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Legal Proceedings, Commitments and Contingencies (Notes) | 9 Months Ended
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Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract] |
Legal Proceedings, Commitments and Contingencies | Legal Proceedings, Commitments and Contingencies Legal Proceedings Earlier this year, 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 United States District Court for the District of Oregon and the Delaware Court of Chancery. On April 11, 2014, the Oregon federal derivative cases were consolidated into one action, In re Galena Biopharma, Inc. Derivative Litig., Nos. 3:14-cv-382, 3:14-cv-514, 3:14-cv-516 (D. Or.). On July 21, 2014, the Oregon state derivative cases were consolidated into one action, Fagin v. Ahn, et al., No. 140202384; Zhang v. Hillsberg, et al., No. 140403987 (Or. Cir. Ct.). On July 22, 2014, all of the Delaware derivative complaints were consolidated into one action, the matter of In re Galena Biopharma, Inc. Stockholder Derivative Litigation, Consolidated C.A. No. 9715-VCN (Del. Ch.). The various 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 this year. Also, five purported securities class action complaints filed in the United States District Court for the District of Oregon have been consolidated into a single action, In re Galena Biopharma, Inc. Securities Litig., No. 3:14-cv-367 (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 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. We intend to vigorously defend against the foregoing complaints. Based on the very early stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of these matters. In March and April 2014, we received demands (“220 Demands”) pursuant to Section 220 of the Delaware General Corporation Law (“Section 220”) from five purported stockholders of our company to inspect certain of our books and records. Under Delaware law, a stockholder may bring an action to enforce a 220 Demand that has been rejected. On March 18, 2014, one of the derivative lawsuit shareholders commenced an action (the “220 Action”) against us in the Delaware Court of Chancery under Section 220 (Fuhs v. Galena Biopharma, Inc., No. 9457-ML (Del. Ch.)). In the 220 Action, the plaintiff seeks to inspect our books and records described in his 220 Demand. The 220 Action was stayed prior to trial, and the shareholder has now filed a derivative complaint in the Delaware Court of Chancery. Nevertheless, we intend to vigorously defend against the 220 Action until it is dismissed. At September 30, 2014, no material liabilities with respect to the foregoing claims have been recorded in our consolidated financial statements. We have notified our insurance carriers of the claims, and 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. 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. Commitments On January 12, 2014, we acquired exclusive worldwide license to develop and commercialize GALE‑401 (anagrelide CR), a patented, controlled-release formulation of anagrelide, through our acquisition of Mills Pharmaceuticals, LLC (“Mills”) under a unit purchase agreement. Under the terms of the unit purchase agreement, we made an up-front cash payment of $2 million to the former Mills owners and also agreed to make additional contingent payments to the former owners upon the achievement of certain development milestones relating to GALE‑401, including 2,000,000 shares of our common stock upon initiating the first clinical trial of GALE‑401 in patients with essential thrombocythemia, or “ET,” and an additional 2,000,000 shares upon initiating a Phase 3 clinical study of GALE‑401. The number of shares issuable upon the milestones is subject to increase based on a formula specified in the purchase agreement, up to a maximum of 3,000,000 shares for each milestone, in the event the five‑day average trailing closing price of our common stock (the “Average Price”) is less than $4.84 at the time the applicable milestone is achieved. Similarly, the number of shares issuable upon achievement of the milestones is subject to decrease based on such formula if the Average Price exceeds $6.84 at the time of achievement of the applicable milestone. We achieved the milestone relating to the initiation of the first clinical trial of GALE-401 in the third quarter of 2014 and issued 3,000,000 shares of common stock to the former owners, the maximum under the unit purchase agreement as our five-day average trailing close price of our common stock was less than the low end of the collar of $4.84. We will record as an addition to the GALE-401 intangible asset the fair value of the shares delivered in payment of each milestone under the Mills unit purchase agreement. The addition to the intangible asset for the fair value of the shares will increase our additional paid-in capital by the same amount, less the par value of the milestone shares. As a result of the achievement of the initiation of the first clinical trial of GALE-401, we recorded an addition to GALE-401 asset and additional paid in capital in the amount of $6.8 million, or the fair value of the shares issued. The milestone payments will have no effect on our net loss. 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 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). Refer to Note 12 for details of the transaction.

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