website under the Investors
section/Events and Presentations:
http://investors.galenabiopharma.com/events.cfm. The conference
call can be accessed by dialing (844) 825-4413 toll-free in the
U.S., or (973) 638-3403 for participants outside the U.S. The
Conference ID number is: 7629100. The archived webcast replay
will be available on the Company's website for one year.
FINANCIAL REVIEW
Operations
Operating loss from Galena’s development programs
and general and administrative expenses, classified as continuing
operations, during the three months ended September 30, 2016
was $6.5 million, including $0.5 million in non-cash stock-based
compensation, compared to an operating loss from continuing
operations of $8.6 million, including $0.6 million in non-cash
stock-based compensation for the same period in 2015. Operating
loss for the first nine months of 2016 was $24.7 million, including
$1.8 million in non-cash stock-based compensation, compared to an
operating loss from continuing operations of $26.6 million,
including $1.3 million in non-cash stock-based compensation for the
same period in 2015.
Loss from continuing operations for Q3 2016 was
$4.3 million, or $0.02 per basic and diluted share, including $2.1
million in non-operating income. Loss from continuing operations
for Q3 2015 was $6.4 million, or $0.04 per basic and diluted share,
including $2.3 million non-operating income. Loss from continuing
operations for the first nine months of 2016 was $9.2 million, or
$0.05 per basic and diluted share, including $15.6 million in
non-operating income. Loss from continuing operations for the first
nine months of 2015 was $28.2 million, or $0.18 per basic and
diluted share, including $1.5 million in non-operating expense.
The net non-operating income for the three months
ended September 30, 2016 was largely due to a $3.7 million
gain from the significant decrease in the estimated fair value of
warrants accounted for as liabilities driven by the decline in
Galena's common stock price. The net non-operating income for the
nine months ended September 30, 2016 was largely due to $14.2
million and $5.2 million gains from the significant decreases in
the estimated fair value of warrants accounted for as liabilities,
and the contingent purchase price liability related to NeuVax given
the decision to close the PRESENT study, respectively. The gain
realized from the decrease in these two liabilities was partially
offset by $1.4 million and $2.0 million of interest expense for the
three and nine months ended September 30, 2016. The changes in the
estimated fair value of warrants accounted for as liabilities and
the contingent purchase price liability are reflected as non-cash
gains and losses in the consolidated financial statements.
Management believes the most relevant measure of our performance is
operating loss.
Loss from discontinued operations from Galena's
former commercial business for Q3 2016 was $2.6 million, or $0.01
per basic and diluted share, compared to $11.7 million, or $0.07
per basic and diluted share, for the same period of 2015. Loss from
discontinued operations for the first nine months of 2016 was $8.9
million, or $0.05 per basic and diluted share, compared to $16.1
million, or $0.11 per basic and diluted share, for the same period
of 2015. The three and nine months ended September 30, 2015 include
a one-time non-cash impairment charge of $8.1 million from the
former commercial business being classified as held for sale.
Net loss for Q3 2016 was $6.9 million, or $0.03 per
basic and diluted share, compared to net loss of $18.0 million, or
$0.11 per basic and diluted share, for the same period of 2015. Net
loss for the first nine months of 2016 was $18.0 million, or $0.10
per basic and diluted share, compared to $44.2 million, or $0.29
per basic and diluted share, for the same period of 2015.
Cash and Cash Equivalents
Galena had cash and cash equivalents of
approximately $24.5 million as of September 30, 2016, compared
with $29.7 million as of December 31, 2015. The decrease of
approximately $5.2 million in cash and cash equivalents from
December 31, 2015 to September 30, 2016 was attributable
primarily to $36.9 million used in operating activities, $1.1
million in selling expenses related to the sale of the Company’s
commercial products, and $4.8 million in payments on long-term
debt. The decrease was partially offset by $31.8 million in net
proceeds from issuance of common stock and warrants to purchase
common stock in offerings and $5.1 million becoming immediately
available to the Company from amending our long-term debt to reduce
restricted cash. As of September 30, 2016, Galena had $18.9 million
of restricted cash including $18.5 million restricted as a minimum
cash covenant for our Debenture, the minimum cash covenant being
the lesser of $18.5 million or the outstanding balance of the
Debenture.
