- Cancer immunotherapy programs – NeuVax™ (nelipepimut-S)
and GALE-301 - made significant advancements in 2014
- Achievement of key
milestones anticipated in 2015 including completion of enrollment
in NeuVax Phase 3 PRESENT trial
- Commercial strategy validated as revenue continues to
increase ahead of second commercial launch
- Abstral® (fentanyl)
Sublingual Tablets 2014 net revenue hits guidance range with $9.3
million; 2015 net revenue guidance reiterated at $15-$18
million
- Conference call and webcast scheduled for today at 2:00
p.m. P.T. / 5:00 p.m. E.T.
Galena Biopharma, Inc. (Nasdaq:GALE), a biopharmaceutical company
developing and commercializing innovative, targeted oncology
therapeutics that address major medical needs across the full
spectrum of cancer care, today reported its financial results for
the quarter and year ended December 31, 2014 and provided a
business update.
"The advances we made across all of our programs in 2014 were
substantial, and I am looking forward to a very positive and
productive 2015 for Galena," said Mark W. Schwartz, Ph.D.,
President and Chief Executive Officer. "Galena is unique among
oncology-focused biopharmaceutical companies of our size in that we
possess an extensive development pipeline complemented by an
established commercial enterprise, providing the company with
multiple opportunities to create value in both the near and longer
terms. The Phase 3 PRESENT clinical trial for NeuVax remains the
centerpiece of our clinical strategy, and we are very pleased to
have recently reported the enrollment of the 700th patient into the
study, and look forward to completing enrollment near the end of
the quarter. Looking ahead, we expect to reach our event-driven,
interim analysis at the end of 2015/early 2016 timeframe with a
top-line data readout anticipated in 2018."
Dr. Schwartz continued, "As we continue to advance the PRESENT
clinical trial, we expect to reach a number of key milestones with
our additional immunotherapy programs, including readouts on our
NeuVax combination trials with Herceptin® and top line data from
our GALE-301 clinical trial. Additionally, we anticipate the
commercial arm of our business to continue to grow revenue, while
enhancing our relationships in the oncology community as our
development pipeline advances. As reported today, we recorded
our strongest Abstral quarter to date, hitting above the middle of
our guidance range for the year, and with the addition of our
second commercial product in Zuplenz, we expect to nearly double
our overall commercial sales in 2015."
Dr. Schwartz concluded, "Our commercial and clinical teams have
done a tremendous job over the past year to advance our multiple
programs. As I assess our company, I am not only excited about
the next 6-12 months, but for the long-term prospects of Galena
Biopharma."
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: 88685732. The conference call will also be
webcast live and 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
archived webcast replay will be available on the Company's website
for 90 days.
FINANCIAL HIGHLIGHTS AND GUIDANCE
"2014 was a productive year for Galena with significant advances
in our pipeline and commercial operations. We are pleased to report
$9.3 million net revenue for Abstral which is consistent with our
guidance of $8 to $10 million for 2014. We expect net revenue to
increase throughout 2015 based on increased Abstral demand combined
with the launch of our second commercial product, Zuplenz. We
reiterate confidence in our net revenue guidance of $15-$18 million
for 2015 for our commercial operations," added Ryan Dunlap, CPA,
Vice President and Chief Financial Officer.
The company recognizes revenue from the sale of Abstral to
wholesale pharmaceutical distributors, net of product-related
discounts, allowances, product returns, rebates, chargebacks, and
patient assistance benefits, as applicable. Net revenue was
$3.2 million in the fourth quarter of 2014 and $9.3 million for the
year ended December 31, 2014, compared to $1.3 million and $2.5
million, respectively, for the same periods of 2013.
Operating loss for the fourth quarter of 2014 was $11.4 million,
including $1.0 million in stock based compensation, and $52.2
million, including $5.4 million in stock-based compensation
charges, for the year ended December 31, 2014, compared to $12.4
million, including $1.6 million in stock-based compensation, and
$33.8 million, including $2.9 million in stock based compensation,
respectively, for the same periods in 2013. The increase in net
operating loss year-over-year is primarily the result of our
increased activity and enrollment in our Phase 3 PRESENT trial for
NeuVax, our investigator sponsored trials for NeuVax, and our Phase
2 trial for GALE-401, as well as increased selling and marketing
expenses associated with the growth of our commercial
activities.
