UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

					
 	 	 	 	 	
FORM 8-K

					
 	 	 	 	 	
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 9, 2016

	

  GALENA BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)

					

	
					
Delaware	 	001-33958	 	20-8099512	
(State or other jurisdiction of incorporation or organization)	 	(Commission
File Number)
	 	(I.R.S. Employer
Identification No.)	
 	 	 	 	 	
 	 	2000 Crow Canyon Place, Suite 380, San Ramon, CA 94583
(855) 855-4253
	 	 	
 	 	(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (855) 855-4253

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

	
		
Item 2.02	Results of Operations and Financial Condition.	

On August 9, 2016 , Galena Biopharma, Inc. (“we,” “us,” “our” and the “company”) issued a press release announcing our financial results for the three and six months ended June 30, 2016 and providing an update on recent business developments. A copy of the press release is attached to this Report as Exhibit 99.1 and is incorporated herein by reference. The slides from the presentation will be referenced below are incorporated by reference.

The information furnished under this Item 2.02, including the accompanying Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing by the company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as specifically stated in such filing.

	
		
Item 5.02	Departure of Directors or Certain Directors; Election of directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.	

(e) On August 8, 2016, we revised the compensation arrangement with our controller and principal accounting officer by promoting John T. Burns, CPA to Vice President of Finance and Corporate Controller, with a salary of $215,000 per year effective Monday, August 8th, 2016.

	
		
Item 7.01	Regulation FD Disclosure.	

On August 9, 2016 , the Company will host a conference call with investors to discuss the Company's financial and operating results for the three and six months ended June 30, 2016. The discussion including slides will be made available to the public via conference call and webcast that will include slides. The slides from the presentation are being furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information in this Item 7.01 and Exhibits 99.2 to this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.

	
		
Item 9.01	Financial Statements and Exhibits.	
(d)    Exhibits

				
 	 	 	
Exhibit No.	  	Description	
 	 	
99.1		  	Press Release of Galena Biopharma, Inc. dated August 9, 2016.	
99.2		 	The corporate update presentation slides dated August 9, 2016.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	

 	 	 	 	GALENA BIOPHARMA, INC.

Date:	 	August 9, 2016	 	 	 	By:	 	/s/ Mark W. Schwartz	
 	 	 	 	 	 	 	 	Mark W. Schwartz Ph.D.
President and Chief Executive Officer	

Galena Biopharma Reports Second Quarter 2016 Financial Results and Provides a Corporate Update

•	Advancing GALE-401 (Anagrelide CR) into a pivotal trial for the treatment of essential thrombocythemia	
		
•	Closing NeuVax Phase 3 PRESENT trial	
		
•	NeuVax combination trials with trastuzumab continue	
		
•	Webcast and conference call scheduled for today at 2:00 p.m. P.T. / 5:00 p.m. E.T.	
 
San Ramon, California, August 9, 2016 - Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company committed to the development and commercialization of hematology and oncology therapeutics that address unmet medical needs, today reported its financial results for the quarter ended June 30, 2016.

As announced on June 29, 2016, Galena discontinued its NeuVax™ (nelipepimut-S) 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 NeuVax T reatment) clinical trial due to futility in accordance with the recommendation from the Independent Data Monitoring Committee (IDMC). With support from outside experts, the Company conducted a thorough investigation of the trial that confirmed the IDMC recommendation and found no evidence of a systemic reversal of the treatment arms, as suggested by the IDMC letter dated June 27, 2016. As a result, Galena is closing the PRESENT trial.

“While we are clearly disappointed in the outcome of the PRESENT trial, we are fortunate to have a diversified, robust pipeline which includes GALE-401 that we are advancing into late stage development,” said Mark W. Schwartz, Ph.D., President and Chief Executive Officer. “We plan to meet with the FDA by the end of the year to discuss our Phase 2/3 clinical trial design for GALE-401. We expect to initiate a pivotal trial in the first half of 2017 addressing an unmet medical need in patients with essential thrombocythemia.”

Dr. Schwartz continued, “We remain committed to the prevention of recurrence in breast, ovarian, and endometrial cancers. We have shared the PRESENT information with our investigators for the NeuVax plus trastuzumab combination trials in breast cancer, and those trials are continuing as planned. The first data presentation of the interim safety analysis from the HER2 1+/2+ patients will be at the European Society for Medical Oncology Congress in October. Our GALE-301 and GALE-302 trials are also ongoing with multiple data presentations expected this year.”