THIRD QUARTER AND RECENT
ACTIVITIES
Clinical Development
Presented GALE-301/GALE-302 Phase 1b
DataOn October 20, 2016, a podium presentation was
delivered on Galena’s GALE-301 and GALE-302 clinical program at the
American College of Surgeons Clinical Congress 2016. The Phase 1b
is a single-center, randomized, single-blinded, three-arm study in
patients with breast or ovarian cancer diagnosis who were treated
with standard of care and were without evidence of disease. This
trial augments the Phase 1/2a trial with single-agent GALE-301 in
ovarian and endometrial cancers. The presentation was
entitled, “A Phase Ib Trial Comparing Different Doses/Schedules of
a Folate Binding Protein (FBP)-derived Peptide Vaccine, E39, and
its Attenuated Version, E39’, to Induce Long-term FBP-specific
Immunity in Disease-free Cancer Patients.” In this trial, which
enrolled mostly breast cancer patients, who have lower FBP exposure
than ovarian patients, the 500mcg dose appears to provide a more
optimal immunological response. This differs from the results
in ovarian cancer patients, who have much higher FBP expression,
with potential secondary immune tolerance, where 1000mcg was the
optimal dose. However, E39’ (GALE-302) given after E39 (GALE-301)
was able to induce long-term immunity in both dosing cohorts,
underscoring the potential importance of attenuated peptides in
relatively antigen-naïve patients.
Presented NeuVax plus Trastuzumab Interim
Safety DataOn October 10, 2016, Galena presented interim
safety data from the NeuVax Phase 2b combination study with
trastuzumab at the European Society for Medical Oncology (ESMO)
2016. The clinical trial is a randomized, multicenter,
investigator-sponsored, 300 patient Phase 2b study enrolling HER2
1+ and 2+ node positive, and high-risk node negative patients. The
poster, entitled, “Interim safety analysis of a phase II trial
combining trastuzumab and NeuVax, a HER2-targeted peptide vaccine,
to prevent breast cancer recurrence in HER2 low expression,”
demonstrated that this novel combination of trastuzumab and NeuVax
in HER2 low-expressing (LE) patients is well-tolerated and the
cardiac effects of trastuzumab are not impacted by the addition of
NeuVax.
Presented GALE-301 FBP Expression
DataOn September 27, 2016, data was presented on the
association between clinical outcomes and folate binding protein
(FBP) expression from our GALE-301 Phase 1/2a clinical trial at the
CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference.
The poster, entitled, “Improved disease-free survival in
endometrial and ovarian cancer patients with low folate binding
protein expression after treatment with the E39 peptide vaccine in
a phase I/IIa trial,” reported clinical outcomes based on FBP
expression level. The data revealed a disease free survival (DFS)
benefit in patients with low FBP expression (FBPlo), but not in
patients with high FBP expression (FBPhi).
Presented Preclinical NeuVax data in
Ovarian and Pancreatic CancerOn September 13, 2016,
preclinical NeuVax data was presented at the Progress in
Vaccination Against Cancer (PIVAC) Conference. NeuVax
contains the immunodominant peptide derived from the extracellular
region of the HER2 protein, which is expressed in ovarian and
pancreatic cancers as well as in breast cancer. The poster,
entitled, “Preclinical study on the efficacy of NeuVax peptide
vaccine against human Her2+/ HLA-A2.1+ ovarian and pancreatic
cancer,” demonstrated the results of HLA-A2 transgenic mice that
were immunized with NeuVax (E75) mixed with recombinant mouse
GM-CSF (NeuVax mice). Administration of the NeuVax vaccination
resulted in a specific, delayed-type hypersensitivity (DTH)
reaction and in the induction of E75 specific CD8+ T cells that
express PD-1 (programmed T-cell death protein). Both ovarian and
pancreatic tumor growth rate was significantly reduced in NSG mice
that received the CD8+ T cells from NeuVax-immunized mice compared
to those receiving CD8+ T cells from control mice. Additionally,
the expression of PD-1 on activated CD8+ T cells suggests an
opportunity to investigate the efficacy of NeuVax in combination
with PD-1 inhibitors.
