GALENA BIOPHARMA, INC., 8-K filed on 12/4/2015
Current report filing
Document and Entity Information
12 Months Ended
Dec. 31, 2014
Document Document And Entity Information [Abstract]
 
Entity Registrant Name
Galena Biopharma, Inc. 
Trading Symbol
GALE 
Entity Central Index Key
0001390478 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Accelerated Filer 
Document Type
8-K 
Document Period End Date
Dec. 31, 2014 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
FY 
Amendment Flag
false 
Entity Well-known Seasoned Issuer
No 
Entity Current Reporting Status
Yes 
Entity Voluntary Filers
No 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 23,650 
$ 47,787 
Restricted cash
200 
200 
Prepaid expenses
1,237 
130 
Current assets held for sale
27,013 
20,668 
Total current assets
52,100 
68,785 
Equipment and furnishings, net
285 
314 
GALE-401 rights
9,255 
0 
In-process research and development
12,864 
12,864 
Goodwill
5,897 
5,898 
Deposits and other assets
87 
115 
Total assets
80,488 
87,976 
Current liabilities:
 
 
Accounts payable
1,886 
1,907 
Accrued expenses and other current liabilities
8,885 
4,841 
Fair value of warrants potentially settleable in cash
5,383 
48,965 
Current portion of long-term debt
3,910 
2,149 
Current liabilities held for sale
7,169 
4,611 
Total current liabilities
27,233 
62,473 
Deferred tax liability
5,053 
5,053 
Contingent purchase price consideration
6,651 
6,821 
Total long-term debt, net
4,492 
7,743 
Total liabilities
43,429 
82,090 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Common stock, $0.0001 par value; 200,000,000 shares authorized, 130,146,341 shares issued and 129,471,341 shares outstanding at December 31, 2014; 125,000,000 shares authorized, 110,100,701 shares issued and 109,425,701 outstanding at December 31, 2013
12 
10 
Additional paid-in capital
256,377 
188,600 
Accumulated deficit
215,481 
178,875 
Less treasury shares at cost, 675,000 shares
(3,849)
(3,849)
Total stockholders’ equity
37,059 
5,886 
Total liabilities and stockholders’ equity
$ 80,488 
$ 87,976 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Preferred stock, par value (usd per share)
$ 0.0001 
$ 0.0001 
Preferred stock, shares authorized
5,000,000 
5,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value (usd per share)
$ 0.0001 
$ 0.0001 
Common stock, shares authorized
200,000,000 
125,000,000 
Common stock, shares issued
130,146,341 
110,100,701 
Common stock, shares outstanding
129,471,341 
109,425,701 
Treasury stock, shares
675,000 
675,000 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Costs and expenses:
 
 
 
Research and development
$ 27,674 
$ 20,424 
$ 14,614 
Selling, general and administrative
16,226 
8,065 
6,585 
Total costs and expenses
43,900 
28,489 
21,199 
Operating loss
(43,900)
(28,489)
(21,199)
Non-operating income (expense):
 
 
 
Gain (loss) on warrant exchange
16,556 
(44,001)
(10,775)
Interest income (expense), net
(1,110)
(807)
(33)
Other income (expense)
170 
3,022 
(2,370)
Total non-operating income (expense), net
15,616 
(41,786)
(13,178)
Loss from continuing operations before income taxes
(28,284)
(70,275)
(34,377)
Income tax expense (benefit)
0 
1,052 
(1,052)
Loss from continuing operations
(28,284)
(71,327)
(33,325)
Loss from discontinued operations
(8,322)
(5,351)
(1,644)
Net loss
(36,606)
(76,678)
(34,969)
Net loss per common share:
 
 
 
Basic and diluted per share, continuing operations (usd per share)
$ (0.24)
$ (0.79)
$ (0.53)
Basic and diluted loss per share, discontinued operations (usd per share)
$ (0.07)
$ (0.06)
$ (0.03)
Basic and diluted net loss per share (usd per share)
$ (0.31)
$ (0.85)
$ (0.56)
Weighted-average common shares outstanding: basic and diluted
119,388,366 
90,181,501 
62,480,666 
Comprehensive loss
 
 
 
Net loss
(36,606)
(76,678)
(34,969)
Reclassification of unrealized gain upon sale of marketable securities
0 
(2,678)
0 
Unrealized gain on marketable securities
 
 
2,678 
Tax effect of reclassification of unrealized gain upon sale of marketable securities
0 
1,052 
0 
Tax effect of unrealized gain on marketable securities
0 
0 
(1,052)
Total comprehensive loss
$ (36,606)
$ (78,304)
$ (33,343)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $)
Total
September 2013 Common Stock Offering [Member]
Long-term Debt Financing [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Additional Paid-in Capital [Member]
September 2013 Common Stock Offering [Member]
Additional Paid-in Capital [Member]
Long-term Debt Financing [Member]
Accumulated Other Comprehensive Income [Member]
Accumulated Deficit [Member]
Treasury Stock [Member]
Beginning balance at Dec. 31, 2011
$ 10,112,000 
 
 
$ 5,000 
$ 81,184,000 
 
 
$ 0 
$ (67,228,000)
$ (3,849,000)
Beginning balance, shares at Dec. 31, 2011
 
 
 
47,811,453 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
Issuance of common stock, shares
 
 
 
25,486,960 
 
 
 
 
 
 
Issuance of common stock
36,378,000 
 
 
2,000 
36,376,000 
 
 
 
 
 
Common stock warrants issued in connection with common stock offering
(7,286,000)
 
 
 
(7,286,000)
 
 
 
 
 
Issuance of common stock in exchange for services, shares
 
 
 
288,285 
 
 
 
 
 
 
Issuance of common stock in exchange for services
364,000 
 
 
 
364,000 
 
 
 
 
 
Issuance of common stock upon exercise of warrants, shares
 
 
 
8,433,003 
 
 
 
 
 
 
Issuance of common stock upon exercise of warrants
16,551,000 
 
 
1,000 
16,550,000 
 
 
 
 
 
Repurchase Of Common Stock Warrant
(266,000)
 
 
 
(266,000)
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan, shares
 
 
 
234,350 
 
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan
93,000 
 
 
 
93,000 
 
 
 
 
 
Issuance of common stock in settlement of contingent purchase price consideration, shares
 
 
 
1,315,849 
 
 
 
 
 
 
Common stock issued in settlement of contingent purchase price consideration
1,579,000 
 
 
 
1,579,000 
 
 
 
 
 
Stock based compensation for services
600,000 
 
 
 
600,000 
 
 
 
 
 
Stock based compensation for directors and employees
794,000 
 
 
 
794,000 
 
 
 
 
 
Net liabilities distributed in connection with the RXi spin-off
2,246,000 
 
 
 
2,159,000 
 
 
 
 
 
Net Liabilities Distributed To Common Stock Holders In Rxi Spin Off, Net of cash transfered in
2,159,000 
 
 
 
 
 
 
 
 
 
Unrealized gain on marketable securities, net of tax
1,626,000 
 
 
 
 
 
 
1,626,000 
 
 
Exercise of stock options, shares
 
 
 
25,937 
 
 
 
 
 
 
Exercise of stock options
21,000 
 
 
 
21,000 
 
 
 
 
 
Net loss
(34,969,000)
 
 
 
 
 
 
 
(34,969,000)
 
Ending balance at Dec. 31, 2012
27,756,000 
 
 
8,000 
132,168,000 
 
 
1,626,000 
(102,197,000)
(3,849,000)
Ending balance, shares at Dec. 31, 2012
 
 
 
83,595,837 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
Issuance of common stock, shares
 
 
 
20,125,000 
 
 
 
 
 
 
Issuance of common stock
37,539,000 
 
 
2,000 
37,537,000 
 
 
 
 
 
Common stock warrants issued in connection with common stock offering
 
(8,238,000)
351,000 
 
 
(8,238,000)
351,000 
 
 
 
Issuance of common stock upon exercise of warrants, shares
 
 
 
5,320,669 
 
 
 
 
 
 
Issuance of common stock upon exercise of warrants
22,064,000 
 
 
 
22,064,000 
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan, shares
 
 
 
52,532 
 
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan
163,000 
 
 
 
163,000 
 
 
 
 
 
Issuance of common stock in settlement of contingent purchase price consideration, shares
 
 
 
492,988 
 
 
 
 
 
 
Common stock issued in settlement of contingent purchase price consideration
1,247,000 
 
 
 
1,247,000 
 
 
 
 
 
Issuance of common stock in exchange for services, shares
 
 
 
99,998 
 
 
 
 
 
 
Issuance of common stock in exchange for services
211,000 
 
 
 
211,000 
 
 
 
 
 
Stock based compensation for directors and employees
1,886,000 
 
 
 
1,886,000 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
644,000 
 
 
 
644,000 
 
 
 
 
 
Net liabilities distributed in connection with the RXi spin-off
0 
 
 
 
 
 
 
 
 
 
Reclassification of unrealized gain upon the sale of marketable securities, net of tax of $1,052
(1,626,000)
 
 
 
 
 
 
(1,626,000)
 
 
Exercise of stock options, shares
 
 
 
413,677 
 
 
 
 
 
 
Exercise of stock options
567,000 
 
 
 
567,000 
 
 
 
 
 
Net loss
(76,678,000)
 
 
 
 
 
 
 
(76,678,000)
 
Ending balance at Dec. 31, 2013
5,886,000 
 
 
10,000 
188,600,000 
 
 
0 
(178,875,000)
(3,849,000)
Ending balance, shares at Dec. 31, 2013
 
 
 
110,100,701 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
Issuance of common stock, shares
1,400,000.0 
 
 
6,633,008 
 
 
 
 
 
 
Issuance of common stock
10,705,000 
 
 
1,000 
10,704,000 
 
 
 
 
 
Common stock warrants issued in connection with common stock offering
 
9,340,000 
5,253,000 
 
 
9,340,000 
5,253,000 
 
 
 
Issuance of common stock upon exercise of warrants, shares
 
 
 
5,467,027 
 
 
 
 
 
 
Issuance of common stock upon exercise of warrants
37,742,000 
 
 
1,000 
37,741,000 
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan, shares
358,141 
 
 
3,449,760 
 
 
 
 
 
 
Issuance of common stock in connection with employee stock purchase plan
4,342,000 
 
 
 
4,342,000 
 
 
 
 
 
Issuance of common stock in settlement of contingent purchase price consideration, shares
 
 
 
114,630 
 
 
 
 
 
 
Common stock issued in settlement of contingent purchase price consideration
263,000 
 
 
 
263,000 
 
 
 
 
 
Issuance of common stock in exchange for services, shares
 
 
 
0 
 
 
 
 
 
 
Issuance of common stock in exchange for services
134,000 
 
 
 
134,000 
 
 
 
 
 
Stock based compensation for directors and employees
(36,606,000)
 
 
 
0 
 
 
 
 
 
Net liabilities distributed in connection with the RXi spin-off
0 
 
 
 
 
 
 
 
 
 
Shares Issued for Milestone Payment
 
 
 
 
 
4,381,215 
 
 
 
 
Exercise of stock options, shares
3,608,000 
 
 
 
 
 
 
 
 
 
Net loss
(36,606,000)
 
 
 
 
 
 
 
(36,606,000)
 
Ending balance at Dec. 31, 2014
$ 37,059,000 
 
 
$ 12,000 
$ 256,377,000 
 
 
$ 0 
$ (215,481,000)
$ (3,849,000)
Ending balance, shares at Dec. 31, 2014
 
 
 
130,146,341 
 
 
 
 
 
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Stockholders' Equity [Abstract]
 
 
 
Reclassification of warrant liabilities upon exercise
$ 27,026 
$ 14,249 
$ 10,843 
Tax on unrealized gain on marketable securities
0 
0 
1,052 
Tax effect of reclassification of unrealized gain upon sale of marketable securities
$ 0 
$ (1,052)
$ 0 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities:
 
 
 
Net loss
$ (28,284)
$ (71,327)
$ (33,325)
Adjustment to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization expense
362 
286 
49 
Gain on sale of marketable securities
0 
(3,911)
0 
Deferred taxes
0 
1,052 
(1,052)
Non-cash stock-based compensation
4,666 
2,307 
1,394 
Fair value of common stock issued in exchange for services
0 
211 
364 
Change in fair value of common stock warrants
(16,556)
44,001 
10,775 
Change in fair value of contingent consideration
(170)
926 
2,370 
Changes in operating assets and liabilities:
 
 
 
Prepaid expenses and other assets
(1,078)
437 
(396)
Accounts payable
(21)
(69)
641 
Accrued expenses and other current liabilities
4,044 
2,811 
(149)
Net cash used in continuing operating activities
(37,037)
(23,276)
(19,329)
Net loss from discontinued operations
(8,322)
(5,351)
(1,644)
Changes in operating assets and liabilities attributable to discontinued operations
2,490 
(302)
0 
Net cash used in discontinued operating activities
(5,832)
(5,653)
(1,644)
Net cash used in operating activities
(42,869)
(28,929)
(20,973)
Cash flows from investing activities:
 
 
 
Change in restricted cash
0 
(99)
 
Cash paid for acquisition of GALE-401
(2,415)
0 
0 
Proceeds from sale of marketable securities
0 
3,911 
0 
Cash paid for purchase of equipment and furnishings
(57)
(320)
 
Net cash used in continuing investing activities
(2,472)
3,492 
0 
Net cash used in discontinued investing activities
(3,056)
(15,532)
(87)
Net cash used in investing activities
(5,528)
(12,040)
(87)
Cash flows from financing activities:
 
 
 
Net proceeds from issuance of common stock
10,704 
37,539 
36,378 
Cash paid for repurchase of warrants
 
 
(266)
Net proceeds from exercise of stock options
4,342 
567 
21 
Proceeds from exercise of warrants
10,717 
7,815 
5,708 
Proceeds from common stock issued in connection with ESPP
263 
163 
93 
Net proceeds from issuance of RXi convertible notes payable
 
0 
500 
Net proceeds from issuance of long-term debt
0 
9,865 
0 
Principal payments on long-term debt
(1,766)
0 
0 
Net cash provided by financing activities
24,260 
55,949 
42,434 
Net increase in cash and cash equivalents
(24,137)
14,980 
21,374 
Cash and cash equivalents at the beginning of period
47,787 
32,807 
11,433 
Cash and cash equivalents at end of period
23,650 
47,787 
32,807 
Supplemental disclosure of cash flow information:
 
 
 
Cash received during the periods for interest
15 
19 
1 
Cash paid during the periods for interest
800 
547 
1 
Supplemental disclosure of non-cash investing and financing activities:
 
 
 
Fair value of warrants issued in connection with common stock recorded as cost of equity
 
8,238 
7,286 
Net liabilities distributed to common stock holders in the RXi spin-off, net of cash transferred
0 
0 
2,246 
Reclassification of warrant liabilities upon exercise
27,026 
14,249 
10,843 
Common stock issued in settlement of contingent purchase price consideration
263 
1,247 
1,579 
Change in fair value of marketable securities before settlement
0 
(2,678)
2,678 
Issuance of common stock in settlement of GALE-401 milestone
6,840 
0 
0 
Fair value of shares issued to acquire Zuplenz rights
2,500 
0 
0 
Future obligations for Zuplenz rights included in accrued expenses
$ 2,716 
$ 0 
$ 0 
CONSOLIDATED STATEMENTS OF CASH FLOWS CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Statement of Cash Flows [Abstract]
 
Cash excluding from net assets acquired
$ 168 
Business and Basis of Presentation
Business and Basis of Presentation
Business and Basis of Presentation

Overview

Galena Biopharma, Inc. (“we,” “us,” “our,” “Galena” or the “company”) is a biopharmaceutical company focused on developing and commercializing innovative, targeted oncology therapeutics that address major medical needs across the full spectrum of cancer care. Galena’s development portfolio ranges from mid- to late-stage clinical assets, including a robust immunotherapy program led by NeuVax™ (nelipepimut-S) currently in an international, Phase 3 clinical trial. The company’s commercial drugs include Abstral® (fentanyl) Sublingual Tablets and Zuplenz® (ondansetron) Oral Soluble Film. Collectively, Galena’s clinical and commercial strategy focuses on identifying and advancing therapeutic opportunities to improve cancer care, from direct treatment of the disease to the reduction of its debilitating side-effects. 

Develop Novel Cancer Immunotherapies

Our targeted cancer immunotherapy approach is based upon preventing recurrence of cancer, which is becoming increasingly important as the number of cancer survivors continues to grow. Once a patient’s tumor becomes metastatic, the outcome is most often fatal, making the prevention of recurrence a potentially critical component of overall patient care. Our programs primarily target patients in the adjuvant (after-surgery) setting who have relatively healthy immune systems, but may still have minimal residual disease.

Our therapies utilize a peptide combined with the immune adjuvant, recombinant human granulocyte macrophage-colony stimulating factor (rhGM-CSF), and work by harnessing the patient’s own immune system to seek out and attack any residual cancer cells. Using peptide immunogens has many potential clinical advantages, including a favorable safety profile, since these drugs may lack the toxicities typical of most cancer therapies. They also have the potential to evoke long-lasting protection through activation immune system and a convenient, intradermal mode of delivery. We are currently engaged in multiple clinical trials with NeuVax™ (nelipepimut-S) and GALE-301, or Folate Binding Protein (FBP), targeting the prevention of recurrence in breast, gastric, ovarian and endometrial cancers.

NeuVax™ (nelipepimut-S), our lead product candidate, is a targeted cancer immunotherapy and is being developed for the prevention of cancer recurrence in human epidermal growth factor receptor (HER2) expressing cancers. NeuVax is the immunodominant nonapeptide derived from the extracellular domain of the HER2 protein, a well-established target for therapeutic intervention in breast and gastric carcinomas. The NeuVax vaccine is combined with GM-CSF for injection under the skin, or intradermal administration. Data has shown that an increased presence of circulating tumor cells (CTCs) may predict Disease Free Survival (DFS) and Overall Survival (OS) - suggesting a dormancy of isolated micrometastases, which, over time, may lead to recurrence. After binding to the HLA A2 or A3 molecules on antigen presenting cells, the nelipepimut-S sequence stimulates specific cytotoxic T lymphocyte (CTLs). These activated CTLs recognize, neutralize and destroy, through cell lysis, HER2 expressing cancer cells, including occult cancer cells and micrometastatic foci. The nelipepimut immune response can also generate CTLs to other immunogenic peptides through inter- and intra-antigenic epitope spreading.

We have multiple trials currently ongoing for NeuVax. For our pivotal, Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) trial, NeuVax is targeting the 30,000-40,000 of the 230,000 female breast cancer patients annually diagnosed in the U.S. who are at a higher risk of their breast cancer recurring, which we refer to as “disease recurrence,” after achieving “no evidence of disease” (NED) status, (or becoming a “survivor”) with standard-of-care therapy (surgery, chemotherapy, radiation). These high-risk patients have a particular molecular signature and disease status: HER2 IHC 1+/2+ (oncoprotein associated with aggressive tumor growth), node positive (disease present in the axillary lymph nodes prior to surgery), and HLA A2/A3 (human leukocyte antigen from A2/A3 patients who have the same loci of genes which represents approximately 65% of population). Up to 25% of resectable, node-positive breast cancer patients, having no radiographic evidence of disease following surgery and adjuvant chemo/radiation therapy, are expected to relapse within three years following diagnosis. The prognosis upon recurrence is very poor. These cancer patients presumably still had isolated, undetected tumor CTCs which led to a recurrence of cancer in the breast (local recurrence) or in another location (metastatic disease).

