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Galena Biopharma Reports Fourth Quarter and Year End 2016 Financial Results and Provides a Corporate UpdateSAN RAMON, Calif., March 15, 2017 (GLOBE NEWSWIRE) -- Galena Biopharma, Inc. (NASDAQ:GALE), a biopharmaceutical company developing hematology and oncology therapeutics that address unmet medical needs, today reported its financial results for the quarter and year ended December 31, 2016. “I am honored to be selected by the Board of Directors to lead Galena as we explore the best possible outcome for the company and its shareholders,” said Stephen F. Ghiglieri, Interim Chief Executive Officer. “As we announced last week, we are working closely with our advisors, Canaccord Genuity, Inc., to evaluate strategic alternatives that may include monetizing our assets, a sale of the company, a business combination, a merger or reverse merger, or remaining as a stand-alone entity. We do not have a set timetable for the process, but we are currently conserving working capital to allow us to make the best strategic decision for the future of the Company.” Mr. Ghiglieri continued, “2016 brought many challenges for Galena. Most significantly, our Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax™ Treatment) trial was discontinued last June based on the recommendation from the independent data monitoring committee that the trial would be futile. While this was a serious setback, NeuVax continues to be our asset with the greatest market potential and the most near term data readout, and we are encouraged by the progress of our two ongoing investigator-sponsored combination trials with NeuVax and trastuzumab. After obtaining positive futility analyses on these trials from the data safety monitoring board (DSMB) last month, we look forward to enrollment being completed in both of those trials this year. To date, in these trials, NeuVax (nelipepimut-S plus GM-CSF) has been well tolerated with no increased cardiotoxicity associated with giving it in combination with trastuzumab. For the Phase 2b trial in patients with low-to-intermediate HER2 expression (HER2 1+/2+), the DSMB recommended to continue the trial and determined that the pre-specified interim efficacy analysis be moved up from 12 months to 6 months after the last patient is enrolled. Therefore, we expect enrollment to be completed in the second quarter of 2017, and for the DSMB to perform the interim efficacy analysis near the end of 2017. For the Phase 2 trial in high-risk, HER2 3+ patients, we expect enrollment to be completed by the end of the year. Furthermore, our single-agent trial in patients with ductal carcinoma in situ (DCIS) is also open for enrollment and screening patients. And, finally, our clinical team has locked the database and is closing out the PRESENT trial with the plan to present the final data at a medical conference later this year.” “Over the second half of 2016, the clinical team was able to effectively refocus their efforts on GALE-401 and did an outstanding job preparing a robust development plan with the support of regulatory experts and key opinion leaders who treat myeloproliferative neoplasms. We were pleased to report that after a productive meeting with the U.S. Food and Drug Administration (FDA) in December, we received confirmation from the FDA that the GALE-401 development program is appropriate for a New Drug Application (NDA) filing using the 505(b)(2) regulatory pathway in patients with essential thrombocythemia (ET) who are intolerant or resistant to hydroxyurea. As a result, we have developed a clear path forward for GALE-401 in the treatment of ET and the team continues the internal work to prepare the Phase 3 trial for initiation. Subject to completing the manufacturing of the new formulation and the internal work to prepare the Phase 3 trial for initiation, the Company is evaluating the appropriate time to commence enrollment of the GALE-401 trial and anticipates making a definitive determination in the second half of 2017,” added Mr. Ghiglieri. Mr. Ghiglieri concluded, “Operationally, we have narrowed our focus in the very near term, strengthened our balance sheet, and are actively moving forward with evaluating strategic options while being keenly focused on providing the best possible outcome for patients and our shareholders. I look forward to keeping you updated in the coming months.” FINANCIAL REVIEW Operations During the three months ended December 31, 2016, operating loss was $7.1 million, including $0.4 million in non-cash stock-based compensation, compared to $7.6 million, including $0.6 million in non-cash stock-based compensation for the same period in 2015. Operating loss for 2016 was $31.9 million, including $2.3 million in non-cash stock-based compensation, compared to $34.2 million, including $1.9 million in non-cash stock-based compensation for 2015. Galena’s development programs and general and administrative expenses are classified as continuing operations. Loss from continuing operations were as follows:
Management believes the most relevant measure of our performance is our operating loss. Net non-operating income (expense) is primarily driven by changes in the estimated fair value of warrants accounted for as liabilities and the contingent purchase price liability that are reflected as non-cash gains and losses in the consolidated financial statements. Net non-operating income (expense) can be broken down as follows:
Loss from discontinued operations from Galena's former commercial business for the fourth quarter of 2016 was $3.6 million, or $0.32 per basic and diluted share, compared to $8.9 million, or $1.10 per basic and diluted share, for the same period of 2015. Loss from discontinued operations for 2016 was $12.4 million, or $1.25 per basic and diluted share, compared to $24.9 million, or $3.21 per basic and diluted share, for 2015. The three and twelve months ended December 31, 2015 include a one-time non-cash impairment charge of $8.1 million from the former commercial business being classified as held for sale, in addition to a $4.5 million loss on sale of the commercial assets, and $1.3 million in severance and exit costs. Overall, net loss for the fourth quarter of 2016 was $5.5 million, or $0.49 per basic and diluted share, compared to net loss of $19.7 million, or $2.43 per basic and diluted share, for the same period of 2015. Net loss for 2016 was $23.5 million, or $2.36 per basic and diluted share, compared to $63.9 million, or $8.23 per basic and diluted share, for 2015. Cash and Cash Equivalents Galena had cash and cash equivalents of approximately $18.1 million as of December 31, 2016, compared with $29.7 million as of December 31, 2015. The decrease of approximately $11.6 million in cash and cash equivalents during 2016 was attributable primarily to $44.9 million used in operating activities, $1.1 million in selling expenses paid related to the sale of the Company’s commercial products, and $5.6 million in payments on long-term debt. The decrease was partially offset by $33.5 million in net proceeds from issuance of common stock, and $5.8 million becoming available to the Company from long-term debt. As of December 31, 2016, Galena had $18.0 million of restricted cash of which $17.6 million is restricted under the terms of our debenture. In its Annual Report on Form 10-K for December 31, 2016, Galena reported that as of February 28, 2017, the Company has approximately $29.1 million in cash and $13.7 million in restricted cash. The Company expects its cash burn for the remainder of 2017 to be approximately $18 million to $22 million based on its current limited operations and estimates of legal expenses associated with the ongoing government investigation and pending legal matters. The cash burn projection is subject to changes in the Company’s operating plans, resolution of the ongoing government investigation and legal matters, uncertainties inherent in the business, strategic alternatives outcomes, and the need to seek to replenish its existing cash and cash equivalents sooner than and in greater amounts than projected. FOURTH QUARTER AND RECENT HIGHLIGHTS Operational Highlights Positive Outcome from the Data Safety Monitoring Board on the Two NeuVax™ (nelipepimut-S) Clinical Trials in Combination with Trastuzumab FDA Confirms 505(b)(2) regulatory pathway for GALE-401 Phase 3 Trial. Announced the Phase 2 Clinical Trial of NeuVax in DCIS is Open for Enrollment and Screening Patients and Presented the Trial Design at the San Antonio Breast Cancer Symposium. Presented multiple posters on the GALE-301/GALE-302 Phase 1b programs. In November 2016, data from the GALE-301/GALE-302 clinical program was presented at the Society for Immunotherapy of Cancer Conference 2016. The presentation, entitled, Phase Ib Trial of Two Folate Binding Protein (FBP) Peptide Booster Vaccines (E39 and E39’) in Breast and Ovarian Cancer Patients, reported the peptide-specific immune response to E39 and E39’ after different combinations of vaccination and boosting. The data showed that both E39 and E39’ are well tolerated with all related adverse events at grade 1 or grade 2. Though numbers were small, patients boosted with the attenuated peptide showed increased cytotoxic T lymphocyte (CTL) response to boosting regardless of significant residual immunity resulting from the primary vaccination series. While this data needs to be confirmed with a larger sample size, this is consistent with the theoretical advantage of boosting with an attenuated peptide, which is expected to induce less antigen-induced cell death of CTLs. In October 2016, a podium presentation was delivered on the GALE-301/GALE-302 clinical program at the American College of Surgeons Clinical Congress 2016. 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 Data. Corporate Highlights Evaluation of Strategic Alternatives and Resignation of President and Chief Executive Officer. Appointed Interim Chief Executive Officer. Closed a Public Offering of Common Stock and Warrants. Settlement with the Securities and Exchange Commission. Announced a Reverse Stock Split.
About Galena Biopharma Galena Biopharma, Inc. is a biopharmaceutical company developing hematology and oncology therapeutics that address unmet medical needs. Galena’s pipeline consists of multiple mid-to-late-stage clinical assets led by its hematology asset, GALE-401, and its 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 the evaluation of strategic alternatives, the timetable for completing the evaluation of strategic alternatives, the progress of the development of Galena’s product candidates, patient enrollment in our clinical trials, as well as other statements related to the progress and timing of our development activities, Galena’s current and prospective financial condition, liquidity and access to capital, present or future licensing, collaborative or financing arrangements, expected outcomes with regulatory agencies, and projected market opportunities for product candidates 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, 2016, most recent Quarterly Reports on Form 10-Q, current reports on Form 8-K, and the prospectus supplement 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. Source: Galena Biopharma, Inc. Contact: Remy Bernarda SVP, Investor Relations & Corporate Communications (925) 498-7709 [email protected] |