Expanded GALE-401 Intellectual Property
Protection with Patent Issuance in JapanOn September 12,
2016, GALE-401 was issued a second Japanese Patent (JP Patent
#5985719) containing composition and method of use claims for
GALE-401, anagrelide controlled release. The patent covers
the treatment of patients suffering from myeloproliferative
diseases, including myeloproliferative neoplasms (MPNs) such as
essential thrombocythemia (ET) and polycythemia vera. The
patent provides GALE-401 exclusivity until 2029, not including any
patent term extensions.
Corporate
Appointed a new Chief Financial
Officer On November 3, 2016, Stephen F.
Ghiglieri was appointed as the Company’s Executive Vice President
and Chief Financial Officer. Mr. Ghiglieri has more than 30 years
in senior level finance and operations roles at both biotechnology
and technology companies. Prior to Galena Biopharma, Mr.
Ghiglieri served as CFO of MedData Inc., a private equity backed
healthcare services company that was sold to Mednax, a publicly
traded national medical group. Previously, he spent nearly 10
years at NeurogesX, ending his tenure as the Company’s Executive
Vice President, Chief Operating Officer, and CFO. Prior to
that he served as the CFO of Hansen Medical, Inc., a medical device
company. He also held senior level finance positions at two
other healthcare companies: Oacis Healthcare Systems, Inc., and
Oclassen Pharmaceuticals, Inc. Additionally, he was also the
CFO and Corporate Secretary for two technology software companies:
Avolent, Inc., and Andromedia, Inc. Mr. Ghiglieri began his career
as an audit manager of PricewaterhouseCoopers, LLP. He received a
Bachelor of Science in Business Administration from California
State University, Hayward where he graduated Magna Cum Laude. Mr.
Ghiglieri is also a Certified Public Accountant (inactive).
Announced a Reverse Stock
Split On October 31, 2016, the Company announced a
Reverse Stock Split of its shares of common stock at a ratio of
1-for-20 following the approval by the Company’s Board of
Directors. The reverse stock split was authorized by the
Company’s stockholders at the Special Meeting of Stockholders held
on October 21, 2016. The reverse stock split will become effective
on November 11, 2016 and the Company’s common stock will commence
trading on a split-adjusted basis when the market opens on Monday,
November 14, 2016. The Company's common stock will continue
to trade on the NASDAQ Capital Market under the symbol "GALE" but
will trade under the new CUSIP number 363256504.
Closed a Registered Direct Equity
Offering On July 13, 2016, Galena closed a registered
direct equity offering of common stock and warrants. The net
proceeds to the Company were approximately $11.7 million.
GALENA BIOPHARMA, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited) |
(Amounts in thousands, except share and per
share data) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
$ |
3,624 |
|
|
$ |
5,740 |
|
|
$ |
15,242 |
|
|
$ |
18,762 |
|
General and administrative |
2,848 |
|
|
2,895 |
|
|
9,490 |
|
|
7,869 |
|
Total operating expenses |
6,472 |
|
|
8,635 |
|
|
24,732 |
|
|
26,631 |
|
Operating loss |
(6,472 |
) |
|
(8,635 |
) |
|
(24,732 |
) |
|
(26,631 |
) |
Non-operating income
(expense): |
|
|
|
|
|
|
|
Litigation settlements |
— |
|
|
— |
|
|
(1,800 |
) |
|
— |
|
Change in fair value of warrants
potentially settleable in cash |
3,652 |
|
|
2,134 |
|
|
14,172 |
|
|
(981 |
) |
Interest expense, net |
(1,377 |
) |
|
(158 |
) |
|
(1,988 |
) |
|
(607 |
) |
Change in fair value of the
contingent purchase price liability |
(145 |
) |
|
307 |
|
|
5,182 |
|
|
69 |
|
Total non-operating income
(expense), net |
2,130 |
|
|
2,283 |
|
|
15,566 |
|
|
(1,519 |
) |
Loss from continuing
operations |
$ |
(4,342 |
) |
|
$ |
(6,352 |
) |
|
$ |
(9,166 |
) |
|
$ |
(28,150 |
) |
Discontinued
operations |
|
|
|
|
|
|
|
Loss from discontinued
operations |
(2,587 |
) |
|
(11,674 |
) |
|
(8,867 |
) |
|
(16,074 |
) |
Net loss |
$ |
(6,929 |
) |
|
$ |