We currently have a number of ongoing or planned clinical trials designed to expand the clinical and geographical footprint of NeuVax:

•
Phase 3 Ongoing: Our Phase 3 PRESENT (Prevention of Recurrence in Early- Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study is enrolling HER2 1+ and 2+ patients under a Special Protocol Assessment (SPA) granted by the U.S. Food and Drug Administration (FDA). The multinational, multicenter, randomized, double-blinded PRESENT trial is ongoing in North America, Western and Eastern Europe, and Israel. Additional information on the study can be found at www.neuvax.com.
•
Phase 2b Ongoing: A randomized, multicenter, investigator-sponsored, 300 patient Phase 2b clinical trial is enrolling HER2 1+/2+ node-positive and high-risk node-negative breast cancer patients to study NeuVax in combination with Herceptin® (trastuzumab; Genentech/Roche) in the adjuvant setting.
•
Phase 2 Ongoing: An investigator-sponsored trial is ongoing to study NeuVax in combination with Herceptin. The study will enroll 100 patients in neoadjuvant, node positive and negative HER2 IHC 3+ patients or HER2 gene-amplified breast cancer patients who are HLA A2+ or HLA A3+ and are determined to be at high-risk for recurrence. Partial funding for this trial comes from the Department of Defense (DoD) through the Congressionally Directed Medical Research Program (CDMRP) via legislation known as the Defense Appropriations Act. The grant was awarded under a Breast Cancer Research Program (BCRP) Breakthrough Award given to the lead investigator for the trial.
•
Phase 2 Planned: In January 2014, we partnered with Dr. Reddy’s Laboratories, Ltd. in India for the commercialization of NeuVax in that region. Dr. Reddy’s is responsible for running a Phase 2 gastric cancer trial of NeuVax in India that is expected to initiate in 2016.
Our second immunotherapy product candidate, GALE-301, targets folate binding protein receptor-alpha, a well-validated therapeutic target, which is highly over-expressed (20-80 fold) in ovarian, endometrial and breast cancers. GALE-301 is an immunogenic peptide and can stimulate CTLs to recognize and destroy FBP-expressing cancer cells. GALE-301 consists of an FBP peptide combined with GM-CSF, and is currently in a Phase 2a clinical trial for the prevention of recurrence in patients with ovarian and endometrial cancers. Current treatments for these diseases are principally with chemotherapeutic agents and patients suffer a high recurrence rate; and, most patients relapse with an extremely poor prognosis. Preliminary promising results from the Phase 2a clinical trial of GALE-301 were presented in November 2014 at the Society for Immunotherapy of Cancer conference and showed a 38% reduction in relative risk of recurrence, and that the agent was well-tolerated with primarily Grade 1 and 2 toxicities and elicited a strong in vivo immune response. We expect to present top line data from the Phase 2a trial mid-year 2015.

Expand Our Development Pipeline

In January 2014, we announced the acquisition of the worldwide rights to anagrelide controlled release (CR), which we renamed GALE-401, through our acquisition of Mills Pharmaceuticals, LLC. GALE-401 contains the active ingredient anagrelide, an FDA-approved product, for the treatment of patients with myeloproliferative neoplasms (MPNs) to lower abnormally elevated platelet levels. The currently available immediate release (IR) version of anagrelide causes adverse events that are believed to be dose and plasma concentration dependent. Therefore, reducing the maximum concentration (Cmax) is hypothesized to reduce the side effects, but preserve efficacy.

Multiple Phase 1 studies in 98 healthy subjects have shown GALE-401 reduces the Cmax of anagrelide following oral administration, appears to be well tolerated at the doses administered, and to be capable of reducing platelet levels. The Phase 1 program provided the desired PK/PD (pharmacokinetic/pharmacodynamic) profile to enable the initiation of the ongoing Phase 2 proof-of-concept trial. The Phase 2 trial enrolled 18 patients in the United States for the treatment of thrombocytosis, or elevated platelet counts in patients with MPNs. Phase 2 top-line safety and efficacy data will be presented this year. Based on a regulatory meeting with the FDA, Galena believes a 505(b)(2) regulatory filing is an acceptable pathway for development and potential approval of GALE-401, with the reference drug Agrylin® (anagrelide; Shire Pharmaceuticals).

In the future, we may pursue selective strategic alliances and acquisitions of other cancer treatments to complement or add to our existing cancer product pipeline.

Maintain Commercial Capabilities

We have established an oncology commercial portfolio to support its development pipeline in a number of key strategic areas in the United States.

Our first commercial product, Abstral® (fentanyl) Sublingual Tablets, is an important treatment option for inadequately controlled breakthrough cancer pain (BTcP), which affects more than 50% of all cancer patients. Abstral is approved by the FDA, and is a sublingual (under the tongue) tablet for the management of breakthrough pain in patients with cancer, 18 years of age and older, who are already receiving, and who are tolerant to, opioid therapy for their persistent baseline cancer pain. The Abstral formulation delivers the analgesic power and increased bioavailability of micronized fentanyl in a convenient sublingual tablet which is designed to dissolve under the tongue in seconds and provide relief of breakthrough pain within minutes. Abstral is a transmucosal immediate release fentanyl (TIRF) product with product class oversight by the TIRF Risk Evaluation and Mitigation Strategy (REMS) access program. Abstral is manufactured for us by contract manufacturers and we distribute and sell Abstral in the U.S. through our commercial organization.

In July 2014 we expanded our commercial portfolio through the licensing of our second commercial product, Zuplenz® (ondansetron) Oral Soluble Film, from MonoSol Rx, LLC. Zuplenz is approved by the FDA in adult patients for the prevention of highly and moderately emetogenic chemotherapy-induced nausea and vomiting (CINV), radiotherapy-induced nausea and vomiting (RINV), and post-operative nausea and vomiting (PONV). Zuplenz is also approved in pediatric patients treated with moderately emetogenic CINV. Nausea and vomiting are two of the most common side-effects experienced by post-surgery patients and patients receiving chemotherapy or radiation. It is estimated that up to 90% of chemotherapy and up to 80% of radiotherapy patients will experience CINV and RINV, respectively.

Zuplenz utilizes MonoSol’s proprietary PharmFilm® technology, an oral soluble film that dissolves on the tongue in less than 30 seconds. Zuplenz eliminates the burden of swallowing pills during periods of emesis, may be advantageous for patients with oral irritation, and may increase patient adherence and the patient's ability to keep the medication down without vomiting. The active pharmaceutical ingredient in Zuplenz, ondansetron, belongs to a class of medications called serotonin 5-HT3 receptor antagonists and works by blocking the action of serotonin, a natural substance that may cause nausea and vomiting. Ondansetron is the most widely prescribed drug in this class of anti-emetics, and used broadly across the oncology spectrum. MonoSol will exclusively manufacture Zuplenz for us for sale in the U.S. through our commercial organization.


Basis of Presentation and Significant Accounting Policies

The accompanying consolidated financial statements included herein have been prepared by Galena pursuant to the generally accepted accounting principles (GAAP)). Unless the context otherwise indicates, references in these notes to the “company,” “we,” “us” or “our” refer (i) to Galena, our wholly owned subsidiary, Apthera, Inc., or “Apthera,” and our wholly owned subsidiary, Mills Pharmaceuticals, Inc. or "Mills."

Discontinued Operations - As described in Note 20, we met the relevant criteria for reporting our commercial business as held for sale and in discontinued operations in the accompanying financial statements as of December 31, 2014 and 2013 and for the years then ended, pursuant to FASB Topic 205-20, Presentation of Financial Statements - Discontinued Operations, and FASB Topic 360, Property, Plant, and Equipment.

Uses of Estimates in Preparation of Financial Statements — The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Principles of Consolidation — The consolidated financial statements include the accounts of Galena and its wholly owned subsidiaries. All material intercompany accounts have been eliminated in consolidation.

Reclassifications — Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on net loss per share.

Cash and Cash Equivalents — The company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts and demand deposits.

Restricted Cash — Restricted cash consists of certificates of deposit on hand with the company’s financial institutions as collateral for its corporate credit cards.

Fair Value of Financial Instruments — The carrying amounts reported in the balance sheet for cash equivalents, marketable securities, accounts receivable, accounts payable, and capital leases approximate their fair values due to their short-term nature and market rates of interest.

Accounts Receivable - The company maintains credit limits for all customers based upon several factors, including but not limited to financial condition and stability, payment history, published credit reports and use of credit references. Management performs analysis to evaluate accounts receivables to ensure recorded amounts reflect estimated net realizable value. Accounts receivable are classified as current assets held for sale as detailed in Note 20.

Inventories — Inventories are stated at the lower of cost or market value and are determined using the first-in, first-out ("FIFO") method. Inventories consist of Abstral work-in-process and finished goods. The company has entered into manufacturing and supply agreements for the manufacture and packing of Abstral finished goods. As of December 31, 2014, the company had inventories of $655,000, consisting of $455,000 of work-in-process and $200,000 of finished goods. As of December 31, 2013, the company had inventories of $386,000, consisting of $270,000 of work-in-process and $116,000 of finished goods. Inventories are classified as current assets held for sale as detailed in Note 20.

Equipment and Furnishings — Equipment and furnishings are stated at cost and depreciated using the straight-line method based on the estimated useful lives (generally three to five years for equipment and furniture) of the related assets.

Goodwill and Intangible Assets — Goodwill and indefinite-lived intangible assets are not amortized but are tested annually for impairment at the reporting unit level, or more frequently if events and circumstances indicate impairment may have occurred. Factors the company considers important that could trigger an interim review for impairment include, but are not limited to, the following:
•Significant changes in the manner of its use of acquired assets or the strategy for its overall business;
•Significant negative industry or economic trends;
•Significant decline in stock price for a sustained period; and
•Significant decline in market capitalization relative to net book value.

Goodwill and other intangible assets with indefinite lives are evaluated for impairment first by a qualitative assessment to determine the likelihood of impairment. If it is determined that impairment is more likely than not, the company will then proceed to the two step impairment test. The first step is to compare the fair value of the reporting unit to the carrying amount of the reporting unit (the “First Step”). If the carrying amount exceeds the fair value, a second step must be followed to calculate impairment (the “Second Step”). Otherwise, if the fair value of the reporting unit exceeds the carrying amount, the goodwill is not considered to be impaired as of the measurement date. In its review of the carrying value of the goodwill for its single reporting unit and its indefinite-lived intangible assets, the company determines fair values of its goodwill using the market approach, and its indefinite-lived intangible assets using the income approach.

Intangible assets not considered indefinite-lived are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable. The company’s policy is to identify and record impairment losses, if necessary, on intangible product rights when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

The company performed its review for impairment using the qualitative assessment for both goodwill and indefinite-lived intangible assets, and has determined that there has been no impairment to these assets as of December 31, 2014.

Assets Held for Sale - The company generally considers assets to be held for sale when (i) the transaction has been approved by the board of directors or management vested with authority to approve the transaction, (ii) the assets are available for immediate sale in their present condition, (iii) the company has initiated an active program to locate a buyer and other actions required to complete the plan to sell the assets, (iv) consummation of the transaction is probable, (v) the assets are being actively marketing for sale at a price that is reasonable in relation to the current fair value, and (vi) the transaction is expected to qualify for recognition as a completed sale, within one year. Following the classification of property and equipment for sale, the company discontinues depreciating the asset and writes down the asset to the lower of the carrying value or fair market value, if needed. As described in Note 20, actions taken by the company's management vested with the board of directors' authority during the quarter ended September 30, 2015 caused the company to meet the relevant criteria for reporting the commercial operations as held for sale.

Contingent Purchase Price Consideration — Contingent consideration is recorded at the estimated fair value as of the acquisition date. The fair value of the contingent consideration is remeasured at each reporting period with any adjustments in fair value included in our consolidated statement of comprehensive loss.

Revenue Recognition - The company recognizes revenue from the sale of Abstral. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured.

We sell Abstral product in the United States to wholesale pharmaceutical distributors and retail pharmacies, or collectively, our "customers," subject to rights of return. During the year ended December 31, 2013, we began recognizing Abstral product sales at the time title transfers to our customer, and providing for an estimate of future product returns. Revenue from product sales is recorded net of provisions for estimated returns, prompt pay discounts, wholesaler discounts, rebates, chargebacks, patient assistance program rebates and other deductions as needed.

Returns - The company estimates future returns based on historical return information, as well as information regarding prescription information and sell-through trends, in relation to the estimated amount of product in the sales channels and product expiration dates. The allowance for returns is recorded as a reduction to revenue in the period in which the revenue is recognized, with a corresponding allowance against accounts receivable.

Product Sales Discounts and Allowances - The company recognizes revenue at the point of sale to its wholesale pharmaceutical distributors and retail pharmacies and the allowances for product returns, rebates and allowances are recognized at the point of sale. The company is required to make significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the company will be required to make adjustments to these allowances in the future.

Prompt Pay Discounts - As an incentive for prompt payment, the company offers a cash discount to customers, generally 2% of gross sales. The company expects that all customers will comply with the contractual terms to earn the discount. The company records the discount as an allowance against accounts receivable and a reduction of revenue.

Wholesaler Discounts - The company offers discounts to certain wholesalers and distributors based on contractually determined rates. The company accrues the discount as a reduction of receivables due from the wholesalers upon shipment to the respective wholesale distributors and retail pharmacies and recognizes the discount as a reduction of revenue in the same period the related revenue is recognized.

Rebates - The company participates in certain rebate programs, which provide discounted prescriptions to members of group purchasing organizations and specialty pharmacies. Under these rebate programs, the company pays a rebate to the third-party administrator of the program, generally two to three months after the quarter in which prescriptions subject to the rebate are filled. The company estimates and accrues these rebates based on current contract prices, historical and estimated future percentages of product sold to qualifying member pharmacies and estimated levels of inventory in the distribution channel. Rebates are recognized as a reduction in the period that the related revenue is recognized.

Chargebacks - The company provides discounts primarily to authorized users of the Federal Supply Schedule (FSS) of the General Services Administration under an FSS contract negotiated by the Department of Veterans Affairs and various organizations under Medicaid or Medicare contracts and regulations. These entities purchase products from the wholesale distributors at a discounted price, and the wholesale distributors then charge back to the company the difference between the current retail price and the price the entity paid for the product. The company estimates and accrues chargebacks based on estimated wholesaler inventory levels, current contract prices and historic chargeback activity. Chargebacks are recognized as a reduction of revenue in the period the related revenue is recognized.

Patient Assistance Programs - The company offers discount card programs to patients for Abstral in which patients receive discounts on their Abstral prescriptions that are reimbursed by the company. The company estimates the total amount that will be recognized based on a percentage of actual redemption applied to inventory in the distribution and retail channel and recognizes the discount as a reduction of revenue and as an other current liability (see Note 6) in the same period the related revenue is recognized.

Acquisitions and In-Licensing — For all in-licensed products and technologies, we perform an analysis to determine whether we hold a variable interest or a controlling financial interest in a variable interest entity. On the basis of our interpretations and conclusions, we determine whether the acquisition falls under the purview of variable interest entity accounting and if so, consider the necessity to consolidate the acquisition. As of December 31, 2014, we determined there were no variable interest entities required to be consolidated.

We also perform an analysis to determine if the assets and liabilities acquired in an acquisition qualify as a "business." The excess of the purchase price over the fair value of the net assets acquired can only be recognized as goodwill in a business combination.

The acquisition of the Abstral U.S. rights has been accounted for as an asset acquisition and not a business combination. The purchase price, including transaction costs, was recorded as an intangible asset related to the license and distribution rights acquired in the transaction. No other significant assets or liabilities were acquired or assumed in the transaction. The license and distribution rights will be amortized over ten years in a pattern based on our Abstral sales projections. Refer to Note 15 for further information regarding the acquisition of Abstral U.S. rights.

The acquisition of the Zuplenz U.S. rights has been accounted for as a business combination. The transaction and the acquisition method of accounting is described in Note 3.

During the quarter ended September 30, 2015, we completed a strategic review of the company’s commercial business including the ongoing sale, distribution and marketing of our two commercial products, Abstral® (fentanyl) Sublingual Tablets and Zuplenz® (ondansetron) Oral Soluble Film (our “commercial business” asset group). As a result of the review, we made a determination to sell or otherwise dispose of our commercial business and the related assets and liabilities are classified as held for sale as reflected in Note 20.

Patents and Patent Application Costs — Although the company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from the patents is uncertain. Patent costs are, therefore, expensed as incurred.

Legal Fees and Insurance Recoveries — There can be a significant time lag between the time that legal fees are incurred and the insurance reimbursement available to offset the related costs. The legal costs are recorded in the period they are incurred, and the insurance recoveries for those costs are recorded in the period when the insurance reimbursement is deemed probable.

Share-based Compensation — The company follows the provisions of the FASB ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, non-employee directors, and consultants, including stock options and warrants. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options and warrants granted as consideration for services rendered by non-employees, the company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50 (“ASC 505-50”), “ Equity Based Payments to Non- Employees.” Non-employee option and warrant grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to vesting, the value of these options and warrants, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options and warrants granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options are fully vested.

Research and Development Expenses — Research and development costs are expensed as incurred. Included in research and development costs are wages, benefits and other operating costs, facilities, supplies, external services and overhead related to our research and development departments, and clinical trial expenses.

Clinical trial expenses include direct costs associated with contract research organizations ("CROs"), as well as patient-related costs at sites at which our trials are being conducted.

Direct costs associated with our CROs are generally payable on a time and materials basis, or when certain enrollment and monitoring milestones are achieved. Expense related to a milestone is recognized in the period in which the milestone is achieved or in which we determine that it is more likely than not that it will be achieved.

The invoicing from clinical trial sites can lag several months. We accrue these site costs based on our estimate of upfront set-up costs upon the screening of the first patient at each site, and the patient related costs based on our knowledge of patient enrollment status at each site.

Income Taxes — The company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax basis of assets or liabilities and their reported amounts in the financial statements in accordance with FASB ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”). These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. ASC 740-10 requires that a valuation allowance be established when management determines that it is more likely than not that all or a portion of a deferred asset will not be realized. The company evaluates the realizability of its net deferred income tax assets and valuation allowances as necessary, at least on an annual basis. During this evaluation, the company reviews its forecasts of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred income tax assets to determine if a valuation allowance is required. Adjustments to the valuation allowance will increase or decrease the company’s income tax provision or benefit. The recognition and measurement of benefits related to the company’s tax positions requires significant judgment, as uncertainties often exist with respect to new laws, new interpretations of existing laws, and rulings by taxing authorities. Differences between actual results and the company’s assumptions or changes in the company’s assumptions in future periods are recorded in the period they become known.

For the year ended December 31, 2014, we did not recognize income tax or benefit. We continue to maintain a full valuation allowance against our net deferred tax assets.

Concentrations of Credit Risk — Financial instruments that potentially subject the company to significant concentrations of credit risk consist principally of cash and cash equivalents. The company maintains cash balances in several accounts with two banks, which at times are in excess of federally insured limits. As of December 31, 2014, the company’s cash equivalents were invested in money market mutual funds. The company’s investment policy does not allow investment in any debt securities rated less than “investment grade” by national ratings services. The company has not experienced any losses on its deposits of cash and cash equivalents. As of December 31, 2014, we had approximately $23,400,000 in interest-bearing accounts above federally insured limits.

Comprehensive Loss — Comprehensive loss consists of our net loss and other comprehensive income related to the unrealized gain (loss), net of tax, on our marketable securities, which are classified as available-for-sale.
Business Combinations
Business Combinations
Business Combination

On July 17, 2014 the Company entered into a definitive license and supply agreement with MonoSol Rx, LLC (MonoSol) for the U.S. commercial rights to Zuplenz® (ondansetron) Oral Soluble Film (Zuplenz), an FDA approved product. The transaction was accounted for as a business combination under the acquisition method of accounting based on Accounting Standards Codification 805, "Business Combinations." Accordingly, the assets acquired and liabilities assumed were recorded at fair value. As of the issuance date of the condensed consolidated financial statements for the year ended December 31, 2014, the Company had not finalized the valuation of the acquired assets and liabilities for the transaction.

