Full Press Release Details
Galena Biopharma Reports Second Quarter 2014 Results
Portland, Oregon, August 11, 2014- Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company developing and commercializing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care, today reported its financial results for the quarter ended June 30, 2014 and provided a business update.
"With the recent acquisition of our second approved product, Zuplenz, Galena now has two commercial products and three clinical assets in development, providing our shareholders a stratified and diversified pipeline as we look to enhance cancer care and treat its often debilitating side-effects," said Mark J. Ahn, Ph.D., President and Chief Executive Officer. "We are excited for the second half of the year as we continue to advance all of our programs. Our two, key expected milestones in clinical development are completion of enrollment activities in our international, Phase 3 NeuVax PRESENT study, and the initiation of the Phase 2 clinical trial with GALE-401. Commercially, we continue to gain traction with Abstral, and we have begun preparations for the launch of Zuplenz in early 2015."
Galena will host a conference call today at 2:00 p.m. P.T./5:00 p.m. E.T. to discuss financial and business results. The 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: 78727492. The conference call will also be webcast live and available under the Investors section/Events and Presentations on the Company's website at www.galenabiopharma.com. The archived webcast replay will be available on the Company's website for 90 days.
Second Quarter 2014 Financial Highlights
Net revenue for the three months ended June 30, 2014 was $2.3 million and $4.5 million for the first half of 2014, compared to no net revenue for the six months ended June 30, 2013. Cost of revenue and gross margin were $0.3 million and $2.0 million, respectively, for the three months ended June 30, 2014. Of the net revenue, approximately $0.9 million was attributable to an order from one of the principal customers of Galena. The timing and amount of the order could cause a corresponding reduction in orders from this customer, and in related revenue, in the third quarter of 2014.
Operating loss for the three months ended June 30, 2014 was $15.8 million, including $1.5 million in stock-based compensation charges, compared to $11.8 million, including $1.7 million in stock-based compensation charges, for the three months ended March 31, 2014, and $8.0 million, including $0.5 million in stock-based compensation charges, for the three months ended June 30, 2013.
Galena also incurs non-cash income and expense related to changes in the fair value estimates of the Company's warrant liabilities. Non-cash expense related to the change in warrant values for the three months ended June 30, 2014 was $3.4 million compared to non-cash income of $9.8 million for the three months ended March 31, 2014, and non-cash expense of $0.5 million for the three months ended June 30, 2013.
Net loss for the three months ended June 30, 2014 was $19.9 million, or $0.17 per basic and diluted share, compared to a net loss of $2.5 million, or $0.02 per basic and diluted share, for the three months ended March 31, 2014, and a net loss of $9.6 million, or $0.11 per basic and diluted share, for the three months ended June 30, 2013.
As of June 30, 2014, Galena had cash and cash equivalents of $39.2 million, compared with $47.8 million as of December 31, 2013.
Q2 and Recent 2014 Developments
GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Net revenue | $ | 2,331 | $ | - | $ | 4,504 | $ | - | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue (excluding amortization of certain acquired intangible assets) | 347 | - | 678 | - | |||||||||||
| Research and development | 8,069 | 5,276 | 14,839 | 10,357 | |||||||||||
| Selling, general, and administrative | 9,600 | 2,710 | 16,430 | 4,240 | |||||||||||
| Amortization of certain acquired intangible assets | 98 | - | 189 | - | |||||||||||
| Total costs and expenses | 18,114 | 7,986 | 32,136 | 14,597 | |||||||||||
| Operating loss | (15,783 | ) | (7,986 | ) | (27,632 | ) | (14,597 | ) | |||||||
| Non-operating income (expense): | |||||||||||||||
| Change in fair value of warrants potentially settleable in cash | (3,353 | ) | (518 | ) | 6,439 | (5,521 | ) | ||||||||
| Interest income (expense), net | (314 | ) | (186 | ) | (628 | ) | (181 | ) | |||||||
| Other income (expense) | (491 | ) | 634 | (656 | ) | 188 | |||||||||
| Total non-operating income (expense), net | (4,158 | ) | (70 | ) | 5,155 | (5,514 | ) | ||||||||
| Loss before income taxes | (19,941 | ) | (8,056 | ) | (22,477 | ) | (20,111 | ) | |||||||
| Income tax benefit | - | 1,541 | - | (1,221 | ) | ||||||||||
| Net loss | $ | (19,941 | ) | $ | (9,597 | ) | $ | (22,477 | ) | $ | (18,890 | ) | |||
| Net loss per common share: | |||||||||||||||
| Basic and diluted net loss per share | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.19 | ) | $ | (0.23 | ) | |||
| Weighted-average common shares outstanding: basic and diluted | 118,083,988 | 83,656,184 | 117,154,099 | 83,331,059 |
GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
| June 30, 2014 | |||||||
| (Unaudited) | December 31, 2013 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 39,162 | $ | 47,787 | |||
| Restricted cash | 200 | 200 | |||||
| Accounts receivable | 2,152 | 3,683 | |||||
| Inventories | 433 | 386 | |||||
| Prepaid expenses | 1,737 | 1,399 | |||||
| Total current assets | 43,684 | 53,455 | |||||
| Equipment and furnishings, net | 623 | 665 | |||||
| In-process research and development | 12,864 | 12,864 | |||||
| Abstral rights, net | 14,784 | 14,979 | |||||
| GALE-401 rights | 2,315 | - | |||||
| Goodwill | 5,898 | 5,898 | |||||
| Deposits and other assets | 108 | 115 | |||||
| Total assets | $ | 80,276 | $ | 87,976 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,036 | $ | 2,660 | |||
| Accrued expenses and other current liabilities | 11,789 | 8,667 | |||||
| Current maturities of capital lease obligations | 6 | 6 | |||||
| Fair value of warrants potentially settleable in cash | 15,506 | 48,965 | |||||
| Current portion of long-term debt | 4,076 | 2,149 | |||||
| Total current liabilities | 33,413 | 62,447 | |||||
| Capital lease obligations, net of current maturities | 19 | 26 | |||||
| Deferred tax liability | 5,053 | 5,053 | |||||
| Contingent purchase price consideration, net of current portion | 7,477 | 6,821 | |||||
| Long-term debt, net of current portion | 6,003 | 7,743 | |||||
| Total liabilities | 51,965 | 82,090 | |||||
| Total stockholders' equity | 28,311 | 5,886 | |||||
| Total liabilities and stockholders' equity | $ | 80,276 | $ | 87,976 |
About Abstral (fentanyl) Sublingual Tablets
Abstral (fentanyl) Sublingual Tablets are an important treatment option for inadequately controlled breakthrough cancer pain which impacts 40%-80% of cancer patients. Abstral is approved by the U.S. Food and Drug Administration, and is a sublingual (under the tongue) fentanyl tablet indicated only 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 convenient sublingual tablet which is designed to dissolve under the tongue in seconds, provide relief of breakthrough pain within minutes, and match the duration of the pain episode. See full prescribing information at www.abstral.com.
About Zuplenz (ondansetron) Oral Soluble Film
Zuplenz (ondansetron) Oral Soluble Film is approved by the U.S. Food and Drug Administration (FDA) in adult patients for the prevention of highly and moderately emetogenic chemotherapy-induced nausea and vomiting (CINV), radiotherapy-induced nausea and vomiting (RINV), and post-operative nausea and vomiting (PONV). Zuplenz is also approved in pediatric patients for moderately emetogenic CINV. Nausea and vomiting are two of the most common side-effects experienced by post-surgery patients and patients receiving chemotherapy or radiation. Zuplenz utilizes the proprietary PharmFilm technology as an oral soluble film that dissolves on the tongue in under 30 seconds. This rapidly dissolving film eliminates the burden of swallowing pills during periods of emesis and in cases of oral irritation. Reducing this burden may increase patient adherence and reduce emergency visits and hospitalization due to a lack of patient compliance or the patient's inability to keep their treatment down without vomiting. Zuplenz is supplied in both 4 mg and 8 mg ondansetron doses with a safety profile equivalent to other products in the class.
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-S 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 U.S. 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).
About GALE-301 (Folate Binding Protein (FBP) vaccine)
GALE-301 (Folate Binding Protein (FBP)) cancer immunotherapy targets FBP, a well-validated therapeutic target, which is highly over-expressed in breast, ovarian and endometrial cancers. FBP is the source of immunogenic peptides that can stimulate cytotoxic T lymphocytes (CTLs) to recognize and destroy presenting FBP-expressing cancer cells. The FBP vaccine consists of the FBP peptide(s) combined with the immune adjuvant, granulocyte macrophage-colony stimulating factor (GM-CSF). GALE-301 is currently in a Phase 2 trial in ovarian and endometrial cancers.
About GALE-401 (Anagrelide CR)
GALE-401 (Anagrelide CR) contains the active ingredient anagrelide, an FDA-approved product, which has been in use since the late 1990s for the treatment of high platelet counts in patients with Myeloproliferative Neoplansms (MPNs), including Polycythemia Vera (PV), Chronic Myelogenous Leukemia (CML), and Essential Thrombocythemia (ET). GALE-401 is a reformulated, controlled release version of anagrelide that is currently only given as an immediate release (IR) version. Adverse events such as nausea, diarrhea, abdominal pain, palpitations, tachycardia, and headache with anagrelide IR are dose and plasma concentration dependent. Therefore, reducing the maximum concentration (Cmax) is expected to reduce the side effects, but preserve efficacy. In Phase 1 studies in healthy volunteers, GALE-401 was shown to significantly reduce the Cmax while preserving nearly 100% of the Area Under the Curve (AUC), or the total amount of drug absorbed by the body. Thus, GALE-401 is expected to reduce the peak plasma exposure to lessen the adverse events while maintaining effective therapeutic levels for platelet inhibition.
About Galena Biopharma
Galena Biopharma, Inc. (NASDAQ: GALE) is a Portland, Oregon-based biopharmaceutical company developing and commercializing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care. 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 our future revenue from the sale of Abstral , planned launch of Zuplenz . 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, 2013 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.
VP, Marketing & Communications