Other income or expense includes non-cash charges related to
changes in the fair value estimates of the company's warrant
liabilities and contingent purchase price liability, and the
realized gain from the sale of marketable securities. The
non-cash benefit related to the changes in values of our warrant
and contingent purchase price liabilities for the fourth quarter of
2014 was $3.6 million and $16.7 million for the year ended December
2014, versus non-cash charges of $37.2 million and $44.9 million,
respectively, for the same periods in 2013, respectively.
Net loss for the fourth quarter of 2014 was $8.0 million,
including $3.6 million in a non-cash benefit described above, and a
net loss of $36.6 million, including a $16.7 million non-cash
benefit, for the year ended December 31, 2014, or $0.06 and $0.31
per basic and diluted share, respectively. Net loss for the fourth
quarter of 2013 was $48.5 million, including $34.7 million of
non-cash charges described above, and a net loss of $76.7 million,
including $41.0 million of non-cash charges for the year ended
December 31, 2013 or $0.46 and $0.85 per basic and diluted share,
respectively.
On November 20, 2014 we announced the execution of a purchase
agreement for up to $55.0 million with Lincoln Park Capital Fund
("LPC"). During the fourth quarter of 2014, we utilized the
LPC agreement, as well as the At Market Issuance Sale Agreement
("ATM") announced in 2013, to raise approximately $10.7 million
through the sale of 6.6 million common shares, at a weighted
average discount to market of approximately 8%. No warrants
were issued in connection with these financing arrangements.
As of December 31, 2014, Galena had cash and cash equivalents of
$23.7 million, compared with $47.8 million as of December 31, 2013,
and $24.7 million at the end of the third quarter of 2014. The
$1.0 million change in cash during the fourth quarter represents
$10.7 million in cash used for operating activities, and $0.1
million in cash used in investing activities, and $0.9 million in
debt service payments, offset by $10.7 million in cash raised using
the aforementioned LPC agreement and ATM facilities.
COMMERCIAL HIGHLIGHTS
Achieved Abstral® (fentanyl) Sublingual Tablets net
revenue of $9.3 million, within the 2014 guidance of $8-$10 million
for the first full year of sales. Abstral is FDA
approved, 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.
Licensed the U.S. Rights for Zuplenz® (ondansetron) Oral
Soluble Film. Zuplenz is a rapidly dissolving, oral
soluble film utilizing the active ingredient ondansetron, the most
widely prescribed anti-emetic. Zuplenz is approved by the 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. Galena expects to launch
Zuplenz in the second quarter 2015.
Launched Galena Patient Services (GPS). GPS is
a full-service support program designed to enhance patient access
to Galena's commercial products. The implementation of GPS has
significantly improved the profitability of Abstral and will also
be utilized by prescribers of Zuplenz.
Reiterated 2015 net revenue guidance between $15-$18
million for the combined commercial programs.
CLINICAL HIGHLIGHTS
NeuVax™ (nelipepimut-S)
NeuVax is a first-in-class, HER2-directed cancer immunotherapy
under evaluation to prevent cancer recurrence after standard of
care treatment in the adjuvant setting in breast and gastric
cancers.
NeuVax Phase 3 PRESENT trial
reaches critical milestone with enrollment of the 700th
Patient. Seven hundred is the patient enrollment
target as defined by the Phase 3 PRESENT
(Prevention of Recurrence in
Early-Stage, Node-Positive Breast
Cancer with Low to Intermediate HER2 Expression
with NeuVax Treatment) clinical
trial protocol. Galena is continuing to enroll those identified
patients who are completing their standard of care and have passed
their initial qualifications for potential enrollment in the
trial. The Company expects over-enrollment will increase the
confidence in both the timing and quality of the statistics and the
final outcome of the trial. Completion of final enrollment in
the trial is expected near the end of Q1, 2015.
