SLS - NASDAQ

Remy Bernarda - Senior Vice President, Investor Relations and Corporate Communications Mark Schwartz - President and Chief Executive Officer Ryan Dunlap - Vice President and Chief Financial Officer Bijan Nejadnik - Executive Vice President and Chief Medical Officer Gavin Choy - Senior Vice President, Clinical Sciences and Operations

Joe Pantginis - ROTH Capital Partners Mara Goldstein - Cantor Fitzgerald Ren Benjamin - Raymond James Rahul Jasuja - Noble Life Science Partners

Good day, ladies and gentlemen, and welcome to the Galena Biopharma third quarter 2015 earnings conference call. [Operator Instructions] I would now like to turn the call over to 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 our 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 slide they are addressing. As listed on Slide number 2, on our presentation, during today's discussion, we may make forward-looking statements about our clinical programs. Such statements include, but are not limited to, statements about our divestiture strategy, commercial and clinical 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 reports on Form 10-Q 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 now turn to Slide 3, as I would like to introduce the members of management presenting on today's call. Dr. Mark Schwartz, our President and CEO; Ryan Dunlap, our Vice President and Chief Financial Officer; Dr. Bijan Nejadnik, Executive Vice President and Chief Medical Officer; and Dr. Gavin Choy, Senior Vice President, Clinical Sciences and Operations, who will discuss progress on our clinical programs. Please turn to Slide number 4, and Dr. Schwartz will begin our discussion.

Thank you, Remy, and welcome everyone to our third quarter earnings conference call. For those of you who saw this quarter's earnings press release, you read that we announced the change in strategy to renew our focus on our clinical pipeline and to divest our commercial operations, and I want to start by providing some insight on our rationale behind this decision. Looking back at the status of our pipeline, shown on Slide 5, in November of 2012 we were enrolling only one Phase 3 trial, our Phase 3 PRESENT study for NeuVax, and we're planning to start our first Phase 2 trial with NeuVax in combination with trastuzumab and a Phase 1 trial for GALE-301. We now turn to Slide 6. Over the last three years, we have significantly advanced our clinical pipeline and we now have four compounds and eight clinical trials in oncology. Most importantly, our two-lead clinical programs are in the field of immunotherapy, the most rapidly advancing area in the oncology field and the most exciting and active area in therapeutic development. The advances in this field have been substantial. And the most recent generation of immunotherapies have recently provided treatments for diseases like melanoma, lung and prostate cancers that historically were extremely difficult to treat and patient outcomes were quite poor. Including monoclonal antibodies, checkpoint inhibitors and cancer vaccines, more than a dozen different immunotherapy agents have been approved, targeting more than 10 different cancer types, including several products for the adjuvant setting. Shortly, I will formally introduce our new Chief Medical Officer, Bijan Nejadnik, who will expand on these immunotherapy developments and Galena's participation in this space and our focus on preventing cancer recurrence. This is an untapped market for many cancer indications and an area where there is very high unmet medical needs, representing significant high value market opportunities for the company. As current treatments under development target existing and metastatic tumors become successful, the number of cancer survivors will continue to grow and Galena's market opportunity will continue to grow with it. I will now transition to the discussion on our strategic decision to exit the commercial business. When I assumed the position of President and CEO of Galena in August of 2014, I along with our executive team began a careful examination of our operations and assets to determine the optimal strategy to enable a greatest opportunity for growth, while maximizing shareholder value. We set very specific internal goals for both the commercial and clinical side to the organization, to ensure we could effectively grow the business. On our Q2 earnings call, we discussed the current status of our commercial business and undertook a very aggressive and focused review of the commercial business, which consist of two products Abstral, fentanyl, sublingual tablets and the

