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): November 9, 2016

         

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

         Delaware   001-33958   20-8099512

(State or other jurisdiction ofincorporation or organization)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

         

   2000 Crow Canyon Place, Suite 380,

San Ramon, CA 94583    

   

(Address of Principal ExecutiveOffices) (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 thefollowing 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 November 9, 2016, Galena Biopharma, Inc. (“we,” “us,” “our” and the “company”) issued a press release announcing our financial results for the three and ninemonths ended September 30, 2016 and providing an update on recent business developments. A copy of the press release is attached to this Report as Exhibit99.1 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 theSecurities Exchange Act of 1934, as amended, (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed tobe incorporated by reference in any filing by the company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the generalincorporation language of such filing, except as specifically stated in such filing.

Item 7.01 Regulation FD Disclosure.

On November 9, 2016, the Company will host a conference call with investors to discuss the Company's financial and operating results for the three and ninemonths ended September 30, 2016. The discussion including slides will be made available to the public via conference call and webcast that will include slides. Theslides 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 Form8-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 deemedincorporated 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 November 9, 2016.99.2   The corporate update presentation slides dated November 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 undersignedhereunto duly authorized.

                 

    GALENA BIOPHARMA, INC.

         

Date: November 9, 2016   By: /s/ Mark W. Schwartz

        Mark W. Schwartz Ph.D.President and Chief Executive Officer

Galena Biopharma Reports Third Quarter 2016 Financial Results and Provides a CorporateUpdate

• GALE-401 expected to initiate a Phase 3 clinical trial in Q2, 2017• Top Line results presented from NeuVax™ (nelipepimut-S) PRESENT Clinical Trial• Webcast and conference call today at 2:00 p.m. P.T. / 5:00 p.m. E.T.

San Ramon, California, November 9, 2016 - Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company committed to the development andcommercialization of hematology and oncology therapeutics that address unmet medical needs, today reported its financial results and provided a corporate updatefor the quarter ended September 30, 2016.

“Over the past several weeks we have collaborated with regulatory experts and world leaders in the treatment of myeloproliferative neoplasms on key elements ofthe trial design for our pivotal, Phase 3 trial that we expect to initiate in the second quarter of 2017,” said Mark W. Schwartz, Ph.D., President and Chief ExecutiveOfficer. “Essential thrombocythemia is a chronic condition in patients presenting with elevated platelets and the limited available treatment options often includechallenging side effects. We believe that GALE-401, our controlled release version of anagrelide, could be both effective at lowering platelets and improve the sideeffect profile from the immediate release version currently available.”

As previously announced, Galena discontinued its NeuVax™ (nelipepimut-S) Phase 3 PRESENT ( P revention of R ecurrence in E arly- S tage, Node-PositiveBreast Cancer with Low to Intermediate HER2 E xpression with NeuVax T reatment) clinical trial due to futility in accordance with the recommendation from theIndependent Data Monitoring Committee (IDMC). On today’s call, management will present the top-line data from the trial and its assessment of the results.

Dr. Schwartz continued, “With a better understanding of the interim data in the PRESENT trial, we have the knowledge and experience to guide our immunotherapyprograms through clinical development, reinforcing my belief and confidence in our pipeline. As the cancer immunotherapy field focuses on combination treatments,we continue to advance our NeuVax plus trastuzumab clinical trials and evaluate additional indications where NeuVax may benefit patients in combination withother agents. Similarly, our GALE-301 and GALE-302 trials remain ongoing with two additional data presentations this year.”

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 includeslides 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 numberis: 7629100. The archived webcast replay will be available on the Company's website for one year.

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FINANCIAL REVIEW

Operations

Operating loss from Galena’s development programs and general and administrative expenses, classified as continuing operations, during the three months endedSeptember 30, 2016 was $6.5 million, including $0.5 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of$8.6 million, including $0.6 million in non-cash stock-based compensation for the same period in 2015. Operating loss for the first nine months of 2016 was $24.7million, including $1.8 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $26.6 million, including $1.3million in non-cash stock-based compensation for the same period in 2015.