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Galena will host a webcast and conference call today at 2:00 p.m. P.T./5:00 p.m. E.T. to discuss its financial and business results. The live webcast will 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 conference 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: 51743330. The archived webcast replay will be available on the Company's website for one year.

FINANCIAL REVIEW

Operations

Operating loss from Galena’s development programs and general and administrative expenses, classified as continuing operations, during the three months ended June 30, 2016 was $9.3 million, including $0.6 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $9.1 million, including $0.4 million in non-cash stock-based compensation for the same period in 2015. Operating loss for the first half of 2016 was $18.3 million, including $1.3 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $18.0 million, including $0.8 million in non-cash stock-based compensation for the same period in 2015.

Income from continuing operations for Q2 2016 was $8.3 million, or $0.05 per basic and diluted share, including $17.6 million in non-operating income. Loss from continuing operations for Q2 2015 was $13.5 million, or $0.08 per basic and diluted share, including a $4.3 million non-cash loss on the change in the warrant liability. Loss from continuing operations for the first half of 2016 was $4.8 million, or $0.03 per basic and diluted share, including $13.4 million in non-operating income. Loss from continuing operations for the first half of 2015 was $21.8 million, or $0.15 per basic and diluted share, including a $3.1 million non-cash loss on the change in the warrant liability.

The increase in Galena's net non-operating income during the three and six months ended June 30, 2016 compared to the three and six months ended June 30, 2015 was largely due to two factors: a significant decrease in the estimated fair value of warrants accounted for as liabilities driven by the decline in Galena's common stock price; and, the significant decrease in the fair value of the contingent purchase price liability for NeuVax given the decision to terminate the PRESENT study. This increase in net non-operating income is reflected as a non-cash gain in the consolidated financial statements. Management believes the most relevant measure of our performance is operating loss and loss from discontinued operations. The non-cash gains in non-operating income were partially offset by $1.8 million in opt-out litigation settlements that were paid in July 2016, with $1.65 million paid in shares of common stock and $0.15 million paid in cash.

Loss from discontinued operations from Galena's former commercial business for Q2 2016 was $2.9 million, or $0.02 per basic and diluted share, compared to $2.2 million, or $0.02 per basic and diluted share, for the same period of 2015. Loss from discontinued operations for the first

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half of 2016 was $6.3 million, or $0.03 per basic and diluted share, compared to $4.4 million, or $0.03 per basic and diluted share, for the same period of 2015.

Net income for Q2 2016 was $5.4 million, or $0.03 per basic and diluted share, compared to net loss of $15.7 million, or $0.10 per basic and diluted share, for the same period of 2015. Net loss for the first half of 2016 was $11.1 million, or $0.06 per basic and diluted share, compared to $26.2 million, or $0.18 per basic and diluted share, for the same period of 2015.

Cash and Cash Equivalents

Galena had cash and cash equivalents of approximately $19.6 million as of June 30, 2016, compared with $29.7 million as of December 31, 2015. The decrease of approximately $10.1 million in cash and cash equivalents from December 31, 2015 to June 30, 2016 was attributable primarily to $24.7 million used in operating activities, $1.1 million in selling expenses related to the sale of the Company’s commercial products, and $4.8 million in payments on long-term debt. The decrease was partially offset by $20.2 million in net proceeds from issuance of common stock and warrants to purchase common stock in January 2016.

Subsequent to quarter end, on July 13, 2016, Galena closed the sale to certain institutional investors of common stock in a registered direct offering, and warrants to purchase common stock in a concurrent private placement. The net proceeds to Galena, after deducting placement agent fees and estimated offering expenses, were approximately $11.7 million.

Additionally, on May 10, 2016, Galena entered into a Securities Purchase Agreement with JGB Newton Ltd. to sell $25.5 million principal amount of Debentures. The Debentures include a 6.375% original issue discount, and, after broker and other expenses, net proceeds were approximately $23.4 million. The net proceeds are currently restricted cash, and Galena is in discussions with the holder of the Debentures to modify the agreement.

SECOND QUARTER AND RECENT ACTIVITIES

Clinical Development

Discontinued NeuVax Phase 3, PRESENT Interim Analysis based on Independent Data Monitoring Committee Recommendation
On June 24, 2016, the IDMC met to conduct a pre-planned safety and futility analysis of 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  NeuVax T reatment) clinical trial. On June 29, 2016, the Company announced the IDMC recommendation to stop the trial for futility. The Company immediately stopped the PRESENT trial, and initiated an investigation into the causes of the recommendation.