Thank you, Mark, and good afternoon, everyone. As a result of the strategic shift that Mark just mentioned, the presentation of our financial results and financial statements this quarter will reflect a distinction between our continuing clinical development, general and administrative activities and sales and marketing results of our commercial business, which are classified as discontinued operations as of the third quarter. Please refer to Slide 8, where I've shown the comparative quarter, as I walk you through the key components of these financial results. All amounts presented are in U.S. dollars. I'll begin with our continuing operating activities, which includes general and administrative or G&A and research and development or R&D expenses. Operating loss from continuing operations for the third quarter of 2015 was $8.6 million compared to $10.6 million for the third quarter of last year and $26.6 million year-to-date through Q3 compared to $34.2 for the same period last year. To breakdown the key expense components. G&A expense for the third quarter was $2.9 million, down 17% from the $3.5 million reported for the third quarter of last year. Year-to-date through the third quarter, G&A expenses were $7.9 million, down 38% from the $12.7 million reported for the same period last year. The year-over-year decrease in G&A cost is largely the result of the reduction in non-recurring professional fees incurred last year, related to the ongoing civil litigation and SEC related activities. We continue to vigorously defend the civil litigation, while also proactively thinking prompt resolution, which may result in future legal expenses. R&D expenses were $5.7 million for the third quarter of 2015, down 19% from the $7 million reported for the second quarter of last year. Year-to-date through the third quarter, R&D expenses were $18.7 million, down 13% from the $21.5 million reported for the same period last year. As we communicated during our last earnings call, this year-over-year decrease was anticipated and is predominantly the result of completing enrollment for our NeuVax Phase 3 PRESENT trial, as the cost during the enrollment period are much higher than the post-enrollment maintenance phase. Aside from G&A and R&D expenses, I just discussed, the other significant expense affecting our overall loss from continuing operations relates to the non-cash charges from changes in the fair value of our warrant liabilities. The change in our warrant liabilities resulted in a gain of $2.1 million for the third quarter of 2015 versus $6.7 million gain for the same quarter of last year, and a loss of $1 million year-to-date through Q3 2015 compared to a gain of $13.2 million for the same period last year. These fluctuations are largely driven by changes in our stock price, which is a key input into the valuation model used to estimate this liability. Moving now to discontinued operations or those elements related to our commercial business. Our loss from discontinued operations was $11.7 million for the third quarter of 2015 or $0.07 per basic and diluted share, including $8.1 million in impairment charge related to the classification of our commercial asset group as held for sale. This compares to $2.6 million or $0.02 per share for the third quarter of last year. Year-to-date through the third quarter, loss from discontinued operations was $16.1 million compared to $6.3 million for the same period last year. The year-over-year decreases result primarily from the aforementioned impairment charge related to the discontinuing of our commercial operation as well as other revenue recognition-related changes and accounting estimates and additional cost associated with the launch of

Thank you, Ryan. It is now my great pleasure to formally introduce our new Chief Medical Officer, Dr. Bijan Nejadnik. Bijan joins us from more than 22 years of experiences both in academic and pharmaceutical industry professional. He spent 13 years in teaching, research and caring for patients at world renowned academic institutions and 12 years in industry. On the corporate side, he has managed numerous clinical development teams and programs with a therapeutic focus on hematology, oncology, immunology and central nervous system diseases. He has successfully developed numerous biologics and small molecules and advancing these agents towards biological license in new drug application submissions. Since Bijan has only been with us for a little over a week, I have asked him to provide his views on the clinical landscape for immunotherapy and where our programs fit in. Then, Gavin Choy, our Head of Clinical Operations, will review the status of our clinical development programs.