The following table summarizes the purchase price consideration and allocation of purchase price:
 
 
Total Acquisition Date Fair Value
Purchase price consideration:
 
 
Cash and cash equivalents
 
$
3,056

Common stock
 
2,482

Liabilities assumed:
 
 
Future milestone payments
 
740

Credit memos for expiring channel inventory
 
1,995

Total consideration
 
$
8,273

 
 
 
Asset acquired:
 
 
Zuplenz rights
 
$
8,101

Goodwill
 
172

Fair value of assets acquired
 
$
8,273

Recently Adopted Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, jointly with the International Accounting Standards Board, issued a comprehensive new standard on revenue recognition from contracts with customers. The standard's core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance to contracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expanded revenue recognition disclosures. This guidance will become effective for us beginning in the first quarter of 2017. Early application is not permitted. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. We are currently evaluating the impact of our pending adoption of this standard on our consolidated financial statements.

In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern (ASU-2014-15), which provides guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and to provide related footnote disclosures. ASU-2014-15 will be effective in the fourth quarter of 2016, with early adoption permitted. We are currently evaluating the impact of our pending adoption of this standard on our consolidated financial statements.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements

The company follows ASC 820, “Fair Value Measurements and Disclosures,” (“ASC 820”) for the company’s financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:
Level 1 — quoted prices in active markets for identical assets or liabilities.
Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The company categorized its cash equivalents and marketable securities as Level 1 inputs. The valuations for Level 1 were determined based on a “market approach” using quoted prices in active markets for identical assets. Valuation of these assets does not require a significant degree of judgment. The company categorized its warrants potentially settleable in cash as Level 2 inputs. The warrants are measured at market value on a recurring basis and are being marked to market each quarter-end until they are completely settled. The warrants are valued using an appropriate pricing model, using assumptions consistent with our application of ASC 718. The contingent purchase price consideration is categorized as Level 3 inputs and is measured at its estimated fair value on a recurring basis and is adjusted at each quarter-end until it is completely settled. The contingent price consideration is valued based on the expected timing of milestones, the expected probability of success for each milestone and discount rates based on a corporate debt interest rate index publicly issued.

The following tables present information about our assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets (in thousands):
 
Description
December 31, 2014
 
Quoted Prices In    
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable 
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
19,477

 
$
19,477

 
$
—

 
$
—

Total assets measured and recorded at fair value
$
19,477

 
$
19,477

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Warrants potentially settleable in cash
$
5,383

 
$
—

 
$
5,383

 
$
—

Contingent purchase price consideration
6,651

 
—

 
—

 
6,651

Total liabilities measured and recorded at fair value
$
12,034

 
$
—

 
$
5,383

 
$
6,651


Description
December 31, 2013
 
Quoted Prices In    
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable 
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
42,349

 
$
42,349

 
$
—

 
$
—

Total assets measured and recorded at fair value
$
42,349

 
$
42,349

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Warrants potentially settleable in cash
$
48,965

 
$
—

 
$
48,965

 
$
—

Contingent purchase price consideration
6,821

 
—

 
—

 
6,821

Total liabilities measured and recorded at fair value
$
55,786

 
$
—

 
$
48,965

 
$
6,821



The company has not transferred any financial instruments into or out of Level 3 classification during the years ended December 31, 2014 or 2013. A reconciliation of the beginning and ending Level 3 liabilities for the years ended December 31, 2014 and 2013 is as follows (in thousands):
 
 
Fair Value
Measurements
Using Significant
Unobservable
Inputs
(Level 3)
Balance, January 1, 2013
$
7,142

Milestone payment
(1,247
)
Change in the estimated fair value of the contingent purchase price consideration
926

Balance, December 31, 2013
6,821

Change in the estimated fair value of the contingent purchase price consideration
(170
)
Balance at December 31, 2014
$
6,651



The fair value of the contingent purchase price consideration is measured at the end of each reporting period using Level 3 inputs in a probability-weighted, discounted cash-outflow model. The significant unobservable assumptions include the probability of achieving each milestone, the date we expect to reach the milestone, and a determination of present value factors used to discount future expected cash outflows.
RXi Spin-off
RXi Spin-off
RXi Spin-off

On September 24, 2011, the company entered into a contribution agreement with our former subsidiary, RXi Pharmaceuticals Corporation, or “RXi,” pursuant to which we assigned and contributed to RXi substantially all of the company’s RNAi-related technologies and assets. The contributed assets consisted primarily of our novel RNAi compounds and licenses relating to our RNAi technologies, as well as the lease of our Worcester, Massachusetts laboratory facility, fixed assets and other equipment located at the facility and our employment arrangements with certain scientific, corporate and administrative personnel who became employees of RXi. The company also contributed $1.5 million of cash to the capital of RXi.

Pursuant to the contribution agreement, RXi assumed certain accrued expenses of our former RXI-109 development program and all subsequent obligations under the contributed licenses, employment arrangements and other agreements. RXi also has agreed to make future milestone payments to us of up to $45 million, consisting of two one-time payments of $15 million and $30 million, respectively, if RXi achieves annual net sales equal to or greater than $500 million and $1 billion, respectively, of any covered products that may be developed with the contributed RNAi technologies.

The company agreed in the securities purchase agreement to distribute to our stockholders on a share-for-share basis a total of approximately 66,959,894 RXi shares, which distribution was made in April 2012. The company retained 33,476,595 shares of common stock of RXi, which were subject to a one-year lock-up period that expired on April 27, 2013. On July 24, 2013, RXi effected a 1-for-30 reverse stock split of its outstanding shares of common stock, including RXi shares held by the company. During the year ended December 31, 2013, the company sold 1,115,887 RXi shares, on a post-split basis, for total proceeds of $3,911,000, which is included in other income as realized gains on sale of marketable securities. There were no shares sold during the years ended December 31, 2014 and 2012.

The company fully liquidated its position in RXi common stock during the year ended December 31, 2013. The value of RXi shares held by the company at December 31, 2012 was $2,678,000, based on the closing price of RXi shares on the last trading day of the year of $2.40 per share, on a post-split basis, as reported on the OTCQX marketplace.
The company classified the RXi activities for previously reported periods as discontinued operations in the consolidated statements of comprehensive loss retroactively for all periods presented. The net assets of RXi were removed from the consolidated balance sheet as of the date of the spin-off, and were recorded as an equity distribution.
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

 
December 31,
 
2014
 
2013
Clinical development expense
$
6,967

 
$
3,109

Compensation and related benefits
1,040

 
1,015

Professional fees
821

 
647

Interest expense
57

 
70

Accrued expenses and other current liabilities
$
8,885

 
$
4,841

Long-term Debt
Long-term Debt
Long-term Debt

On May 8, 2013 we entered into a loan and security agreement with Oxford Finance LLC, as collateral agent, and related lenders under which we may borrow up to $15 million (the “Loan”) in two tranches. We borrowed $10 million on May 8, 2013. The Loan payments will include 12 months of interest-only payments at the fixed coupon rate of 8.45%, followed by 30 months of amortization of principal and interest until maturity in November 2016. In connection with the Loan, we paid the lender a 1% cash facility fee and a 5.5% cash final payment and granted to the lenders seven-year warrants to purchase up to 182,186 shares of our common stock at an exercise price of $2.47, which equaled a 20-day average market price of our common stock prior to the date of the grant.

As of December 31, 2014, future schedule principal payments to be made on long-term debt are as follows (in thousands):
For the year ending December 31, 2015
 
$
3,910

2016
 
4,254

Total future principal payments
 
8,164

Unamortized debt issuance costs (net of fair value of warrants issued)
 
238

Total debt
 
8,402

Less current portion
 
(3,910
)
Total long-term debt, net
 
$
4,492

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Legal Proceedings

In early 2014, several purported shareholder derivative complaints were filed against our company, as nominal defendant, and certain of our officers and directors in the Circuit Court of Oregon for the County of Multnomah, the U.S. District Court for the District of Oregon, and the Delaware Court of Chancery. On April 11, 2014, the derivative complaints pending in the U.S. District Court for the District of Oregon were consolidated in the matter of In Re Galena Biopharma, Inc. Derivative Litigation, No. 3:14-cv-382-SI (D. Or.), and on August 25, 2014, the lead plaintiffs filed a consolidated amended complaint. On July 21, 2014, all of the derivative complaints pending in the Delaware Court of Chancery were consolidated in the matter of In re Galena Biopharma, Inc. Stockholder Derivative Litigation, Consolidated C.A. No. 9715-VCN (Del. Ch.). On February 10, 2015, the lead plaintiffs in the derivative complaints pending in the Delaware Court of Chancery voluntarily dismissed their action without prejudice. As a result of this dismissal, and at the recommendation of the special litigation committee of the board established on July 21, 2014 to investigate the derivative claims, on February 26, 2015 our board of directors disbanded the special litigation committee.

The operative complaints allege, among other things, breaches of fiduciary duties and abuse of control by the officers and directors in connection with public statements purportedly issued by us or on our behalf and sales of our common stock by our officers and directors in January and February of 2014, improper stock-option grants, and excessive compensation of our non-employee directors.

Also, five purported securities class action complaints filed in the U.S. District Court for the District of Oregon have been consolidated into a single action, In re Galena Biopharma, Inc. Securities Litigation, No. 3:14-cv-367-SI (D. Or.), and a lead plaintiff has been appointed. On October 31, 2014, the lead plaintiff filed a consolidated amended complaint, which alleges, among other things, that our company and certain of our officers and directors violated the federal securities laws by making materially false and misleading statements and omissions in press releases and in filings with the SEC arising out of the same circumstances that are the subject of the derivative actions described above, and which alleges that certain of our officers and directors sold company stock while in possession of material non-public information.

We intend to vigorously defend against and seek resolution to the foregoing claims. At December 31, 2014, we have not recorded any liabilities with respect to the claims in our consolidated financial statements. We believe that claims are covered under our liability insurance, and we have notified our insurance carriers of the claims. The insurers have responded by requesting additional information and by reserving their rights under the policies, including the rights to deny coverage under various policy exclusions. Subject to their reservation of rights, we are being reimbursed by our insurer for substantially all legal fees relating to our defense of the claims.

We are aware that the SEC is investigating certain matters relating to the use of certain outside investor-relations professionals by us and other public companies. We have been in contact with the SEC staff through our counsel and are cooperating with the investigation.

Litigation is inherently uncertain, and there is no assurance as to the outcome of the matters described above. We could incur substantial unreimbursed legal fees, settlements, judgments, and other expenses in connection with these or other legal and regulatory proceedings that may not qualify for coverage under, or may exceed the limits of, our applicable directors and officers liability insurance policies and could have a material adverse effect on our financial condition, liquidity, and results of operations. These matters also may distract the time and attention of our officers and directors or divert our other resources away from our ongoing commercial and development programs. An unfavorable outcome in any of these matters could damage our business and reputation or result in additional claims or proceedings against us.

Commitments

The company acquires assets still in development and enters into research and development arrangements with third parties that often require milestone and royalty payments based on the progress of the asset through development stages. Milestone payments may be required, for example, upon approval of the product for marketing by a regulatory agency. In certain agreements, the company is required to make royalty payments based upon a percentage of the sales. Because of the contingent nature of these payments, they are not included in the table of contractual obligations shown below.

These arrangements may be material individually, and in the unlikely event that milestones for multiple products covered by these arrangements were reached in the same period, the aggregate charge to expense could be material to the results of operations. In addition, these arrangements often give the company the discretion to unilaterally terminate development of the product, which would allow the company to avoid making the contingent payments; however, the company is unlikely to cease development if the compound successfully achieves clinical testing objectives. The company’s contractual obligations that will require future cash payments as of December 31, 2014 are as follows (in thousands):

 
Operating
Leases(1)
 
Non-Cancelable
Employment
Agreements(2)
 
Subtotal
 
Cancelable
License
Agreements(3)
 
Total
2015
$
74

 
$
828

 
$
902

 
$
350

 
$
1,252

2016
83

 
100

 
183

 
350

 
533

2017
82

 
—

 
82

 
350

 
432

2018
70

 
—

 
70

 
350

 
420

2019 and thereafter
—

 
—

 
—

 
6,815

 
6,815

Total
$
309

 
$
928

 
$
1,237

 
$
8,215

 
$
9,452


(1) 
Operating leases are primarily facility and equipment related obligations with third party vendors. Operating lease expenses during the years ended December 31, 2014, 2013, and 2012 were approximately $72,000, $77,000 and $139,000, respectively.
(2) 
Employment agreement obligations include management contracts, as well as scientific advisory board member compensation agreements. Certain agreements, which have been revised from time to time, provide for minimum salary levels, adjusted annually at the discretion of the Compensation Committee, as well as for minimum bonuses that are payable.
(3) 
License agreements generally relate to the company’s obligations with The Board of Regents, University of Texas and Henry M. Jackson Foundation for our oncology therapies. The company continually assesses the progress of its licensed technology and the progress of its research and development efforts as it relates to its licensed technology and may terminate with notice to the licensor at any time. In the event these licenses are terminated, no amounts will be due.

The company applies the disclosure provisions FASB ASC Topic 460 (“ASC 460”), “ Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others ”, to its agreements that contain guarantee or indemnification clauses. The company provides (i) indemnifications of varying scope and size to certain investors and other parties for certain losses suffered or incurred by the indemnified party in connection with various types of third-party claims and (ii) indemnifications of varying scope and size to officers and directors against third party claims arising from the services they provide to us. These indemnifications give rise only to the disclosure provisions of ASC 460. To date, the company has not incurred costs as a result of these obligations and does not expect to incur material costs in the future. Accordingly, the company has not accrued any liabilities in its financial statements related to these indemnifications.

We have received a Paragraph IV certification notice from Actavis Pharma, Inc. and related companies (Actavis) contending that the patents held by Orexo for Abstral that are listed in the Orange Book (U.S. Patents 6,759,059, 6,761,910 and 7,910,132, which expire in August 2026, July 2023 and January 2016), are invalid, unenforceable and/or will not be infringed by the manufacture, use, or sale of a generic form of Abstral. In response to these notices, Orexo filed suit against Actavis to defend their patent rights, which we license from Orexo. We are obligated under our contract with Orexo to absorb 88% of the legal costs associated with defending Abstral patents. We intend to work with Orexo to continue to vigorously enforce intellectual property rights relating to any future challenges the Abstral product.
Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity

Preferred Stock — The company has authorized up to 5,000,000 shares of preferred stock, $0.0001 par value per share, for issuance. The preferred stock will have such rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be determined by the company’s board of directors upon its issuance. To date, the company has not issued any preferred shares.

Common Stock — The company has authorized up to 200,000,000 shares of common stock, $0.0001 par value per share, for issuance. Shares of common stock are reserved as follows:

April 2012 Registered Direct Offering — On April 13, 2012, the company completed an underwritten public offering of 9,751,000 shares of common stock for gross proceeds of approximately $14.6 million, resulting in approximately $13.5 million of net proceeds to the company after deducting the underwriting discounts and commissions and offering expenses.

December 2012 Registered Direct Offering — On December 18, 2012, the company closed an underwritten public offering of 15,156,250 units at a price to the public of $1.60 per unit for gross proceeds of $24.3 million (the “December 2012 Offering”). The offering provided approximately $22.5 million to the company after deducting the underwriting discounts and commissions and offering expenses. Each unit consists of (i) one share of common stock, and (ii) a five-year warrant to purchase 0.50 of a share of common stock at an exercise price of $1.90 per share (subject to anti-dilution adjustment provisions).

September 2013 Underwritten Public Offering - On September 18, 2013 the company closed an underwritten public offering of 17,500,000 units at a price to the public of $2.00 per unit for gross proceeds of $35 million (the "September 2013 Offering"). Each unit consists of one share of common stock, and a warrant to purchase 0.35 of a share of common stock at an exercise price of $2.50 per share. The offering included an over-allotment option for the underwriters to purchase an additional 2,625,000 shares of common stock and/or warrants up to 918,750 share of common stock. On September 23, 2013, the underwriters exercised their over-allotment option in full. The additional gross proceeds to the company as a result of the full exercise of the over-allotment option were approximately $5.2 million. The total net proceeds of the September 2013 offering, including the exercise of the over-allotment option, were $37.5 million, after deducting underwriting discounts and commissions and offering expenses payable by the company.

November 2014 Purchase Agreement with Lincoln Park Capital, LLC - On November 18, 2014, the company entered into a purchase agreement with Lincoln Park Capital, LLC (LPC), pursuant to which the company has the right to sell to LPC up to $50 million in shares of the company's common stock, subject to certain limitations and conditions over the 36 month term of the purchase agreement. Pursuant to the purchase agreement, LPC initially purchased 2.5 million shares of the company's common stock at $2.00 per share and the company issued 631,221 shares of common stock to LPC as a commitment fee, which was recorded as a cost of capital. As a result of this initial issuance, the company received initial net proceeds of $4.9 million, after deducting commissions and other offering expenses. In addition to the LPC’s initial purchase of our common stock under the purchase agreement, during 2014, we received net proceeds of $8.5 million from LPC’s subsequent purchases of a total of 4.6 million shares of our common stock, excluding the commitment fee shares.

At Market Issuance Sales Agreements - On May 24, 2013 the Company entered into At Market Issuance Sales Agreements (ATM) with MLV & Co. LLC and Maxim Group LLC (the Agents). From time to time during the term of the ATM, we may issue and sell through the Agents, shares of our common stock, and the Agents collect a fee equal to 3% of the gross proceeds from the sale of shares, up to a total limit of $20 million in gross proceeds. The ATM is available to the company until it is terminated by the Agents or the company. During the year ended December 31, 2014, we received $2.3 million in net proceeds from the sale of 1.4 million shares of our common stock through the ATM. There were no sales of our common stock under the ATM in 2013.

March 2015 Underwritten Public Offering - On March 18, 2015 the company closed an underwritten public offering of 24,358,974 units at a price to the public of $1.56 per unit for gross proceeds of $38 million (the "March 2015 Offering"). Each unit consists of one share of common stock, and a warrant to purchase 0.50 of a share of common stock at an exercise price of $2.08 per share. The March 2015 Offering included an over-allotment option for the underwriters to purchase an additional 3,653,846 shares of common stock and/or warrants to purchase up to 1,826,923 shares of common stock. On March 18, 2015, the underwriters exercised their over-allotment option to purchase warrants to purchase an aggregate of 1,826,923 shares of common stock. On April 10, 2015, the underwriters exercised their over-allotment option to purchase 3,653,846 shares of common stock for additional net proceeds of $5.4 million. The total net proceeds of the March 2015 Offering, including the exercise of the over-allotment option to purchase the warrants, were $40.8 million, after deducting underwriting discounts and commissions and offering expenses payable by the company.

Other Equity Transactions — On January 20, 2012, The company sold 579,710 shares of our common stock for $400,000, the fair market value on the date of issuance, to Kwang Dong Pharmaceuticals Company, as part of an existing license agreement for NeuVax covering territorial rights for the compound in South Korea that the company acquired in its merger acquisition with Apthera. During 2013, the company issued a total of 492,988 shares of common stock to the holders of the company's outstanding contingent value rights holders for a milestone payment with a total fair market value of $1,247,000.
Stock Based Compensation
Stock Based Compensation
Stock-Based Compensation

Options to Purchase Shares of Common Stock — The company follows the provisions ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees, non-employee directors and consultants, including employee stock options. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options and warrants granted in consideration for services rendered by non-employees, the company recognizes compensation expense in accordance with the requirements of ASC Topic 505-50. Non-employee option and warrant grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to vesting, the value of these options and warrants, as calculated using the Black-Scholes option-pricing model, is being re-measured using the fair value of the company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options and warrants granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options and warrants are fully vested.