Presented GALE-401 Combined Safety Data at the European Hematology Association 21 st Congress. A total of six trials have been run with GALE-401, five Phase 1 trials in healthy volunteers (N=98), and one Phase 2 single arm, open label pilot study in patients with myeloproliferative neoplasms (MPNs) (N=18). The poster, entitled, “ Anagrelide Controlled

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Release (GALE-401) Safety Profile Consistently Well Tolerated in Myeloproliferative Neoplasms Patients and Healthy Volunteers ” was designed to characterize the safety profile of GALE-401 in all subjects treated to date. The results demonstrated that GALE-401 is well tolerated in MPN patients as well as in healthy volunteers and predominantly mild to moderate toxicities were observed that did not reveal any unexpected adverse events.

Received Two Orphan Drug Designations for GALE-301 and GALE-301/GALE-302
The U.S. Food and Drug Administration granted two orphan-drug designations for Galena’s two cancer immunotherapy peptides derived from Folate Binding Protein (FBP) for the treatment (including prevention of recurrence) of ovarian cancer: one for GALE-301 (E39), and one for GALE-301 (E39) and GALE-302 (E39’).

Presented GALE-301 Phase 1/2a Primary Analysis at the American Society of Clinical Oncology Annual Meeting 2016. The poster, entitled, “ The primary analysis of a phase I/IIa dose finding trial of a folate binding protein vaccine, E39 + GM-CSF in ovarian and endometrial cancer patients to prevent recurrence ,” demonstrated that the vaccine is well tolerated and immunogenic. In the optimal dose group, the results demonstrate potential clinical benefit for GALE-301 to prevent recurrence in these patients, and that boosters may sustain this effect.

Received Fast Track Designation for NeuVax
On June 1, 2016, Galena announced that the FDA has designated NeuVax™, combined with GM-CSF, as a Fast Track development program for the treatment of patients with early stage, node positive breast cancer with low to intermediate HER2 expression, otherwise known as HER2 1+ or 2+, following standard of care.

Presented GALE-301 Phase 1/2a Clinical Booster Data at the American Association for Cancer Research (AACR) Annual Meeting.  The poster, entitled, “ Comparing an attenuated booster (E39’) vs. E39 booster to potentiate the clinical benefit of the folate binding protein (FBP)-derived vaccine (E39 + GM-CSF) in a phase I/IIa trial to prevent recurrence in endometrial (EC) and ovarian cancer (OC) patients,” randomized patients to two different boosters: the wildtype peptide (GALE-301/E39), versus the attenuated peptide (GALE-302/E39’). Both peptides demonstrated the same tolerable safety profile with only Grade 1 local reactions and minimal Grade 2 toxicities.  Importantly, the percentage of patients who received two booster inoculations and remained disease free showed a statistically significantly improvement in the drug treatment arm, versus the control arm, regardless of which booster was used.

Corporate

Closed an Underwritten Public Equity Offering. On July 13, 2016, Galena closed the previously announced underwritten public offering of common stock and warrants. The net proceeds to the Company were approximately $11.7 million.

Derivative and Securities Class Action Lawsuits Granted Final Court Approval. On June 24, 2016, the U.S. District Court for the District of Oregon entered a final order and partial

4

judgment in  In re Galena Biopharma, Inc. Securities Litigation , granting final approval of the settlement. On the same day, the Court also issued an opinion and order awarding attorney’s fees of $4.5 million plus costs, which is paid out of the settlement funds. The settlement provides for a payment of $20 million to the class and the dismissal of all claims against the Company and current and former officers and directors in connection with the consolidated federal securities class actions. Of the $20 million settlement payment to the class, $16.7 million was paid by Galena’s insurance carriers and $2.3 million in cash was paid by Galena on July 1, 2016, along with $1 million in shares of common stock (480,053 shares) issued on July 6, 2016.