Thank you, Mark. I'm excited to be a part of Galena team and feel privileged to have the opportunity to address our analyst and shareholders today. I have recently joined Galena, and as expected, before joining, I spent some time contemplating their opportunity. I have been fascinated by immunology and oncology, since I was a medical student, as these two disciplines have been joining forces, I believe we are living in one of the extraordinary infection moments in the history of medicine. Some major progress made in the field of cancer immunotherapy includes the use of monoclonal antibodies, advances in cell therapy such as CAR-T cells and advance of checkpoint inhibitors, and finally the innovations in cancer vaccines. Although, all of these major paths are offering great impact in the life of patients and a solid perspective and reliability, cancer vaccines offer the unique chance of preventing a deadly disease. And as we know, there is no better treatment for a fatal disease than preventing it. Of course, developing a vaccine takes more time and involved patients do not have detectible disease. This requires patients and commitment to the field and to the patients. For this reason, I'm inspired by the courage, Galena, has shown. As you can see on Slide 11, it was estimated there were 14.5 million cancer survivors in the United States in 2014. And by 2024, this is projected that there will be approximately 19 million cancer survivors. This provides a tremendous opportunity for Galena, as we are uniquely positioned to potentially treat patients with different kinds of malignancies. As available cancer treatments continue to prove successful, which I believe they will either independently or in combination with one another, the number of cancer survivors will continue to grow. However, the question remains in the mind of every treating physician and every cancer survivor, as to how to prevent the next reoccurrence. This will provide significant opportunity for us to develop vaccines that can give patients every chance to maintain their survival status. As a former practicing physician I have to say, helping a patient with reducing the burden of an advanced disease is tremendously satisfying, very visible, and provides immediate gratification. Preventing the disease, on the other hand, has no visibility, as the disease does not occur or in the case of cancer survivor, does not reoccur. However, this is a tremendous service to those patients and fortunately is getting more and more attention from the public, the regulators and the payers. I'm very optimistic regarding the development in the field of immuno-oncology and how our clinical assets might complement the treatment armamentarium across a range of cancers. Please now turn into Slide 12. And I will hand the call over to Dr. Gavin Choy, to review our operational progress. I look forward to further dialog in the future.

Thank you. Indeed, we are thrilled to have Bijan lead our clinical development team and we look forward to his leadership, insight and expertise, as we advance our clinical development pipeline. Today, I will focus on the advancements we've made on our vaccine immunotherapy clinical programs over the last quarter. On Slide 13 is a detailed summary of our NeuVax programs in breast cancer, where we currently have four trials; the registration of a single agent trial; two trials in combination with trastuzumab, all targeting secondary prevention; and importantly, a proof-of-principle Phase 2 trial in primary prevention in patients with DCIS. We have leveraged our resources and garnered funding from partners and government agencies to expand the patient population under potential utility of NeuVax. NeuVax is a peptide derived from the HER2 protein that binds through the human leukocyte antigen or HLA and is combined with immune adjuvant GM-CSF. Our lead clinical trial is PRESENT, the acronym for the Prevention of Recurrence in Early-Stage, node-positive breast cancer with low to intermediate HER2 Expression with NeuVax Treatment. This is our pivotal Phase 3 single agent registration study targeting node-positive HER2, IHC 1+/2+ patients and is under a special FDA approved special protocol assessment. We had an important advancement in this trial this quarter, based on cardiac monitoring data from the ECHO or MUGA scan, the IDMC recommended reduced cardiac toxicity monitoring consistent with pre-specified toxicity monitoring stopping rules, defined in the study protocol. This is a positive trend for the trial that signals, to date, we have not observed severe cardiac issues with the patients, commonly associated with HER2 targeted therapies. Our next major clinical milestone for this trial will be achieving a positive readout on our event-driven interim analysis, which will occur when we reach 70 events, defined as recurrence or death from any cause. Based on our current event rate, as we have indicated in the past, we expect to reach this milestone in the first quarter of next year. Once we reach the 70 event, we will prepare the data for review and schedule to IDMC meeting, leading to the safety and fatality analysis that will likely be reported in the second quarter of 2016. We believe this will be a significant derisking event for the trial. In addition present, we also have two mid-stage trials in combination with trastuzumab, currently active across multiple sites in the United States. The first is a Phase 2b study in node-positive and triple negative HER2 IHC 1+ and 2+ patients. Our second combination trial expands our breast cancer presence to the HER2 IHC 3+ patients. This trial is treating women who high risk with node-positive or node-negative disease. During the quarter, we also announced our collaboration with the National Cancer Institute or NCI on a new proof-of-concept Phase 2 clinical trial in women with ductal carcinoma in situ or DCIS. The trial will be VADIS, Phase 2 trial of the Nelipepimut-S Peptide VAccine in women with DCIS of the breast cancer, and advances NeuVax earlier into treatment paradigm towards breast cancer primary prevention. The primary endpoint of the trial is immunologic, evaluating for the NeuVax specifics cytotoxic T-lymphocytes response in vaccinated patients compared to patients receiving GM-CSF alone. The University of Texas M.D. Anderson Cancer Center, Chemoprevention Consortium is the lead institution for this multi-center trial. The study will determine whether long-lasting immunity is induced and whether the induced immune response suppresses the growth of DCIS cells. The results from this study will enable us to design a Phase 3 clinical trial to test whether this vaccine prevents the development of invasive breast cancer in women with DCIS, potentially indicating the need for surgery. We expect to initiate the VADIS Phase 2 trial in the first quarter of next year. Moving now to Slide 14 and our second immunotherapy program that now has two assets, GALE-301 and GALE-302. Both GALE-301 or E39 and GALE-302 or E39 prime, previously known as J65 are peptide vaccines derived from folate binding protein and are targeting the prevention of recurrence in ovarian, breast and endometrial cancers to disease where the recurrences are high and the outcomes are often quite poor. Both assets are also combined with GM-CSF and are evaluating women, who have no evidence of disease after undergoing the standard of care therapy and render disease free. GALE-301 is in the Phase 2a portion of its Phase 1/2 trial, but the optimal dose carry-forward from the Phase 1, as depicted in the Study schema on Slide 15. In September, we present a positive data at the European Cancer Congress or ECC on the Phase 2a portion of the trial. The poster at ECC provided updated data for all patients, who had received at least 12 months of treatment, and their results can be seen on Slide 16. As presented, in the 1,000 microgram group or optimal dose vaccine group, the two year disease free survival estimate at 85.7% versus 33.6% in the control group with a P value of 0.02. We are continuing to collect safety, immunologic and clinical recurrence data and expect to present and update in the first half of 2016. As you saw this morning, we presented data over the weekend at The Society for the Immunotherapy of Cancer conference and introduced GALE-302. GALE-302 is an attenuated or weaker version of the E39 peptide. Folate binding protein is a highly expressed tumor associated antigen in many cancers, making it a very logical treatment target for active immunotherapy. It also results in immunogenic peptide that have led to development of a potentially very potent vaccine. It is derived that this potency could lead to T-cell exhaustion in patient's overtime, leading to cancer immune evasion. So we are assessing whether incorporating an attenuated version of the vaccine into the treatment regimen will provide an improved immune response. Please turn to Slide 17, for the study schema. The poster presented data on our Phase 1b randomized trial comparing three sequences of GALE-301 and GALE-302, comprising the primary vaccine series or PVS in breasts and ovarian cancer patients. The objective of this trial is to optimize the x vivo immune responses in the local and delayed type hypersensitivity reaction. HLA A2 positive breast or ovarian cancer patients were enrolled after completion of standard of care. 39 patients were randomized into three arms with 30 patients completing the PVS. This preliminary analysis revealed both vaccines are immunogenic and well-tolerated with no major safety differences between PVS sequences. The result of the DTH reactions among three sequences is shown on Slide 18. The data derived from DTH reactions indicate that treating patients first with strong vaccine, GALE-301, followed by a weaker version, GALE-302, produce the most prominent and statistically significant local and DTH responses. We have made significant progress with all of our immunotherapy programs this year, and we are especially excited to expand the utility of NeuVax and DCIS, and advance our programs targeting FBP. We are in a strong position to make further advancements in 2016. I would now like to hand the call over to Mark for closing comments. Please turn to Slide 19.

Thank you, Gavin. Turning now to Slide 20. Over the past year, we have met several key development milestones. Most importantly, we completed over enrollment in our PRESENT trial and look forward to reaching our 70 event in Q1 and reporting the results of the interim analysis shortly thereafter. We also had several positive data readouts on our FBP targeted program with GALE-301 and GALE-302. We are pleased with the outcomes we saw in these trials, as we look at ways to optimize immune response. As the data continues to mature, we will consider the outcomes, as we plan the next stages of our FBP directed program and expect to announce progress on that next year. And finally, we will be reporting final date on our GALE-401 Phase 2 program at ASH and are evaluating next steps for that asset as well. I'd like to end this call, what maybe our most important slide, so please turn to Slide 21. This is the first patient in our PRESENT trial, and I try to end all of my presentation with this image, because it reminds me why we are here. Bijan talked about the courage of our small company to embark on these potentially groundbreaking clinical studies. But the steps we've taken today and the focus on our immunotherapy pipeline, we are committed to our investigators, their staff, the nurses and our patients to provide treatments and unmet medical needs and enhance shareholder value. We will now open the call for questions.

[Operator Instructions] And our first question comes from the Joe Pantginis of ROTH Capital Partners.

Mark, maybe just, first, I want to get a sense about the divestiture of the assets from a personnel standpoint. What was the size of the personnel decrease? And then, as you're looking now to refocus on immunotherapy, basically going back to your roots, what do you see as the potential needs for hiring for the immunotherapy franchise?

We are in the process of divesting the full commercial organization, and we do anticipate spinning-off the full organization. As a fully staffed commercial organization, it was about 47 people. So as we go forward, based on the clinical trials that we bring on, the additional trials that we start, we'll scale the organization accordingly. So I think the hiring in the short-term, the next three to six months on the clinical side will be modest, as we look to fill key scale sets that we need to do. We need to start thinking about to the BLA filing and building the basis for that infrastructure. Our other trials are moving forward. So they'll soon be moving hopefully through the Phase 2 process and potentially into Phase 3. And so I think we'll scale the development, as we make progress on those areas and the number of trials we get started increases.

And then going back to NeuVax, obviously focus should move back to this product with present maturing, can you go back to a recurring theme that I know you've gotten a lot, we've gotten a lot with regard to NeuVax as a monotheraphy, it's an issue/question/pushback regarding the mechanism of targeting just HER2 1+ and 2+ and the views are not hitting 3+ as a single agent?

So Joe, is your question regarding it being a single agent or our targeting of HER2 1+/2+?

That basic question that we used to get, and I know you've gotten as well is why do you feel it might not work in targeting 3+ as well or what is the mechanism around that?

So we've gotten the questions, and the answer to that is as follows, we did generate some data in the Phase 2 trial regarding 3+ patients, but it really wasn't enough to draw a fundamental conclusion. I think the fact that the Phase 2 trial generated data of efficacy in 1+/2+ patients is very straightforward. And I think that our decision to go into the 1+/2+ is based more on the unmet medical need and the practicality of going into that patient population. There are no drugs for those patients, targeting 1+/2+ patients, either in the metastatic or the adjuvant setting and we were highly supported by the FDA moving down that path. There also is clinical data to support why any vaccine might work better in the 1+/2+ patient population, such as the decreased expression of HLA in 3+ patients, for example, but really we were driven by the data that we have and ultimately the unmet medical need that we believe exists. We're certainly not interested in running a clinical trial against Herceptin. In fact, we have two clinical trials in combination with Herceptin, and I think there is a lot more value in being synergistic with them than trying to move into a the HER2 positive space, which is already quite crowded.

And our next question comes from Cantor Fitzgerald of Cantor Fitzgerald.

This is Mara Goldstein with Cantor Fitzgerald. So if I go back to four years ago when the company divested other assets and ended up dividending those off to shareholders, is that an option that's on the table?

We are looking to divest the commercial assets. And at this point, Mara, we're not at liberty to say exactly what any structure or a transaction might be.

And the $8 million impairment charge, how much of that was cash?

That impairment charge is basically a non-cash charge in our financial statements, which resulted from supplying accounting guidance to value our commercial assets to the lower of cost less cost of sell based on judgmental estimate on fair value, so that's a non-cash charge in our financial statement.

So then the operating burn of $27.8 million, should we consider that a reasonable go-forward base?

I'd say moving forward, as mentioned, $9 million to $11 million per quarter for the next couple of quarters is reasonable. We will give you additional guidance post divestiture when we get that settled, but I think $9 million to $11 million, Mara, is probably good model to get your through 2016 at this point.

And then I had a clinical question just on a folate receptor program, and again sort of the idea around expression levels and what data you've been able to look at thus far that would suggest treating patients with different levels would yield you different outcomes? And what can we expect going forward?

So the way I understand your question is, why do we think that different schemes in Folate Binding Protein vaccination provides the better resolve or what is the exact nature of your question?

Well, essentially, I mean, you have like different levels across the spectrum of women with disease, and so I'm just curious as to sort of what the underlying rationale is for how you treat according to those levels?

The FBP is over-expressed in those cancers, especially in ovarian and breast and gynecological cancers, so this is a known fact. And based on that we felt that that would be a great opportunity to kind of have a vaccination against that specific antigen, so there is when you look at patients all across the regulation of FBP is pretty high and acute in those patients, so of course, you will have some ups and downs even within the same patient over time, but the overall target seems to be very viable, and obviously, the results will speak for themselves.

And if I could just ask a question on, Mark, the statement you made on 401 about making a decision about what to do, do you mean including that as a potential candidate for divestment or do you mean continuing into a registration study?

No, Mara, as we get the data, the analysis of the data how to carry forward in development.

And our next question comes from Ren Benjamin of Raymond James.

Maybe just starting off the two trastuzumab studies, can you give us an enrollment update? How are those trials enrolling? And just remind us when we might see data from either of those studies?

We have not and we are not giving enrollment updates in those trials at this time. We have indicated that our current expectations -- and both of those trials, as well, also do have recurrence rates that we need to monitor, but in the HER2 1+/ 2+ NeuVax Herceptin combination trial, we anticipate that there would be an interim data analysis probably sometime in 2017. That's all that we've indicated at this point in time.

A second question just regarding GALE-301 and 302, I guess, I'm looking for an explanation as to instead of combining with an attenuated peptide, why not move forward in this day and age looking with -- working with other more potent adjuvants or even better checkpoint inhibitors?

So your question is the adjuvant specifically or why chose the E39 and E39 prime?

Well, for the E39, you already have, right, so that's 301. I guess, the E39 prime, it seems to me that just given all that we know about immuno-oncology, the funds would be best spent maybe combining 301 with a checkpoint inhibitor, let's say, and so I'm kind of curious as to what is leading you guys down this particular path?

So, Ryan, your comment at 301 that we have -- I mean, 302 we also have, so it's something that we can easily pass and move forward with, I think much like NeuVax once we develop a firm understanding of where we are, the capabilities of the compound, its most appropriate setting, looking for additional combination strategies and trials is something that we will definitely be doing much like we're doing with NeuVax. We've added a DCIS trial here recently. We continue to look and make a high priority for additional trials in NeuVax. We will do the same with FBP. I think partly, as we generate a bit more data on it, we'll be in a better position to define how best to use it and what the best type of combination might be.

And just one final question from me. I'm just back from SITC and AACR, so I'm feeling especially science geeky. And one of the things that really resonated at SITC was this talk on the hallmarks of what makes a good cancer vaccine. And they listed several things, right, a highly mutational antigen, a very potent adjuvant, something that they defined as a long peptide, and then the potential of a checkpoint inhibitor or something to enhance the CD8 T-cell response or even CD4 T-cell response. So can you maybe just comment on NeuVax and how it kind of fits into these kind of four points that were brought up?

I attended the same conference and I feel the same amount of geekiness that you do. And I had an opportunity to discuss it with a couple of peoples as well myself. And my understanding is although the longer this peptide, the more possibility of having an epitope provoking the intensive immunological reaction. However, and by the same token the reaction maybe less targeted towards the specific antigen on the target cancer cell. And the best indicator into end of the day is the stability of the antigen and the robustness of the immunologic reaction, the specific immunological reaction and the result obtained from the studies. Now, when you look at the NeuVax E75, it is obviously very specific and stimulates the CTLs against this peptide and generates memories to T-cells that will confirm long-lived and antigen-specific protection against the repeat challenges with the E75 epitope. And also the non-clinical data indicated that the E75 is highly binding and recognizes a majority of the breast cancer CTLs, and in this situation the E75 is picked up by the dendritic cells and doesn't have to go through the intercellular modification and therefore the results are pretty as specific as expected.

And just one final one on checkpoint combinations, have you guys done any preclinical work evaluating NeuVax in combination with any other checkpoint inhibitors?

We are actually undertaking that work now and it is an area that is a very high priority and a very high focus for us, both preclinical as well as clinical opportunities.

And our next question comes from Jason Kolbert of Maxim Group.

This is actually [ph] Dianne calling for Jason. And my question is that, given the early efficacy of the GALE-301 and the GALE-302 in the Phase 1b study in breast cancer, are there any thoughts on the potential use to use the FBP vaccines in combination with NeuVax for breast cancer, because there seems to be a potential for synergy?

Absolutely, we have had those discussions in-house, and like the whole range of opportunities that I think our platform presents to us, it's really a matter of sequencing them into our long-term clinical goal. So the short answer is yes. And I think you've touched on a point that's been a very exciting topic of conversation in-house and we are now looking at ways as to how to carry that forward in light of the additional and other priorities that we have.

And also, breast, endometrial, and ovarian cancer and a handful of other cancers have been shown to be highly immunogenic to unlocking more cancer killing power of T-cells, but cytokines like IL-12 could have a role especially for vaccines against these tumor types. Is bringing an IL-12 or checkpoint something Galena is considering?

So remember that right now we are working in adjuvant settings, so I think working with IL-12 in the adjuvant setting -- IL-12, as I understand has a fair amount of toxicities. As we move forward, I guess, downstream into the potentially the metastatic setting, I think there is a number of different agents that we could do combination studies with including IL-12, including checkpoint inhibitors, or any of the other immune agents that are out there that essentially allow the efficacy of the T-cell to improve in the otherwise tumor sequestered environment. So we are looking at a number of different options at the moment, and so that's one of them, but I think to be honest, some of the other more recent drugs that I think are bit more targeted and focused are probably higher on our list.

And our last question comes from Rahul Jasuja of Noble Life Science Partners.

So just one or two remaining questions that I have from the list. So Mark, you did mention just in the last discussion that this is in the adjuvant setting. And clearly, most of the advances that have been made in the brave new world of cancer immunotherapy have been in the metastatic setting. So in the current stage where you guys are, whether it'd be with NeuVax or the FBP peptide, you're in the minimal residual disease setting in the prevention of cancer reoccurrence. So there really isn't an opportunity with checkpoint inhibitors in this setting, correct?

In the adjuvant setting you're talking about?

Right.

I think in general you're pointing in the right direction, but I believe IPI was just given approval for melanoma in the adjuvant setting, so I think to some degree, it will probably be determined by the specific cancer. I think in general though, the opportunity is going to be much bigger for a combination of NeuVax with a checkpoint inhibitor or an existing tumor setting or a metastatic setting. I wouldn't eliminate the adjuvant settings. I think it's just going to be a much more narrower selection and they're going to have to be more carefully thought through.

And then, a question on the E39 prime. So sort of a burning question that I have here is what is the attenuation? Is it an attenuation that makes the binding of the peptide in the HLA pocket different such that you get more clonal expansion of CTLs, what is the mechanism there? Is that understood?

The mechanism of attenuation here is basically that the overall -- when you have the groove of the HLA and you have the connection of your peptide, that affinity could be different and the level of stimulation could be different. Clearly, the E39 prime has less of that stimulation, because of the change into amino acids in the sequence and then the E39. The major issue with strong antigens is that overtime you may have the T-cell exhaustion and that's call commonly T-cell burn out. And alternating the strong with the weaker one in some cases, and this is more specific in this specific case, can offer a better immunological reaction and therefore has a better chance to give you a clinical response as well.

And just I have to ask this even though it's a little sort of end of reach, so you actually can show with an attenuated peptide that you can get better CTL effector function in vitro as well?

Yes, that has been -- yes, and also in the Phase 2 immunologic response reaction, clearly the regiment of three injections, inoculations, of the E39 and then followed by three E39 prime showed that the reactions from the number of patients you could get was more robust.

And at this time, I'd like to turn the call back over to Mark Schwartz for closing remarks. End of Q&A

I'd like to thank everybody for your time late in today here. I appreciate it. And look forward to talking with everybody in the future.