PORTLAND, Ore., March 17, 2014 (GLOBE NEWSWIRE) -- Galena Biopharma (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 and year ended December 31, 2013 and provided a business update.
"The last year has been transformational for Galena as we progressed from a development stage company to a revenue-generating commercial organization with products and programs that span the entire cancer care spectrum, including five ongoing or planned mid-to-late stage clinical trials," said Mark J. Ahn, Ph.D., President and Chief Executive Officer. "We look forward to an even more productive 2014. Specifically, we are increasing our 2014 Abstral net revenue guidance to $11 to $15 million from $8 to $12 million. We are also poised to make significant strides in pipeline development by completing enrollment in several trials including our pivotal NeuVax Phase 3 study, the Phase 2b combination study with NeuVax and trastuzumab, and our Phase 2 study of GALE-301. We will also officially enter the hematology space with the clinical start of GALE-401. The company is resourced through key milestones with cash of $55.3 million as of March 14, 2014 and net operating expenses estimated at approximately $8 million per quarter for this year. Our continued progress would not be possible without the patients and healthcare professionals dedicated to our products, our shareholders, and a committed team of employees."
Dr. Ahn continued, "Though we have made considerable advances as a company and envision significant progress in 2014, recent events have served to overshadow our achievements. We intend to vigorously defend against the recent claims against us, and recognizing the impact that it has had on our shareholders, we are taking every possible step to address the situation. In that regard, and in conjunction with today's quarterly update, we have announced the appointment of Irving M. Einhorn to our Board of Directors."
Mr. Einhorn is the founder of Einhorn Securities Enforcement Consulting, an advisory and consulting firm to publicly held companies. His background includes more than 40 years of experience in SEC enforcement, regulation, compliance, and disclosure requirements, including 17 years of service as an SEC attorney.
"We welcome Irv to our Board and look forward to his unique expertise as we seek to address the various claims that have been brought forth against our company and its officers and directors," stated Sanford J. Hillsberg, Chairman of the Board. "Having someone with Irv's stature and experience in the field of securities law compliance should help to assure our stakeholders that Galena will do a thorough, independent review of the matters in question, while also aggressively protecting the interests of the Company and its shareholders against any claims that prove to be malicious or otherwise without merit."
Fourth Quarter and Fiscal Year 2013 Financial Highlights and Guidance
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 $1.3 million in the fourth quarter of 2013 and $2.5 million for the year ended December 31, 2013.
Cost of revenue (excluding amortization of certain acquired intangible assets) and gross profit were $0.3 million and $1.0 million for the fourth quarter of 2013 and were $0.5 million and $2.0 million for the year ended December 31, 2013, respectively.
Operating loss for the fourth quarter of 2013 was $12.4 million, including $1.7 million in stock based compensation, and $33.8 million, including $2.9 million in stock-based compensation charges, for the year ended December 31, 2013, compared to $5.6 million, including $0.7 million in stock-based compensation, and $21.2 million, including $1.9 million in stock based compensation, for the same periods in 2012. 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, as well as increased selling and marketing expenses associated with the launch of our first and only commercial product, Abstral.
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, as well as the realized gain from the sale of marketable securities and interest expense. The non-cash charges related to the changes in values of our warrant and contingent purchase price liabilities for the fourth quarter of 2013 were $37.2 million, and $44.9 million for the year ended December 2013, versus a non-cash benefit of $0.8 million and non-cash charge of $13.1 million for the same periods in 2012, respectively. Other income from the realized gain on the sale of marketable securities and interest expense during the fourth quarter of 2013 were $2.5 million and $0.3 million, respectively, and $3.9 million and $0.8 million, respectively, for the year ended December 31, 2013. No marketable securities were sold or significant interest expense incurred during 2012.
Net loss for the fourth quarter of 2013 was $48.5 million, including $38.9 million in non-cash charges described above, and $76.7 million, including $47.8 million in non-cash charges, for the year ended December 31, 2013, or $0.46 and $0.85 per basic and diluted share, respectively, versus $3.8 million, included no significant net non-cash charges, and $35.0 million, including $15.0 million in non-cash charges, or $0.05 and $0.56 per basic and diluted share, respectively, for the same periods in 2012.
As of December 31, 2013, Galena had cash and cash equivalents of $47.8 million, compared with $32.8 million as of December 31, 2012. As of March 14, 2014, Galena had cash and cash equivalents of $55.3 million.