Appointed Mary Ann Gray, Ph.D. to the Company’s Board of Directors. Effective April 25, 2016, the Board increased the number of directors from eight to nine directors and appointed Mary Ann Gray, Ph.D. as a Class III director. Dr. Gray is President of Gray Strategic Advisors, LLC, which provides strategic advice to both public and private biotechnology companies. Previously, she worked at the Federated Kaufmann Fund focusing on both public and private healthcare investments, and was also a sell-side biotechnology analyst for nine years. Earlier in her career, Dr. Gray held scientific positions at Schering Plough and NeoRx, managed pre-clinical toxicology studies for the National Cancer Institute through Battelle Memorial Institute, and worked in a hospital laboratory. Dr. Gray has a Ph.D. in Pharmacology from the University of Vermont where she focused on novel chemotherapeutic agents for the treatment of cancer, and she received her B.S. in biology from the University of South Carolina. She completed her postdoctoral work at Northwestern University Medical School and Yale University School of Medicine. 

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GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Amounts in thousands, except share and per share data)

	
																
 	Three Months Ended
June 30,	 	Six Months Ended
June 30,	
 	2016	 	2015	 	2016	 	2015	
Operating expenses:	 	 	 	 	 	 	 	
Research and development	$	6,175		 	$	7,197		 	$	11,618		 	$	13,022		
General and administrative	3,117		 	1,886		 	6,642		 	4,973		
Total operating expenses	9,292		 	9,083		 	18,260		 	17,995		
Operating loss	(9,292	)	 	(9,083	)	 	(18,260	)	 	(17,995	)	
Non-operating income (expense):	 	 	 	 	 	 	 	
Litigation settlements	(1,800	)	 	—		 	(1,800	)	 	—		
Change in fair value of warrants potentially settleable in cash	14,392		 	(4,267	)	 	10,520		 	(3,115	)	
Interest expense, net	(519	)	 	(207	)	 	(611	)	 	(432	)	
Change in fair value of the contingent purchase price liability	5,497		 	83		 	5,327		 	(238	)	
Total non-operating income (expense), net	17,570		 	(4,391	)	 	13,436		 	(3,785	)	
Income (loss) from continuing operations	$	8,278		 	$	(13,474	)	 	$	(4,824	)	 	$	(21,780	)	
Discontinued operations	 	 	 	 	 	 	 	
Loss from discontinued operations
	(2,889	)	 	(2,186	)	 	(6,280	)	 	(4,417	)	
Net income (loss)	$	5,389		 	$	(15,660	)	 	$	(11,104	)	 	$	(26,197	)	
Net income (loss) per common share:	 	 	 	 	 	 	 	
Basic and diluted net income (loss) per share, continuing operations	$	0.05		 	$	(0.08	)	 	$	(0.03	)	 	$	(0.15	)	
Basic and diluted net income (loss) per share, discontinued operations	$	(0.02	)	 	$	(0.02	)	 	$	(0.03	)	 	$	(0.03	)	
Basic net income (loss) per share	$	0.03		 	$	(0.10	)	 	$	(0.06	)	 	$	(0.18	)	
Weighted-average common shares outstanding: basic	182,034,593		 	161,383,398		 	180,703,456		 	148,647,581		
Weighted-average common shares outstanding: diluted	185,477,330		 	161,383,398		 	180,703,456		 	148,647,581		

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GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands)

	
								
 	June 30, 2016	 	December 31, 2015	
ASSETS	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	19,590		 	$	29,730		
Restricted cash	24,401		 	401		
Litigation settlement insurance recovery	—		 	21,700		
Prepaid expenses and other current assets	1,210		 	1,398		
Current assets of discontinued operations	83		 	392		
Total current assets	45,284		 	53,621		
Equipment and furnishings, net	259		 	335		
In-process research and development	12,864		 	12,864		
GALE-401 rights	9,255		 	9,255		
Goodwill	5,898		 	5,898		
Deposits	218		 	171		
Total assets	$	73,778		 	$	82,144		
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	
Current liabilities:	 	 	 	
Accounts payable	$	1,273		 	$	1,597		
Accrued expense and other current liabilities	4,703		 	5,292		
Litigation settlement payable	5,100		 	25,000		
Fair value of warrants potentially settleable in cash	9,264		 	14,518		
Current portion of long-term debt	23,157		 	4,739		
Current liabilities of discontinued operations	3,727		 	5,925		
Total current liabilities	47,224		 	57,071		
Deferred tax liability, non-current	5,418		 	5,418		
Contingent purchase price consideration, net of current portion	815		 	6,142		
Total liabilities	53,457		 	68,631		
Stockholders’ equity	20,321		 	13,513		
Total liabilities and stockholders’ equity	$	73,778		 	$	82,144		