The following table summarizes the components of stock-based compensation expense in the Consolidated Statements of Comprehensive Loss for the years ended December 31, 2014, 2013, and 2012 (in thousands):

 
2014
 
2013
 
2012
Research and development
$
484

 
$
754

 
$
580

General and administrative
4,903

 
2,150

 
1,179

Total stock-based compensation
$
5,387

 
$
2,904

 
$
1,759



The company uses the Black-Scholes option-pricing model and the following weighted-average assumptions to determine the fair value of all its stock options granted:
 
 
2014
 
2013
 
2012
Risk free interest rate
2.01
%
 
1.57
%
 
1.05
%
Volatility
79.37
%
 
77.98
%
 
75.76
%
Expected lives (years)
6.16

 
6.25

 
6.13

Expected dividend yield
0.00
%
 
0.00
%
 
0.00
%


The weighted-average fair value of options granted during the years ended December 31, 2014 and 2013 was $1.74 and $1.98 per share, respectively.

The company’s expected common stock price volatility assumption is based upon the volatility of a basket of comparable companies. The expected life assumptions for employee grants were based upon the simplified method provided for under ASC 718-10, which averages the contractual term of the company’s options of ten years with the average vesting term of four years for an average of six years. The expected life assumptions for non-employees were based upon the contractual term of the option. The dividend yield assumption is zero, because the company has never paid cash dividends and presently has no intention of paying cash dividends in the future. The risk-free interest rate used for each grant was also based upon prevailing short-term interest rates. The company has estimated an annualized forfeiture rate of 15% for options granted to its employees, 8% for options granted to senior management and zero for non-employee directors. The company will record additional expense if the actual forfeitures are lower than estimated and will record a recovery of prior expense if the actual forfeiture rates are higher than estimated.

As of December 31, 2014, there was $11,367,000 of unrecognized compensation cost related to outstanding options that is expected to be recognized as a component of the company’s operating expenses over a weighted-average period of 2.82 years.

As of December 31, 2014, an aggregate of 16,500,000 shares of common stock were reserved for issuance under the company’s 2007 Incentive Plan, including 8,590,000 shares subject to outstanding common stock options granted under the plan and 2,888,000 shares available for future grants. The administrator of the plan determines the times when an option may become exercisable. Vesting periods of options granted to date have not exceeded four years. The options generally will expire, unless previously exercised, no later than ten years from the grant date.

The following table summarizes option activity of the company:
 
 
Total
Number of
Shares
(In Thousands)
 
Weighted
Average
Exercise
Price
Outstanding at December 31, 2013
13,159

 
$
2.73

Granted
1,375

 
2.50

Exercised
(3,608
)
 
1.31

Cancelled
(2,336
)
 
2.85

Outstanding at December 31, 2014
8,590

 
$
3.25

Options exercisable at December 31, 2014
5,544

 
$
3.56



The weighted average remaining contractual life of options outstanding as of December 31, 2014, 2013, and 2012 was 7.35, 8.09, and 7.87, respectively. The weighted average remaining contractual life of options exercisable as of December 31, 2014, 2013, and 2012 was 6.51, 6.76, and 7.38, respectively.

The aggregate intrinsic value of outstanding options as of December 31, 2014, 2013, and 2012 was $610,000, $30,537,000, and $2,288,000, respectively. The aggregate intrinsic value of exercisable options as of December 31, 2014, 2013, and 2012 was $509,000, $16,376,000, and $1,394,000, respectively. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the company's common stock and the exercise price of the underlying options.

The aggregate intrinsic value of options exercised during the years ended December 31, 2014, 2013, and 2012 was $13,429,000, $890,000, and $18,000 respectively.

Employee Stock Purchase Plan — The company also has an employee stock purchase plan (“ESPP”) which allows employees to contribute up to 15% of their cash earnings, subject to certain maximums, to be used to purchase shares of our common stock on each semi-annual purchase date. The purchase price is equal to 85% of the market value per share on either the first or last day of the semi-annual period, whichever is lower. Our ESPP is non-compensatory pursuant to the provisions of generally accepted accounting principles for share-based compensation expense. The ESPP contains an “evergreen provision” with annual increases in the number of shares available for issuance on the first day of each year through January 1, 2015 equal to the lesser of: (a) 250,000 shares increased on each anniversary of the adoption of the Plan by 1% of the total shares of stock then outstanding and (b) 1,000,000 shares. As of December 31, 2014, an aggregate of 641,859 shares of common stock were authorized and available for future issuance under the ESPP. The company has issued 358,141 shares under the ESPP through December 31, 2014.
Restricted Stock Units — In addition to options to purchase shares of common stock, the company may grant restricted stock units (“RSU”) as part of its compensation package. If granted, each RSU would be granted at the fair market value of the company's common stock on the date of grant. Vesting is determined on a grant-by-grant basis.
Warrants
Warrants
Warrants

The following is a summary of warrant activity for the years ended December 31, 2014 and 2013 (in thousands):
 
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
 
Consultant
and Oxford Warrants
 
Total
Outstanding, January 1, 2013
—

 
7,578

 
2,846

 
361

 
360

 
978

 
1,093

 
13,216

Granted
7,044

 
—

 
—

 
—

 
—

 
—

 
182

 
7,226

Exercised
(602
)
 
(2,661
)
 
(1,688
)
 
(185
)
 
(70
)
 
—

 
(196
)
 
(5,402
)
Expired
—

 
—

 
—

 
—

 
—

 
—

 
(190
)
 
(190
)
Outstanding, December 31, 2013
6,442

 
4,917

 
1,158

 
176

 
290

 
978

 
889

 
14,850

Granted
—

 
—

 
—

 
—

 
—

 
—

 
300

 
300

Exercised
(2,469
)
 
(1,886
)
 
(543
)
 
—

 
(265
)
 
(62
)
 
(469
)
 
(5,694
)
Expired
—

 
—

 
—

 
—

 
—

 
(916
)
 
—

 
(916
)
Outstanding, December 31, 2014
3,973

 
3,031

 
615

 
176

 
25

 
—

 
720

 
8,540

Expiration
September 2018
 
December 2017
 
April 2017
 
March 2016
 
March 2016
 
August 2014
 
Varies 2014-2020
 
 


Warrants consist of warrants potentially settleable in cash, which are liability-classified warrants, and equity-classified warrants.

Warrants classified as liabilities

Liability-classified warrants consist of warrants to purchase common stock issued in connection with equity financings in September 2013, December 2012, April 2011, March 2011, March 2010 and August 2009. These warrants are potentially settleable in cash and were determined not to be indexed to our common stock.

The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the condensed consolidated statement of comprehensive loss as other income (expense). The fair value of the warrants is estimated using an appropriate pricing model with the following inputs:
 
 
As of December 31, 2014
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
Strike price
$
2.50

 
$
1.90

 
$
0.65

 
$
0.65

 
$
2.15

 
$
4.50

Expected term (years)
3.72

 
2.98

 
2.31

 
1.18

 
1.24

 
0.00

Volatility %
75.60
%
 
76.85
%
 
78.24
%
 
77.38
%
 
77.12
%
 
—
%
Risk-free rate %
1.30
%
 
1.09
%
 
0.80
%
 
0.32
%
 
0.35
%
 
—
%
 
 
As of December 31, 2013
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
Strike price
$
2.50

 
$
1.90

 
$
0.65

 
$
0.65

 
$
2.15

 
$
4.50

Expected term (years)
4.72

 
3.98

 
3.31

 
2.18

 
2.24

 
0.59

Volatility %
71.97
%
 
71.38
%
 
71.71
%
 
73.45
%
 
73.36
%
 
66.85
%
Risk-free rate %
1.61
%
 
1.25
%
 
0.93
%
 
0.45
%
 
0.47
%
 
0.11
%


The company’s expected volatility is based on a combination of implied volatilities of similar publicly traded entities. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the time of valuation. The dividend yield used in the pricing model is zero, because the company has no present intention to pay cash dividends.

The changes in fair value of the warrant liability for the years ended December 31, 2014 and 2013 were as follows (in thousands):
 
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
 
Total
Warrant liability, January 1, 2013
$
—

 
$
6,954

 
$
3,310

 
$
378

 
$
187

 
$
135

 
$
10,964

Fair value of warrants granted
8,238

 
—

 
—

 
—

 
—

 
—

 
8,238

Fair value of warrants exercised
(1,931
)
 
(8,482
)
 
(3,455
)
 
(260
)
 
(121
)
 
—

 
(14,249
)
Change in fair value of warrants
16,643

 
19,588

 
5,214

 
645

 
879

 
1,043

 
44,012

Warrant liability, December 31, 2013
22,950

 
18,060

 
5,069

 
763

 
945

 
1,178

 
48,965

Fair value of warrants granted
—

 
—

 
—

 
—

 
—

 
—

 
—

Fair value of warrants exercised
(12,713
)
 
(10,086
)
 
(2,906
)
 
—

 
(1,159
)
 
(162
)
 
(27,026
)
Change in fair value of warrants
(7,677
)
 
(5,947
)
 
(1,538
)
 
(600
)
 
222

 
(1,016
)
 
(16,556
)
Warrant liability, December 31, 2014
$
2,560

 
$
2,027

 
$
625

 
$
163

 
$
8

 
$
—

 
$
5,383



Warrants classified as equity

Equity-classified warrants consist of warrants issued in connection with consulting services provided to us. Additionally, on May 8, 2013 as a part of our Loan financing, we granted Oxford Financial LLC warrants to purchase 182,186 shares of common stock at an exercise price of $2.47, which equaled to the 20-day average market price of our common stock prior to the date of the grant. The warrants were valued using the Black Scholes model. The fair value assumptions for the grant included a volatility of 75.34%, expected term of seven years, risk free rate of 1.20%, and a dividend rate of 0.00%. The fair value of the warrants granted was $1.93 per share. These warrants are recorded in equity at fair value upon issuance, and not as liabilities, and are not subject to adjustment to fair value in subsequent reporting periods.
Other Income (Expense) (Notes)
Other Income (Expense)
Other Income (Expense)

Other income (expense) is summarized as follows (in thousands):
 
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
Realized gain on sale of marketable securities
 
$
—

 
$
3,911

 
$
—

Change in fair value of the contingent purchase price liability
 
170

 
(926
)
 
(2,370
)
Miscellaneous other income
 
—

 
37

 
—

Total other income (expense)
 
$
170

 
$
3,022

 
$
(2,370
)
Net Loss Per Share
Net Loss Per Share
Net Loss Per Share

The company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260 “Earnings per Share.” Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants.

The following table sets forth the potentially dilutive common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive (in thousands):
 
 
December 31,
 
2014
 
2013
Warrants to purchase common stock
8,540

 
14,850

Options to purchase common stock
8,590

 
13,159

Total
17,130

 
28,009

Income Taxes
Income Taxes
Income Taxes
The components of federal and state income tax expense (benefit) are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
 
2012
Current
 
 
 
 
 
 
Federal
 
$
—

 
$
—

 
$
—

State
 
—

 
—

 
—

Total current
 
—

 
—

 
—

Deferred expense (benefit)
 
 
 
 
 
 
Federal
 
—

 
894

 
(894
)
State
 
—

 
158

 
(158
)
Total deferred
 
—

 
1,052

 
(1,052
)
Total income tax expense (benefit)
 
$
—

 
$
1,052

 
$
(1,052
)

The components of net deferred tax assets are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
Net operating loss carryforwards
 
$
53,950

 
$
33,539

Tax credit carryforwards
 
3,590

 
3,549

Stock based compensation
 
4,676

 
8,322

Other
 
190

 
12

Licensing deduction deferral
 
8,919

 
8,682

Gross deferred tax assets
 
71,325

 
54,104

Valuation allowance
 
(71,325
)
 
(54,104
)
Net deferred tax asset
 
$
—

 
$
—


The components of net deferred tax liabilities are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
In-process research and development not subject to future amortization for tax purposes
 
$
5,053

 
$
5,053

Gross deferred tax liability
 
$
5,053

 
$
5,053



The provision for income taxes differs from the provision computed by applying the federal statutory rate to net loss before income taxes as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
 
2012
Expected federal income tax benefit
 
$
(12,447
)
 
$
(25,713
)
 
$
(11,688
)
State income taxes after credits
 
(1,283
)
 
(3,676
)
 
(1,067
)
Unrealized gain on marketable securities
 
—

 
1,052

 
(1,052
)
Changes in warrant value
 
(6,503
)
 
17,283

 
3,664

Stock compensation
 
3,996

 
813

 
152

Effect of change in valuation allowance
 
17,275

 
11,408

 
8,939

Income tax credits
 
(42
)
 
(240
)
 
—

Other
 
(996
)
 
125

 
—

 
 
$
—

 
$
1,052

 
$
(1,052
)

The company has incurred net operating losses from inception. At December 31, 2014, the company had domestic federal and state net operating loss carryforwards of approximately $144.0 million and $145.9 million, respectively, available to reduce future taxable income, which expire at various dates beginning in 2014 through 2034. The company also had federal and state research and development tax credit carryforwards of approximately $2.3 million and $2.0 million, respectively, available to reduce future tax liabilities and which expire at various dates beginning in 2023 through 2033. The income tax expense for the year ended December 31, 2013 relates to the realized gain on sale of marketable securities.
Approximately $8.7 million of the company's net operating loss carryforwards were generated as a result of deductions related to the exercises of stock options. If utilized, this portion of the Company's carryforwards, as tax effected, will be accounted for as a direct increase to contributed capital rather than as a reduction of that year's provision for income taxes. Net operating loss carryforwards created by excess tax benefits from the exercise of stock options are not recorded as deferred tax assets. The deferred tax assets related to net operating losses have been accordingly reduced by $3.4 million for the year ended December 31, 2014.
Under the provisions of the Internal Revenue Code, certain substantial changes in the company’s ownership may result in a limitation on the amount of net operating loss carryforwards and research and development credit carryforwards which could be utilized annually to offset future taxable income and taxes payable.
Based on an assessment of all available evidence including, but not limited to the company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a 100% deferred income tax valuation allowance has been recorded against these assets. The valuation allowance increased by $17.2 million and $12.5 million for the years ended December 31, 2014 and 2013, respectively.
The company files income tax returns in the U.S. federal, Massachusetts, Colorado, California, Connecticut, Georgia, Texas and Oregon jurisdictions. The company is subject to tax examinations for the 2010 tax year and beyond. The company does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The company has not incurred any interest or penalties. In the event that the company is assessed interest or penalties at some point in the future, they will be classified in the financial statements as general and administrative expense.
License Agreements
License Agreements
License Agreements

As part of its business, the company enters into licensing agreements with third parties that often require milestone and royalty payments based on the progress of the licensed asset through development and commercial stages. Milestone payments may be required, for example, upon approval of the product for marketing by a regulatory agency, and the company may be required to make royalty payments based upon a percentage of net sales of the product. The expenditures required under these arrangements in any period may be material and are likely to fluctuate from period to period.

These arrangements sometimes permit the company to unilaterally terminate development of the product and thereby avoid future contingent payments; however, the company is unlikely to cease development if the compound successfully achieves clinical testing objectives.

In conjunction with the acquisition of NeuVaxTM, the company acquired rights and assumed obligations under a license agreement among Apthera and The University of Texas M. D. Anderson Cancer Center (“MDACC”) and The Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. (“HJF”) which grants exclusive worldwide rights to a U.S. patent covering the nelipepimut-S peptide and several U.S. and foreign patents and patent applications covering methods of using the peptide as a vaccine. Under the terms of this license, we are required to pay an annual maintenance fee of $200,000, we paid a milestone payment of $200,000 upon commencing the Phase 3 PRESENT trial of NeuVax and other clinical milestone payments, as well as royalty payments based on sales of NeuVax or other therapeutic products developed from the licensed technologies.

Effective December 3, 2012, we entered into a license and supply agreement with ABIC Marketing Limited, a subsidiary of Teva Pharmaceuticals (“ABIC”), under which we granted ABIC exclusive rights to seek marketing approval in Israel for our NeuVax product candidate for intradermal injection for the treatment of breast cancer following its approval by the FDA or the European Medicines Agency, and to market, sell and distribute NeuVax in Israel assuming such approval is obtained. ABIC’s rights also include a right of first refusal in Israel for all future indications for which NeuVax may be approved. Under the license and supply agreement, ABIC will assume responsibility for regulatory registration of NeuVax in Israel, provide financial support for local development, and commercialize the product in the region in exchange for making royalty payments to us based on future sales of NeuVax. ABIC also agrees in the license and supply agreement to purchase from us all supplies of NeuVax at a price determined according to a specified formula.

On March 18, 2013, we acquired Abstral® (fentanyl) sublingual tablets for sale and distribution in the United States from Orexo AB (ORX.ST), a specialty pharmaceutical company based in Sweden. Abstral has been approved by the U.S. Food and Drug Administration (FDA) and is a transmucosal immediate-release fentanyl (TIRF) product.

Under our agreement with Orexo, we assumed responsibility for the U.S. commercialization of Abstral and for all regulatory and reporting matters in the U.S. We also agreed to establish and maintain through 2015 a specified minimum commercial field force to market, sell and distribute Abstral and to use commercially reasonable efforts to reach the specified sales milestones. Orexo is entitled to reacquire the U.S. rights to Abstral from us for no consideration if we breach our obligations to establish and maintain the requisite sales force throughout the marketing period. We launched U.S. commercial sales of Abstral in the fourth quarter of 2013.

In exchange for the U.S. rights to Abstral, (1) we paid Orexo $10 million in March 2013 and a $5 million milestone payment in cash in October 2013 upon the approval by the FDA of a specified U.S. manufacturer of Abstral; and (2) we agreed to pay to Orexo: (a) three one-time future cash milestone payments based on our net sales of Abstral; and (b) a low double-digit royalty on future net sales. No further milestone or royalty payments will be due after the date on which all claims of the last remaining licensed patents expire (currently 2019) or become invalidated by a governmental agency.

On January 12, 2014, we acquired worldwide rights to anagrelide controlled release (CR) formulation, which we renamed GALE-401, through our acquisition of Mills Pharmaceuticals, LLC ("Mills"), and Mills became a wholly owned subsidiary. GALE-401 contains the active ingredient anagrelide, an FDA-approved product that has been in use since the late 1990s for the treatment of myleoproliferative neoplasms (MPNs). Mills holds an exclusive license to develop and commercialize anagrelide CR formulation, pursuant to a license agreement with BioVascular, Inc. Under the terms of the license agreement, Mills has agreed to pay BioVascular, Inc. a mid-to-low single digit royalty on net revenue from the sale of licensed products as well as future cash milestone payments based on the achievement of specified regulatory milestones. We are responsible for patent prosecution and maintenance.

On July 17, 2014, we entered into a definitive license and supply agreement with MonoSol Rx, LLC (MonoSol) for the U.S. commercial rights to Zuplenz® (ondansetron) Oral Soluble Film, an FDA approved product in adult patients for the prevention of highly and moderately emetogenic chemotherapy-induced nausea and vomiting (CINV), radiotherapy-induced nausea and vomiting (RINV), and post-operative nausea and vomiting (PONV). Zuplenz is also approved for pediatric patients with moderately emetogenic CINV. In exchange for the U.S. rights to Zuplenz, in connection with the effectiveness of the license and transfer to us of the New Drug Application (NDA) for Zuplenz, we will paid MonoSol a total of $5 million in cash and shares of our common stock. In addition to these payments, we agreed to pay MonoSol $0.5 million upon the earlier of (a) the occurrence of a specified managed care milestone and (b) December 31, 2014, (ii) $0.25 million within 30 days after MonoSol’s payment of applicable fees relating to the notice of allowance by the United States Patent and Trademark Office of a U.S. patent with composition claims covering Zuplenz that extend beyond 2028, (iii) future cash milestone payments of up to an aggregate of $16.5 million, consisting of six one-time payments based on our achievement of "net sales" of Zuplenz in amounts ranging from $20 million to $100 million, and (iv) a double-digit royalty on future “net sales.”

