Lincoln Park Doubles Down On Oncology With $55M Galena Biopharma Bet

November 21, 2014

By Riley McDermid, BioSpace.com Breaking News Editor

Portland, Ore.-based oncology company Galena Pharmaceuticals said today that it has entered into a $55 million purchase agreement with institutional investor Lincoln Park Capital Fund.

Under the terms of the deal, LPC purchased $5 million dollars of Galena common stock for $2 per share, a 9 percent premium on the company’s market value as of Nov. 18, the day the agreement was executed. The terms now allow Galena to sell LPC up to $50 million in additional stock over a three year time period.

Galena said it will roll that funding right back into its product development programs, as well as shore up its working capital and commercial activities. The structure of the financing is one that is very popular with smaller private companies, because it provides built-in capital over a longer time period, which firms can draw from as they grow.

The company has a suite of cancer drugs and therapies in its pipeline, including Abstral (fentanyl) Sublingal Tablets and Zuplenz (ondansetron) Oral Soluble Film. Its main focus right now is the Phase II trial of immunotherapy program NeuVax (nelipepimut), which it is currently conducting.

“This funding mechanism from Lincoln Park Capital, an established healthcare investment firm, provides Galena with strategic, long-term access to capital in order to execute on our clinical and commercial programs as we approach multiple milestones over the next several quarters,” said Mark Schwartz, president and chief executive officer of Galena. “Importantly, this structure allows us to complete control and flexibility to access capital at the appropriate times, coinciding with the progress of the company.”

Chicago-based LPC has a vast portfolio that encompasses companies in tech, biotech, healthcare, finance and energy. As an institutional investor, it invests on behalf of public and private partnerships such as municipalities and pension funds.