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About Galena Biopharma

Galena Biopharma, Inc. is a biopharmaceutical company committed to the development and commercialization of hematology and oncology therapeutics that address unmet medical needs. Galena’s pipeline consists of multiple mid-to-late-stage clinical assets led by our hematology asset, GALE-401, and our 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 development of our products, our future financial condition and results of operations and potential for profitability, the sufficiency of our cash resources, our ability to obtain additional equity or debt financing, possible partnering or other strategic opportunities for the development of our products, as well as other statements related to the progress and timing of our product commercialization and development activities, present or future licensing, collaborative or financing arrangements 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, 2015 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 is a trademark of Galena Biopharma, Inc.

Contact:

Remy Bernarda
SVP, Investor Relations & Corporate Communications
(925) 498-7709
ir@galenabiopharma.com

Source: Galena Biopharma, Inc.

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Q2, 2016 Financial Results & Corporate Update 

 

FORWARD LOOKING STATEMENT This presentation 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 divestiture of the commercial operations including the two commercial products, the issuance and exclusivity of patents, and the progress of development of Galena’s product candidates, including patient enrollment in our clinical trials, interim analysis, time to complete the trials, and expected time periods for results. 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, 2015 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. 2 

 

EARNINGS CALL PARTICIPANTS Presenters Mark W. Schwartz, Ph.D. President & Chief Executive Officer  Bijan Nejadnik, M.D. Executive Vice President, Chief Medical Officer John T. Burns, CPA Vice President, Finance and Corporate Controller Other Participants  Remy Bernarda, IRC SVP, Investor Relations & Corporate Communications  Tom Knapp, Esq Interim General Counsel 3 

 

OPENING REMARKS Mark W. Schwartz, Ph.D. President and Chief Executive Officer 4 

 

DEVELOPMENT PIPELINE Product Therapeutic Area Phase 1 Phase 2 Phase 3 BLA / NDA Hematology GALE-401 (Anagrelide CR) Essential Thrombocythemia Immunotherapy: Breast Cancer NeuVax™ + Herceptin® Node-positive or node negative/triple negative HER2 IHC 1+/2+ NeuVax™ + Herceptin® High risk, node-positive or negative, HER2 IHC 3+ NeuVax™ Ductal Carcinoma in Situ (DCIS) Immunotherapy: Gastric Cancer NeuVax™ Gastric, HER2 IHC 1+/2+/3+ Immunotherapy: Gynecological Cancer GALE-301 Ovarian & Endometrial GALE-301 + GALE-302 Ovarian & Breast *NeuVax is an investigational product. Efficacy has not been established. Herceptin is a registered trademark of Genentech. Ongoing Planned VADIS 5 2b 

 

CLINICAL DEVELOPMENT Bijan Nejadnik, M.D. Executive Vice President, Chief Medical Officer 6 

 

GALE-401 7 Anagrelide Controlled Release (CR) 

 

GALE-401 Development Summary  Potential Clinical Benefits from Phase 2 trial • Potentially faster onset of action • Consistent efficacy • Indication of improved tolerability vs anagrelide IR • Twice a day dosing with a PK profile supportive of once-a-day dosing  Strong Development Rational • Novel proprietary formulation of FDA approved product with known mechanism of action • 505(b)(2) regulatory pathway sufficient for approval (to be confirmed with the FDA) • Intellectual property allowing market exclusivity through 2029 8 

 

ESSENTIAL THROMBOCYTHEMIA (ET): CURRENT U.S. STANDARD OF CARE 9 • Generally first line therapy for ET • Cytotoxic Myelosuppressive drug (reduces other blood cells as well) • Increased risk of developing acute leukemia after long term; avoided in younger patients • About 25% of patients are intolerant/refractory • Off-label third line use • Non cytotoxic drug • Not used in most patients because requires injection and has flu like symptoms • Used mostly in pregnant women • Generally second line therapy for ET • Non cytotoxic drug • Decreases platelets formation • Not associated with increased risk of leukemia • Side effects: palpitations, headaches • About one-third are intolerant to Anagrelide • Hydroxyurea and Anagrelide Treatment Failure Sources: Leukemia and Lymphoma Society: Essential Thrombocythemia Facts Cervantes, F. Hematology 2011; 215-221 1st Line: Hydroxyurea 2nd Line: Anagrelide IR Interferon alpha 3rd Line: Unmet Need 