Under the terms of the license agreement, we assumed responsibility for the commercialization of Zuplenz and for all regulatory and reporting matters in the U.S. We also agreed in the license and supply agreement to use our best commercial efforts to begin commercializing Zuplenz in the U.S. on or before December 31, 2014 in accordance with a joint commercialization plan to be established by the company and MonoSol. We also agreed that, until net sales of Zuplenz exceed a specified minimum amount or a competing product has been approved by the FDA and is placed into the market for sale, we will maintain a specified minimum number of field sales force personnel on specified terms.

Under the license and supply agreement, MonoSol has the exclusive right to supply all of our requirements for Zuplenz, subject to certain conditions.
Significant Customers and Concentration of Credit Risk
Significant Customer and Concentration of Credit Risk
Significant Customers and Concentration of Credit Risk

The company is engaged in the business of developing and commercializing pharmaceutical products. The company has recognized revenue from only one commercial product, Abstral, available in six dosing strengths, and all sales reported are in the United States.

The percentage of product sales to our customer that represented 10% or more of revenue in at least one of the periods presented, is as follows:
 
 
Year ended December 31,
 
 
2014
 
2013
Customer A
 
43
%
 
25
%
Customer B
 
18
%
 
6
%
Customer C
 
14
%
 
26
%
Customer D
 
11
%
 
34
%


There were no product sales during the year ended December 31, 2012.

The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:
 
 
December 31,
 
 
2014
 
2013
Customer A
 
24
%
 
25
%
Customer B
 
31
%
 
1
%
Customer C
 
16
%
 
11
%
Customer D
 
21
%
 
54
%
Related Party Transactions
Related Party Transactions
Related Party Transactions
Since 2011, the company has retained TroyGould PC as outside corporate counsel. Sanford J. Hillsberg, the Chairman of the company, is a senior lawyer with TroyGould PC. The company incurred $553,000, $577,000, and $507,000 for services provided by TroyGould PC during the years ended December 31, 2014, 2013, and 2012, respctively. At December 31, 2014 and 2013 Galena owed $97,000 and $177,000, respectively, to TroyGould PC.
Employee Benefit Plan
Employee Benefit Plan
Employee Benefit Plan

The company sponsors a 401(k) retirement savings plan (the “Plan”). Participation in the Plan is available to full-time employees who meet eligibility requirements. Eligible employees may defer a portion of their salary as defined by Internal Revenue Service regulations. The company may make matching contributions on behalf of all participants in the 401(k) Plan in an amount determined by the company’s board of directors. The company may also make additional discretionary profit sharing contributions in amounts as determined by the board of directors, subject to statutory limitations. Matching and profit-sharing contributions, if any, are subject to a vesting schedule; all other contributions are at all times fully vested. The company intends the 401(k) Plan, and the accompanying trust, to qualify under Sections 401(k) and 501 of the Internal Revenue Code so that contributions by employees to the 401(k) Plan, and income earned (if any) on plan contributions, are not taxable to employees until withdrawn from the 401(k) Plan, and so that the company will be able to deduct its contributions, if any, when made. The trustee under the 401(k) Plan, at the direction of each participant, invests the assets of the 401(k) Plan in any of a number of investment options. For the year ending December 31, 2014 and 2013, the company made matching contributions totaling $85,000 and $35,000, respectively There were no contributions to the plan in 2012.
Selected Quarterly Financial Data (Unaudited)
Selected Quarterly Financial Data (Unaudited)
Selected Quarterly Financial Data (Unaudited)

The following amounts are in thousands, except per share amounts:

 
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
2014
 
 
 
 
 
 
 
 
Net revenue
 
$
2,173

 
$
2,331

 
$
1,620

 
$
3,195

Gross profit on net revenue (1)
 
$
1,751

 
$
1,886

 
$
1,303

 
$
2,536

Net loss
 
$
(2,536
)
 
$
(19,941
)
 
$
(6,173
)
 
$
(7,506
)
Net loss per share
 
$
(0.02
)
 
$
(0.17
)
 
$
(0.05
)
 
$
(0.06
)
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
Net revenue
 
$
—

 
$
—

 
$
1,170

 
$
1,317

Gross profit on net revenue (1)
 
$
—

 
$
—

 
$
869

 
$
967

Net loss
 
$
(9,293
)
 
$
(9,597
)
 
$
(9,287
)
 
$
(48,501
)
Net loss per share
 
$
(0.11
)
 
$
(0.11
)
 
$
(0.11
)
 
$
(0.46
)
Discontinued Operations, Assets Held for Sale (Notes)
Discontinued Operations,Assets Held for Sale
Discontinued Operations

As part of the company's strategic objective to focus its resources on its development pipeline, our management and board of directors decided and committed to pursue a plan to sell or otherwise divest the company’s commercial business during the third quarter of 2015. The Company’s commercial business is comprised of two products: Abstral® (fentanyl) Sublingual Tablets and Zuplenz® (ondansetron) Oral Soluble Film. On November 19, 2015, the Company completed its sale of certain assets of the Company related to and including its Abstral® as described in Note 21 .

The company met the relevant criteria for reporting the commercial business as held for sale and in discontinued operations in the accompanying financial statements as of December 31, 2014 and 2013 and for the years then ended, pursuant to FASB Topic 205-20, Presentation of Financial Statements--Discontinued Operations, and FASB Topic 360, Property, Plant, and Equipment. The company has assessed the commercial business net asset group for impairment pursuant to FASB Topic 360, as discussed in Note 1, determining that the carrying value exceed the fair value of the assets, therefore has recorded a $8.1 million impairment charge as of September 30, 2015. There is no impairment recognized in the periods presented as the determination to impair the assets was completed during the quarter ended September 30, 2015.

The company entered into an agreement with a third party firm to assist the company with the divestiture of its commercial operations including identifying potential acquirers. Pursuant to the terms of the agreement, in the event the company successfully completes a divestiture through the sale of its commercial operations to a third-party, the company is obligated to pay a success fee to the third party firm in an amount up to $900,000 of cash consideration received, 5% of realized future revenue and payment streams, as well as reimbursement for reasonable out-of-pocket expenses.

The company has also entered into compensatory arrangements related to the divestiture of our commercial business with certain members of commercial management. Under the terms of these arrangements, if the company meets certain sales and margin numbers in the fourth quarter of 2015 and successfully completes a divestiture through sale of its commercial operations to a third-party, the company may pay a retention fee to the three employees in a combined total amount equal to the lesser of $400,000 or 3% of cash consideration received as upfront payment in the transaction, with payment to each employee portion conditioned on his or her continued employment through the closing date of such a divestiture of one or both products and satisfaction of other terms. These employees may also receive severance payments equal to one month’s salary for between four and seven months in event the divestiture does not result in continued employment with the acquirer.

The following table presents a reconciliation of the carrying amounts of assets and liabilities of the commercial operations to assets held for sale in the balance sheets (in thousands):
 
2014
 
2013
Carrying amounts of assets included as part of discontinued operations:
Accounts receivable
$
1,535

 
$
3,683

Inventories
655

 
386

Prepaid expenses and other current assets
1,747

 
1,269

Equipment and furnishings, net
270

 
351

Abstral rights, net
14,533

 
14,979

Zuplenz rights
8,101

 
—

Goodwill
172

 
—

Total current assets held for sale
27,013

 
20,668

 
 
 
 
Carrying amounts of liabilities included as part of discontinued operations:
Accounts payable
$
385

 
$
753

Accrued expenses and other current liabilities
6,784

 
3,858

Total current liabilities held for sale
$
7,169

 
$
4,611


The following table represents the components attributable to the commercial business in 2014 and 2013 and the spin-off of RXi in 2012 that are presented in the consolidated statements of comprehensive loss as discontinued operations (in thousands):
 
2014
 
2013
 
2012
Net revenue
$
9,319

 
$
2,487

 
$
—

Cost of revenue
(1,403
)
 
(520
)
 
—

Amortization of certain acquired intangible assets
(440
)
 
(131
)
 
—

Research and development
(680
)
 
(651
)
 
(1,325
)
Selling, general, and administrative
(15,118
)
 
(6,536
)
 
(293
)
Non-operating income (expense)
—

 
—

 
(26
)
Loss from discontinued operations
$
(8,322
)
 
$
(5,351
)
 
$
(1,644
)

The following table presents significant operating non-cash items and capital expenditures related to discontinued operations (in thousands):
 
2014
 
2013
Depreciation and amortization
$
527

 
$
166

Stock-based compensation
$
721

 
$
223

Purchases of property and equipment
$
—

 
$
(385
)
Cash paid for acquisition of Abstral rights
$
—

 
$
(15,143
)
Cash paid for acquisition of Zuplenz rights
$
(3,056
)
 
$
—



There no significant operating non-cash items or capital expenditures related to discontinue operations in 2012.
Subsequent Events
Subsequent Events
Subsequent Events

The company evaluated all events or transactions that occurred after December 31, 2014 up through the date these financial statements were issued. Other than as disclosed elsewhere in the notes to the condensed consolidated financial statements, the company did not have any material recognizable or unrecognizable subsequent events.

March 2015 Underwritten Public Offering - On March 18, 2015 the company closed an underwritten public offering of 24,358,974 units at a price to the public of $1.56 per unit for gross proceeds of $38 million (the "March 2015 Offering"). Each unit consists of one share of common stock, and a warrant to purchase 0.50 of a share of common stock at an exercise price of $2.08 per share. The March 2015 Offering included an over-allotment option for the underwriters to purchase an additional 3,653,846 shares of common stock and/or warrants to purchase up to 1,826,923 shares of common stock. On March 18, 2015, the underwriters exercised their over-allotment option to purchase warrants to purchase an aggregate of 1,826,923 shares of common stock. On April 10, 2015, the underwriters exercised their over-allotment option to purchase 3,653,846 shares of common stock for additional net proceeds of $5.4 million. The total net proceeds of the March 2015 Offering, including the exercise of the over-allotment option to purchase the warrants, were $40.8 million, after deducting underwriting discounts and commissions and offering expense payable by the company.

Adoption of Compensatory Plan - On June 19, 2015, at our 2015 Annual Meeting of stockholders (the “Annual Meeting”), our stockholders approved an amendment (the “Amendment”) to our Amended and Restated 2007 Incentive Plan, as amended (as so amended, the “2007 Plan”), to increase the number of shares of our common stock reserved for issuance under the 2007 Incentive Plan by 10,000,000 shares of our common stock to a total of 26,500,000 shares. The Amendment previously had been approved by our board of directors on April 17, 2015, subject to stockholder approval. The Amendment became effective immediately upon stockholder approval at the Annual Meeting.
Increase to Number of Shares of Common Stock Authorized for Issuance - On June 19, 2015, at our 2015 Annual Meeting of stockholders (the “Annual Meeting”), our stockholders approved an amendment (the “Amendment”) to our Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized for issuance by 75,000,000 shares, to a total of 275,000,000 shares.
ANDA Litigation - On October 23, 2015, Orexo AB (“Orexo”) and Galena Biopharma, Inc. (the “Company”) entered into a settlement and license agreement with Actavis Laboratories FL, Inc. (“Actavis”) to resolve pending patent litigation brought by the Orexo against Actavis involving Abstral® (fentanyl) sublingual tablets. The pending patent litigation was filed by Orexo in the U.S. District Court for the District of New Jersey in response to Actavis’ submission of an Abbreviated New Drug Application (“ANDA”) to the U.S. Food and Drug Administration (“FDA”), seeking marketing approval for a generic version of Abstral. As a result of the settlement and license agreement, Actavis will be permitted to enter the market with a generic or authorized generic version of Abstral in the United States June 2018 or earlier under certain circumstances. The Court has entered an order dismissing with prejudice the litigation against Actavis. Details of the settlement are confidential, and the parties have submited the agreement to the Federal Trade Commission and the Department of Justice, as required by federal law. The expiration date for the latest expiring Abstral patent listed in the FDA’s Orange Book is September 2019.

Discontinued Operations (see also Note 20) - As part of the company's strategic objective to focus its resources on its development pipeline, our management and board of directors decided and committed to pursue a plan to sell or otherwise divest the company’s commercial business during the third quarter of 2015. The Company met the relevant criteria for reporting the commercial operations as held for sale as of September 30, 2015, and as a result, assessed the commercial asset group for impairment pursuant to ASC Topic 360, Property, Plant, and Equipment. The net carrying value of the commercial asset group was compared to its fair value as of September 30, 2105. The Company determined that the fair value using a risk adjusted net present value of deal consideration received from bids from potential acquirers. The Company determined that the carrying value exceeded its fair value and as a result recorded an $8.1 million impairment charge on assets classified as held for sale in the quarterly period ended September 30, 2015.

Sale of Abstral and related assets - On November 19, 2015, Galena Biopharma, Inc. (the “Company”) and Sentynl Therapeutics Inc., a Delaware corporation (“Sentynl”), entered into and closed upon an Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to Sentynl and Sentynl agreed to purchase from the Company, certain assets of the Company related to and including its Abstral® (fentanyl) sublingual tablets product (“Abstral”). The assets sold and assigned to Sentynl pursuant to the Purchase Agreement included all of the Company’s rights and interests in the Asset Purchase Agreement by and between the Company and Orexo AB (“Orexo”) dated March 15, 2013, and the License Agreement by and between the Company and Orexo dated March 18, 2013 (collectively, the “Orexo Agreements”). The Company’s future obligations under the Orexo Agreements were assumed by Sentynl pursuant to such assignment. The Purchase Agreement further provides that the Company will continue to be responsible for any pre-closing liabilities and obligations related to Abstral, as well for certain channel liabilities related to Abstral for a period of time post-closing.
 
The total potential consideration payable to the Company under the Purchase Agreement is $12 million, comprised of an $8 million upfront payment and up to an aggregate of $4 million in future sales milestones based on certain net sales achievements by Sentynl.

The Purchase Agreement also includes customary representations, warranties, covenants and indemnities by Sentynl and the Company. The above description of the material terms and conditions of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement.

Litigation Settlement - On December 3, 2015, the Company agreed in principle to resolve and settle the consolidated shareholder derivative action, captioned In re Galena Biopharma, Inc. Derivative Litigation, Civil Action No. 3:14-cv-00382-SI, currently pending in the United States District Court for the District of Oregon against the Company and/or certain of its current and former officers and directors. The agreement in principle was reached in connection with a voluntary mediation held to explore a possible settlement of both the shareholder derivative action and a putative securities class action that is discussed below.
 
The settlement will not become effective until approved by the Court. The settlement includes a payment of $15 million in cash by the Company's insurance carriers, which the Company will use to fund a portion of the class action settlement, and cancellation of 1,200,000 director stock options. The settlement also will require that the Company implement certain corporate governance measures and will provide that the plaintiffs' counsel may apply to the court for an award of attorneys’ fees and expenses up to $5 million. Any fees and expenses awarded by the court to the plaintiffs’ counsel will be paid by one of the Company’s insurance carriers. The settlement will not include any admission of wrongdoing or liability on the part of the Company or the individual defendants and will include a full release of the Company and the current and former officers and directors in connection with the allegations made in the consolidated federal derivative actions and state court derivative actions.

In addition, on December 3, 2015, the Company agreed in principal to resolve and settle the securities putative class action lawsuit, In re Galena Biopharma, Inc. Securities Litigation, Civil Action No. 3:14-cv-00367-SI, pending against the Company, certain of its current and former officers and directors, and other defendants in the United States District Court for the District of Oregon. The agreement, which is subject to shareholder notice and Court approval, provides for a settlement payment of $20 million to the class and the dismissal of all claims against the Company and the current and former officers and directors in connection with the consolidated federal securities class actions. Of the $20 million settlement payment to the class, $16.7 million will be paid by the Company’s insurance carriers under the insurance policies and $3.3 million will be paid by the Company through a combination of $2.3 million in cash and $1 million in shares of the Company’s common stock. The Company will be responsible for defense costs and any settlements or judgments incurred for any related opt out lawsuits.

The information included in the Legal Proceedings section of Note 8 does not reflect the litigation settlement as described above.
Business and Basis of Presentation (Policies)
Uses of Estimates in Preparation of Financial Statements 
Uses of Estimates in Preparation of Financial Statements — The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Principles of Consolidation 
Principles of Consolidation — The consolidated financial statements include the accounts of Galena and its wholly owned subsidiaries. All material intercompany accounts have been eliminated in consolidation.
Reclassifications 

Reclassifications — Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on net loss per share.
Cash and Cash Equivalents 
Cash and Cash Equivalents — The company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts and demand deposits.
Restricted Cash 
Restricted Cash — Restricted cash consists of certificates of deposit on hand with the company’s financial institutions as collateral for its corporate credit cards
Fair Value of Financial Instruments 
Fair Value of Financial Instruments — The carrying amounts reported in the balance sheet for cash equivalents, marketable securities, accounts receivable, accounts payable, and capital leases approximate their fair values due to their short-term nature and market rates of interest.
Equipment and Furnishings 
Equipment and Furnishings — Equipment and furnishings are stated at cost and depreciated using the straight-line method based on the estimated useful lives (generally three to five years for equipment and furniture) of the related assets.
Goodwill and Intangible Assets 
Goodwill and Intangible Assets — Goodwill and indefinite-lived intangible assets are not amortized but are tested annually for impairment at the reporting unit level, or more frequently if events and circumstances indicate impairment may have occurred. Factors the company considers important that could trigger an interim review for impairment include, but are not limited to, the following:
•Significant changes in the manner of its use of acquired assets or the strategy for its overall business;
•Significant negative industry or economic trends;
•Significant decline in stock price for a sustained period; and
•Significant decline in market capitalization relative to net book value.

Goodwill and other intangible assets with indefinite lives are evaluated for impairment first by a qualitative assessment to determine the likelihood of impairment. If it is determined that impairment is more likely than not, the company will then proceed to the two step impairment test. The first step is to compare the fair value of the reporting unit to the carrying amount of the reporting unit (the “First Step”). If the carrying amount exceeds the fair value, a second step must be followed to calculate impairment (the “Second Step”). Otherwise, if the fair value of the reporting unit exceeds the carrying amount, the goodwill is not considered to be impaired as of the measurement date. In its review of the carrying value of the goodwill for its single reporting unit and its indefinite-lived intangible assets, the company determines fair values of its goodwill using the market approach, and its indefinite-lived intangible assets using the income approach.

Intangible assets not considered indefinite-lived are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable. The company’s policy is to identify and record impairment losses, if necessary, on intangible product rights when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

The company performed its review for impairment using the qualitative assessment for both goodwill and indefinite-lived intangible assets, and has determined that there has been no impairment to these assets as of December 31, 2014.
Revenue Recognition 

Acquisitions and In-Licensing 
Acquisitions and In-Licensing — For all in-licensed products and technologies, we perform an analysis to determine whether we hold a variable interest or a controlling financial interest in a variable interest entity. On the basis of our interpretations and conclusions, we determine whether the acquisition falls under the purview of variable interest entity accounting and if so, consider the necessity to consolidate the acquisition. As of December 31, 2014, we determined there were no variable interest entities required to be consolidated.

We also perform an analysis to determine if the assets and liabilities acquired in an acquisition qualify as a "business." The excess of the purchase price over the fair value of the net assets acquired can only be recognized as goodwill in a business combination.