Loss from continuing operations for Q3 2016 was $4.3 million, or $0.02 per basic and diluted share, including $2.1 million in non-operating income. Loss fromcontinuing operations for Q3 2015 was $6.4 million, or $0.04 per basic and diluted share, including $2.3 million non-operating income. Loss from continuingoperations for the first nine months of 2016 was $9.2 million, or $0.05 per basic and diluted share, including $15.6 million in non-operating income. Loss fromcontinuing operations for the first nine months of 2015 was $28.2 million, or $0.18 per basic and diluted share, including $1.5 million in non-operating expense.

The net non-operating income for the three months ended September 30, 2016 was largely due to a $3.7 million gain from the significant decrease in the estimatedfair value of warrants accounted for as liabilities driven by the decline in Galena's common stock price. The net non-operating income for the nine months endedSeptember 30, 2016 was largely due to $14.2 million and $5.2 million gains from the significant decreases in the estimated fair value of warrants accounting for asliabilities and the contingent purchase price liability related to NeuVax given the decision to close the PRESENT study, respectively. The gain realized from thedecrease in these two liabilities was partially offset by $1.4 million and $2.0 million of interest expense for the three and nine months ended September 30, 2016.The changes in the estimated fair value of warrants accounted for as liabilities and the contingent purchase price liability are reflected as non-cash gains and lossesin the consolidated financial statements. Management believes the most relevant measure of our performance is operating loss.

Loss from discontinued operations from Galena's former commercial business for Q3 2016 was $2.6 million, or $0.01 per basic and diluted share, compared to$11.7 million, or $0.07 per basic and diluted share, for the same period of 2015. Loss from discontinued operations for the first nine months of 2016 was $8.9million, or $0.05 per basic and diluted share, compared to $16.1 million, or $0.11 per basic and diluted share, for the same period of 2015. The three and ninemonths ended September 30, 2015 include a one-time non-cash impairment charge of $8.1 million from the former commercial business being classified as held forsale.

Net loss for Q3 2016 was $6.9 million, or $0.03 per basic and diluted share, compared to net loss of $18.0 million, or $0.11 per basic and diluted share, for thesame period of 2015. Net loss for the first nine months of 2016 was $18.0 million, or $0.10 per basic and diluted share, compared to $44.2 million, or $0.29 perbasic and diluted share, for the same period of 2015.

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Cash and Cash Equivalents

Galena had cash and cash equivalents of approximately $24.5 million as of September 30, 2016, compared with $29.7 million as of December 31, 2015. Thedecrease of approximately $5.2 million in cash and cash equivalents from December 31, 2015 to September 30, 2016 was attributable primarily to $36.9 millionused 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-termdebt. The decrease was partially offset by $31.8 million in net proceeds from issuance of common stock and warrants to purchase common stock in offerings, and$5.1 million becoming immediately available to the Company from amending our long-term debt to reduce restricted cash. As of September 30, 2016, Galena had$18.9 million of restricted cash including $18.5 million restricted as a minimum cash covenant for our Debenture, the minimum cash covenant being the lesser of$18.5 million or the outstanding balance of the Debenture.

THIRD QUARTER AND RECENT ACTIVITIES

Clinical Development

Presented GALE-301/GALE-302 Phase 1b DataOn October 20, 2016, a podium presentation was delivered on Galena’s GALE-301 and GALE-302 clinical program at the American College of Surgeons ClinicalCongress 2016. The Phase 1b is a single-center, randomized, single-blinded, three-arm study in patients with breast or ovarian cancer diagnosis who were treatedwith standard of care and were without evidence of disease. This trial augments the Phase 1/2a trial with single-agent GALE-301 in ovarian and endometrialcancers. 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 cancerpatients, who have lower FBP exposure than ovarian patients, the 500mcg dose appears to provide a more optimal immunological response. This differs from theresults 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 ofattenuated peptides in relatively antigen-naïve patients.