Initiated Phase 2 clinical
trial with NeuVax in combination with Herceptin® (trastuzumab) to
treat high-risk HER2 3+ or HER2 gene-amplified breast cancer
patients to expand the potentially eligible patient population and
overall NeuVax clinical trial portfolio. The trial is
supported by a grant received from the Department of Defense
(DoD). The clinical trial is enrolling 100 patients and will
seek to prevent breast cancer recurrence in high-risk HER2 3+
patients who fail to obtain a pathological complete response (pCR)
following neoadjuvant treatment with an approved regimen that
includes Herceptin and at least 4 cycles of a taxane-containing
chemotherapy. The grant, a Breast Cancer Research
Program Breakthrough Award, was obtained by Elizabeth A.
Mittendorf, M.D., Associate Professor, Department of Surgical
Oncology, The University of Texas MD Anderson Cancer Center who is
the Principal Investigator of the trial.
Dr. Reddy's partnership
expands the potential indication and geographic footprint for
NeuVax. Galena licensed the commercial rights to Dr.
Reddy's for NeuVax in breast and gastric cancers in India. As
part of the agreement, Dr. Reddy's will evaluate NeuVax in gastric
cancer in a Phase 2 clinical trial that is expected to initiate in
2016.
GALE-301: Folate Binding Protein
(FBP)
GALE-301 is a cancer immunotherapy targeting folate binding
protein receptor-alpha for the prevention of cancer recurrence in
the adjuvant setting in ovarian and endometrial cancers.
Presented GALE-301 Phase 1
preliminary data at the American Society of Clinical Oncology
(ASCO) 50th Annual Meeting. Presented data on the first 30
patients who were enrolled in the Phase 1 dose escalation trial
demonstrating that the drug was well tolerated with a manageable
safety profile and immunologically active. The Phase 1 trial
also determined the optimal dose of 1000 mcg of peptide, which was
carried forward into the ongoing Phase 2a clinical trial.
Initiated the Phase 2a
clinical trial in ovarian and endometrial cancers and completed
enrollment ahead of schedule. The Phase 2 trial
initiated in Q1, 2014 utilizing the 1,000 mcg optimal biological
dose along with the implementation of a booster regimen, and
completed enrollment ahead of schedule in Q2, 2014. The
primary objective of the trial is to measure immune response, with
secondary outcomes of time to recurrence and disease free survival
between treatment arms.
Presented GALE-301 Phase 2a
clinical trial data at the Society for Immunotherapy of Cancer
(SITC) 29th Annual Meeting. The
Phase 1/2a trial enrolled 51 patients and preliminary data
demonstrated that GALE-301 is well tolerated and elicits a strong
in vivo immune response with primarily Grade 1 and Grade 2
toxicities. The data showed a 31% recurrence rate in the
vaccine group compared to 50% in the control group at a median
follow up of 13 months, a 38% reduction in relative risk of
recurrence. Galena expects the top-line data to be presented
mid-year 2015.
GALE-401: Anagrelide Controlled
Release
Acquired Mills Pharmaceuticals and anagrelide controlled release
(CR), renamed to GALE-401. GALE-401 is a
controlled release formulation of anagrelide in development to
lower abnormally elevated platelet counts in patients with
myeloproliferative neoplasms.
Initiated the Phase 2,
clinical proof-of-concept trial for GALE-401 in patients with
myeloproliferative neoplasms (MPNs) and completed enrollment six
months ahead of schedule. The Phase 2 is evaluating 18
patients with elevated platelet counts to assess safety and
tolerability, preliminary efficacy, and to measure plasma
concentrations of GALE-401. The primary efficacy endpoint will be
the proportion of patients who achieve a complete or partial
platelet response for at least four weeks during the first six
months of treatment.
Presented GALE-401 Phase 1 and
preliminary Phase 2 data at 56th American Society of Hematology
(ASH) Annual Meeting & Exposition. Phase 1
results in 98 healthy adult subjects demonstrated GALE-401 reduces
platelet counts with a tolerable safety profile. Preliminary
Phase 2 clinical trial data demonstrated promising platelet
response with top-line data expected by mid-year 2015.