 

GALE-401 ET Development Opportunity  Significant unmet medical need • No alternatives after Anagrelide IR and Hydroxyurea  Diagnosed patient population for ET • US Prevalence: 135,000 - 175,000  ~75% of diagnosed patients receive treatment  ~9,000 third line patients  Limited competition with very few agents in development  Multiple life cycle management opportunities  Next steps • Finalize the Phase 2/3 clinical trial design • Type B meeting with the FDA • Initiate pivotal trial in 1H, 2017 10 Sources: Harrison et al N Engl J Med 2005;353:33-45; Mehta et al, (2014) Epidemiology of myeloproliferative neoplasms in the United States, Leukemia & Lymphoma, 55:3, 595-600, DOI: 10.3109/10428194.2013.813500 

 

IMMUNOTHERAPY PROGRAMS 11 NeuVax™ (nelipepimut-S) GALE-301/GALE-302 

 

NEUVAX: CURRENT CLINICAL TRIALS Phase Treatment HER2 Status Indication Trial Status Protocol Defined # of Patients Collaborations 2b Combination with trastuzumab 1+, 2+ BREAST Node Positive or High Risk Node Negative HLA A2+, A3+, A24+, A26+ Enrolling U.S. only 33 centers 300 2 Combination with trastuzumab 3+ high risk BREAST Node Positive HLA A2+, A3+ Enrolling U.S. only 28 centers 100 2 Single agent VADIS Study 1+, 2+,3+ BREAST Ductal Carcinoma in Situ (DCIS) HLA A2+ Suspended U.S. only 4 centers 48 2 Single agent 1+, 2+,3+ GASTRIC HLA A2+, A3+ Planned India Only 50 12 

 

GALE-301 & GALE-302: CURRENT CLINICAL DEVELOPMENT 13 Phase Treatment Cancer Type Target Indication Current Status # of Enrolled Patients 1/2a GALE-301 Ovarian, Endometrial HLA A2+ Ovarian Enrolled 51 1b GALE-301 & GALE-302 Ovarian, Breast HLA A2+ Ovarian / Breast Enrolled 39 

 

GALE-301: OPTIMAL DOSE GROUP SHOWS PRELIMINARY EFFICACY 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Vaccine Control % of Subj e ct s Recurrence 24.0% 13.3% Source: Peoples, et. al, Poster Presentation, American Society of Clinical Oncology 2016 14 Phase 1/2a trial ongoing  Phase 1: Determined optimal dose and demonstrated safety and potent immune response  Phase 2a Preliminary data: • At 16 months median follow-up:  Overall recurrence rate was 44.8% in the VG versus 54.5% in the CG (p=0.58),  Recurrence rate of 23.5% in patients who received booster inoculations. • Two year DFS estimate in 1000 mcg dose group is 73.5% vaccine vs. 38.1% control (p=.03) • GALE-301 plus GM-CSF is well tolerated and elicits a strong in vivo immune response with primarily Grade 1 and Grade 2 toxicities Estimated 24 months Disease Free Survival by Dosing Cohort 

 

FINANCE John Burns Vice President, Finance and Corporate Controller 15 

 

STATEMENTS OF OPERATIONS 16 

 

FINANCIAL OVERVIEW Cash Position (as of June 30, 2016) $19.6 million Financing (July 13, 2016) + $11.7 million Debt Financing (May 10, 2016) + $24 million (restricted cash) Projected Quarterly Burn Q3, 2016 $12 - $13 million Q4, 2016 $8 - $10 million Shares Outstanding (as of July 31, 2016) 214 million Market Cap (as of August 8, 2016) ~$100 million 17 

 

MILESTONES & CLOSING REMARKS Mark W. Schwartz, Ph.D. President and Chief Executive Officer 18 

 

2H, 2016 MILESTONES 19 PROGRAM MILESTONE PROJECTED DATE GALE-401 (anagrelide CR) Present combined safety data ✓ Confirmation of 505(b)2 pathway 2H Submit final Phase 2 report Q4 NeuVax™ (nelipepimut-S) Fast Track Designation ✓ Initiate DCIS trial Q2 Combo H&N 1+/2+ Interim safety data Q4 GALE-301 GALE-302 Present 301/302 booster data ✓ Present GALE-301 Phase 2a primary analysis ✓ Orphan Drug Designation ✓ Present GALE-301 Biomarker & Dosing Data Q4