Presented NeuVax plus Trastuzumab Interim Safety DataOn October 10, 2016, Galena presented interim safety data from the NeuVax Phase 2b combination study with trastuzumab at the European Society for MedicalOncology (ESMO) 2016. The clinical trial is a randomized, multicenter, investigator-sponsored, 300 patient Phase 2b study enrolling HER2 1+ and 2+ nodepositive, and high-risk node negative patients. The poster, entitled, “Interim safety analysis of a phase II trial combining trastuzumab and NeuVax, a HER2-targetedpeptide vaccine, to prevent breast cancer recurrence in HER2 low expression,” demonstrated that this novel combination of trastuzumab and NeuVax in HER2 low-expressing (LE) patients is well-tolerated and the cardiac effects of trastuzumab are not impacted by the addition of NeuVax.

Presented GALE-301 FBP Expression DataOn September 27, 2016, data was presented on the association between clinical outcomes and folate binding protein (FBP) expression from our GALE-301 Phase1/2a clinical trial at the CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference. The poster, entitled, “Improved disease-free survival inendometrial and ovarian cancer patients with low folate binding protein expression after treatment with the E39 peptide vaccine in a phase I/IIa trial,” reportedclinical outcomes based on FBP expression level. The data revealed a disease free survival (DFS) benefit in patients with low FBP expression (FBPlo), but not inpatients with high FBP expression (FBPhi).

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Presented Preclinical NeuVax data in Ovarian and Pancreatic CancerOn September 13, 2016, preclinical NeuVax data was presented at the Progress in Vaccination Against Cancer (PIVAC) Conference. NeuVax contains theimmunodominant peptide derived from the extracellular region of the HER2 protein, which is expressed in ovarian and pancreatic cancers as well as in breastcancer. The poster, entitled, “Preclinical study on the efficacy of NeuVax peptide vaccine against human Her2+/ HLA-A2.1+ ovarian and pancreatic cancer,”demonstrated the results of HLA-A2 transgenic mice that were immunized with NeuVax (E75) mixed with recombinant mouse GM-CSF (NeuVax mice).Administration of the NeuVax vaccination resulted in a specific, delayed-type hypersensitivity (DTH) reaction and in the induction of E75 specific CD8+ T cells thatexpress PD-1 (programmed T-cell death protein). Both ovarian and pancreatic tumor growth rate was significantly reduced in NSG mice that received the CD8+ Tcells from NeuVax-immunized mice compared to those receiving CD8+ T cells from control mice. Additionally, the expression of PD-1 on activated CD8+ T cellssuggests an opportunity to investigate the efficacy of NeuVax in combination with PD-1 inhibitors.

Expanded GALE-401 Intellectual Property Protection with Patent Issuance in JapanOn September 12, 2016, GALE-401 was issued a second Japanese Patent (JP Patent #5985719) containing composition and method of use claims for GALE-401,anagrelide controlled release. The patent covers the treatment of patients suffering from myeloproliferative diseases, including myeloproliferative neoplasms(MPNs) such as essential thrombocythemia (ET) and polycythemia vera. The patent provides GALE-401 exclusivity until 2029, not including any patent termextensions.

Corporate

Appointed a new Chief Financial OfficerOn November 3, 2016, Stephen F. Ghiglieri was appointed as the Company’s Executive Vice President and Chief Financial Officer. Mr. Ghiglieri has more than 30years in senior level finance and operations roles at both biotechnology and technology companies. Prior to Galena Biopharma, Mr. Ghiglieri served as CFO ofMedData Inc., a private equity backed healthcare services company that was sold to Mednax, a publicly traded national medical group. Previously, he spent nearly10 years at NeurogesX, ending his tenure as the Company’s Executive Vice President, Chief Operating Officer, and CFO. Prior to that he served as the CFO ofHansen Medical, Inc., a medical device company. He also held senior level finance positions at two other healthcare companies: Oacis Healthcare Systems, Inc.,and Oclassen Pharmaceuticals, Inc. Additionally, he was also the CFO and Corporate Secretary for two technology software companies: Avolent, Inc., andAndromedia, Inc. Mr. Ghiglieri began his career as an audit manager of PricewaterhouseCoopers, LLP. He received a Bachelor of Science in BusinessAdministration from California State University, Hayward where he graduated Magna Cum Laude. Mr. Ghiglieri is also a Certified Public Accountant (inactive).