INTELLECTUAL PROPERTY
In 2014, Galena significantly expanded the intellectual property
position for its development assets.
NeuVax U.S. patent
issued to cover the use of NeuVax to prevent recurrence of
any HER2/neu expressing tumor having a fluorescence in situ
hybridization (FISH) rating of less than about 2.0 as a stand-alone
therapy or in combination with an adjuvant and/or other agents. The
patent will expire in 2028, not including any patent term
extensions.
NeuVax U.S. patent
issued to cover the use of NeuVax in combination with
Herceptin for treating patients having any HER2/neu expressing
cancer. The patent will expire in 2026, not including any
patent term extensions.
NeuVax patent issued in
Japan to cover the use of NeuVax alone or in combination
with other agents to prevent recurrence of any breast cancer tumor
expressing low-to-intermediate (Immunohistochemistry (IHC) 1+ or 2+
or FISH less than about 2.0) levels of HER2. The patent will
expire in 2027, not including any patent term extensions.
NeuVax intellectual property
expanded in Europe and Australia with the granting of a
Pharmaceutical Use Patent by the European Patent Office and a
Notice of Acceptance from the Australian Patent Office. The
patents afford protection with their respective classifications in
all of the European countries and Australia and will expire in
2028, not including any patent term extensions.
GALE-401 U.S. patent
allowed, a composition of matter patent in the U.S. for
the controlled release formulations of anagrelide in a broad range
of unit dosage forms, articles of manufacture containing GALE-401,
and methods of reducing platelet counts in patients with a broad
spectrum of diseases and conditions, including myeloproliferative
neoplasms, by administering GALE-401. The patent is expected to
issue this year and will expire in 2029, not including any patent
term extensions.
CORPORATE HIGHLIGHTS
Appointed Mark W. Schwartz, Ph.D. as
President and Chief Executive Officer and member of the Board of
Directors in August 2014. Dr. Schwartz was previously
Galena's Executive Vice President and Chief Operating Officer where
he worked across all of the company's programs, oversaw the
initiation of the PRESENT trial as well as the commercialization
efforts, and also managed intellectual property efforts,
acquisitions, and partnerships. Dr. Schwartz brings more than 30
years of experience in the biotechnology and life science industry
and joined the Company following Galena's acquisition of Apthera,
Inc. where he served as the company's President and CEO.
Appointed Irving M. Einhorn to serve as a director of
the company. Mr. Einhorn is the former Regional
Administrator of the Los Angeles Regional Office of the Securities
and Exchange Commission (SEC). Mr. Einhorn has unique experience in
SEC enforcement, SEC regulation, SEC compliance, and SEC disclosure
requirements based on 17 years of service as an SEC attorney and
over 40 years of experience as an attorney whose practice has been
devoted exclusively to securities related compliance and
enforcement matters.
Galena's Special Committee completed its
investigation. The Special Committee report was
published in September 2014 and set forth certain recommendations
for improving the Company's governance, which the Company has
accepted and is implementing. It was released for publication
by a Special Litigation Committee (SLC) Galena formed in the summer
of 2014 to investigate new claims asserted in the Delaware
derivative litigation. Plaintiffs in the Delaware derivative
litigation voluntarily dismissed their case in February
2015. Following this dismissal, the SLC has terminated its
work. Two cases remain pending in Oregon.
Enhanced the balance sheet with the execution of a
purchase agreement for up to $55.0 million with Lincoln Park
Capital. The purchase agreement provides Galena
control and flexibility to access capital over the long-term to
fund the Company's clinical and development programs.