On May 8, 2013 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 depending on the achievement of certain operational and financial milestones.
"We are pleased to report $2.5 million net revenue for Abstral consistent with our guidance of $1.5 to $3 million for 2013. We expect net revenue to increase throughout 2014 based on anticipated increases in the number of Abstral prescriptions fulfilled, combined with the execution of programs which are projected to significantly reduce our gross-to-net revenue adjustments," added Ryan Dunlap, Vice President and Chief Financial Officer.
2013 and Year-to-Date Company Milestones
Commercial: Abstral® (fentanyl) Sublingual Tablets
Clinical Development: Cancer Immunotherapy
|GALENA BIOPHARMA, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(Amounts in thousands, except share and per share data)|
|Three Months Ended December 31,||Year Ended December 31,|
|Net revenue||$ 1,317||$ —||$ 2,487||$ —|
|Costs and expenses:|
|Cost of revenue (excluding amortization of certain acquired intangible assets)||262||—||520||—|
|Research and development||7,086||4,061||21,076||14,614|
|Selling, general and administrative||6,231||1,517||14,600||6,585|
|Amortization of certain acquired intangible assets||88||—||131||—|
|Total costs and expenses||13,667||5,578||36,327||21,199|
|Non-operating income (expense):|
|Interest income (expense), net||(312)||2||(807)||(33)|
|Other income (expense)||(34,725)||773||(40,979)||(13,145)|
|Total non-operating income (expense), net||(35,037)||775||(41,786)||(13,178)|
|Loss from continuing operations before income taxes||(47,387)||(4,803)||(75,626)||(34,377)|
|Income tax expense (benefit)||1,114||(1,052)||1,052||(1,052)|
|Loss from continuing operations||(48,501)||(3,751)||(76,678)||(33,325)|
|Loss from discontinued operations||—||—||—||(1,644)|
|Net loss||$ (48,501)||$ (3,751)||$ (76,678)||$ (34,969)|
|Net loss per common share:|
|Basic and diluted per share, continuing operations||$ (0.46)||$ (0.05)||$ (0.85)||$ (0.53)|
|Basic and diluted loss per share, discontinued operations||$ —||$ —||$ —||$ (0.03)|
|Basic and diluted net loss per share||$ (0.46)||$ (0.05)||$ (0.85)||$ (0.56)|
|Weighted-average common shares outstanding: basic and diluted||106,510,727||69,496,295||90,181,501||62,480,666|
|GALENA BIOPHARMA, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Amounts in thousands)|
|December 31, 2013||December 31, 2012|
|Cash and cash equivalents||$ 47,787||$ 32,807|
|Prepaid expenses and other current assets||1,399||535|
|Total current assets||53,455||36,121|
|Equipment and furnishings, net||665||29|
|In-process research and development||12,864||12,864|
|Total assets||$ 87,976||$ 54,986|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable||$ 2,660||$ 1,976|
|Accrued expense and other current liabilities||8,667||2,038|
|Current maturities of capital lease obligations||6||6|
|Fair value of warrants potentially settleable in cash||48,965||10,964|
|Current contingent purchase price consideration||—||935|
|Current portion of long-term debt||2,149||—|
|Total current liabilities||62,447||15,919|
|Capital lease obligations, net of current maturities||26||51|
|Deferred tax liability, non-current||5,053||5,053|
|Contingent purchase price consideration, net of current portion||6,821||6,207|
|Long-term debt, net of current portion||7,743||—|
|Total liabilities and stockholders' equity||$ 87,976||$ 54,986|
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 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, whichis 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 cancer.
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 Essential Thrombocythemia (ET). GALE-401 is a reformulated, controlled release version of anagrelide that is currently only given as an immediate release (IR) version. Phase 1 studies have shown the drug to be effective at lowering platelet levels while reducing side effects that prevent patients from taking their therapy regularly. 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. GALE-401 has been 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.
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 target revenue from the sale of Abstral® and the progress of development of Galena's product candidates, including patient enrollment in our clinical trials, as well as statements about recent litigation and company and regulatory investigations described in detail in Galena's Annual Report on Form 10-K for the year ended December 31, 2013, the workings of the recently formed special board committee and other 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, 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.
Remy Bernarda VP, Marketing & Communications (503) 405-8258
San Ramon, California, UNITED STATES
Remy Bernarda VP, Marketing & Communications (503) 405-8258
Galena Biopharma, Inc.