On March 10, 2016 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported a corporate update and reported financial results for the fourth quarter and full year ending December 31, 2015 (Filing, Q4/Annual, Five Prime Therapeutics, 2015, MAR 10, 2016, View Source [SID:1234509490]).

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"2015 was a transformational year for Five Prime," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "Of note, our license and collaboration agreement with Bristol-Myers Squibb (BMS) maximizes the clinical and commercial potential of FPA008 and the exceptional terms have strengthened our financial position. In addition, we are encouraged by the early safety and efficacy data from FPA144 in patients with gastric cancer, and we look forward to assessing its potential in other indications. Beyond our clinical programs, we also made progress in our internal immuno-oncology research programs, and continue to be on track to file an IND application in 2017."

2015 Business Highlights and Recent Developments

Clinical Development:

• FPA008: an investigational antibody that inhibits CSF1R and has been shown in preclinical models to block the activation and survival of monocytes and macrophages.

• Established Exclusive Worldwide License and Collaboration Agreement with BMS for FPA008. In October 2015, Five Prime and BMS entered into an exclusive worldwide license and collaboration agreement for the development and commercialization of FPA008. Five Prime received a $350 million upfront payment during the fourth quarter and is eligible to receive up to $1.4 billion in development and regulatory milestone payments as well as royalty percentages ranging from the high teens to the low twenties on future worldwide net sales of FPA008. Five Prime also has an option to co-promote FPA008 in the United States.

• Initiated Phase 1a/1b FPA008/OPDIVO Combination Trial. In September 2015, Five Prime initiated patient dosing in the Phase 1a/1b clinical trial evaluating the safety, tolerability and preliminary efficacy of the immunotherapy combination of FPA008 with OPDIVO (nivolumab), BMS’s PD-1 immune checkpoint inhibitor. Five Prime expects to expand into Phase 1b in multiple tumor settings in the second half of 2016.

•
Initiated Phase 1/2 Clinical Trial of FPA008 in Pigmented Villonodular Synovitis (PVNS). In the third quarter of 2015, Five Prime initiated patient dosing in its Phase 1/2 clinical trial in PVNS, a CSF1R-driven tumor and an orphan indication. The company expects to begin

Phase 2 expansion, which will evaluate tumor response rate and duration as well as measures of pain and joint function, in mid-2016. The company submitted an epidemiology study focusing on the incidence and prevalence of this rare disease for presentation at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.

• FPA144: an anti-FGF receptor 2b (FGFR2b) Monoclonal Antibody Engineered to Recruit NK Cells into the Tumor Microenvironment. During the fourth quarter of 2015, Five Prime completed dose escalation in the ongoing Phase 1 trial of single-agent FPA144 and began dose expansion at a selected dose in new cohorts of gastric cancer patients whose tumors overexpress FGFR2b. In January 2016, Five Prime presented preliminary data from the dose escalation portion of the trial at the ASCO (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium, which showed:

• Two partial responses in six gastric cancer patients with IHC 3+ FGFR2b-positive gastric cancer;

• A partial response in a patient whose bladder cancer overexpressed FGFR2b; and

• FPA144 was well tolerated and differentiated from small molecule kinase inhibitors targeting the pathway, which often cause hyperphosphatemia and other dose-limiting toxicities.
Based on results to date, Five Prime continues to evaluate FPA144 as a monotherapy in refractory gastric cancer, as a combination therapy for gastric cancer, and as a potential treatment for other types of cancer. The company submitted an abstract for presentation at the ASCO (Free ASCO Whitepaper) 2016 Annual Meeting in June and will present preclinical data regarding FPA144’s ability to reprogram immune cells in the tumor microenvironment at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2016.

• FP-1039/GSK3052230, an FGF Ligand Trap. GlaxoSmithKline (GSK) presented data from the ongoing open-label Phase 1b trial in patients with squamous non-small cell lung cancer (sqNSCLC) and mesothelioma at the World Conference on Lung Cancer in September 2015. In January 2016, GSK and Five Prime agreed to stop enrollment in the sqNSCLC patient cohorts given the change in treatment paradigms following approvals of immuno-oncology agents and the increasingly competitive landscape in sqNSCLC. In addition, the companies agreed that GSK would continue to enroll mesothelioma patients based on encouraging preliminary data from the mesothelioma arm of the trial.

On March 9, 2016, GSK notified Five Prime that it was providing 180-day notice of termination of the FP-1039 license and collaboration agreement for convenience. Five Prime plans to work with GSK to ensure completion of enrollment in the ongoing mesothelioma arm of the Phase 1b study and to transfer the asset and program back to Five Prime. Five Prime continues to be encouraged by the progress of this Phase 1b trial. Mesothelioma could represent a potentially attractive market opportunity for a company like Five Prime. Five Prime will base decisions on future development of FP-1039 on whether the quality and durability of responses in this population is maintained in this trial. GSK has submitted mesothelioma data for presentation at the ASCO (Free ASCO Whitepaper) 2016 Annual Meeting.
Preclinical Research and Development:

• Progressed Internal Immuno-Oncology Research Programs. During 2015, Five Prime continued to expand its immuno-oncology research efforts and advanced multiple candidates into preclinical development. The company continues to be on track to file an IND application in 2017.
• Established New GITR Agonist Program. Five Prime in-licensed novel, potentially best-in-class, multivalent glucocorticoid-induced tumor necrosis factor receptor (GITR) antibodies from Inhibrx during the third quarter of 2015. Their unique multivalent format facilitates clustering of GITR on T cells, which should result in superior T cell activation compared to conventional antibodies.

• Enhanced the Company’s Ability to Generate Therapeutic Antibodies and Move Them More Rapidly Toward IND Applications. In October 2015, Five Prime secured a license from Open Monoclonal Technology (OMT) to access mono- and bi-specific antibody platforms and antibody repertoire sequencing technology for the generation of novel therapeutic candidates. In December 2015, Five Prime obtained a license from Xoma Ltd. to one of Xoma’s proprietary phage display libraries for antibody discovery.
Other Licenses and Collaborations:

• Entered into License Agreement with bluebird bio for Antibodies to Develop CAR T Cell Therapy. In May 2015, Five Prime granted an exclusive license to bluebird bio to research, develop and commercialize chimeric antigen receptor (CAR) T cell therapies using Five Prime’s proprietary human antibodies to an undisclosed target for hematologic malignancies and solid tumors. The agreement included a $1.5 million upfront payment and subsequent milestone payments to Five Prime, which together could total over $130 million per licensed product if certain development, regulatory, and commercial milestones are achieved. Five Prime is also eligible to receive tiered royalties on product sales.

• GSK Exercised Options to Reserve Multiple Protein Targets Discovered by Five Prime for Respiratory Disease. GSK paid Five Prime $600,000 in target reservation fees.
Finance:

• Completed Public Offering of Common Stock. In January 2015, Five Prime completed an underwritten public offering of common stock, raising net proceeds of $78.7 million.
Summary of Financial Results and Guidance:

• Cash Position. Cash, cash equivalents and marketable securities totaled $517.5 million on December 31, 2015 compared to $149.1 million on December 31, 2014. The increase in year-end 2015 cash was primarily attributable to the $350 million upfront payment received in December 2015 from BMS for the FPA008 license and collaboration agreement.

•
Revenue. Collaboration revenue for the fourth quarter of 2015 increased by $358.7 million to $363.3 million from $4.6 million in the fourth quarter of 2014, primarily due to revenue recognized under the FPA008 license and

collaboration agreement with BMS. Collaboration revenue for the full year 2015 increased by $360.6 million to $379.8 million in 2015 from $19.2 million in 2014 primarily due to revenue recognized under the collaborations with BMS, UCB and GSK.

• R&D Expenses. Research and development expenses for the fourth quarter of 2015 increased by $8.4 million, or 67%, to $21.0 million from $12.6 million in the fourth quarter of 2014. Full year 2015 research and development expenses increased by $27.0 million, or 63%, to $70.2 million in 2015 from $43.2 million in 2014. This increase was primarily related to advancing the FPA008 program in immuno-oncology and PVNS, and advancing internal immuno-oncology research and preclinical activities, including expenses related to in-licensing GITR antibodies.

• G&A Expenses. General and administrative expenses for the fourth quarter of 2015 increased by $4.6 million, or 115%, to $8.6 million from $4.0 million in the fourth quarter of 2014. Full year 2015 general and administrative expenses were $22.6 million, an increase of $9.0 million, or 66%, from $13.6 million in 2014. This increase was primarily due to increases in personnel related expenses, including stock-based compensation, facility costs and recruiting related to expansion of operations.

• Net Income (Loss). Net income for the fourth quarter of 2015 was $296.1 million, or $11.37 per basic share and $10.63 per diluted share, compared to a net loss of $11.8 million, or $0.55 per basic and diluted share, for the fourth quarter of 2014. Full year 2015 net income was $249.6 million, or $9.73 per basic share and $9.23 per diluted share, compared to a net loss of $37.4 million, or $1.79 per basic and diluted share in 2014. These increases in net income were primarily related to the revenue recognized under the FPA008 license and collaboration agreement with BMS.

Cash Guidance. Five Prime expects full-year 2016 net cash used in operating activities to be less than $120 million, comprising less than $90 million used in operations and less than $30 million used for income tax payments. The company estimates ending 2016 with approximately $400 million in cash, cash equivalents and marketable securities.

On March 10, 2016 Committed to technologies that assist in the goal of reducing lung cancer morbidity worldwide, Medtronic (NYSE: MDT) reported European enrollment in the NAVIGATE clinical trial (Press release, Medtronic, MAR 10, 2016, View Source;p=RssLanding&cat=news&id=2147494 [SID:1234509456]). This 2,500-patient international study will assess the long-term impact of its superDimension(TM) navigation system as an aid in early detection of lung cancer and subsequent treatment.

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The superDimensionsystem uses LungGPS(TM) technology, the first of its kind to enable Electromagnetic Navigation Bronchoscopy (ENB) procedures. ENB procedures provide a minimally invasive approach to access difficult-to-reach areas of the lung, which can aid in the diagnosis of lung disease, can help patients avoid surgery for benign disease and other invasive procedures like transthoracic needle aspiration, and lead to earlier, personalized treatment – potentially saving lives. The superDimension system has received CE Mark in Europe, 510(k) clearance in the US and has also been approved for use in numerous international markets.

"Early detection, diagnosis and intervention are crucial to the survival of people living with lung cancer," said Mag. Petra Lichtenberger, Assistant to Prof. Dr. Lamprecht at the Department of Pulmonology of Kepler University Clinic Linz, Austria, which enrolled the first ENB patient in Europe. "Technology that allows medical professionals to view areas of the lung that could not be accessed before is a major advance that is changing the landscape of lung cancer diagnosis and helping save patient lives."

Up to 75 centers around the world will enroll patients in the single-arm, multi-center post-market observational study designed to evaluate the impact of ENB procedures on early diagnosis and treatment. The NAVIGATE study will also determine the success rate of physicians using the technology to obtain biopsy samples from the surrounding lymph nodes. In addition, the study will assess the effectiveness of physicians’ placement of fiducial markers or dyes to guide subsequent procedures to treat or remove lung tumors.

More than 22 sites have been activated to enroll patients since the study first launched in the U.S. in April 2015. Healthcare professionals will follow patients for 24 months.

"The NAVIGATE study represents our commitment to delivering meaningful solutions that support the early detection and treatment of lung cancer to save patient lives," said Vafa Jamali, president, Early Technologies business in the Medtronic Minimally Invasive Therapies Group. "The enrollment of patients in Europe for the NAVIGATE study is a significant milestone and an important step to help establish ENB procedures as the gold standard for detecting lung cancer in the earlier, more curable stages."

According to the World Health Organization, lung cancer is the number one cancer killer in the world, accounting for 1.59 million deaths in 2012.1 In its early stages, lung cancer presents few, if any, symptoms. As a result, diagnosis for the vast majority of lung cancer patients happens in the late stages, and long-term survival rates drastically decline. When diagnosed early, an estimated 85 percent of lung cancer cases appear at a more curable stage.2 Early detection and immediate treatment dramatically increases the typical long-term survival rate from 15 percent at five years3 to 88 percent at 10 years.

To date nearly 100,000 ENB procedures have been performed globally at more than 600 hospitals commercially and as part of prior clinical trials.

Additional information about the NAVIGATE study and enrolling sites can be found at clinicaltrials.gov/ct2/show/NCT02410837.

Multimedia Release
A multimedia version of this release, with video and links to graphics can be found at: http://bit.ly/1TIeoLk.

On March 10, 2016 Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company committed to the development and commercialization of targeted oncology therapeutics that address major unmet medical needs, reported its financial results for the quarter and year ended December 31, 2015 (Filing, Q4/Annual, Galena Biopharma, 2015, MAR 10, 2016, View Source [SID:1234509491]).

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"2016 is poised to be a critical year for Galena as we look forward to reaching two significant milestones in our NeuVax Phase 3, PRESENT clinical trial targeting the prevention of breast cancer recurrence," said Mark W. Schwartz, Ph.D., President and CEO. "As anticipated, we expect to reach the 70th event in the PRESENT trial, defined as a recurrence of the primary cancer, occurrence of another cancer, or death from any cause, within the next few weeks. Once we reach this event, we will prepare the data for review by our Independent Data Monitoring Committee (IDMC), and the IDMC will then conduct an interim safety and futility analysis. We expect this analysis to be completed and announced at the end of the second quarter."

Dr. Schwartz continued, "NeuVax is our most advanced program and represents the greatest commercial potential for Galena. In addition to the PRESENT trial, we are excited to have several additional partner and investigator-sponsored trials with NeuVax in both breast and gastric cancers. This year, we expect preliminary safety data from our NeuVax breast cancer combination trial with trastuzumab, and we look forward to initiating Phase 2 studies with our partners in women diagnosed with Ductal Carcinoma in Situ (DCIS) and in patients with gastric cancer. Our goal for 2016 is to continue the development of the NeuVax franchise by investigating a host of cancer indications, patient populations, and treatment regimens both as a stand-alone therapy and in combination with other technologies where NeuVax can be beneficial to cancer patients."

Dr. Schwartz added, "On the corporate side, I have implemented several major strategic initiatives since I took over as President and CEO. Over the last eighteen months, we have taken positive steps to restructure the Company by divesting our commercial business and sharpening our focus on NeuVax and our additional clinical development programs. In December, we also announced the proposed settlement of both the derivative and securities class action litigation and expect those settlements to be approved by the end of the second quarter of this year. Furthermore, led by our Nominating and Governance Committee, we have begun to expand our

Board of Directors with the replacement of one retiring director, and the planned addition of another new director. On the financial side, we successfully raised capital at the beginning of the year to strengthen our balance sheet, and we expect our 2016 quarterly cash burn to be between $9 to $11 million dollars based on our current programs with several non-recurring expenses increasing that burn in the first half of the year, as detailed below. As a result, and given the volatile and unpredictable financial markets, we believe a conservative approach to our clinical spend and maintaining our primary focus on NeuVax, is warranted. Therefore, and in concert with this mission-oriented approach, we are reviewing our non-NeuVax programs and calibrating those programs’ new trial initiation dates in order to optimize the allocation of our resources."

Dr. Schwartz concluded, "Looking ahead, we are taking the necessary steps to move Galena forward with advancing clinical programs and a strong management team who is focused on two main goals: providing therapeutic modalities to prevent or significantly delay cancer recurrence, and maximizing value for our dedicated shareholders."

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: View Source 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: 50939696. The archived webcast replay will be available on the Company’s website for 90 days.

FINANCIAL HIGHLIGHTS

Continuing Operations

Operating loss from Galena’s ongoing development programs, classified as continuing operations, for the fourth quarter of 2015 was $7.6 million, including $0.6 million in stock-based compensation, compared to an operating loss from continuing operations of $9.7 million, including $0.8 million in stock-based compensation for the same period in 2014. Operating loss from continuing operations in 2015 was $34.2 million, including $1.9 million in stock-based compensation, compared to an operating loss from continuing operations of $43.9 million, including $5.4 million in stock-based compensation in 2014. The decrease in net operating loss in the quarter and year ended December 31, 2015 compared to the quarter and year ended December 31, 2014 was primarily the result of the completion of enrollment in the Company’s Phase 3 PRESENT trial for NeuVax, the decrease in stock-based compensation, and a reduction in non-insurance reimbursed legal expenses associated with ongoing litigation and regulatory proceedings.

Non-operating income or expenses include charges related to securities and derivative litigation settlement expense, non-cash changes in the fair value estimates of the Company’s warrant liabilities, non-cash change in the contingent purchase price liability, and interest expense. Because the settlement of the securities and derivative litigation was reached in the fourth quarter of 2015, the settlement amount and related costs were expensed in the fourth quarter of 2015. Non-operating expense for the fourth quarter and year ended December 31, 2015 was primarily attributable to the $5.3 million expense incurred for the securities and derivative settlement. Of the $5.3 million charge, $3.3 million is accrued as of year-end, which Galena expects to pay out upon final court approval of the settlement in the second quarter of 2016 comprising $2.3 million in cash and $1 million in Galena common stock. This expense was partially offset by a non-cash gain of $2.1 million during the fourth quarter of 2015 and $1.2 million during the year ended 2015, related to the change in the value of the Company’s warrant liability during both periods. The fourth quarter and year ended 2014 non-operating income was primarily attributable to the non-cash gains of $3.4 million during the fourth quarter of 2014 and $16.6 million during the year ended 2014, respectively, related to the change in the value of the warrant liability.

Loss from continuing operations for the fourth quarter of 2015 was $10.8 million, including a $2.1 million non-cash gain on warrant liability, or $0.07 per basic and diluted share. Loss from continuing operations for the fourth quarter of 2014 was $6.3 million, including a $3.4 million non-cash gain on warrant liability, or $0.05 per basic and diluted share. Loss from continuing operations in 2015 was $39.0 million, including $5.3 million for the securities and litigation settlement and a $1.2 million non-cash gain on warrant liability, or $0.25 per basic and diluted share. Loss from continuing operations in 2014 was $28.3 million, including a $16.6 million non-cash gain on warrant liability, or $0.24 per basic and diluted share.

Non-recurring Charges

During the second half of 2015, Galena had several one-time, non-recurring charges that materially affected its earnings per share for the fourth quarter and full year 2015. These one-time charges were the result of the divestiture of the commercial operations, which was classified as discontinued operations beginning in the third quarter of 2015, and the securities and derivate litigation settlement expense in the fourth quarter of 2015.

Quarter Ended

Year ended
Non-recurring charges included in loss from discontinued operations:

Impairment charge form classification as held for sale (non-cash)
$
—

$
8,071

Loss on sale of commercial business assets (non-cash)
$
4,549

$
4,549

Severance and exit costs
$
1,349

$
1,349

Non-recurring charges included in loss from continuing operations:

Litigation settlement
$
5,282

$
5,282

Discontinued Operations

Loss from discontinued operations for the fourth quarter of 2015 was $8.9 million, or $0.05 per basic and diluted share, compared to $1.7 million, or $0.01 per basic and diluted share, for the same period of 2014. Of note, the Company has retrospectively recast its previously issued 2014 annual financial statements to present the commercial business as discontinued operations. The loss from discontinued operations for the fourth quarter of 2015 includes a non-cash charge of $4.5 million on the loss on sale of the commercial business assets and $1.3 million of severance and exit costs. Loss from discontinued operations in 2015 was $24.9 million, or $0.16 per basic and diluted share, compared to $8.3 million, or $0.07 per basic and diluted share, for the same period of 2014. Loss from discontinued operations in 2015 also includes an $8.1 million non-cash impairment charge from classification of assets held for sale in addition to the loss on sale of commercial business assets and severance and exit costs described above.

Cash and Cash Equivalents

As of December 31, 2015, Galena had cash and cash equivalents of $29.7 million, compared with $23.7 million as of December 31, 2014. The $6.1 million increase in cash through the fourth quarter of 2015 represents $47.4 raised from issuance of common stock and $11.3 net proceeds from the sale of commercial assets, partially offset by $38.8 million used in continuing operating activities, $9.4 million used in discontinued operating activities, and $3.9 million in debt service payments.

For the Year Ended December 31,

2015

2014
Cash flows from continuing operations:

Cash flows used in continuing operating activities
$
(38,802
)

$
(37,037
)
Cash flows used in continuing investing activities
(354
)

(2,472
)
Cash flows provided by continuing financing activities
43,845

24,260

Total cash flows provided by (used in) continuing operating activities
4,689

(15,249
)

Cash flows from discontinued operations:

Cash flows used in discontinued operating activities
(9,358
)

(5,832
)
Cash flows used in discontinued investing activities
10,749

—

(3,056
)
Total cash flows provided by (used in) discontinued operating activities
1,391

(8,888
)

Total cash flows:

Cash flows used in operating activities
(48,160
)

(42,869
)
Cash flows used in investing activities
10,395

(5,528
)
Cash flows provided by financing activities
43,845

24,260

Total increase (decrease) in cash and cash equivalents
6,080

(24,137
)
Beginning cash
$
23,650

$
47,787

Ending cash
$
29,730

$
23,650

Net Loss and Net Loss Per Share

Net loss for the fourth quarter of 2015 was $19.7 million, or $0.12 per basic and diluted share, compared to $8.0 million, or $0.06 per basic and diluted share, for the same period of 2014. Net loss in 2015 was $63.9 million, or $0.41 per basic and diluted share, compared to $36.6 million, or $0.31 per basic and diluted share, for the same period of 2014.

FOURTH QUARTER AND RECENT HIGHLIGHTS

Clinical Development Highlights

Received a Notice of Allowance of a U.S. Patent for NeuVax (nelipepimut-S). Galena announced the United States Patent Office issued a Notice of Allowance for an additional U.S. patent application covering multiple uses of NeuVax (nelipepimut-S): inducing and maintaining an immune response to HER2 expressing tumor cells in patients in clinical remission with a tumor having a fluorescence in situ hybridization (FISH) rating of less than about 2.0 (FISH <2.0); inducing and sustaining a cytotoxic T-lymphocyte (CTL) response to HER2 in patients in clinical remission from a tumor with a FISH rating of less than about 2.0 (FISH < 2.0); reducing risk of cancer recurrence in patients in clinical remission from a tumor with a FISH rating of less than about 2.0 (FISH < 2.0); and preventing bone only recurrence of a HER2 expressing cancer. This patent will expand both the protection and the potential population of cancer patients NeuVax may address. Once issued, the patent will expire in 2028, not including any patent term extensions.

Presented Observational Study Data in Gastric Cancer Patients at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2016 Gastrointestinal Cancers Symposium. The Company presented data from an observational study in gastric cancer patients at the ASCO (Free ASCO Whitepaper) 2016 Gastrointestinal Cancers Symposium. The study was conducted by Galena’s partner, Dr. Reddy’s Laboratories Ltd, who will conduct a Phase 2 clinical trial of NeuVax in gastric cancer patients in India. The poster, entitled, "An observational study evaluating the expression of HER2 (1+, 2+, and 3+) with HLA A2+/A3+ in gastric adenocarcinoma patients," showed that approximately 25% of the patients met the projected clinical protocol population of all levels of expression of HER2 and HLA A2+ and/or A3+ as defined for the planned NeuVax Phase 2 clinical trial. Results indicate an acceptable potential for enrollment rate, given the high incidence of gastric cancer in this population, and will inform the screen failure rate in the planned Phase 2 clinical study.

Presented GALE-302 Preliminary Immunological Data Optimizing GALE-301 at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 30th Anniversary Annual Meeting. The poster, entitled, "Preliminary report of a clinical trial supporting the sequential use of an attenuated E39 peptide (E39’) to optimize the immunologic response to the FBP (E39+GM-CSF) vaccine," compared three primary vaccine series (PVS) sequences of GALE-301 (E39) and GALE-302 (E39’) in ovarian and breast cancer patients to optimize the ex vivo immune responses, local reactions (LR), and delayed type hypersensitivity (DTH) reactions. The data demonstrated that the in vivo immune response is enhanced with the use of the attenuated E39’ (GALE-302) after E39 (GALE-301). The optimal vaccination sequence utilizing three inoculations of GALE-301 followed by three inoculations of GALE-302 produced the most prominent and statistically significant LR and DTH responses.

Announced a collaboration with the National Cancer Institute (NCI) to initiate a new, Phase 2 Clinical Trial With NeuVax in Ductal Carcinoma in Situ (DCIS) Patients. The trial will be entitled, "VADIS: Phase 2 trial of the Nelipepimut-S Peptide VAccine in Women with DCIS of the Breast," and The University of Texas M.D. Anderson Cancer Center (MDACC) Phase I and II Chemoprevention Consortium is the lead for this multi-center trial. The Consortium is funded through the Division of Cancer Prevention at the NCI, which will provide financial and administrative support for the trial. Galena will provide NeuVax, as well as additional financial and administrative support.

Corporate Highlights

Announced Proposed Settlement of Derivative and Securities Class Action Lawsuits. On February 4, 2016, the United States District Court for the District of Oregon (the "Court") issued an order preliminarily approving the proposed settlement by and among the Company, the Court-appointed co-lead plaintiffs, and all named defendants in the shareholder derivative action entitled In Re Galena Biopharma, Inc. Derivative Litigation, Case No. 3:10­cv­00382­SI. A hearing to determine whether the Court should issue an order of final approval of the settlement has been scheduled for April 21, 2016. On February 16, 2016, the Court also issued an order preliminarily approving the proposed settlement by and among the Company and the current and former officers and directors in the consolidated putative federal class action, In Re Galena Biopharma, Inc. Securities Litigation, pending in the United States District Court for the District of Oregon. A hearing to determine whether the Court should issue an order of final approval of the Settlement has been scheduled for June 23, 2016.

Announced Changes to Board of Directors and Management Team. Galena announced that Steven A. Kriegsman will be retiring as a director of the Company when his current term expires the day prior to the June 2016 Annual Meeting of Stockholders. The Company plans to replace Mr. Kriegsman’s position on the Board of Directors and add one new director. The Company also announced the departure of Chief Financial Officer (CFO), Mr. Ryan Dunlap, due to his inability to relocate to the Company’s headquarters in California. Galena has instituted a search for the two new members to its Board of Directors and for a new CFO.

Galena appointed Bijan Nejadnik, M.D., as its Executive Vice President and Chief Medical Officer. Dr. Nejadnik is responsible for managing all of Galena’s clinical development programs. Dr. Nejadnik has more than twenty two years of academic and industry experience, including twelve years with pharmaceutical and biotech companies including Jazz Pharmaceuticals, Johnson & Johnson, and Purdue Pharma. During his career, Dr. Nejadnik has successfully developed numerous biologics and small molecules, advancing these agents towards Biologics License Application (BLA) and New Drug Application (NDA) submissions.

Closed a Public Offering. On January 12, 2016, Galena closed the previously announced underwritten public offering of common stock and warrants. The net proceeds to the Company were approximately $20.1 million.

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

Three Months Ended December 31,

Year Ended December 31,

2015

2014

2015

2014
Operating expenses:

Research and development
$
4,849

$
6,211

$
23,611

$
27,674

General and administrative
2,740

3,482

10,609

16,226

Total operating expenses
7,589

9,693

34,220

43,900

Operating loss
(7,589
)

(9,693
)

(34,220
)

(43,900
)
Non-operating income (expense):

Litigation settlement
(5,282
)

—

(5,282
)

—

Change in fair value of warrants potentially settleable in cash
2,143

3,382

1,162

16,556

Interest expense, net
(153
)

(185
)

(760
)

(1,110
)
Other income
440

229

509

170

Total non-operating income (expense), net
(2,852
)

3,426

(4,371
)

15,616

Loss before income taxes
(10,441
)

(6,267
)

(38,591
)

(28,284
)
Income tax expense
365

—

365

—

Loss from continuing operations
$
(10,806
)

$
(6,267
)

$
(38,956
)

$
(28,284
)
Discontinued operations

Loss from discontinued operations

(8,872
)

(1,689
)

(24,946
)

(8,322
)
Net loss
$
(19,678
)

$
(7,956
)

$
(63,902
)

$
(36,606
)

Net loss per common share:

Basic and diluted net loss per share, continuing operations
$
(0.07
)

$
(0.05
)

$
(0.25
)

$
(0.24
)
Basic and diluted net loss per share, discontinued operations
$
(0.05
)

$
(0.01
)

$
(0.16
)

$
(0.07
)
Basic net loss per share
$
(0.12
)

$
(0.06
)

$
(0.41
)

$
(0.31
)
Weighted-average common shares outstanding: basic and diluted
161,905,422

122,917,163

155,264,729

119,388,366

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

December 31, 2015

December 31, 2014
ASSETS

Current assets:

Cash and cash equivalents
$
29,730

$
23,650

Restricted cash
401

200

Litigation settlement insurance recovery
21,700

—

Prepaid expenses and other current assets
1,398

1,237

Current assets of discontinued operations
392

27,013

Total current assets
53,621

52,100

Equipment and furnishings, net
335

285

In-process research and development
12,864

12,864

GALE-401 rights
9,255

9,255

Goodwill
5,898

5,897

Deposits
171

87

Total assets
$
82,144

$
80,488

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
1,597

$
1,886

Accrued expense and other current liabilities
5,292

8,885

Litigation settlement payable
25,000

—

Fair value of warrants potentially settleable in cash
14,518

5,383

Current portion of long-term debt
4,739

3,910

Current liabilities of discontinued operations
5,925

7,169

Total current liabilities
57,071

27,233

Deferred tax liability, non-current
5,418

5,053

Contingent purchase price consideration, net of current portion
6,142

6,651

Long-term debt, net of current portion
—

4,492

Total liabilities
68,631

43,429

Stockholders’ equity
13,513

37,059

Total liabilities and stockholders’ equity
$
82,144

$
80,488

On March 9, 2016 OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI) reported year end 2015 financial results and provided a summary of anticipated milestones (Press release, OncoGenex Pharmaceuticals, MAR 9, 2016, View Source [SID:1234509458]).

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Financial Results and Anticipated Near-term Milestones

As of December 31, 2015, the company’s cash, cash equivalents and short-term investments increased to $55.2 million from $47.1 million as of December 31, 2014.

Based on current expectations, OncoGenex believes that its cash, cash equivalents and short-term investments will be sufficient to fund its currently planned operations into the third quarter of 2017. Depending on timing of enrollment or event-driven final analyses, the expected key milestones and activities are as follows:

Custirsen
Announcing AFFINITY trial results, the phase 3 trial evaluating a survival benefit for custirsen in combination with cabazitaxel as second-line chemotherapy in approximately 630 patients with castrate-resistant prostate cancer. The final analysis for the intent-to-treat population is expected in the third quarter of 2016.

Announcing ENSPIRIT trial results, the phase 3 trial evaluating a survival benefit for custirsen in combination with docetaxel as second-line chemotherapy in approximately 700 patients with non-small cell lung cancer. The final survival analysis is expected in the first half of 2017.

Apatorsen
Announcing Borealis-2 trial results, an investigator-sponsored, randomized phase 2 trial evaluating apatorsen in combination with docetaxel treatment compared to docetaxel treatment alone in patients with advanced or metastatic bladder cancer. Final results are expected in the second half of 2016.

Announcing Spruce trial results for the overall survival endpoint, the investigator-sponsored, randomized, placebo-controlled phase 2 trial evaluating apatorsen treatment with carboplatin and pemetrexed chemotherapy in patients with previously untreated advanced non-squamous NSCLC. Results, including evaluation of patients with high Hsp27 expression, are expected in the second half of 2016.

Preparing an investigational new drug application for FDA submission. The proposed Phase 1/2 study design would evaluate apatorsen for intravesical administration in combination with Bacillus Calmette-Guerin (BCG) treatment in patients with non-muscle invasive bladder cancer. In its feedback to OncoGenex at a pre-IND meeting, the FDA supported the study population and classification of subpopulations and deemed proposed definitions of primary and secondary endpoints acceptable.

Revenue for the fourth quarter and year ended December 31, 2015 was $6.0 million and $18.2 million, respectively. This compares with $5.7 million and $27.1 million, respectively, in the same periods in 2014. The decrease in 2015 as compared to 2014 was due primarily to lower collaboration revenue recognized for the reimbursement of expenses for the AFFINITY trial as a result of patients coming off treatment. This was partially offset by higher ENSPIRIT trial costs, which OncoGenex became responsible for pursuant to the Termination Agreement with Teva. Revenue recognized in 2015 is attributable to the advance reimbursement received in the second quarter of 2015, pursuant to the Termination Agreement with Teva, for research and development costs incurred by OncoGenex related to the custirsen development program.

Total operating expenses for the fourth quarter and year ended December 31, 2015 were $9.5 million and $36.9 million, respectively. Net loss for the fourth quarter and year ended December 31, 2015 was $1.7 million and $16.8 million, respectively.

As of March 9, 2016, OncoGenex had 29,812,998 shares outstanding.

On March 09, 2016 XOMA Corporation (Nasdaq:XOMA), a leader in the discovery and development of therapeutic antibodies, today reported the completion of its divestiture activities to focus the Company exclusively on advancing its portfolio of assets to address endocrine diseases, and provided its financial results for the quarter and year ended December 31, 2015 (Press release, Xoma, MAR 9, 2016, View Source [SID:1234509460]).

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Recent Corporate Developments:

Initiated a Phase 2 proof-of-concept study of XOMA 358 in patients with congenital hyperinsulinism, a rare genetic disorder in which the insulin cells of the pancreas secrete inappropriate and excessive insulin

Licensed its first-in-class TGF-beta immuno-oncology antibody program to Novartis for an upfront payment of $37 million, potential milestone payments of up to $480 million and tiered royalties up to low double digits

Extended the maturity date of its $13.5 million note due to Novartis until September 2020

Licensed XMetA, its selective insulin receptor modulator antibody program for diabetes, to Novo Nordisk A/S for an upfront payment of $5 million, potential milestone payments of up to $290 million and tiered royalties

Sold biologics manufacturing facility to Agenus Inc.

Divested anti-botulinum toxin program to Nanotherapeutics, Inc.

Closed the remaining gevokizumab clinical programs; initiating licensing efforts

Reduced headcount by half to approximately 90

Achieved cash runway to finance endocrine franchise into 2017

"The transformation we initiated in the third quarter of last year — and now have completed in less than six months — was considerable in its scale and complexity, but essential to position XOMA to deliver our promising portfolio of endocrine assets," stated John Varian, Chief Executive Officer of XOMA. "Novel antibodies and technologies created by XOMA scientists to target diseases such as cancer, diabetes and botulism will be advanced in the capable hands of Novartis, Novo Nordisk, Nanotherapeutics and Agenus, with XOMA sharing in potential successes in certain cases."

Mr. Varian continued, "We are now fully focused on efficiently maximizing the potential of XOMA 358, XOMA 129, and XOMA 213, all of which may address unmet medical needs in endocrinology. Our XOMA 358 proof-of-concept study in patients with hypoglycemia due to congenital hyperinsulinism is progressing on schedule. Several patients have been enrolled in the U.S., and our UK study center expects to begin enrolling patients in the coming weeks. Our XOMA 358 proof-of-concept study in patients with hyperinsulinism post bariatric surgery is expected to start dosing patients early in the second quarter. Additionally, we have finalized the design of a proof-of-concept study for XOMA 213, which may offer a new therapeutic option for patients with hyperprolactinemia, and anticipate initiating the study midyear. In 2016, we expect to have Phase 2 data from both XOMA 358 indications, and they will set the stage for XOMA in 2017 and beyond."

Gevokizumab Update

Given XOMA’s focus on endocrinology, the Company has decided to stop all gevokizumab related development activities and is initiating a formal sales process for the asset. As a result, the Company is closing the Phase 3 program in patients suffering from pyoderma gangrenosum. A preliminary review of the data from the approximate 25 patients enrolled in the trial to date did not show a clear signal of activity in this indication. XOMA has been approached by several companies interested in gevokizumab and data from all gevokizumab studies will be available to potential buyers.

Financial Results

XOMA recorded total revenues of $55.4 million for the twelve months ended December 31, 2015, compared with $18.9 million during the same period of 2014. For the three months ended December 31, 2015, XOMA recorded revenues of $48.2 million compared with $4.3 million in the corresponding period of 2014. The increase in the full-year and fourth quarter 2015 revenues was due primarily to our licensing activity in the fourth quarter, including a $37.0 million upfront payment from Novartis, a $5.0 million upfront payment from Novo Nordisk and a $3.8 million payment from Pfizer, which were partially offset by lower revenues from our contracts with the National Institutes of Allergy and Infectious Disease (NIAID) and reimbursements from Servier under our collaboration agreement.

Annual research and development (R&D) expenses for 2015 were $70.9 million compared to $80.7 million incurred in 2014. The decrease in 2015 reflects a $3.1 million reduction in salaries and related expenses, a $3.5 million reduction in internal and external manufacturing costs, and a decrease in our clinical trial costs associated with gevokizumab. For the three-month periods ended December 31, 2015 and 2014, R&D expenses were $13.6 million and $19.4 million, respectively. The decrease in the 2015 fourth quarter R&D expenses was due primarily to reduced headcount and clinical trial costs.

In 2015, selling, general and administrative (SG&A) expenses were $20.6 million compared to $19.9 million incurred during 2014, primarily reflecting increased consulting services related to our out-licensing activities and increased legal fees, which were partially offset by a reduction in salaries and related personnel costs. SG&A expenses were $4.7 million in the fourth quarter of 2015, as compared to $4.1 million in the corresponding quarter of 2014. The increase in SG&A expenses primarily reflects an increase in legal fees partially offset by a decrease in salaries and related expenses.

In August 2015, the Company announced its intention to close the gevokizumab Phase 3 EYEGUARD global clinical program. In connection with the Company’s efforts to lower operating expenses and focus on its endocrine product pipeline, management implemented a restructuring plan during second half of 2015 that included the elimination of a number of positions throughout all areas of the Company. During the year ended December 31, 2015, XOMA recorded charges of $2.9 million related to severance, other termination benefits and outplacement services and recognized an additional restructuring charge of $0.8 million in contract termination costs, which primarily included costs in connection with the discontinuation of the EYEGUARD studies.

For the year ended December 31, 2015, XOMA had a net loss of $20.6 million compared with a net loss of $38.3 million in the year ended December 31, 2014. The full-year net losses in 2015 and 2014 included a $17.8 million gain and $45.8 million gain, respectively, in non-cash revaluation of contingent warrant liabilities, which resulted primarily from fluctuations in XOMA’s stock price. Excluding those revaluations, the net loss for 2015 was $38.4 million, and the net loss for 2014 was $84.1 million. For the three months ended December 31, 2015, XOMA reported a net income of $25.4 million, which included a charge of $6.4 million directly related to the revaluation of contingent warrant liabilities. Excluding the non-cash expense associated with the revaluation of contingent warrant liabilities, the net income for the 2015 fourth quarter was $31.7 million. Excluding a $12.1 million gain in non-cash revaluation of contingent warrant liabilities, the net loss for the 2014 fourth quarter was $19.4 million.

On December 31, 2015, XOMA had cash and equivalents of $65.8 million. The Company ended December 31, 2014, with cash and cash equivalents of $78.4 million.

The Company expects to have cash through the first quarter of 2017.