The acquisition of the Abstral U.S. rights has been accounted for as an asset acquisition and not a business combination. The purchase price, including transaction costs, was recorded as an intangible asset related to the license and distribution rights acquired in the transaction. No other significant assets or liabilities were acquired or assumed in the transaction. The license and distribution rights will be amortized over ten years in a pattern based on our Abstral sales projections. Refer to Note 15 for further information regarding the acquisition of Abstral U.S. rights.
Goodwill and Intangible Assets — Goodwill and indefinite-lived intangible assets are not amortized but are tested annually for impairment at the reporting unit level, or more frequently if events and circumstances indicate impairment may have occurred. Factors the company considers important that could trigger an interim review for impairment include, but are not limited to, the following:
•Significant changes in the manner of its use of acquired assets or the strategy for its overall business;
•Significant negative industry or economic trends;
•Significant decline in stock price for a sustained period; and
•Significant decline in market capitalization relative to net book value.

Goodwill and other intangible assets with indefinite lives are evaluated for impairment first by a qualitative assessment to determine the likelihood of impairment. If it is determined that impairment is more likely than not, the company will then proceed to the two step impairment test. The first step is to compare the fair value of the reporting unit to the carrying amount of the reporting unit (the “First Step”). If the carrying amount exceeds the fair value, a second step must be followed to calculate impairment (the “Second Step”). Otherwise, if the fair value of the reporting unit exceeds the carrying amount, the goodwill is not considered to be impaired as of the measurement date. In its review of the carrying value of the goodwill for its single reporting unit and its indefinite-lived intangible assets, the company determines fair values of its goodwill using the market approach, and its indefinite-lived intangible assets using the income approach.

Intangible assets not considered indefinite-lived are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable. The company’s policy is to identify and record impairment losses, if necessary, on intangible product rights when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.

The company performed its review for impairment using the qualitative assessment for both goodwill and indefinite-lived intangible assets, and has determined that there has been no impairment to these assets as of December 31, 2014.
Patents and Patent Application Costs 
Patents and Patent Application Costs — Although the company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from the patents is uncertain. Patent costs are, therefore, expensed as incurred.
Share-based Compensation 
Share-based Compensation — The company follows the provisions of the FASB ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees, non-employee directors, and consultants, including stock options and warrants. Stock compensation expense based on the grant date fair value estimated in accordance with the provisions of ASC 718 is recognized as an expense over the requisite service period.

For stock options and warrants granted as consideration for services rendered by non-employees, the company recognizes compensation expense in accordance with the requirements of FASB ASC Topic 505-50 (“ASC 505-50”), “ Equity Based Payments to Non- Employees.” Non-employee option and warrant grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to vesting, the value of these options and warrants, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the company’s common stock and the non-cash compensation recognized during the period will be adjusted accordingly. Since the fair market value of options and warrants granted to non-employees is subject to change in the future, the amount of the future compensation expense will include fair value re-measurements until the stock options are fully vested.
Research and Development Expenses 
Research and Development Expenses — Research and development costs are expensed as incurred. Included in research and development costs are wages, benefits and other operating costs, facilities, supplies, external services and overhead related to our research and development departments, and clinical trial expenses.

Clinical trial expenses include direct costs associated with contract research organizations ("CROs"), as well as patient-related costs at sites at which our trials are being conducted.

Direct costs associated with our CROs are generally payable on a time and materials basis, or when certain enrollment and monitoring milestones are achieved. Expense related to a milestone is recognized in the period in which the milestone is achieved or in which we determine that it is more likely than not that it will be achieved.

The invoicing from clinical trial sites can lag several months. We accrue these site costs based on our estimate of upfront set-up costs upon the screening of the first patient at each site, and the patient related costs based on our knowledge of patient enrollment status at each site.
Income Taxes 
Income Taxes — The company recognizes liabilities or assets for the deferred tax consequences of temporary differences between the tax basis of assets or liabilities and their reported amounts in the financial statements in accordance with FASB ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”). These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. ASC 740-10 requires that a valuation allowance be established when management determines that it is more likely than not that all or a portion of a deferred asset will not be realized. The company evaluates the realizability of its net deferred income tax assets and valuation allowances as necessary, at least on an annual basis. During this evaluation, the company reviews its forecasts of income in conjunction with other positive and negative evidence surrounding the realizability of its deferred income tax assets to determine if a valuation allowance is required. Adjustments to the valuation allowance will increase or decrease the company’s income tax provision or benefit. The recognition and measurement of benefits related to the company’s tax positions requires significant judgment, as uncertainties often exist with respect to new laws, new interpretations of existing laws, and rulings by taxing authorities. Differences between actual results and the company’s assumptions or changes in the company’s assumptions in future periods are recorded in the period they become known.
Concentrations of Credit Risk 
Concentrations of Credit Risk — Financial instruments that potentially subject the company to significant concentrations of credit risk consist principally of cash and cash equivalents. The company maintains cash balances in several accounts with two banks, which at times are in excess of federally insured limits. As of December 31, 2014, the company’s cash equivalents were invested in money market mutual funds. The company’s investment policy does not allow investment in any debt securities rated less than “investment grade” by national ratings services. The company has not experienced any losses on its deposits of cash and cash equivalents.
Comprehensive Loss 
Comprehensive Loss — Comprehensive loss consists of our net loss and other comprehensive income related to the unrealized gain (loss), net of tax, on our marketable securities, which are classified as available-for-sale.
Fair Value Measurement 
Fair Value Measurements

The company follows ASC 820, “Fair Value Measurements and Disclosures,” (“ASC 820”) for the company’s financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and are re-measured and reported at fair value at least annually using a fair value hierarchy that is broken down into three levels. Level inputs are defined as follows:
Level 1 — quoted prices in active markets for identical assets or liabilities.
Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date.
Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date.

The company categorized its cash equivalents and marketable securities as Level 1 inputs. The valuations for Level 1 were determined based on a “market approach” using quoted prices in active markets for identical assets. Valuation of these assets does not require a significant degree of judgment. The company categorized its warrants potentially settleable in cash as Level 2 inputs. The warrants are measured at market value on a recurring basis and are being marked to market each quarter-end until they are completely settled. The warrants are valued using an appropriate pricing model, using assumptions consistent with our application of ASC 718. The contingent purchase price consideration is categorized as Level 3 inputs and is measured at its estimated fair value on a recurring basis and is adjusted at each quarter-end until it is completely settled. The contingent price consideration is valued based on the expected timing of milestones, the expected probability of success for each milestone and discount rates based on a corporate debt interest rate index publicly issued.
Net Loss Per Share 
Net Loss Per Share

The company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260 “Earnings per Share.” Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants.
Business Combinations (Tables)
Schedule of Purchase Price Consideration
The following table summarizes the purchase price consideration and allocation of purchase price:
 
 
Total Acquisition Date Fair Value
Purchase price consideration:
 
 
Cash and cash equivalents
 
$
3,056

Common stock
 
2,482

Liabilities assumed:
 
 
Future milestone payments
 
740

Credit memos for expiring channel inventory
 
1,995

Total consideration
 
$
8,273

 
 
 
Asset acquired:
 
 
Zuplenz rights
 
$
8,101

Goodwill
 
172

Fair value of assets acquired
 
$
8,273

Fair Value Measurements (Tables)
Contingent Purchase Price Consideration, Measured at Estimated Fair Value on Recurring Basis 
Description
December 31, 2014
 
Quoted Prices In    
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable 
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
19,477

 
$
19,477

 
$
—

 
$
—

Total assets measured and recorded at fair value
$
19,477

 
$
19,477

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Warrants potentially settleable in cash
$
5,383

 
$
—

 
$
5,383

 
$
—

Contingent purchase price consideration
6,651

 
—

 
—

 
6,651

Total liabilities measured and recorded at fair value
$
12,034

 
$
—

 
$
5,383

 
$
6,651


Description
December 31, 2013
 
Quoted Prices In    
Active Markets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable 
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents
$
42,349

 
$
42,349

 
$
—

 
$
—

Total assets measured and recorded at fair value
$
42,349

 
$
42,349

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Warrants potentially settleable in cash
$
48,965

 
$
—

 
$
48,965

 
$
—

Contingent purchase price consideration
6,821

 
—

 
—

 
6,821

Total liabilities measured and recorded at fair value
$
55,786

 
$
—

 
$
48,965

 
$
6,821

Reconciliation of Level 3 Liabilities 
A reconciliation of the beginning and ending Level 3 liabilities for the years ended December 31, 2014 and 2013 is as follows (in thousands):
 
 
Fair Value
Measurements
Using Significant
Unobservable
Inputs
(Level 3)
Balance, January 1, 2013
$
7,142

Milestone payment
(1,247
)
Change in the estimated fair value of the contingent purchase price consideration
926

Balance, December 31, 2013
6,821

Change in the estimated fair value of the contingent purchase price consideration
(170
)
Balance at December 31, 2014
$
6,651

Accrued Expenses and Other Current Liabilities (Tables)
Schedule of Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):

 
December 31,
 
2014
 
2013
Clinical development expense
$
6,967

 
$
3,109

Compensation and related benefits
1,040

 
1,015

Professional fees
821

 
647

Interest expense
57

 
70

Accrued expenses and other current liabilities
$
8,885

 
$
4,841

Long-term Debt (Tables)
Schedule of Future Principal Payments
As of December 31, 2014, future schedule principal payments to be made on long-term debt are as follows (in thousands):
For the year ending December 31, 2015
 
$
3,910

2016
 
4,254

Total future principal payments
 
8,164

Unamortized debt issuance costs (net of fair value of warrants issued)
 
238

Total debt
 
8,402

Less current portion
 
(3,910
)
Total long-term debt, net
 
$
4,492

Commitments and Contingencies (Tables)
Schedule of Contractual Obligations and Future Cash Payments
The company’s contractual obligations that will require future cash payments as of December 31, 2014 are as follows (in thousands):

 
Operating
Leases(1)
 
Non-Cancelable
Employment
Agreements(2)
 
Subtotal
 
Cancelable
License
Agreements(3)
 
Total
2015
$
74

 
$
828

 
$
902

 
$
350

 
$
1,252

2016
83

 
100

 
183

 
350

 
533

2017
82

 
—

 
82

 
350

 
432

2018
70

 
—

 
70

 
350

 
420

2019 and thereafter
—

 
—

 
—

 
6,815

 
6,815

Total
$
309

 
$
928

 
$
1,237

 
$
8,215

 
$
9,452


(1) 
Operating leases are primarily facility and equipment related obligations with third party vendors. Operating lease expenses during the years ended December 31, 2014, 2013, and 2012 were approximately $72,000, $77,000 and $139,000, respectively.
(2) 
Employment agreement obligations include management contracts, as well as scientific advisory board member compensation agreements. Certain agreements, which have been revised from time to time, provide for minimum salary levels, adjusted annually at the discretion of the Compensation Committee, as well as for minimum bonuses that are payable.
(3) 
License agreements generally relate to the company’s obligations with The Board of Regents, University of Texas and Henry M. Jackson Foundation for our oncology therapies. The company continually assesses the progress of its licensed technology and the progress of its research and development efforts as it relates to its licensed technology and may terminate with notice to the licensor at any time. In the event these licenses are terminated, no amounts will be due.
Stock Based Compensation (Tables)
Schedule of Components of Stock-based Compensation Expense 
The following table summarizes the components of stock-based compensation expense in the Consolidated Statements of Comprehensive Loss for the years ended December 31, 2014, 2013, and 2012 (in thousands):

 
2014
 
2013
 
2012
Research and development
$
484

 
$
754

 
$
580

General and administrative
4,903

 
2,150

 
1,179

Total stock-based compensation
$
5,387

 
$
2,904

 
$
1,759

Assumptions for Option Grants Issued 
The company uses the Black-Scholes option-pricing model and the following weighted-average assumptions to determine the fair value of all its stock options granted:
 
 
2014
 
2013
 
2012
Risk free interest rate
2.01
%
 
1.57
%
 
1.05
%
Volatility
79.37
%
 
77.98
%
 
75.76
%
Expected lives (years)
6.16

 
6.25

 
6.13

Expected dividend yield
0.00
%
 
0.00
%
 
0.00
%
Stock Option Activity 
The following table summarizes option activity of the company:
 
 
Total
Number of
Shares
(In Thousands)
 
Weighted
Average
Exercise
Price
Outstanding at December 31, 2013
13,159

 
$
2.73

Granted
1,375

 
2.50

Exercised
(3,608
)
 
1.31

Cancelled
(2,336
)
 
2.85

Outstanding at December 31, 2014
8,590

 
$
3.25

Options exercisable at December 31, 2014
5,544

 
$
3.56

Warrants (Tables)
Schedule of Warrant Activity 
The following is a summary of warrant activity for the years ended December 31, 2014 and 2013 (in thousands):
 
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
 
Consultant
and Oxford Warrants
 
Total
Outstanding, January 1, 2013
—

 
7,578

 
2,846

 
361

 
360

 
978

 
1,093

 
13,216

Granted
7,044

 
—

 
—

 
—

 
—

 
—

 
182

 
7,226

Exercised
(602
)
 
(2,661
)
 
(1,688
)
 
(185
)
 
(70
)
 
—

 
(196
)
 
(5,402
)
Expired
—

 
—

 
—

 
—

 
—

 
—

 
(190
)
 
(190
)
Outstanding, December 31, 2013
6,442

 
4,917

 
1,158

 
176

 
290

 
978

 
889

 
14,850

Granted
—

 
—

 
—

 
—

 
—

 
—

 
300

 
300

Exercised
(2,469
)
 
(1,886
)
 
(543
)
 
—

 
(265
)
 
(62
)
 
(469
)
 
(5,694
)
Expired
—

 
—

 
—

 
—

 
—

 
(916
)
 
—

 
(916
)
Outstanding, December 31, 2014
3,973

 
3,031

 
615

 
176

 
25

 
—

 
720

 
8,540

Expiration
September 2018
 
December 2017
 
April 2017
 
March 2016
 
March 2016
 
August 2014
 
Varies 2014-2020
 
 
Fair Value of Warrants is Estimated Using Black-Scholes Option Pricing Model 
The fair value of the warrants is estimated using an appropriate pricing model with the following inputs:
 
 
As of December 31, 2014
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
Strike price
$
2.50

 
$
1.90

 
$
0.65

 
$
0.65

 
$
2.15

 
$
4.50

Expected term (years)
3.72

 
2.98

 
2.31

 
1.18

 
1.24

 
0.00

Volatility %
75.60
%
 
76.85
%
 
78.24
%
 
77.38
%
 
77.12
%
 
—
%
Risk-free rate %
1.30
%
 
1.09
%
 
0.80
%
 
0.32
%
 
0.35
%
 
—
%
 
 
As of December 31, 2013
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
Strike price
$
2.50

 
$
1.90

 
$
0.65

 
$
0.65

 
$
2.15

 
$
4.50

Expected term (years)
4.72

 
3.98

 
3.31

 
2.18

 
2.24

 
0.59

Volatility %
71.97
%
 
71.38
%
 
71.71
%
 
73.45
%
 
73.36
%
 
66.85
%
Risk-free rate %
1.61
%
 
1.25
%
 
0.93
%
 
0.45
%
 
0.47
%
 
0.11
%
Changes in Fair Value of Warrant Liability 
The changes in fair value of the warrant liability for the years ended December 31, 2014 and 2013 were as follows (in thousands):
 
 
September
2013
Warrants
 
December
2012
Warrants
 
April 2011
Warrants
 
March
2011
Warrants
 
March
2010
Warrants
 
August
2009
Warrants
 
Total
Warrant liability, January 1, 2013
$
—

 
$
6,954

 
$
3,310

 
$
378

 
$
187

 
$
135

 
$
10,964

Fair value of warrants granted
8,238

 
—

 
—

 
—

 
—

 
—

 
8,238

Fair value of warrants exercised
(1,931
)
 
(8,482
)
 
(3,455
)
 
(260
)
 
(121
)
 
—

 
(14,249
)
Change in fair value of warrants
16,643

 
19,588

 
5,214

 
645

 
879

 
1,043

 
44,012

Warrant liability, December 31, 2013
22,950

 
18,060

 
5,069

 
763

 
945

 
1,178

 
48,965

Fair value of warrants granted
—

 
—

 
—

 
—

 
—

 
—

 
—

Fair value of warrants exercised
(12,713
)
 
(10,086
)
 
(2,906
)
 
—

 
(1,159
)
 
(162
)
 
(27,026
)
Change in fair value of warrants
(7,677
)
 
(5,947
)
 
(1,538
)
 
(600
)
 
222

 
(1,016
)
 
(16,556
)
Warrant liability, December 31, 2014
$
2,560

 
$
2,027

 
$
625

 
$
163

 
$
8

 
$
—

 
$
5,383

Other Income (Expense) (Tables)
Schedule of Other Income (Expense)
Other Income (Expense)

Other income (expense) is summarized as follows (in thousands):
 
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
Realized gain on sale of marketable securities
 
$
—

 
$
3,911

 
$
—

Change in fair value of the contingent purchase price liability
 
170

 
(926
)
 
(2,370
)
Miscellaneous other income
 
—

 
37

 
—

Total other income (expense)
 
$
170

 
$
3,022

 
$
(2,370
)
Net Loss Per Share (Tables)
Common Shares Excluded from Net Loss
The following table sets forth the potentially dilutive common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive (in thousands):
 
 
December 31,
 
2014
 
2013
Warrants to purchase common stock
8,540

 
14,850

Options to purchase common stock
8,590

 
13,159

Total
17,130

 
28,009

Income Taxes (Tables)
Components of Federal and State Income Tax Expense (Benefit) 
The components of federal and state income tax expense (benefit) are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
 
2012
Current
 
 
 
 
 
 
Federal
 
$
—

 
$
—

 
$
—

State
 
—

 
—

 
—

Total current
 
—

 
—

 
—

Deferred expense (benefit)
 
 
 
 
 
 
Federal
 
—

 
894

 
(894
)
State
 
—

 
158

 
(158
)
Total deferred
 
—

 
1,052

 
(1,052
)
Total income tax expense (benefit)
 
$
—

 
$
1,052

 
$
(1,052
)
Components of Net Deferred Tax Assets 
The components of net deferred tax assets are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
Net operating loss carryforwards
 
$
53,950

 
$
33,539

Tax credit carryforwards
 
3,590

 
3,549

Stock based compensation
 
4,676

 
8,322

Other
 
190

 
12

Licensing deduction deferral
 
8,919

 
8,682

Gross deferred tax assets
 
71,325

 
54,104

Valuation allowance
 
(71,325
)
 
(54,104
)
Net deferred tax asset
 
$
—

 
$
—

Components of Net Deferred Tax Liabilities 
The components of net deferred tax liabilities are as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
In-process research and development not subject to future amortization for tax purposes
 
$
5,053

 
$
5,053

Gross deferred tax liability
 
$
5,053

 
$
5,053

Schedule of Provision Computed by Applying Federal Statutory Rate 
The provision for income taxes differs from the provision computed by applying the federal statutory rate to net loss before income taxes as follows (in thousands):
 
 
 
As of December 31,
 
 
2014
 
2013
 
2012
Expected federal income tax benefit
 
$
(12,447
)
 
$
(25,713
)
 
$
(11,688
)
State income taxes after credits
 
(1,283
)
 
(3,676
)
 
(1,067
)
Unrealized gain on marketable securities
 
—

 
1,052

 
(1,052
)
Changes in warrant value
 
(6,503
)
 
17,283

 
3,664

Stock compensation
 
3,996

 
813

 
152

Effect of change in valuation allowance
 
17,275

 
11,408

 
8,939

Income tax credits
 
(42
)
 
(240
)
 
—

Other
 
(996
)
 
125

 
—

 
 
$
—

 
$
1,052

 
$
(1,052
)
Significant Customers and Concentration of Credit Risk (Tables)
Schedules of Concentration of Risk, by Risk Factor
The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:
 
