Hello and welcome to the Galena Biopharma Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only-mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. And now, I like to introduce your host for today's call, Remy Bernarda, Senior Vice President, Investor Relations and Corporate Communications. You may begin.

Good afternoon, everyone, and thank you for joining our call today. For those of you listening via telephone, I would encourage you to visit our website and log into our webcast presentation. For this quarterly call, we will be using slides to enhance our information flow. The slides can be accessed on our website in the Investors section under Events and Presentation. These slides are posted both as a PDF document and will also be available on the webcast. The slides are viewer controlled, meaning that you, the viewer will need to advance the slides. Our speakers will alert you to the slides they are addressing. As listed on slide number two on our presentation, during today's discussion, we may make forward-looking statements about our programs. Such statements include, but are not limited to, statements about our commercialization strategy, operations and plans and the development progress of our clinical product candidates, including patient enrollment, trial initiations and collaborations. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those identified under Risk Factors in our annual report on Form 10-K , quarterly report on Form 10-Q and other documents filed and other documents filed with the SEC and available on our website. Actual results may differ materially from those contemplated by these forward-looking statements. Please turn to slide number three as I would now like to introduce the members of Management on the call. Dr. Mark Schwartz, our President and CEO; Dr. Gavin Choy, Senior Vice President, Clinical Sciences and Operations, who will discuss our Clinical Programs; Christopher Lento, Senior Vice President of Commercial, who will discuss our Commercial Business; and Ryan Dunlap, our Vice President and Chief Financial Officer. Please now turn to slide number five, and Dr. Schwartz will begin our discussion.

Thank you, Remy, and welcome everyone to our second quarter earnings conference call. I am pleased to report our progress today as a last four months has been extremely productive for us. On this slide five I have highlighted major milestones we have completed and I am grateful for our entire Galena team for their efforts to reach these accomplishments. I will briefly review this and then turn the call over to Gavin Chris and Ryan to elaborate further. On the clinical side as we stated last quarter we accomplished critical milestone with a completion of over-enrollment in our PRESENT trial for NeuVax and we look forward to analysis which we expect to later this year or early next year. In total we have three ongoing breast cancer trial for this agent as a drug candidate NeuVax falls in an exciting and dynamic landscape known as innumo-oncology where new approvals and breakthrough in this area continue to improve the lives of cancer patients. We plan to continue to expand the utility of new vaccine diseases where patient may benefit from our immune therapy. Today we have been successful and expanding our portfolio and have funding from partners and government agencies to help us expand the use of NeuVax. We are constantly evaluating the immune oncology landscape and opportunities where NeuVax may contribute and expect to initiate additional trials in the future. Kevin will elaborate on this in more detail. We also have two meaningful data presentation on earlier stage assets GALE-301 also known as Folate Binding Protein Vaccine or FBP and GALE-401 with both assets demonstrating efficacy, safety and tolerability. Our second immunotherapy assets GALE-301 or FBP is in a Phase II-A trial treating ovarian and endometrial cancers the preliminary results were quite promising with the reduction and relevant risk…

Thank you Mark. As Mark mentioned our clinical team made terrific progress in the second quarter and we are looking forward to several additional clinical data presentation over the remainder of the year as I mentioned on our last call we successfully completed enrolment in our Phase III PRESENT clinical trial with our lead cancer immunotherapy assets NeuVax. The steady schema was depicted on slide seven and reaching this significant milestone was critical for our company and the overall clinical development of NeuVax for the prevention of breast cancer recurrence. NeuVax is peptide derived from the HER2 protein that binds the human leukocyte antigen or HLA. PRESENT multi-center multi-national prospective double blind study enrolling lymph node positive breast cancer patients with HER2 1+, 2+ tumors in the adjuvant setting. NeuVax is used for these women who have no evidence of disease after their standard of care treatment otherwise known as secondary prevention. Because there are no achievements currently approved in this setting there is just a physical unmet medical need for these patients and unfortunately if these patients to these reoccurs it is most often fail. Our next major clinical milestone for this trial will be achieving a positive readout on our even driven interim analysis which will occur when we reached some of the events defined as recurrence or death for many cause. We believe this would be a significant derisking event for the trial. As you reminder this is a safety and utility analysis and based on our current event rate, we expect to reach this milestone by the end of this year on the first quarter of 2016. I would now like to take some time to discuss our NeuVax franchise and where we see potential for the program. In addition to the PRESENT trial, we also…