Announced a Reverse Stock SplitOn October 31, 2016, the Company announced a Reverse Stock Split of its shares of common stock at a ratio of 1-for-20 following the approval by the Company’sBoard of Directors. The reverse stock split was authorized by the Company’s stockholders at the Special Meeting of Stockholders held on October 21, 2016. Thereverse stock split will become effective on November 11, 2016 and the Company’s common stock will commence trading on a split-adjusted basis when themarket opens on Monday, November 14, 2016. The Company's common stock will continue to trade on the NASDAQ Capital Market under the symbol "GALE" butwill trade under the new CUSIP number 363256504.

Closed a Registered Direct Equity OfferingOn July 13, 2016, Galena closed a registered direct equity offering of common stock and warrants. The net proceeds to the Company were approximately $11.7million.

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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

September 30,  Nine Months Ended

September 30,

  2016   2015   2016   2015Operating expenses:              

Research and development $ 3,624   $ 5,740   $ 15,242   $ 18,762General and administrative 2,848   2,895   9,490   7,869

Total operating expenses 6,472   8,635   24,732   26,631Operating loss (6,472)   (8,635)   (24,732)   (26,631)Non-operating income (expense):              

Litigation settlements —   —   (1,800)   —Change in fair value of warrants potentially settleable in cash 3,652   2,134   14,172   (981)Interest expense, net (1,377)   (158)   (1,988)   (607)Change in fair value of the contingent purchase price liability (145)   307   5,182   69

Total non-operating income (expense), net 2,130   2,283   15,566   (1,519)Loss from continuing operations $ (4,342)   $ (6,352)   $ (9,166)   $ (28,150)Discontinued operations              

Loss from discontinued operations(2,587)   (11,674)   (8,867)   (16,074)

Net loss $ (6,929)   $ (18,026)   $ (18,033)   $ (44,224)Net loss per common share:              

Basic and diluted net loss per share, continuing operations $ (0.02)   $ (0.04)   $ (0.05)   $ (0.18)Basic and diluted net loss per share, discontinued operations $ (0.01)   $ (0.07)   $ (0.05)   $ (0.11)

Basic and diluted net loss per share $ (0.03)   $ (0.11)   $ (0.10)   $ (0.29)Weighted-average common shares outstanding: basic and diluted 209,303,286   161,857,522   190,306,319   153,000,857

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GALENA BIOPHARMA, INC.CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)(Amounts in thousands)

  September 30, 2016   December 31, 2015ASSETS      

Current assets:      Cash and cash equivalents $ 24,514   $ 29,730Restricted cash 18,901   401Litigation settlement insurance recovery —   21,700Prepaid expenses and other current assets 1,043   1,398Current assets of discontinued operations —   392

Total current assets 44,458   53,621Equipment and furnishings, net 226   335In-process research and development 12,864   12,864GALE-401 rights 9,255   9,255Goodwill 5,898   5,898Deposits 145   171

Total assets $ 72,846   $ 82,144LIABILITIES AND STOCKHOLDERS’ EQUITY      

Current liabilities:      Accounts payable $ 894   $ 1,597Accrued expense and other current liabilities 3,819   5,292Litigation settlement payable —   25,000Fair value of warrants potentially settleable in cash 9,908   14,518Current portion of long-term debt 23,722   4,739Current liabilities of discontinued operations 4,195   5,925

Total current liabilities 42,538   57,071Deferred tax liability, non-current 5,418   5,418Contingent purchase price consideration, net of current portion 960   6,142

Total liabilities 48,916   68,631Stockholders’ equity 23,930   13,513

Total liabilities and stockholders’ equity $ 72,846   $ 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 thataddress unmet medical needs. Galena’s pipeline consists of multiple mid-to-late-stage clinical assets led by our hematology asset, GALE-401, and our novelcancer 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 arenot limited to, statements about development of our products, our future financial condition and results of operations and potential for profitability, the sufficiency ofour 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, collaborativeor financing arrangements or that otherwise relate to future periods. These forward-looking statements are subject to a number of risks, uncertainties andassumptions, including those identified under “Risk Factors” in Galena’s Annual Report on Form 10-K for the year ended December 31, 2015 and most recentQuarterly Reports on Form 10-Q filed with the SEC. Actual results may differ materially from those contemplated by these forward-looking statements. Galena doesnot 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 pressrelease.

