Galena Biopharma Reports Third Quarter 2013 Results

Galena Biopharma Reports Third Quarter 2013 Results

PORTLAND, Ore., Nov. 6, 2013 (GLOBE NEWSWIRE) -- Galena Biopharma
(Nasdaq:GALE), a biopharmaceutical company commercializing and developing
innovative, targeted oncology treatments that address major unmet medical
needs to advance cancer care, today reported its financial results for the
three and nine months ended September 30, 2013 and provided a business update.

"Our commercial success to date with Abstral^® has been very encouraging and
we are excited to report initial revenues ahead of schedule. With our sales
force and commercial organization fully deployed, we continue to make
significant strides with physicians, payors and patients—and expect continuing
strength with the launch," said Mark J. Ahn, Ph.D., President and Chief
Executive Officer. "We are also making steady progress in advancing our
NeuVax™ and FBP cancer immunotherapy pipeline."

Third Quarter 2013 Financial Highlights

Net revenue was $1.2 million for the three months ended September 30, 2013,
the first quarter of Abstral^® (fentanyl) sublingual tablet sales, ahead of
our official launch and commencement of promotional efforts in the fourth
quarter. Cost of revenue and gross profit for the three months ended September
30, 2013 were $0.3 and $0.9 million, respectively.

Operating loss for the three months ended September 30, 2013 was $6.9 million,
including $0.5 million in stock-based compensation charges, compared with an
operating loss of $5.5 million for the three months ended September 30, 2012,
which includes $0.4 million in stock-based compensation charges. For the nine
months ended September 30, 2013, operating loss from continuing operations was
$21.5 million compared with $15.6 million for the nine months ended September
30, 2012.

Galena Biopharma also incurred income or expense due to 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, which is included in other income
and expense. The non-cash expenses related to the changes in values of our
warrant and contingent purchase price liabilities for the three months ended
September 30, 2013 were $1.8 million versus $0.7 million for the three months
ended September 30, 2012. These expenses for the nine months ended September
30, 2013 were $7.7 million versus $13.9 million for the nine months ended
September 30, 2012. Other income from the realized gain on the sale of
marketable securities was $0.8 million and $1.4 million for the three and nine
months ended September 30, 2013, respectively.

Net loss for the three months ended September 30, 2013 was $9.3 million, or
$0.11 per basic and diluted share, versus a net loss of $6.3 million, or $0.09
per basic and diluted share, for the three months ended September 30, 2012.
Net loss for the nine months ended September 30, 2013 was $28.2 million, or
$0.34 per basic and diluted share, versus a net loss (including both continued
operations and discontinued operations) of $31.2 million, or $0.52 per basic
and diluted share, for the nine months ended September 30, 2012.

As of September 30, 2013, Galena had cash, cash equivalents, marketable
securities and net accounts receivable of $55.8 million, compared with $35.6
million as of December 31, 2012. Our marketable securities consisted of
approximately 0.8 million shares of common stock in RXi Pharmaceuticals
(OTCQX:RXII) with a market value of approximately $2.8 million as of September
30, 2013 and 33.5 million (1.1 million post reverse-stock split) shares of
common stock of RXi with a market value of approximately $2.7 million as of
December 31, 2012.

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.

Third Quarter and Recent Highlights

  *Launched First Commercial Product: Abstral^® (fentanyl) Sublingual Tablets
    for the Treatment of Breakthrough Cancer Pain. Galena acquired Abstral in
    March 2013 and formally launched the product in the U.S. in October.
    Abstral is a sublingual (under the tongue) fentanyl tablet indicated 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. Abstral can be
    prescribed by Risk Evaluation and Mitigation Strategy (REMS) certified
    healthcare professionals and is available to patients at all retail
    pharmacies nationwide.
    
  *Initiated RELIEF Patient Registry for Abstral and Debuted Marketing
    Campaign at PAINWeek.RELIEF:Rapid Evaluation of Lifestyle, Independence,
    and Elimination of breakthrough cancer pain with Freedom from oral
    discomfort through the use of Abstral^® (fentanyl) Sublingual
    Tablets.RELIEF is a post-marketing, multicenter trial to assess Abstral
    for breakthrough cancer pain (BTcP) in opioid-tolerant cancer patients.
    RELIEF is an observational registry study to be completed by enrolled
    patients over a thirty-day period while using Abstral for treatment of
    their BTcP.Approximately 2,500 patients are expected to enroll in the
    program.
    