Thank you, Gavin and good afternoon everyone. I'll start my discussion with Abstral. As a remainder Abstral indicated for the treatment of breakthrough cancer pain and opioid tolerant adult cancer patients. And falls under the TIRF REMS access program. I'm pleased to report Abstral net revenue is 3.4 million for the second quarter of 2015, our highest net revenue quarter since launch. This is a result of our team adding new prescribers and a continued adoption of our Galena patient services for GPS program. On slide 16 you can see this trajectory. In addition our gross to net deduction improved to 77% this quarter compared to 65% in Q1 in 2015. Ryan will discuss this in more detail later in the call. Turning to slide 17, this shows a number of Abstral units dispensed per pay transaction. As shown we continued to trend positively at around 80 to 85 tablets per transaction versus 55 tablets per transaction in June of last year. This has resulted in more profitable transactions and is directly related to our providers becoming more comfortable prescribing Abstral and adopting the benefits of our GPS programs. Our current market share and the brand TIRF market remains steady at around 4% to 5% of total prescriptions dollars on a monthly basis according to Walter Reed. More importantly on slide 18 you can see that our average transaction price reached an all-time high in June at $5,673 per transaction. Our focus remains on growing our oncology prescriber base. Slide 19 illustrates the fact that we are maintaining about 34% of our Abstral business through oncology focused providers and platelet care specialist. As a reminder this is up from 1% when we launched Abstral. We anticipate this number to continue to grow over time and expect that with the promotion…

Thank you Chris and good afternoon everyone. Please refer to slide 26 as I walk you through the highlights of our 2015 P&L starting with revenue, and of course all amounts mentioned will be in US dollars. Net revenue from the sale of Abstral for the second quarter of 2015 was $3.4 million up 48% from the $2.3 million reported for the same quarter of last year. Net revenue for the first half of the year was $6.1 million up 36% from the $4.5 million reported for the first half of last year. Gross to net deductions continue to improve as Chris mentioned, moving below 25% during Q2 as we gain more utilization of our various patient assistance programs and our account management and managed care teams strengthen relationships with our distributors, pharmacies and commercial payers. We expect - gross to net deduction percentages to remain at these levels moving forward which reflects the significant progress our team has made in this area. Last week we launched our second product Zuplenz, and we expect to begin recognizing revenue moving forward. While we are optimistic about our sales for this product, we expect to report initially high growth to net deduction at around 60% to 70% due to the lack of any historical sales demand and product return information. As a result, our revenue recognition for Zuplenz will be deferred until the product that sold through or win the right of return from our customers no longer exists. Also as we mentioned before, after we purchased Zuplenz, we worked closely with certain distributors to replace the outdated products sold by the previous licensee with our new longer dated Galena-labeled product. these agreements will delay our revenue recognition for Zuplenz as we get through the first couple of quarters after launch and…

Thank you Ryan. Galena had a successful first half of the year and we remain focused on our cancer immunotherapy programs lead by our PRESENT trial with NeuVax and the potential and the potential for future trials and additional indications. Our employee’s companywide work diligently to achieve several of our major milestones and we look forward to continue advances our commercial programs and our clinical data readouts over the remainder of this year. We will now open the call for questions.

[Operator Instructions]. Our first comes from Mara Goldstein with Cantor Fitzgerald. Your line is open. You may ask your question

Thanks for taking the question. I was hoping that maybe you could walk us a little bit through the results for 301. I mean understanding that you're showing the optimal dose group. The broader study showed a higher if I understand response rate and the non-treated group. So maybe you can help me with that.

So Mara let me take the first crack at that and then Gavin can jump in. So the trial was set up as a dose escalation trial, so we essentially started a low dose and migrated our way out to the optimal dose the maximum dose that didn't have any safety or tolerability use and that was a 1000 microgram. I think what we saw is that I don't have all the data paths right in front of me from the published data, but the non-optimal dose groups, the dose groups below the 1000 micrograms did not show really a measurement improvement over the placebo but the 1000 microgram showed a very measurable, I don't want to use the word significant but a very measurable improvement over placebo and in fact depending on the specific statistics or what statistically significant. So I think that the data indicates that there is a very dramatic dose response curve a dose response mechanism taking place and that the 1000 microgram does represent a dose in which the immune system is responding very strongly. And in fact it is strong and after represent a clinical response.

Right I guess my question is but why then with the complete response rate be lower. Is it just a function of chance that you had this for responders and sub-optimal group?

So Mara we're not looking at complete response we're looking at clinical recurrence.

So in your press release so I apologize.

Yeah so I think the press release may have stated that incorrectly it's actually the CR is actually a clinical recurrence. And yeah, so in this setting we're looking in the adjuvant setting where patients were if there is no evidence of disease and then came on to our trial and as Mark mentioned there was a dose escalation of about 1000 mics at the top dose. The two lower doses were 500 and 100 micrograms of E75. And just to add on to what Mark has said, we also showed in the abstract that there was a pre and post-DTH immunological response as well. And the clinical recurrence collaborated with the DTH reaction showing that the 1000 microgram dose cohort had a statistically significant increase or decrease or the millimeters of DTH was significant compared to that lower less than 1000 microgram dose cohort.

Okay. You should look at your press release because did you have clinical response and complete response. So I apologize for my confusion but it does exist in that press release. So, thanks if I can just.

Mara is this for 301 or 401.

301.

Okay.

So. And if I can just ask a financial question on the financial vehicle at Lincoln Park, I think that there was a settlement in that $50 million or so. So can you just let us know how much you have what is less than that funding vehicle?

Sure Mara, this is Ryan. Thanks for the question, we have hi we have about $42 million left out at Lincoln Park study.

Okay. Thank you.

You bet.

Our next question comes from Jason Colbert [ph]. Your line is open, sir you may ask your question.