NeuVax is a trademark of Galena Biopharma, Inc.

Contact:

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

Source: Galena Biopharma, Inc.

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Q3, 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   Stephen Ghiglieri   Executive Vice President,   Chief Financial Officer       Other Participants    Remy Bernarda, IRC   SVP, Investor Relations &   Corporate Communications    Thomas J. Knapp, Esq   Interim General Counsel     3   

 

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

 

Pseudo-Progression with Immunotherapy    Definition: Appearance of progression on radiographic imaging due to   increased tumor size (swelling) from tumor infiltrating lymphocytes   (TIL’s) and other immune cells   • A growing or new tumor detected via imaging isn't always progressing   cancer    Discovery of pseudoprogression in the context of cancer   immunotherapy in the last few years has changed the criteria for use of   imaging as a method for diagnosing tumor progression   • Image of a new tumor may simply represent an immune system   response to undetectable micrometastasis that would not otherwise   be seen on the scan    irRECIST (Immune-related Response Evaluation Criteria In Solid   Tumors) adapted rules that provide better assessment of the effect of   immunotherapeutic agents         Reference: https://www.lungevity.org/about-lung-cancer/experts-blog/immunotherapy-and-concept-of-pseudo-progression 5   

 

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

 

PHASE 3 PRESENT   TOP-LINE INTERIM   RESULTS   

 

PRESENT Top-Line Interim DFS Results   NeuVax Arm   Control Arm   Data based on interim data cut.   p-value = 0.07     Median time on trial   19.7 months   

 

Imaging in the PRESENT Trial   NeuVax Arm   Control Arm   1st Imaging   ~Month 12 2nd Imaging   ~Month 24   3rd Imaging   ~Month 36   Pre-treatment   Imaging   DFS Adjudicated Events   Diagnosed by   Clinical Presentation   Proactive Imaging 66% of DFS events   found via Proactive   Imaging 24 47   Data based on interim data cut.   

 

Composition of 71 DFS events at Interim Analysis   10   DFS Event NeuVax Arm (n = 376) Control Arm (n = 382)   Recurrence of Primary Cancer 36 (9.6%) 23 (6.0%)   Occurrence of another Cancer 5 (1.3%) 4 (1.0%)   Death from any cause 2 (0.5%) 1 (0.3%)   0 3 6 9 12 15 18 21 24 27 30 33 36  Active Placebo  T  im  e  t  o  D  F  S  (  m  on  th  s  )   (n=  7  1  )   Percentage of DFS events   found by proactive imaging   around 12 months:   NeuVax = 60%   Control = 32%   Data based on interim data cut.   

 

Pseudo-Progression in Cancer Immunotherapy &   The PRESENT Trial   In adjuvant setting, immunological therapies require extended clinical monitoring over time to   evaluate their effectiveness in preventing recurrences of clinical significance   This inflammation can be potentially beneficial, but paradoxically show as worsening of a tumor or   be assessed inaccurately as a recurrence in the case of micrometasteses   Inflammation changes the consistency (more opaque to XRay) and the volume (swelling), which   makes a micrometastasis visible that otherwise would not have been detected, or a tumor appears   to be enlarged on a CT Scan   In the period of immunostimulation, immune inflammatory cells (NeuVax T-Cells) enter the tumor   or micrometastases and create inflammation which includes edema, and attracts inflammatory cells   11   

 

Summary    Low rate of recurrence seen in the control arm may have resulted from   an overall improvement in the standard of care    Existing lesions were discovered by proactive imaging   • May not have had any clinical significance at the time of identification   • Lesions changed by inflammation and may never have progressed to   clinical tumors    The inflammation caused by NeuVax induced cytotoxic T-cells (TILs)   within the micrometastases made the lesions visible on scans in the   NeuVax group and not the control group   Pseudo-Recurrence       12   

 

IMMUNOTHERAPY   PROGRAMS   13   NeuVax™ (nelipepimut-S)   GALE-301/GALE-302   

 

DEVELOPMENT PIPELINE   PRODUCT THERAPETIC 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   14   2b   

 

GALE-401   Anagrelide Controlled   Release (CR)   15   

 

Essential Thrombocythemia (ET)   Diagnosis   • Chronic   hematologic   malignancy with   no known cause   • Symptoms   • Diagnostic tools   • Blood test   • Bone marrow   biopsy   • Gene   mutation test     Common   Symptoms   • Headache   • Vision   disturbances or   migraines   • Dizziness or   lightheadedness   • Coldness or   blueness of   fingers or toes   • Burning,   redness, and   pain in the   hands and feet   Thrombotic   Complications   • Stroke   • Transient   ischemic attack   (TIA)   • Heart attack   • DVT or   pulmonary   embolus   • Blood clotting in   unusual   locations   Risk Factors   •Women 1.5x   more likely   • Patients >60   years old, with   20% <40 years   • Mutations   • JAK2 - 50%   • CALR ~25%   16 Source: MPN Research Foundation   

 

Current ET Treatment Options   Hydroxyurea   • Generally first line therapy   • Cytotoxic Myelosuppressive drug   (reduces other blood cells as well)   • Increased risk of developing acute   leukemia after long term   • Avoided in younger patients   • ~25% of patients intolerant/refractory   Anagrelide IR   • Poor tolerability and compliance   thought to be related to blood   concentrations   • Non cytotoxic drug   • Not associated with increased risk of   leukemia   • Significant side effects   Aspirin   • Given to reduce the risk of blood   clotting   • May help relieve the burning   sensation in patient’s hands and feet   (erythromelagia)     Other Therapies   • Interferon   • Busulfan   • Retry hydroxyurea   • Observation   17 Sources: Leukemia and Lymphoma Society: Essential Thrombocythemia Facts Cervantes, F. Hematology 2011; 215-221   

 

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 for approval (to be confirmed with the FDA)   • Intellectual property allowing market exclusivity through 2029       18   

 

GALE-401 ET Development Opportunity    Diagnosed patient population for ET   • US Prevalence: 135,000 - 175,000    Limited competition with very few agents in development    Multiple life cycle management opportunities    Next steps   • End of Phase 2 meeting with the FDA   • Finalize the Phase 3 clinical trial design   • Initiate pivotal trial in Q2, 2017   19   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   

 

FINANCE   John Burns   Vice President, Finance and   Corporate Controller   20   

 

STATEMENTS OF OPERATIONS   21   

 

Q3 2016 CASH BURN   Beginning Cash Position (as of June 30, 2016) $19.6 million   Net proceeds from equity financing $11.7 million   Reduction in restricted cash $5.5 million   Cash burn from continuing operations ($7.7 million)   Cash burn from discontinued operations ($2.1 million)   Cash burn on litigation settlements ($2.5 million)   Ending Cash Position (as of September 30, 2016) $24.5 million   22   

 

FINANCIAL OVERVIEW   Cash Position (as of 30 Sept 16) $24.5 million   Restricted Cash (as of 30 Sept 16 - $18.5 relating to   Debenture)   $18.9 million   Projected Q4 Cash Burn from Operations $7 - $9 million   Shares Outstanding (as of 31 Oct 16) 217 million   23   

 

FINANCE   Stephen Ghiglieri   Executive Vice President,   Chief Financial Officer     24   

 

MILESTONES &   CLOSING   REMARKS   Mark W. Schwartz, Ph.D.   President and   Chief Executive Officer     25   

 

2H, 2016 MILESTONES   26   PROGRAM MILESTONE   PROJECTED   DATE   GALE-401   (anagrelide CR)   Present combined safety data ✓   Confirmation of 505(b)2 pathway 2H   NeuVax™   (nelipepimut-S)   Fast Track Designation ✓   Combo H&N 1+/2+ Interim safety data ✓   Initiate DCIS trial 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