  *Strengthened leadership team with appointment of Dr. Brian Hamilton, M.D.,
    Ph.D. to serve as Galena's Executive Vice President and Chief Medical
    Officer. Dr. Hamilton has extensive academic and pharmaceutical experience
    in immunology, hematopoietic stem cell transplantation, and oncology.
    Having worked in both large pharmaceutical companies such as AstraZeneca
    and Wyeth, as well as biotech companies such as BioVex, Soligenix, and
    Onyx, he has experience with drug development across multiple therapeutic
    indications and platforms, including small molecules, biologics, oncolytic
    viruses, and vaccines. He has been a partner and Vice President of
    Biopharm Solutions, a private consulting firm in the life sciences
    industry, since 2001. Dr. Hamilton received his M.D. and Ph.D. from the
    University of Washington School of Medicine with extensive specialty
    training to include Pediatrics at the Children's Medical Center in Dallas,
    Texas, Immunology at the Children's Hospital Medical Center and Sidney
    Farber Cancer Center, and Allergy at the University of California-San
    Francisco. He has held academic appointments at the University of
    Washington and the University of Miami. Dr. Hamilton will replace Rosemary
    Mazanet M.D., Ph.D., whose employment with Galena will conclude November
    7, 2013.
    
  *Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive
    Breast Cancer with Low to Intermediate HER2 Expression with NeuVax™
    Treatment) trial, under an SPA, continues to enroll at approximately 130
    sites globally. Galena has partnered with Leica Biosystems to develop a
    reliable and reproducible HER2 companion diagnostic test to assure a
    uniform determination of patients' HER2 status.The diagnostic will
    enableHER2 0, 1+, 2+ and 3+ differentiation to ensure Galena is enrolling
    the appropriate patients with low to intermediate HER2 expression into the
    PRESENT trial, and ultimately for treatment with the NeuVax vaccine.
    Leica's Bond Oracle™ HER2 IHC System is a state-of-the-art diagnostic
    testing system that provides added assurance the patients enrolled in the
    trial have the appropriate HER2 expression level.
    
  *Phase 2b NeuVax plus Herceptin® (trastuzumab; Genentech/Roche) 300 patient
    randomized, combination trial is enrolling at 9 sites in the US.
    
  *Results from the Phase 1 portion of the Folate Binding Protein (FBP) trial
    will be presented at the Society for Immunotherapy of Cancer (SITC)
    conference taking place this weekend, November 7-10, 2013.
    
  *Expanded NeuVax™ Intellectual Property With European Allowance. This
    Pharmaceutical Use Patent for NeuVax^™ (nelipepimut-S) covers the use of
    NeuVax as a vaccine for the prevention of relapse in breast cancer
    patients with an immunochemistry (IHC) rating of 1+ or 2+ for HER[2]/neu
    protein expression and a fluorescence in situ hybridization (FISH) rating
    of less than 2.0 for HER[2]/neu gene expression. The intention to grant
    the patent was received in August 2013, with the official Decision to
    Grant received in October 2013.The patent affords protection in all of
    the European countries and will expire in April 2028.
    
  *NeuVax Oral presentation at the American College of Surgeons Clinical
    Congress.NeuVax shown to induce a full immune response in treated
    patients and create an immune memory to target residual cancer
    cells.Additionally, the Phase 3 PRESENT HER2 1+/2+ patients confirmed as
    optimal treatment population.
    
  *Completed $40 Million financing to significantly strengthen our balance
    sheet.

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 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).

According to the National Cancer Institute, over 230,000 women in the U.S. are
diagnosed with breast cancer annually. Of these women, only about 25% are HER2
positive (IHC 3+). NeuVax targets the approximately 50%-60% of these women who
are HER2 low to intermediate (IHC 1+/2+ or FISH < 2.0) and achieve remission
with current standard of care, but have no available HER2-targeted adjuvant
treatment options to maintain their disease-free status.

