Full Press Release Details
Galena Biopharma Reports Third Quarter 2011
Financial Results and Provides Business Update
| NeuVax (E75) makes significant progress towards initiating the Phase 3 PRESENT ( P revention of R ecurrence in E arly- S tage, Node-Positive Breast Cancer with Low to Intermediate HER2 E xpression with N euVax T reatment) study in 1H, 2012. | |||
| Folate Binding Protein-E39 (FBP) targeted vaccine aimed at preventing the recurrence of ovarian and endometrial cancers to commence Phase 1/2 trials by year-end 2011. | |||
| Spin-off on track of non-core RNAi subsidiary separately funded since September 26, 2011. |
Lake Oswego, Oregon, November 14, 2011 Galena Biopharma (NASDAQ: GALE), a biotechnology company
focused on developing innovative, targeted oncology treatments addressing major unmet medical needs
to advance cancer care, today provided a business update and reported its financial results for the
quarter ended September 30, 2011.
Galena s lead asset, NeuVax (E75 plus Granulocyte Macrophage Colony-stimulating Factor, GM-CSF), a
peptide-based adjuvant immunotherapy, has achieved key milestones over the past several months. As
a result, its Phase 3 PRESENT (Prevention of Recurrence in
Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2
Expression with NeuVax Treatment) clinical trial remains on track to
commence in the first half of 2012. In addition, Galena acquired Folate Binding Protein-E39 (FBP),
a targeted vaccine to prevent recurrence in gynecological cancers. Galena expects to initiate a
Phase 1 trial for FBP by the end of 2011.
Over the last quarter, we have made tremendous strides to reposition Galena Biopharma and create a
promising, late-stage cancer immunotherapy company with multiple product candidates, stated Mark
J. Ahn, PhD, Galena s President and Chief Executive Officer. We now have the right team in place
to move both NeuVax and FBP through clinical development, and we are excited to present these
treatment opportunities to patients in need.
In September, Galena announced a strategic transaction involving its new RXi Pharmaceuticals
Corporation subsidiary. As part of the strategic transaction, the company contributed its RNAi
program to RXi and changed its name from RXi Pharmaceuticals to Galena Biopharma to reflect its
focus on developing its portfolio of targeted cancer therapies. Additionally, Galena committed,
among other things, to distribute to its stockholders as of a future record date to
be announced, a portion of the RXi common stock held by Galena in order to accomplish the spin-off
of RXi. The spin-off is subject to certain conditions, including the completion of the
registration of the spin-off with the Securities and Exchange Commission.
| Enhanced the NeuVax patent portfolio by acquiring patent rights covering the use of NeuVax in combination with trastuzumab (Herceptin ; Genentech/Roche); and use in low-to-intermediate HER2 breast cancer patients not eligible for Herceptin therapy. | |||
| Met all requirements specified by the U.S. Food and Drug Administration (FDA) to lift the NeuVax Chemistry, Manufacturing, and Controls partial clinical hold and initiated manufacturing of clinical trial material. | |||
| NeuVax Phase 1/2 clinical trial results cited in the journal Cancer , published by the American Cancer Society. | |||
| Presented positive data from the Phase 2 NeuVax clinical trials at the 26th Annual Meeting of the Society for the Immunotherapy of Cancer (SITC) which demonstrated that patients with less aggressive disease traits may derive greater clinical benefit from vaccination and have lower rates of breast cancer recurrence. | |||
| Licensed Folate Binding Protein-E39 (FBP), a targeted peptide vaccine to prevent recurrence in gynecological cancers from the University of Texas M.D. Anderson Cancer Center and the Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. | |||
| Strengthened Galena s leadership team: |
| Hana B. Moran, PhD, named as Vice President, Regulatory Affairs and Quality Assurance. | |||
| Kwang Lee named as Vice President, Finance and Principal Accounting Officer. | |||
| Rosemary Mazanet, MD, PhD, added as Chief Medical Officer. |
Quarterly Financial Highlights:
Cash, Cash Equivalents and Short-Term Investments
As of September 30, 2011, cash, cash equivalents and short-term investments totaled $15.7 million,
compared with cash and cash equivalents of $6.9 million at December 31, 2010. This
$8.8 million increase is attributable to the closing of two underwritten public offerings that
provided net cash proceeds of approximately $18.2 million after underwriting fees and other
estimated offering expenses (the March 2011 offering resulting in net proceeds of $7.3 million and
the April 2011 offering resulting in net proceeds of $10.9 million), offset by net cash used in
operating activities of $10.5 million for the nine months ended September 30, 2011.