 
December 31,
 
 
2014
 
2013
Customer A
 
24
%
 
25
%
Customer B
 
31
%
 
1
%
Customer C
 
16
%
 
11
%
Customer D
 
21
%
 
54
%
The percentage of product sales to our customer that represented 10% or more of revenue in at least one of the periods presented, is as follows:
 
 
Year ended December 31,
 
 
2014
 
2013
Customer A
 
43
%
 
25
%
Customer B
 
18
%
 
6
%
Customer C
 
14
%
 
26
%
Customer D
 
11
%
 
34
%
Selected Quarterly Financial Data (Unaudited) (Tables)
Schedule of Quarterly Financial Data (Unaudited)
The following amounts are in thousands, except per share amounts:

 
 
1st Quarter
 
2nd Quarter
 
3rd Quarter
 
4th Quarter
2014
 
 
 
 
 
 
 
 
Net revenue
 
$
2,173

 
$
2,331

 
$
1,620

 
$
3,195

Gross profit on net revenue (1)
 
$
1,751

 
$
1,886

 
$
1,303

 
$
2,536

Net loss
 
$
(2,536
)
 
$
(19,941
)
 
$
(6,173
)
 
$
(7,506
)
Net loss per share
 
$
(0.02
)
 
$
(0.17
)
 
$
(0.05
)
 
$
(0.06
)
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
Net revenue
 
$
—

 
$
—

 
$
1,170

 
$
1,317

Gross profit on net revenue (1)
 
$
—

 
$
—

 
$
869

 
$
967

Net loss
 
$
(9,293
)
 
$
(9,597
)
 
$
(9,287
)
 
$
(48,501
)
Net loss per share
 
$
(0.11
)
 
$
(0.11
)
 
$
(0.11
)
 
$
(0.46
)
Discontinued Operations, Assets Held for Sale (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures
The following table presents a reconciliation of the carrying amounts of assets and liabilities of the commercial operations to assets held for sale in the balance sheets (in thousands):
 
2014
 
2013
Carrying amounts of assets included as part of discontinued operations:
Accounts receivable
$
1,535

 
$
3,683

Inventories
655

 
386

Prepaid expenses and other current assets
1,747

 
1,269

Equipment and furnishings, net
270

 
351

Abstral rights, net
14,533

 
14,979

Zuplenz rights
8,101

 
—

Goodwill
172

 
—

Total current assets held for sale
27,013

 
20,668

 
 
 
 
Carrying amounts of liabilities included as part of discontinued operations:
Accounts payable
$
385

 
$
753

Accrued expenses and other current liabilities
6,784

 
3,858

Total current liabilities held for sale
$
7,169

 
$
4,611


The following table represents the components attributable to the commercial business in 2014 and 2013 and the spin-off of RXi in 2012 that are presented in the consolidated statements of comprehensive loss as discontinued operations (in thousands):
 
2014
 
2013
 
2012
Net revenue
$
9,319

 
$
2,487

 
$
—

Cost of revenue
(1,403
)
 
(520
)
 
—

Amortization of certain acquired intangible assets
(440
)
 
(131
)
 
—

Research and development
(680
)
 
(651
)
 
(1,325
)
Selling, general, and administrative
(15,118
)
 
(6,536
)
 
(293
)
Non-operating income (expense)
—

 
—

 
(26
)
Loss from discontinued operations
$
(8,322
)
 
$
(5,351
)
 
$
(1,644
)

The following table presents significant operating non-cash items and capital expenditures related to discontinued operations (in thousands):
 
2014
 
2013
Depreciation and amortization
$
527

 
$
166

Stock-based compensation
$
721

 
$
223

Purchases of property and equipment
$
—

 
$
(385
)
Cash paid for acquisition of Abstral rights
$
—

 
$
(15,143
)
Cash paid for acquisition of Zuplenz rights
$
(3,056
)
 
$
—

Business and Basis of Presentation (Additional Information) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Schedule Of Summary Of Significant Accounting Policies [Line Items]
 
Highly-liquid debt instruments maturity days
90 days 
Amortization period of license and distribution rights
10 years 
Interest bearing accounts
$ 23,400 
Minimum [Member] |
Equipment and Furnishings [Member]
 
Schedule Of Summary Of Significant Accounting Policies [Line Items]
 
Estimated useful lives
3 years 
Maximum [Member] |
Equipment and Furnishings [Member]
 
Schedule Of Summary Of Significant Accounting Policies [Line Items]
 
Estimated useful lives
5 years 
Business Combinations (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Jul. 17, 2014
Zuplenz [Member]
Jul. 17, 2014
Zuplenz [Member]
Jul. 17, 2014
Zuplenz [Member]
Common Stock [Member]
Business Acquisition [Line Items]
 
 
 
 
 
Cash and cash equivalents
 
 
 
$ 3,056 
 
Common stock
 
 
 
 
2,482 
Future milestone payments
 
 
740 
 
 
Credit memos for expiring channel inventory
 
 
1,995 
 
 
Total consideration
 
 
8,273 
 
 
Zuplenz rights
 
 
 
8,101 
 
Goodwill
5,897 
5,898 
 
172 
 
Fair value of assets acquired
 
 
$ 8,273 
 
 
RXi Spin-off (Additional Information) (Detail) (USD $)
12 Months Ended
Dec. 31, 2014
Apr. 30, 2012
Sep. 24, 2011
Related Party Transaction [Line Items]
 
 
 
Proceeds from sale of shares after spin-off
$ 3,911,000 
 
 
RXi [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Cash contribution in capital
 
 
1,500,000 
Proceeds from technology revenue
45,000,000 
 
 
Proceeds from technology revenue under condition one
15,000,000 
 
 
Proceeds from technology revenue under condition two
30,000,000 
 
 
Minimum estimated sales
500,000,000 
 
 
Estimated sales
1,000,000,000 
 
 
Number of shares distributed to surrenders under spin-off
 
66,959,894 
 
Number of shares retained by company under spin-off
 
33,476,595 
 
Lock up period of shares under spin-off
1 year 
 
 
Expiration date of shares under spin-off
Apr. 27, 2013 
 
 
Number of shares sold by company after spin-off
1,115,887 
 
 
Retained price per shares under spin-off
$ 2.40 
 
 
Retained value of shares under spin-off
$ 2,678,000 
 
 
Fair Value Measurements (Contingent Purchase Price Consideration, Measured at Estimated Fair Value on Recurring Basis) (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Assets:
 
 
 
Cash equivalents
$ 23,400 
 
 
Liabilities:
 
 
 
Warrants potentially settleable in cash
5,383 
48,965 
 
Unobservable Inputs (Level 3) [Member]
 
 
 
Liabilities:
 
 
 
Contingent purchase price consideration
6,651 
6,821 
7,142 
Fair Value, Measurements, Recurring [Member]
 
 
 
Assets:
 
 
 
Cash equivalents
19,477 
42,349 
 
Total assets
19,477 
42,349 
 
Liabilities:
 
 
 
Warrants potentially settleable in cash
5,383 
48,965 
 
Contingent purchase price consideration
6,651 
6,821 
 
Total liabilities
12,034 
55,786 
 
Fair Value, Measurements, Recurring [Member] |
Quoted Prices in Active Markets (Level 1) [Member]
 
 
 
Assets:
 
 
 
Cash equivalents
19,477 
42,349 
 
Total assets
19,477 
42,349 
 
Liabilities:
 
 
 
Warrants potentially settleable in cash
0 
0 
 
Contingent purchase price consideration
0 
0 
 
Total liabilities
0 
0 
 
Fair Value, Measurements, Recurring [Member] |
Significant Other Observable Inputs (Level 2) [Member]
 
 
 
Assets:
 
 
 
Cash equivalents
0 
0 
 
Total assets
0 
0 
 
Liabilities:
 
 
 
Warrants potentially settleable in cash
5,383 
48,965 
 
Contingent purchase price consideration
0 
0 
 
Total liabilities
5,383 
48,965 
 
Fair Value, Measurements, Recurring [Member] |
Unobservable Inputs (Level 3) [Member]
 
 
 
Assets:
 
 
 
Cash equivalents
0 
0 
 
Total assets
0 
0 
 
Liabilities:
 
 
 
Warrants potentially settleable in cash
0 
0 
 
Contingent purchase price consideration
6,651 
6,821 
 
Total liabilities
$ 6,651 
$ 6,821 
 
Fair Value Measurements (Reconciliation of Level 3 Liabilities) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
Change in the estimated fair value of the contingent purchase price consideration
$ 170 
$ (926)
$ (2,370)
Unobservable Inputs (Level 3) [Member]
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
Beginning Balance Liabilities
6,821 
7,142 
 
MIlestone Payment
 
(1,247)
 
Change in the estimated fair value of the contingent purchase price consideration
170 
(926)
 
Ending Balance Liabilities
$ 6,651 
$ 6,821 
 
Accrued Expenses and Other Current Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Payables and Accruals [Abstract]
 
 
Clinical development expense
$ 6,967 
$ 3,109 
Compensation and related benefits
1,040 
1,015 
Professional fees
821 
647 
Interest expense
57 
70 
Accrued expenses and other current liabilities
$ 8,885 
$ 4,841 
Long-term Debt (Additional Information) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
0 Months Ended
May 8, 2013
Sep. 18, 2013
Debt Instrument [Line Items]
 
 
Loan, amount
$ 15 
 
Term for interest only payments
12 months 
 
Interest payments at the fixed coupon rate
8.45% 
 
Term for principal and interest payments
30 months 
 
Cash facility fee percentage
1.00% 
 
Cash final payment percentage
5.50% 
 
Warrant term
7 years 
 
Number of shares availabe from warrants
 
0.35 
Exercise price (usd per share)
$ 2.47 
$ 2.50 
Duration of average market price used for warrant exercise price
20 days 
 
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Number of shares availabe from warrants
182,186 
 
First Tranche [Member]
 
 
Debt Instrument [Line Items]
 
 
Loan, amount
$ 10 
 
Long-term Debt (Schedule of Future Principal Payments) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Debt Disclosure [Abstract]
 
 
2015
$ 3,910 
 
2016
4,254 
 
Total future principal payments
8,164 
 
Unamortized debt issuance costs (net of fair value of warrants issued)
238 
 
Total debt
8,402 
 
Long-term Debt, Current Maturities
(3,910)
(2,149)
Total long-term debt, net
$ 4,492 
$ 7,743 
Commitments and Contingencies (Schedule of Contractual Obligations and Future Cash Payments) (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Loss Contingencies [Line Items]
 
Operating Leases - 2015
$ 74 
Operating Leases - 2016
83 
Operating Leases - 2017
82 
Operating Leases - 2018
70 
Operating Leases -2019
0 
Total
309 
2015
1,252 
2016
533 
2017
432 
2018
420 
2019
6,815 
Total
9,452 
Non-Cancelable Employment Agreements [Member]
 
Loss Contingencies [Line Items]
 
2015
828 
2016
100 
2017
0 
2018
0 
2019
0 
Total
928 
Subtotal [Member]
 
Loss Contingencies [Line Items]
 
2015
902 
2016
183 
2017
82 
2018
70 
2019
0 
Total
1,237 
Cancelable License Agreements [Member]
 
Loss Contingencies [Line Items]
 
2015
350 
2016
350 
2017
350 
2018
350 
2019
6,815 
Total
$ 8,215 
Commitments and Contingencies (Schedule of Contractual Obligations and Future Cash Payments) (Footnotes) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Operating lease expenses
$ 72 
$ 77 
$ 139 
Stockholders' Equity (Additional Information) (Detail) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended
Nov. 18, 2014
Sep. 23, 2013
Sep. 18, 2013
Dec. 18, 2012
Apr. 13, 2012
Sep. 30, 2013
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
May 8, 2013
Sep. 18, 2013
Common Stock [Member]
Sep. 18, 2013
Warrants to purchase common stock [Member]
Dec. 18, 2012
Warrants to purchase common stock [Member]
Nov. 18, 2014
Lincoln Park Capital, LLC [Member]
Dec. 31, 2014
Lincoln Park Capital, LLC [Member]
Nov. 18, 2014
Lincoln Park Capital, LLC [Member]
Nov. 18, 2014
Lincoln Park Capital, LLC [Member]
Common Stock [Member]
Dec. 31, 2014
MLV & Co. LLC and Maxim Group LLC [Member]
Jan. 21, 2012
Kwang Dong Pharmaceutical Company [Member]
Dec. 31, 2014
Kwang Dong Pharmaceutical Company [Member]
Jan. 21, 2012
Kwang Dong Pharmaceutical Company [Member]
Common Stock [Member]
Dec. 31, 2014
Kwang Dong Pharmaceutical Company [Member]
Common Stock [Member]
Apr. 10, 2015
Subsequent Event [Member]
Mar. 18, 2015
Subsequent Event [Member]
Apr. 10, 2015
Subsequent Event [Member]
Sep. 30, 2015
Subsequent Event [Member]
Mar. 18, 2015
Subsequent Event [Member]
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, shares authorized
 
 
 
 
 
 
5,000,000 
5,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, par value (usd per share)
 
 
 
 
 
 
$ 0.0001 
$ 0.0001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, shares authorized
 
 
 
 
 
 
200,000,000 
125,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
275,000,000 
3,653,846 
Common stock, par value (usd per share)
 
 
 
 
 
 
$ 0.0001 
$ 0.0001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of common stock, shares
 
 
17,500,000 
 
9,751,000 
 
1,400,000.0 
 
 
 
 
 
 
 
4,600,000.0 
 
631,221 
 
 
 
579,710 
492,988 
 
24,358,974 
 
 
 
At Market Issuance Sales Agreements, Percent of Gross Proceeds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
 
 
 
 
 
 
At Market Issuance Sales Agreements, Maximum Gross Proceeds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20,000,000 
 
 
 
 
 
 
 
 
 
Share price (usd per share)
 
 
$ 2.00 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2.00 
 
 
 
 
 
 
 
 
 
 
$ 1.56 
Proceeds from issuance of shares
 
5,200,000 
35,000,000 
24,300,000 
14,600,000 
 
2,300,000 
 
 
 
 
 
 
4,900,000 
8,500,000 
 
50,000,000 
 
 
 
 
 
 
38,000,000 
 
 
 
Purchase Agreement Term
36 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Issued During Period, Shares, Purchase of Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares per unit
 
 
1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.50 
Number of shares availabe from warrants
 
 
0.35 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,826,923 
Exercise price (usd per share)
 
 
$ 2.50 
 
 
 
 
 
 
$ 2.47 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2.08 
Shares issued, overallotment option
 
 
 
 
 
 
 
 
 
 
2,625,000 
918,750 
 
 
 
 
 
 
 
 
 
 
3,653,846 
1,826,923 
 
 
 
Proceeds from issuance of shares, net underwriting discounts, commissions and offering expenses
 
 
 
22,500,000 
13,500,000 
37,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,400,000 
 
40,800,000 
 
 
Warrant To Purchase Share Of Common Stock
 
 
 
0.50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class Of Warrant Or Right Exercise Price Of Warrants
 
 
 
$ 1.90 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants Issued Under Underwritten Public Offering
 
 
 
 
 
 
 
 
 
 
 
 
15,156,250 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class Of Warrant Or Right Exercise Price Of Warrants Under Underwritten Public Offering
 
 
 
$ 1.60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of common stock
 
 
 
 
 
 
$ 10,705,000 
$ 37,539,000 
$ 36,378,000 
 
 
 
 
 
 
 
 
 
$ 400,000 
$ 1,247,000 
 
 
 
 
 
 
 
Stock Based Compensation (Components of Stock-based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Research and Development Expense [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation
$ 484 
$ 754 
$ 580 
Selling, General and Administrative Expenses [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation
4,903 
2,150 
1,179 
Continuing Operations [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation
$ 5,387 
$ 2,904 
$ 1,759 
Warrants (Schedule of Warrant Activity) (Detail)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
14,850 
13,216 
Granted
300 
7,226 
Exercised
(5,694)
(5,402)
Expired
(916)
(190)
Warrants outstanding , Ending balance
8,540 
14,850 
September 2013 Warrant [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
6,442 
0 
Granted
0 
7,044 
Exercised
(2,469)
(602)
Expired
0 
0 
Warrants outstanding , Ending balance
3,973 
6,442 
Expiration
Sep. 18, 2018 
 
December 2012 Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
4,917 
7,578 
Granted
0 
0 
Exercised
(1,886)
(2,661)
Expired
0 
0 
Warrants outstanding , Ending balance
3,031 
4,917 
Expiration
Dec. 31, 2017 
 
April 2011 Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
1,158 
2,846 
Granted
0 
0 
Exercised
(543)
(1,688)
Expired
0 
0 
Warrants outstanding , Ending balance
615 
1,158 
Expiration
Apr. 30, 2017 
 
March 2011 Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
176 
361 
Granted
0 
0 
Exercised
0 
(185)
Expired
0 
0 
Warrants outstanding , Ending balance
176 
176 
Expiration
Mar. 31, 2016 
 
March 2010 Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
290 
360 
Granted
0 
0 
Exercised
(265)
(70)
Expired
0 
0 
Warrants outstanding , Ending balance
25 
290 
Expiration
Mar. 31, 2016 
 
August 2009 Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
978 
978 
Granted
0 
0 
Exercised
(62)
0 
Expired
(916)
0 
Warrants outstanding , Ending balance
0 
978 
Expiration
Aug. 31, 2014 
 
Consultant Warrants [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Warrants outstanding , Beginning balance
889 
1,093 
Granted
300 
182 
Exercised
(469)
(196)
Expired
0 
(190)
Warrants outstanding , Ending balance
720 
889 
Consultant Warrants [Member] |
Minimum [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Expiration
Dec. 31, 2014 
 
Consultant Warrants [Member] |
Maximum [Member]
 
 
Class of Warrant or Right, Outstanding [Roll Forward]
 
 
Expiration
Dec. 31, 2020 
 
Stock Based Compensation (Assumptions for Option Grants Issued) (Detail)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Risk free interest rate
2.01% 
1.57% 
1.05% 
Volatility
79.37% 
77.98% 
75.76% 
Expected lives (years)
6 years 1 month 28 days 
6 years 3 months 
6 years 1 month 17 days 
Expected dividend yield
0.00% 
0.00% 
0.00% 
Warrants (Fair Value of Warrants is Estimated Using Black-Scholes Option Pricing Model) (Detail)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
September 2013 Warrant [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 2.50 
$ 2.50 
Expected term (years)
3 years 8 months 19 days 
4 years 8 months 19 days 
Volatility %
75.60% 
71.97% 
Risk-free rate %
1.30% 
1.61% 
December 2012 Warrants [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 1.90 
$ 1.90 
Expected term (years)
2 years 11 months 23 days 
3 years 11 months 23 days 
Volatility %
76.85% 
71.38% 
Risk-free rate %
1.09% 
1.25% 
April 2011 Warrants [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 0.65 
$ 0.65 
Expected term (years)
2 years 3 months 22 days 
3 years 3 months 22 days 
Volatility %
78.24% 
71.71% 
Risk-free rate %
0.80% 
0.93% 
March 2011 Warrants [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 0.65 
$ 0.65 
Expected term (years)
1 year 2 months 5 days 
2 years 2 months 5 days 
Volatility %
77.38% 
73.45% 
Risk-free rate %
0.32% 
0.45% 
March 2010 Warrants [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 2.15 
$ 2.15 
Expected term (years)
1 year 2 months 27 days 
2 years 2 months 27 days 
Volatility %
77.12% 
73.36% 
Risk-free rate %
0.35% 
0.47% 
August 2009 Warrants [Member]
 
 
Class of Warrant or Right [Line Items]
 
 
Strike price
$ 4.50 
$ 4.50 
Expected term (years)
0 years 
7 months 2 days 
Volatility %
0.00% 
66.85% 
Risk-free rate %
0.00% 
0.11% 
Stock Based Compensation (Additional Information) (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Weighted average exercise price, granted
$ 1.74 
$ 1.98 
 