About Folate Binding Protein (FBP)

Folate Binding Protein (FBP) is highly over-expressed in breast, ovarian and
endometrial cancers and is a well-validated therapeutic target. FBP is the
source of immunogenic peptides like E39 that can stimulate cytotoxic T
lymphocytes (CTL) to recognize and destroy preclinical 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). Galena's
FBP vaccine, E39, is currently in Phase 1/2 trial in two gynecological
cancers; ovarian and endometrial adenocarinomas.

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 more convenient sublingual tablet which rapidly dissolves under
the tongue in seconds, provides rapid relief of breakthrough pain in minutes,
and matches the duration of the entire pain episode. See full prescribing
information at www.abstral.com.

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 the progress of the commercialization
of Abstral and development of Galena's product candidates, including patient
enrollment in our clinical trials, as well as statements about our
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, 2012 and Quarterly Report on Form 10-Q for the quarter
ended September 30, 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.


Galena Biopharma, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)

                        Three Months  Three Months  Nine Months   Nine Months
                         Ended         Ended         Ended         Ended
                        September 30, September 30, September 30, September
                         2013          2012          2013          30, 2012
Net revenue              $ 1,170       $ —           $ 1,170       $ —
Cost of revenue          301           —             301           —
Gross profit             869           —             869           —
Operating expenses:                                             
Research and development 3,633         4,169         13,990        10,553
expense
General and              4,129         1,359         8,369         5,068
administrative expense
Operating loss           6,893         5,528         21,490        15,621
Other income (expense),  (1,235)       (733)         (6,749)       (13,953)
net
Income (loss) from
continuing operations    (8,128)       (6,261)       (28,239)      (29,574)
before income taxes
Income tax expense       1,159         —             (62)          —
(benefit)
Net loss from continuing (9,287)       (6,261)       (28,177)      (29,574)
operations
Discontinued operations  —             —             —             (1,644)
Net loss                 $ (9,287)     $ (6,261)     $ (28,177)    $ (31,218)
Net loss per common                                             
share:
Basic and diluted per
share, continuing        $ (0.11)      $ (0.09)      $ (0.33)      $ (0.49)
operations
Basic and diluted loss
per share, discontinued  $ —           $ —           $ —           $ (0.03)
operations
Basic and diluted net    $ (0.11)      $ (0.09)      $ (0.33)      $ (0.52)
loss per share
Weighted-average common
shares outstanding:      87,319,450    67,265,470    84,678,612    60,150,658
basic and diluted


Galena Biopharma, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

                                         September30, 2013 
                                         (Unaudited)        December31, 2012
ASSETS                                                      
Current assets:                                             
Cash and cash equivalents                 $ 51,396           $ 32,807
Restricted cash                           100                101
Marketable securities                     2,837              2,678
Accounts receivable                       1,543              —
Inventory                                 425                —
Prepaid expenses and other current assets 485                535
Total current assets                      56,786             36,121
Equipment and furnishings, net            545                29
In-process research and development       12,864             12,864
Abstral rights, net                       15,032             —
Goodwill                                  5,898              5,898
Deposits                                  129                74
Total assets                              $ 91,254           $ 54,986
LIABILITIES AND STOCKHOLDERS' EQUITY                        
Current liabilities:                                        
Accounts payable                          $ 1,890            $ 1,976
Accrued expense and other current         8,889              2,038
liabilities
Current maturities of capital lease       6                  6
obligations
Fair value of warrants potentially        24,267             10,964
settleable in cash
Current portion of contingent purchase    247                935
price consideration
Current portion of long-term debt         1,215              —
Total current liabilities                 36,514             15,919
Capital lease obligations, net of current 30                 51
maturities
Deferred tax liability, non-current       5,053              5,053
Contingent purchase price consideration,  6,454              6,207
net of current portion
Long-term debt, net of current portion    8,583              —
Total liabilities                         56,634             27,230
Stockholders' equity                      34,620             27,756
Total liabilities and stockholders'       $ 91,254           $ 54,986
equity

CONTACT: Remy Bernarda
         Senior Director, Communications
         +1 (503) 405-8258
         rbernarda@galenabiopharma.com

Galena Biopharma, Inc.