GALENA BIOPHARMA,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Amounts in thousands,
except share and per share data) |
|
|
|
|
|
|
Three Months
Ended December 31, |
Year Ended
December 31, |
|
2014 |
2013 |
2014 |
2013 |
Net revenue |
$3,195 |
$1,317 |
$9,319 |
$2,487 |
Costs and expenses: |
|
|
|
|
Cost of revenue (excluding
amortization of certain acquired intangible assets) |
478 |
262 |
1,403 |
520 |
Research and development |
6,272 |
7,086 |
28,354 |
21,076 |
Selling, general, and
administrative |
7,646 |
6,231 |
31,344 |
14,600 |
Amortization of certain
acquired intangible assets |
181 |
88 |
440 |
131 |
Total costs and expenses |
14,577 |
13,667 |
61,541 |
36,327 |
Operating loss |
(11,382) |
(12,350) |
(52,222) |
(33,840) |
Non-operating income (expense): |
|
|
|
|
Change in fair value of
warrants potentially settleable in cash |
3,382 |
(36,866) |
16,556 |
(44,001) |
Interest income (expense),
net |
(185) |
(312) |
(1,110) |
(807) |
Other income |
229 |
2,141 |
170 |
3,022 |
Total non-operating income
(expense), net |
3,426 |
(35,037) |
15,616 |
(41,786) |
Loss before income taxes |
(7,956) |
(47,387) |
(36,606) |
(75,626) |
Income tax expense |
— |
1,114 |
— |
1,052 |
Net loss |
$(7,956) |
$(48,501) |
$(36,606) |
$(76,678) |
Net loss per common share: |
|
|
|
|
Basic and diluted net loss per
share |
$(0.06) |
$(0.46) |
$(0.31) |
$(0.85) |
Weighted average common shares outstanding:
basic and diluted |
122,917,163 |
106,510,727 |
119,388,366 |
90,181,501 |
GALENA BIOPHARMA,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(Amounts in
thousands) |
|
|
|
|
December 31,
2014 |
December 31,
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$23,650 |
$47,787 |
Restricted cash |
200 |
200 |
Accounts receivable |
1,839 |
3,683 |
Inventory |
655 |
386 |
Prepaid expenses and other
current assets |
2,680 |
1,399 |
Total current assets |
29,024 |
53,455 |
Equipment and furnishings, net |
555 |
665 |
In-process research and development |
12,864 |
12,864 |
Abstral rights |
14,533 |
14,979 |
Zuplenz rights |
8,101 |
— |
GALE-401 rights |
9,255 |
— |
Goodwill |
6,069 |
5,898 |
Deposits |
87 |
115 |
Total assets |
$80,488 |
$87,976 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$2,271 |
$2,660 |
Accrued expense and other
current liabilities |
15,669 |
8,699 |
Fair value of warrants
potentially settleable in cash |
5,383 |
48,965 |
Current portion of long-term
debt |
3,910 |
2,149 |
Total current liabilities |
27,233 |
62,473 |
Deferred tax liability, non-current |
5,053 |
5,053 |
Contingent purchase price consideration, net
of current portion |
6,651 |
6,821 |
Long-term debt, net of current portion |
4,492 |
7,743 |
Total liabilities |
43,429 |
82,090 |
Stockholders' equity |
37,059 |
5,886 |
Total liabilities and
stockholders' equity |
$80,488 |
$87,976 |
About Galena Biopharma
Galena Biopharma, Inc. (Nasdaq:GALE) is a biopharmaceutical
company developing and commercializing innovative, targeted
oncology therapeutics that address major medical needs across the
full spectrum of cancer care. Galena's development
portfolio ranges from mid- to late-stage clinical assets, including
a robust immunotherapy program led by NeuVax™ (nelipepimut-S)
currently in an international, Phase 3 clinical trial. The
Company's commercial drugs include Abstral® (fentanyl) Sublingual
Tablets and Zuplenz® (ondansetron) Oral Soluble Film. Collectively,
Galena's clinical and commercial strategy focuses on identifying
and advancing therapeutic opportunities to improve cancer
care, from direct treatment of the disease to the reduction of
its debilitating side-effects. 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 2014 revenue from the sale of Abstral®, our
planned launch of Zuplenz®, the issuance of patents, and the
progress of development of Galena's product candidates, including
patient enrollment in our clinical trials. 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,
2014 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™ and Abstral® are trademarks of Galena Biopharma,
Inc. Herceptin® is the property of Genentech/Roche. All
other trademarks are the property of their respective owners.
CONTACT: Remy Bernarda
SVP, Investor Relations & Corporate Communications
(503) 405-8258
rbernarda@galenabiopharma.com
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