Net loss for the three months ended September 30, 2011 was $5.5 million or $0.13 per basic and
diluted share, compared with a net loss of $4.1 million, or $0.23 per basic and diluted share, for
the comparable period in 2010. Galena also reported a net loss of $13.1 million, or $0.39 per basic
and diluted share, for the nine months ended September 30, 2011, compared with a net loss of $10.2
million, or $0.57 per basic and diluted share, for the nine months ended September 30, 2010. The
increase of $1.4 million, or 34%, in net loss for the quarter ended September 30, 2011 compared to
the quarter ended September 30, 2010 was primarily due to a $1.4 million increase in net loss from
operations. The increase of $2.9 million, or 28%, in net loss for the nine months ended September
30, 2011 compared to the nine months ended September 30, 2010 was primarily due to a $2.1 million
increase in net loss from operations and a decrease of $1.7 million of non-cash income as a result
of the change in fair value of warrant liability offset by an increase in non-cash income of $0.7
million related to a gain in the purchase price consideration liability and an increase in other
income of $0.2 million from government grant monies received.
Net loss from operations increased to $5.1 million in the third quarter of 2011 from $3.7 million
in the third quarter of 2010, and increased to $15.0 million for the nine months ended September
30, 2011 compared to $12.9 million for the comparable period in 2010. The increase of $1.4 million,
or 38%, in net loss from operations for the quarter ended September 30, 2011 compared to the
quarter ended September 30, 2010 was primarily due to a $1.0 million increase in research and
development expenses and a $0.3 million increase in general and administrative expenses due to the
focus on expenses related to the Apthera acquisition. The increase of $2.1 million, or 16%, in net
loss from operations for the nine months ended September 30, 2011 compared to the nine months ended
September 30, 2010 was primarily the result of a $2.5 million increase in research and development
expenses and a $0.8 million increase in general and administrative expenses due to the focus on
oncology related to the Apthera acquisition, offset by a decrease of $1.2 million in non-cash
equity based compensation, as noted below.
Research and Development Expenses
Research and development expenses increased to $3.0 million in the third quarter of 2011 from $1.9
million in the third quarter of 2010, and increased to $7.8 million for the first nine months
of 2011 from $6.1 million for the first nine months of 2010. The increase in research and
development expenses for the third quarter of 2011 compared with the third quarter of 2010 of
$1.1 million, or 58%, was primarily due to an increase in research and development expenses
related to a ramp up in NeuVax-related fees and activities. The increase of $1.7 million, or 28%
for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010
was primarily due to an increase of $2.5 million in research and development expenses related to a
ramp up in NeuVax-related fees and activities, which was partially offset by a decrease of $0.8
million in non-employee non-cash stock based compensation.
General and Administrative Expenses
General and administrative expenses increased to $2.1 million in the third quarter of 2011 from
$1.8 million in the third quarter of 2010, and increased to $7.1 million for the first nine months
of 2011 from $6.8 million for the first nine months in 2010. The increase in general and
administrative expenses for the third quarter of 2011 compared with the third quarter of 2010 of
$0.3 million, or 17%, was primarily due to an increase in expenses for professional services. The
increase of $0.3 million, or 4%, for the nine months ended September 30, 2011 compared to the nine
months ended September 30, 2010 was primarily due to an increase of $0.7 million in general and
administrative expenses, an increase of $0.1 million in employee non-cash stock based compensation
and an increase of $0.02 million in non-cash stock based compensation expense, offset by a decrease
of $0.5 million in non-cash compensation related to a warrant issued for business advisory
services. Excluding these non-cash items, general and administrative expenses were approximately
$5.0 million for the nine months ended September 30, 2011, compared with $4.2 million for the nine
months ended September 30, 2010. The increase of $0.8 was primarily due to severance payments in
connection with a reduction in force and an increase in expenses for professional services.
About NeuVax (E75 GM-CSF)
NeuVax consists of the E75 peptide derived from human epidermal growth factor receptor 2 (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. Based on a successful Phase 2
trial, which achieved its primary endpoint of disease-free survival, the Food and Drug
Administration granted NeuVax a Special Protocol Assessment for its Phase 3 PRESENT
(Prevention of Recurrence in Early-Stage, Node-Positive Breast
Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment)