"The acquisition of Abstral diversifies and strengthens our pipeline, providing Galena with an FDA approved product that will become a cornerstone of our commercial strategy and bring revenues to the Company in 2014 to support the development of our pipeline," said Mark J. Ahn, Ph.D., President and Chief Executive Officer of Galena Biopharma. "Galena's launch of Abstral will build relationships with future prescribers of NeuVax™, which is currently in global Phase 3 clinical trials in node positive HER2 IHC 1+/2+ breast cancer patients. Medical oncologists, who manage tumor and treatment related pain, predominantly prescribe TIRFs for advanced breast cancer and other solid tumor patients which represent the majority of overall prescriptions."
Under the terms of the agreement, Galena Biopharma will pay Orexo $10 million upfront and $5 million within the first twelve months of closing, plus low double digit royalties and one-time milestone payments based on pre-specified net sales.
Galena has identified its commercialization management team towards a launch in the fourth quarter of 2013. To fund the acquisition and launch of Abstral, Galena plans to enter into a debt financing, subject to customary closing conditions. The term loan would include a total loan amount of $15 million, to be drawn in two tranches. Terms would include a coupon rate of approximately 7.59 percent and 4.5 percent warrant coverage. Interest-only payments would be due monthly through April 2014, then 30 months of amortization to maturity in 2016. The actual terms of the proposed debt financing may be different.
"With Galena Biopharma, Orexo has found a very committed partner for Abstral in the United States, who is well positioned to realize the significant potential that exists for Abstral. I have been impressed by the competence, experience and commitment to Abstral from the Galena Biopharma management team," stated Nikolaj Sørensen, President and CEO of Orexo.About Breakthrough Cancer Pain Breakthrough cancer pain is defined as a transient exacerbation of pain that occurs either spontaneously, or in relation to a specific predictable or unpredictable trigger, despite relatively stable and adequately controlled background pain. Breakthrough cancer pain occurs in 40-80 percent of patients who are already receiving chronic, long-acting opioid pain management and yet have episodes of severe tumor- and treatment-related cancer pain. Breakthrough pain occurs frequently in these patients, particularly as they try to conduct normal daily activities, with a mean number of episodes of 4 per day (average range 1-14 per day) and a median duration of 30 minutes (range 1-240 minutes). The wide range of time to relief of these severe pain episodes leads to high levels of distress and impaired quality of life experienced by patients.