Hi Mark hi guys. It's actually Jason McCarthy for Jason Colbert. Just kind of a broad question, we see I mean you're looking at you have a fully rolled or over and old actually PRESENT trial for NeuVax of several other vaccines that is going on. Could you guys elaborate a little bit on the potential of expanding the NeuVax in the vaccine platform possibly the combinations studies with like a check point modulator or even with a partner and the reason I'm asking is that we're beginning to see more of the big pharma companies gravitating to cancer vaccines almost like they gravitated the CAR T and we think that the space, the vaccine space in particular is very undervalued right now relative to the CAR T space and might be starting to catch and I just wondered if that something that you guys are thinking about.

So Jason I would agree with you that it's very undervalued. So I think we have a common vision there and thanks for the question. The short answer is yes, we are very actively looking at - as we talk you go to slide 11 in the presentation if you have to be in front of your computer. We are very actively engaged in discussions with different folks to understand what the possibilities are in terms of using NeuVax across the range of settings in particular. Let's talk about breast cancer although we could certainly go into any HER2 expressing solid tumor. But we are very active in investigating the opportunities for NeuVax in combination with immune modulators whether it's a checkpoint inhibitor or another immune modulator moving down in downstream and in metastatic area or moving I guess what you might call upstream or earlier into the cancer prevention side. So I can't - there is nothing specific that I can talk to at the moment. But it is an area that's a very active interest to us and we are working on opportunities that we can jump into here over the next period of time.

Great. Yeah, we do see like the CAR T space. Yeah, everything is moving toward solid tumors you are already there with your vaccine for NeuVax and we think that we know the heterogeneity of these tumors. It's going to be a stumbling block for CAR T and this is where you could see vaccine maybe even in the next year. Start to break through and become a little bit more relevant or a lot more relevant and that was the reason for my question because you do have data coming. It could be critical inflection point for the company. Thank you for taking my question.

You are welcome and we agree with you completely. I think the T-cell data of NeuVax and E39 can be very pivotal in the combination setting.

Great. Thanks guys.

Our next question comes from Rahul Jasuja [ph] with Global Life Science. Your line is open sir.

Hi, guys. Good evening. Thanks for taking my question. So just sticking with the combination approach for potentially NeuVax there. So as I understand it. I guess breast cancers are not monogenic and PD1 PDL1 low. So unless you're talking about triple negative which doesn't really qualify for the HER2 high expresses. Could you comment on that?

I'm sorry. Rahul, restate your question that because....

Sure.

Yeah, I'm sorry. I didn't quite catch the key question.

Yeah, absolutely. It's very exciting that there is an opportunity here as the previous color is set to combine to look at combination study just because in the context of modern immunotherapy approach for you reversing the immuno suppression. I mean in presentation the vaccine did play a big part. So in relevance to that my question is for breast cancer in particular HER2 expressing breast cancer. My understanding is that PD1 PDL1 are not expressed and therefore are not already highly expressed. Therefore using a PD1 approach is not appropriate. But potentially using maybe a T-cell simulative may work. Is that the right thinking there?

I think it is. I know that people have done a lot of work looking at the PD1 and PDL1 markers. I don't know how consistently though that they have been indicative of the actions of those compounds that as a biomarker I don't know that they all always predicted the outcome those inhibitors in various trials. I think as NeuVax's ability to stimulate a significant T-cell response that any removal of the breaks any added support we can give to that T-cell activity could be enough to overcome the suppressive effect of even a very low expression to PD1 PDL1 could be very useful. I guess I'm not convinced the people really understand enough of the biology to know what's really going to work in each individual setting. Each tumor is different that the biology various radically the immune system adopts and changes and while I think checkpoint inhibitor had a dramatic effect on melanoma. There is still a lot of biology we don't understands and what the combination of these agents are really going to where they're going to resolving success.

Fair enough there is more than just the PD1 and PDL1 that could sort of harness adoptive and in an immunity to help for vaccine studies. That's helpful. Let me move to Zuplenz now, and just to get some clarification there. Really the major thrust for CIN is driven by an intravenous anti medic drug 583 and tags out their IV. How much of a play does the oral space have but to your end. and also the other follow up my question is it's for acute and for so it's for HEX and for MEK is it also for delayed Zuplenz it's part of the delayed regimen 2.

So, thank you for the question. This is Chris. You're correct on the intravenous market, if you separated out the 5HT3 market, the overall market in the branded segment is around $1.1 billion $1.2 billion, a $1 billion of that is made up by the injectibles which leaves roughly a $100 million in oral or non-injectible segment. So Zuplenz will play in that space, but it could also be used with the injectibles products as well. And there is another $5 billion sitting out in the generic space as well. So the product has opportunity to pull market share from each of those segments.

Okay. And then Zuplenz would be used at least in the HEX setting. I will think in combination with dexamethasone and MK1 with receptor antagonist right.

Maybe.

Right.

That is correct.

Okay great. That's all I had guys. Thanks.

There are no other questions in the queue. I will now turn it back over to Mark Schwartz.

Thank you very much everybody. Appreciate your time this evening and look forward to talking to you next quarter.

Ladies and gentlemen that concludes today's conference. You may now disconnect.