Full Press Release Details
Galena Biopharma Reports Second Quarter 2013 Financial Results
Lake Oswego, Oregon, August 8, 2013- Galena Biopharma (NASDAQ: GALE), a biopharmaceutical company commercializing and developing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care, today reported its financial results for the three months and six months ended June 30, 2013 and provided a business update.
"We have made rapid progress towards successfully commercializing Abstral ," said Mark J. Ahn, Ph.D., President and Chief Executive Officer. "While the NeuVax PRESENT trial continues its enrollment and our other development programs advance, Galena has now evolved into a fully integrated biopharmaceutical company. Building our capabilities allows us to seize opportunities to better serve patients and increase shareholder value."
Second Quarter 2013 Financial Highlights
Operating loss for the three months ended June 30, 2013 was $7.9 million, including $0.5 million in stock-based compensation charges, compared with an operating loss of $5.7 million for the three months ended June 30, 2012, which includes $0.2 million in stock-based compensation charges. For the the six months ended June 30, 2013, operating loss from continuing operations was $14.6 million compared with $10.1 million for the six months ended June 30, 2012.
Galena Biopharma also incurs income or expense due to non-cash charges related to changes in the fair value estimates of the Company's warrant liabilities and contingent purchase price liability, as well as the realized gain from the sale of marketable securities, which is included in other income and expense. The non-cash charges related to the changes in values of our warrant and contingent purchase price liabilities for the three months ended June 30, 2013 were $0.5 million versus income of $5.9 million for the three months ended June 30, 2012. These charges for the six months ended June 30, 2013 were $5.9 million versus $13.2 million for the six months ended June 30, 2012. Other income from the realized gain on the sale of marketable securities was $0.6 million for the three months ended June 30, 2013.
Net loss (including both continued operations and discontinued operations) for the three months ended June 30, 2013 was $9.6 million, or $0.11 per basic and diluted share, versus a net loss of $0.2 million, or $0.00 per basic share and $0.03 per diluted share, for the three months ended June 30, 2012. Net loss (including both continued operations and discontinued operations) for the six months ended June 30, 2013 was $18.9 million, or $0.23 per basic and diluted share, versus a net loss of $25.0 million, or $0.44 per basic and diluted share, for the six months ended June 30, 2012.
As of June 30, 2013, Galena had cash, cash equivalents and marketable securities of $26.8 million, compared with $35.6 million as of December 31, 2012. Our marketable securities consisted of approximately 30.5 million (1.0 million post reverse-stock split) shares of common stock in RXi Pharmaceuticals (OTCQX: RXII) with a market value of approximately $5.8 million as of June 30, 2013 and 33.5 million (1.1 million post reverse-stock split) shares of common stock of RXi with a market value of approximately $2.7 million as of December 31, 2012. On July 19, 2013, RXi effected a 1-for-30 reverse stock split of its outstanding shares of common stock (OTCQX: RXIID). On May 8, Galena completed a debt financing of $15 million to fund the purchase and launch of Abstral, of which $10 million was drawn immediately and $5 million remains available.
About NeuVax (nelipepimut-S)
NeuVax (nelipepimut-S) is the immunodominant nonapeptide derived from the extracellular domain of the HER2 protein, a well-established target for therapeutic intervention in breast carcinoma. The nelipepimut sequence stimulates specific CD8+ cytotoxic T lymphocytes (CTLs) following binding to HLA-A2/A3 molecules on antigen presenting cells (APC). These activated specific CTLs recognize, neutralize and destroy, through cell lysis, HER2 expressing cancer cells, including occult cancer cells and micrometastatic foci. The nelipepimut immune response can also generate CTLs to other immunogenic peptides through inter- and intra-antigenic epitope spreading. Based on a successful Phase 2 trial, which achieved its primary endpoint of disease-free survival (DFS), the Food and Drug Administration (FDA) granted NeuVax a Special Protocol Assessment (SPA) for its Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study. The PRESENT trial is ongoing and additional information on the study can be found at www.neuvax.com. A randomized, multicenter investigator sponsored, 300 patient Phase 2b clinical trial is also enrolling patients to study NeuVax in combination with Herceptin (trastuzumab; Genentech/Roche).
According to the National Cancer Institute, over 230,000 women in the U.S. are diagnosed with breast cancer annually. Of these women, only about 25% are HER2 positive (IHC 3+). NeuVax targets the approximately 50%-60% of these women who are HER2 low to intermediate (IHC 1+/2+ or FISH < 2.0) and achieve remission with current standard of care, but have no available HER2-targeted adjuvant treatment options to maintain their disease-free status.
About Abstral (fentanyl) Sublingual Tablets
Abstral (fentanyl) Sublingual Tablets are an important treatment option for inadequately controlled breakthrough cancer pain (BTcP) which impact 40%-80% of cancer patients. Abstral is approved by the FDA, and is a sublingual (under the tongue) fentanyl tablet indicated for the management of breakthrough pain in patients with cancer, 18 years of age and older, who are already receiving, and who are tolerant to, opioid therapy for their persistent baseline cancer pain. The innovative Abstral formulation delivers the analgesic power and increased bioavailability of micronized fentanyl in a more convenient sublingual tablet which rapidly dissolves under the tongue in seconds, provides rapid relief of breakthrough pain in minutes, and matches the duration of the entire pain episode. Abstral is available through the transmucosal immediate-release fentanyl (TIRF) Risk Evaluation and Mitigation Strategy (REMS) program. For additional important safety information, see the full Prescribing Information for Abstral available at www.abstral.com.
About Galena Biopharma
Galena Biopharma, Inc. (NASDAQ: GALE) is a Portland, Oregon-based biopharmaceutical company commercializing and developing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care. For more information please visit us at 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 the progress of the commercialization of Abstral and development of Galena's product candidates, including patient enrollment in our clinical trials, as well as statements about our expectations, plans and prospects. 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, 2012 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 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.
Galena Biopharma, Inc.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF EXPENSES (Unaudited)
(Amounts in thousands, except share and per share data)
| Three Months Ended June 30, 2013 | Three Months Ended June 30, 2012 | Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | ||||||||||||
| Expenses: | |||||||||||||||
| Research and development expense | $ | 5,276 | $ | 3,720 | $ | 10,357 | $ | 6,384 | |||||||
| General and administrative expense | 2,710 | 1,963 | 4,240 | 3,709 | |||||||||||
| Operating loss | 7,986 | 5,683 | 14,597 | 10,093 | |||||||||||
| Other income (expense), net | (70 | ) | 5,910 | (5,514 | ) | (13,220 | ) | ||||||||
| Income (loss) from continuing operations before income taxes | (8,056 | ) | 227 | (20,111 | ) | (23,313 | ) | ||||||||
| Income tax expense (benefit) | 1,541 | - | (1,221 | ) | - | ||||||||||
| Net loss from continuing operations | (9,597 | ) | 227 | (18,890 | ) | (23,313 | ) | ||||||||
| Discontinued operations | - | (423 | ) | - | (1,644 | ) | |||||||||
| Net loss | $ | (9,597 | ) | $ | (196 | ) | $ | (18,890 | ) | $ | (24,957 | ) | |||
| Earnings per share - basic | |||||||||||||||
| Income (loss) from continuing operations | $ | (0.11 | ) | $ | 0.00 | $ | (0.23 | ) | $ | (0.41 | ) | ||||
| Loss from discontinued operations | $ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | (0.03 | ) | |||||
| Net loss | $ | (0.11 | ) | $ | 0.00 | $ | (0.23 | ) | $ | (0.44 | ) | ||||
| Earnings per share - diluted | |||||||||||||||
| Income (loss) from continuing operations | $ | (0.11 | ) | $ | (0.03 | ) | $ | (0.23 | ) | $ | (0.41 | ) | |||
| Loss from discontinued operations | $ | 0.00 | $ | (0.01 | ) | $ | 0.00 | $ | (0.03 | ) | |||||
| Net loss | $ | (0.11 | ) | $ | (0.03 | ) | $ | (0.23 | ) | $ | (0.44 | ) | |||
| Weighted average common shares outstanding - basic | 83,656,184 | 65,112,147 | 83,331,059 | 56,554,160 | |||||||||||
| Weighted average common shares outstanding - diluted | 83,656,184 | 67,177,572 | 83,331,059 | 56,554,160 |
Galena Biopharma, Inc.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
| June 30, 2013 | |||||||
| (Unaudited) | December 31, 2012 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 20,919 | $ | 32,807 | |||
| Restricted cash | 102 | 101 | |||||
| Marketable securities | 5,786 | 2,678 | |||||
| Inventory | 352 | - | |||||
| Prepaid expenses and other current assets | 389 | 535 | |||||
| Total current assets | 27,548 | 36,121 | |||||
| Equipment and furnishings, net | 467 | 29 | |||||
| In-process research and development | 12,864 | 12,864 | |||||
| Abstral rights | 15,083 | - | |||||
| Goodwill | 5,898 | 5,898 | |||||
| Deposits | 142 | 74 | |||||
| Total assets | $ | 62,002 | $ | 54,986 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,092 | $ | 1,976 | |||
| Accrued expense and other current liabilities | 8,444 | 2,038 | |||||
| Current maturities of capital lease obligations | 6 | 6 | |||||
| Fair value of warrants potentially settleable in cash | 14,909 | 10,964 | |||||
| Current contingent purchase price consideration | - | 935 | |||||
| Current portion of long-term debt | 301 | - | |||||
| Total current liabilities | 25,752 | 15,919 | |||||
| Capital lease obligations, net of current maturities | 34 | 51 | |||||
| Deferred tax liability, non-current | 5,053 | 5,053 | |||||
| Contingent purchase price consideration, net of current portion | 6,529 | 6,207 | |||||
| Long-term debt, net of current portion | 9,403 | - | |||||
| Total liabilities | 46,771 | 27,230 | |||||
| Stockholders' equity | 15,231 | 27,756 | |||||
| Total liabilities and stockholders' equity | $ | 62,002 | $ | 54,986 |
Senior Director, Communications