(18,026 |
) |
|
$ |
(18,033 |
) |
|
$ |
(44,224 |
) |
Net loss per common
share: |
|
|
|
|
|
|
|
Basic and diluted net loss per
share, continuing operations |
$ |
(0.02 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.18 |
) |
Basic and diluted net loss per
share, discontinued operations |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.11 |
) |
Basic and diluted net loss
per share |
$ |
(0.03 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.29 |
) |
Weighted-average common
shares outstanding: basic and diluted |
|
209,303,286 |
|
|
|
161,857,522 |
|
|
|
190,306,319 |
|
|
|
153,000,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GALENA BIOPHARMA, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(unaudited) |
(Amounts in thousands) |
|
|
September 30, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
24,514 |
|
|
$ |
29,730 |
|
Restricted cash |
18,901 |
|
|
401 |
|
Litigation settlement insurance
recovery |
— |
|
|
21,700 |
|
Prepaid expenses and other current
assets |
1,043 |
|
|
1,398 |
|
Current assets of discontinued
operations |
— |
|
|
392 |
|
Total current assets |
44,458 |
|
|
53,621 |
|
Equipment and furnishings,
net |
226 |
|
|
335 |
|
In-process research and
development |
12,864 |
|
|
12,864 |
|
GALE-401 rights |
9,255 |
|
|
9,255 |
|
Goodwill |
5,898 |
|
|
5,898 |
|
Deposits |
145 |
|
|
171 |
|
Total assets |
$ |
72,846 |
|
|
$ |
82,144 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
894 |
|
|
$ |
1,597 |
|
Accrued expense and other current
liabilities |
3,819 |
|
|
5,292 |
|
Litigation settlement payable |
— |
|
|
25,000 |
|
Fair value of warrants potentially
settleable in cash |
9,908 |
|
|
14,518 |
|
Current portion of long-term
debt |
23,722 |
|
|
4,739 |
|
Current liabilities of discontinued
operations |
4,195 |
|
|
5,925 |
|
Total current liabilities |
42,538 |
|
|
57,071 |
|
Deferred tax liability,
non-current |
5,418 |
|
|
5,418 |
|
Contingent purchase price
consideration, net of current portion |
960 |
|
|
6,142 |
|
Total liabilities |
48,916 |
|
|
68,631 |
|
Stockholders’ equity |
23,930 |
|
|
13,513 |
|
Total liabilities and
stockholders’ equity |
$ |
72,846 |
|
|
$ |
82,144 |
|
|
|
|
|
|
|
|
|
About Galena Biopharma
Galena Biopharma, Inc. is a biopharmaceutical
company committed to the development and commercialization of
hematology and oncology therapeutics that address unmet medical
needs. Galena’s pipeline consists of multiple mid-to-late-stage
clinical assets led by our hematology asset, GALE-401, and our
novel cancer immunotherapy programs including NeuVax™
(nelipepimut-S) and GALE-301/GALE-302. For more information, visit
www.galenabiopharma.com.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not
limited to, statements about development of our products, our
future financial condition and results of operations and potential
for profitability, the sufficiency of our cash resources, our
ability to obtain additional equity or debt financing, possible
partnering or other strategic opportunities for the development of
our products, as well as other statements related to the progress
and timing of our product commercialization and development
activities, present or future licensing, collaborative or financing
arrangements or that otherwise relate to future periods. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including those identified under
“Risk Factors” in Galena’s Annual Report on Form 10-K for the year
ended December 31, 2015 and most recent Quarterly Reports on Form
10-Q filed with the SEC. Actual results may differ materially
from those contemplated by these forward-looking statements. Galena
does not undertake to update any of these forward-looking
statements to reflect a change in its views or events or
circumstances that occur after the date of this press release.
NeuVax is a trademark of Galena Biopharma, Inc.
Contact:
Remy Bernarda
SVP, Investor Relations & Corporate Communications
(925) 498-7709
ir@galenabiopharma.com
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