Averages contractual term
10 years 
 
 
Estimated annualized forfeiture rate for options granted to employees
15.00% 
 
 
Estimated annualized forfeiture rate for options granted to senior management
8.00% 
 
 
Unrecognized compensation cost
$ 11,367 
 
 
Operating expenses weighted average period
2 years 9 months 26 days 
 
 
Shares subject to outstanding common stock options granted
1,375,000 
 
 
Weighted average contractual term for options outstanding
7 years 4 months 6 days 
8 years 1 month 2 days 
7 years 10 months 13 days 
Weighted average contractual term for options exercisable
6 years 6 months 4 days 
6 years 9 months 4 days 
7 years 4 months 17 days 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value
610 
30,537 
2,288 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value
509 
16,376 
1,394 
Aggregate Intrinsic Value Of Stock Options Exercisable
$ 13,429 
$ 890 
$ 18 
Issuance of common stock in connection with employee stock purchase plan, shares
358,141 
 
 
Minimum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Average vesting term
4 years 
 
 
Maximum [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Average vesting term
6 years 
 
 
2007 Incentive Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Shares of common stock reserved for issuance
16,500,000 
 
 
Shares subject to outstanding common stock options granted
8,590,000 
 
 
Shares available for future grants
2,888,000 
 
 
Vesting periods of options granted
4 years 
 
 
Options expire from date of grant
10 years 
 
 
Employee Stock Purchase Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Shares of common stock reserved for issuance
641,859 
 
 
Share Based Compensation Arrangement By Share Based Payment Award Percentage Earning Of Participants
 
15.00% 
 
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent
 
85.00% 
 
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized
250,000 
 
 
Percentage Increase In Number Of Shares Available For Future Issuance Under Stock Based Awards
1.00% 
 
 
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Issued
1,000,000 
 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Equity instrument granted
0 
0 
 
Warrants (Changes in Fair Value of Warrant Liability) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Sep. 30, 2013
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
$ 48,965 
$ 10,964 
$ 5,383 
Fair Value of Warrants Granted
0 
8,238 
 
Fair value of warrants exercised
(27,026)
(14,249)
 
Change in fair value of warrants
(16,556)
44,012 
 
Warrant liability, Ending balance
 
48,965 
5,383 
September 2013 Warrant [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
22,950 
0 
2,560 
Fair Value of Warrants Granted
0 
8,238 
 
Fair value of warrants exercised
(12,713)
(1,931)
 
Change in fair value of warrants
(7,677)
16,643 
 
Warrant liability, Ending balance
 
22,950 
2,560 
December 2012 Warrants [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
18,060 
6,954 
2,027 
Fair Value of Warrants Granted
 
0 
 
Fair value of warrants exercised
(10,086)
(8,482)
 
Change in fair value of warrants
(5,947)
19,588 
 
Warrant liability, Ending balance
 
18,060 
2,027 
April 2011 Warrants [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
5,069 
3,310 
625 
Fair Value of Warrants Granted
 
0 
 
Fair value of warrants exercised
(2,906)
(3,455)
 
Change in fair value of warrants
(1,538)
5,214 
 
Warrant liability, Ending balance
 
5,069 
625 
March 2011 Warrants [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
763 
378 
163 
Fair Value of Warrants Granted
 
0 
 
Fair value of warrants exercised
0 
(260)
 
Change in fair value of warrants
(600)
645 
 
Warrant liability, Ending balance
 
763 
163 
March 2010 Warrants [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
945 
187 
8 
Fair Value of Warrants Granted
 
0 
 
Fair value of warrants exercised
(1,159)
(121)
 
Change in fair value of warrants
222 
879 
 
Warrant liability, Ending balance
 
945 
8 
August 2009 Warrants [Member]
 
 
 
Class of Warrant or Right, Fair Value [Roll Forward]
 
 
 
Warrant liability, Beginning balance
1,178 
135 
0 
Fair Value of Warrants Granted
 
0 
 
Fair value of warrants exercised
(162)
0 
 
Change in fair value of warrants
(1,016)
1,043 
 
Warrant liability, Ending balance
 
$ 1,178 
$ 0 
Stock Based Compensation (Stock Option Activity) (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Total Number of Shares, outstanding Beginning Balance
13,159 
 
Stock options activity, Total Number of Shares, Granted
1,375 
 
Stock options activity, Total Number of Shares, Exercised
(3,608)
 
Stock options activity, Total Number of Shares, Cancelled
(2,336)
 
Total Number of Shares, outstanding Ending Balance
8,590 
 
Total Number of Shares, exercisable
5,544 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Stock options activity, Weighted Average Exercise Price, Beginning balance
$ 2.73 
 
Stock options activity, Weighted Average Exercise Price, Granted
$ 2.50 
 
Stock options activity, Weighted Average Exercise Price, Exercised
$ 1.31 
 
Stock options activity, Weighted Average Exercise Price, Cancelled
$ 2.85 
 
Stock options activity, Weighted Average Exercise Price, Ending balance
$ 3.25 
 
Stock options activity, Weighted Average Exercise Price, exercisable
$ 3.56 
 
Stock options activity, Aggregate Intrinsic Value, Beginning balance
$ 30,537 
$ 2,288 
Stock options activity, Aggregate Intrinsic Value, Ending balance
$ 610 
$ 2,288 
Warrants (Warrants Classified as Equity) (Details) (USD $)
0 Months Ended
May 8, 2013
Sep. 18, 2013
Warrants and Rights Note Disclosure [Abstract]
 
 
Warrants Granted, Number of Shares
182,186 
 
Exercise price (usd per share)
$ 2.47 
$ 2.50 
Number of Days Averaged for Exercise Price
20 days 
 
Fair Value Assumptions, Expected Volatility Rate
75.34% 
 
Fair Value Assumptions, Expected Term
7 years 
 
Fair Value Assumptions, Risk Free Interest Rate
1.20% 
 
Fair Value Assumptions, Expected Dividend Rate
0.00% 
 
Fair Value of Warrants Granted, per Share
$ 1.93 
 
Other Income (Expense) (Schedule of Other Income (Expense)) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Other Income and Expenses [Abstract]
 
 
 
Realized gain on sale of marketable securities
$ 0 
$ 3,911 
$ 0 
Change in fair value of the contingent purchase price liability
170 
(926)
(2,370)
Miscellaneous other income
0 
37 
0 
Total other income (expense)
$ 170 
$ 3,022 
$ (2,370)
Net Loss Per Share (Common Shares Excluded from Net Loss) (Detail)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Shares of common stock issuable upon the exercise which were excluded from the computation of diluted earnings per share
17,130 
28,009 
Warrants to purchase common stock [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Shares of common stock issuable upon the exercise which were excluded from the computation of diluted earnings per share
8,540 
14,850 
Options to purchase common stock [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Shares of common stock issuable upon the exercise which were excluded from the computation of diluted earnings per share
8,590 
13,159 
Income Taxes (Components of Federal and State Income Tax Expense (Benefit)) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Current
 
 
 
Federal
$ 0 
$ 0 
$ 0 
State
0 
0 
0 
Total current
0 
0 
0 
Deferred
 
 
 
Federal
0 
894 
(894)
State
0 
158 
(158)
Total deferred
0 
1,052 
(1,052)
Total income tax expense (benefit)
$ 0 
$ 1,052 
$ (1,052)
Income Taxes (Components of Net Deferred Tax Assets) (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
Net operating loss carryforwards
$ 53,950 
$ 33,539 
Tax credit carryforwards
3,590 
3,549 
Stock based compensation
4,676 
8,322 
Other
190 
12 
Licensing deduction deferral
8,919 
8,682 
Gross deferred tax assets
71,325 
54,104 
Valuation allowance
(71,325)
(54,104)
Net deferred tax asset
$ 0 
$ 0 
Income Taxes (Components of Net Deferred Tax Liabilities) (Detail) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
In-process research and development not subject to future amortization for tax purposes
$ 5,053 
$ 5,053 
Gross deferred tax liability
$ 5,053 
$ 5,053 
Income Taxes (Schedule of Provision Computed by Applying Federal Statutory Rate) (Detail) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Tax Disclosure [Abstract]
 
 
 
Expected federal income tax benefit
$ (12,447)
$ (25,713)
$ (11,688)
State income taxes after credits
(1,283)
(3,676)
(1,067)
Unrealized gain on marketable securities
0 
1,052 
(1,052)
Changes in warrant value
(6,503)
17,283 
3,664 
Stock compensation
3,996 
813 
152 
Effect of change in valuation allowance
17,275 
11,408 
8,939 
Income tax credits
(42)
(240)
0 
Other
(996)
125 
0 
Total income tax expense (benefit)
$ 0 
$ 1,052 
$ (1,052)
Income Taxes (Additional Information) (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Tax Credit Carryforward [Line Items]
 
 
Federal operating loss carryforwards
$ 144.0 
 
State operating loss carryforwards
145.9 
 
Operating loss carryforwards, exercise of stock options
8.7 
 
Decrease in deferred tax assets
(3.4)
 
Deferred income tax valuation
 
100.00% 
Increase in valuation allowance
17.2 
12.5 
Domestic Tax Authority [Member]
 
 
Tax Credit Carryforward [Line Items]
 
 
Research and development tax credit carryforwards
2.3 
 
State and Local Jurisdiction [Member]
 
 
Tax Credit Carryforward [Line Items]
 
 
Research and development tax credit carryforwards
$ 2.0 
 
License Agreements License Agreements (Additional Information) (Detail) (USD $)
1 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended
Mar. 30, 2013
Dec. 31, 2014
Jul. 17, 2014
Zuplenz [Member]
milestone_payment
Jul. 17, 2014
Zuplenz [Member]
Jul. 17, 2014
Zuplenz [Member]
Minimum [Member]
Jul. 17, 2014
Zuplenz [Member]
Maximum [Member]
Mar. 18, 2013
Orexo [Member]
milestone_payment
Dec. 31, 2014
Orexo [Member]
Mar. 31, 2013
Orexo [Member]
Dec. 31, 2014
M D Anderson Cancer Center [Member]
License And Collaboration Agreements [Line Items]
 
 
 
 
 
 
 
 
 
 
Annual maintenance fee
 
 
 
 
 
 
 
 
 
$ 200,000 
Milestone payment
 
5,000,000 
 
16,500,000 
 
 
 
 
 
200,000 
Cash paid for acquisition of Abstral rights
10,000,000 
 
 
 
 
 
 
 
 
 
Remaining cash held of Abstral rights
 
 
 
 
 
 
 
 
5,000,000 
 
Number of one-time future milestone payments
 
 
6 
 
 
 
3 
 
 
 
Estimated year of licensed patents expiration
 
 
 
 
 
 
 
2019 
 
 
Phase one milestone payment
 
500,000 
 
 
 
 
 
 
 
 
Phase two milestone payment
 
250,000 
 
 
 
 
 
 
 
 
Phase two milestone payment period
 
30 days 
 
 
 
 
 
 
 
 
Net sales target
 
 
 
 
$ 20,000,000 
$ 100,000,000 
 
 
 
 
Significant Customers and Concentration of Credit Risk (Details)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Concentration Risk [Line Items]
 
 
Number of commercial products
1 
 
Number of dosing strengths
6 
 
Customer Concentration Risk [Member] |
Sales Revenue, Product Line [Member] |
Customer A [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
43.00% 
25.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Product Line [Member] |
Customer B [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
18.00% 
6.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Product Line [Member] |
Customer C [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
14.00% 
26.00% 
Customer Concentration Risk [Member] |
Sales Revenue, Product Line [Member] |
Customer D [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
11.00% 
34.00% 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer A [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
24.00% 
25.00% 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer B [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
31.00% 
1.00% 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer C [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
16.00% 
11.00% 
Customer Concentration Risk [Member] |
Accounts Receivable [Member] |
Customer D [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration risk percentage
21.00% 
54.00% 
Related Party Transactions (Details) (Troy Gould Pc [Member], USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Related Party Transaction [Line Items]
 
 
 
Due to related party
$ 97,000 
$ 177,000 
 
Professional Fees [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Related party expenses
$ 553,000 
$ 577,000 
$ 507,000 
Employee Benefit Plan (Details) (USD $)
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract]
 
 
 
Employer contribution
$ 85,000 
$ 35,000 
$ 0 
Selected Quarterly Financial Data (Unaudited) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Mar. 31, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 3,195 
$ 1,620 
$ 2,331 
$ 2,173 
$ 1,317 
$ 1,170 
$ 0 
$ 0 
 
 
 
Gross profit on net revenue
2,536 
1,303 
1,886 
1,751 
967 
869 
0 
0 
 
 
 
Net loss
$ (7,506)
$ (6,173)
$ (19,941)
$ (2,536)
$ (48,501)
$ (9,287)
$ (9,597)
$ (9,293)
$ (36,606)
$ (76,678)
$ (34,969)
Net loss per share (usd per share)
$ (0.06)
$ (0.05)
$ (0.17)
$ (0.02)
$ (0.46)
$ (0.11)
$ (0.11)
$ (0.11)
 
 
 
Discontinued Operations, Assets Held for Sale (Details) (Subsequent Event [Member], Commercial Business Segment [Member], USD $)
3 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Subsequent Event [Member] |
Commercial Business Segment [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Impairment charge
$ 8,100,000 
 
Success fee contingently due to third party
900,000 
 
Percent of realized future revenue
 
5.00% 
Retention fees contingently due
$ 400,000 
 
Retention fees contingently due (as percentage of consideration received)
3.00% 
 
Discontinued Operations, Assets Held for Sale - Carrying Amounts of Assets and LIabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Total current liabilities held for sale
$ 7,169 
$ 4,611 
Commercial Business Segment [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Accounts receivable
1,535 
3,683 
Inventories
655 
386 
Prepaid expenses and other current assets
1,747 
1,269 
Equipment and furnishings, net
270 
351 
Goodwill
172 
0 
Total current assets held for sale
27,013 
20,668 
Accounts payable
385 
753 
Accrued expenses and other current liabilities
6,784 
3,858 
Total current liabilities held for sale
7,169 
4,611 
Abstral Rights, Net [Member] |
Commercial Business Segment [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Rights
14,533 
14,979 
Zuplenz Rights [Member] |
Commercial Business Segment [Member]
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Rights
$ 8,101 
$ 0 
Discontinued Operations, Assets Held for Sale - Components Attributable to Commercial Business (Details) (Commercial Business Segment [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Commercial Business Segment [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Net revenue
$ 9,319 
$ 2,487 
$ 0 
Cost of revenue
(1,403)
(520)
0 
Amortization of certain acquired intangible assets
(440)
(131)
0 
Research and development
(680)
(651)
(1,325)
Selling, general, and administrative
(15,118)
(6,536)
(293)
Non-operating income (expense)
0 
0 
(26)
Impairment charge from classification as assets held for sale
$ 8,322 
$ 5,351 
$ 1,644 
Discontinued Operations, Assets Held for Sale - Significant Operating Non-cash and Capital Expenditures (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Depreciation and amortization expense
$ 362 
$ 286 
$ 49 
Purchases of property and equipment
(57)
(320)
 
Commercial Business Segment [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Depreciation and amortization expense
527 
166 
 
Stock-based compensation
721 
223 
 
Purchases of property and equipment
0 
385 
 
Abstral Rights, Net [Member] |
Commercial Business Segment [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Cash paid for acquisition of rights
0 
15,143 
 
Zuplenz Rights [Member] |
Commercial Business Segment [Member]
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Cash paid for acquisition of rights
$ 3,056 
$ 0 
 
Subsequent Events (Additional Information) (Details) (USD $)
0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended
Sep. 23, 2013
Sep. 18, 2013
Dec. 18, 2012
Apr. 13, 2012
Sep. 30, 2013
Dec. 31, 2014
Dec. 31, 2013
May 8, 2013
Jun. 19, 2015
Subsequent Event [Member]
Apr. 10, 2015
Subsequent Event [Member]
Mar. 18, 2015
Subsequent Event [Member]
Apr. 10, 2015
Subsequent Event [Member]
Sep. 30, 2015
Subsequent Event [Member]
Mar. 18, 2015
Subsequent Event [Member]
Jun. 19, 2015
2007 Incentive Plan [Member]
Subsequent Event [Member]
Jun. 19, 2015
2007 Incentive Plan [Member]
Subsequent Event [Member]
Sep. 30, 2015
Commercial Business Segment [Member]
Subsequent Event [Member]
Nov. 19, 2015
Asset Purchase Agreement [Member]
Subsequent Event [Member]
Dec. 3, 2015
Pending Litigation
Galena Biopharma, Inc. Derivative Litigation, Civil Action No. 3:14-cv-00382-SI
Subsequent Event [Member]
Dec. 3, 2015
Pending Litigation
Galena Biopharma, Inc. Derivative Litigation, Civil Action No. 3:14-cv-00382-SI
Subsequent Event [Member]
Dec. 3, 2015
Pending Litigation
Galena Biopharma, Inc. Securities Litigation, Civil Action No. 3:14-cv-00367-SI
Subsequent Event [Member]
Dec. 3, 2015
Pending Litigation
Galena Biopharma, Inc. Securities Litigation, Civil Action No. 3:14-cv-00367-SI
Subsequent Event [Member]
Dec. 3, 2015
Cash
Pending Litigation
Galena Biopharma, Inc. Securities Litigation, Civil Action No. 3:14-cv-00367-SI
Subsequent Event [Member]
Dec. 3, 2015
Common Stock [Member]
Pending Litigation
Galena Biopharma, Inc. Securities Litigation, Civil Action No. 3:14-cv-00367-SI
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of common stock, shares
 
17,500,000 
 
9,751,000 
 
1,400,000.0 
 
 
 
 
24,358,974 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share price (usd per share)
 
$ 2.00 
 
 
 
 
 
 
 
 
 
 
 
$ 1.56 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of shares
$ 5,200,000 
$ 35,000,000 
$ 24,300,000 
$ 14,600,000 
 
$ 2,300,000 
 
 
 
 
$ 38,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares per unit
 
1 
 
 
 
 
 
 
 
 
 
 
 
0.50 
 
 
 
 
 
 
 
 
 
 
Exercise price (usd per share)
 
$ 2.50 
 
 
 
 
 
$ 2.47 
 
 
 
 
 
$ 2.08 
 
 
 
 
 
 
 
 
 
 
Common stock, shares authorized
 
 
 
 
 
200,000,000 
125,000,000 
 
 
 
 
 
275,000,000 
3,653,846 
 
26,500,000 
 
 
 
 
 
 
 
 
Number of shares availabe from warrants
 
0.35 
 
 
 
 
 
 
 
 
 
 
 
1,826,923 
 
 
 
 
 
 
 
 
 
 
Shares issued, overallotment option
 
 
 
 
 
 
 
 
 
3,653,846 
1,826,923 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of shares, net underwriting discounts, commissions and offering expenses
 
 
22,500,000 
13,500,000 
37,500,000 
 
 
 
 
5,400,000 
 
40,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
Increase in shares authorized
 
 
 
 
 
 
 
 
75,000,000 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
Impairment charge
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,100,000 
 
 
 
 
 
 
 
Total consideration received
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,000,000 
 
 
 
 
 
 
Upfront proceeds from sale of assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,000,000 
 
 
 
 
 
 
Potential receivable, based on net sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
Loss contingency, damages sought
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
 
 
 
 
 
Litigation settlement, amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
 
 
 
Insurance settlements receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15,000,000 
 
16,700,000 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period
 
 
 
 
 
2,336,000 
 
 
 
 
 
 
 
 
 
 
 
 
1,200,000 
 
 
 
 
 
Litigation settlement amount to be paid
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3,300,000 
$ 2,300,000 
$ 1,000,000