Operating loss from continuing operations for the year ended December 31, 2012 was $21.2 million, including $1.8 million in stock-based compensation.

NeuVax™ (nelipepimut-S or E75) Phase 3 PRESENT trial being conducted under a Special Protocol Assessment (SPA) is currently enrolling in over 100 clinical sites worldwide.

Phase 2b clinical trial with NeuVax in combination with Herceptin^® (trastuzumab; Genentech/Roche) has been initiated with first of 300 patients to study.

Lead product, NeuVax (nelipepimut-S or E75), is the first adjuvant breast cancer vaccine to enter pivotal Phase 3 clinical trials. NeuVax consists of the synthetic E75 peptide derived from the HER2 oncogene product combined with the immune stimulant granulocyte macrophage-colony stimulating factor (GM-CSF). Treatment with NeuVax stimulates cytotoxic (CD8+) T cells in a highly specific manner to target cells expressing any level of HER2. Based on promising Phase 2 results, Galena initiated a randomized, multi-national Phase 3 trial entitled PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax™ Treatment). The Phase 3 study is being conducted under a Special Protocol Assessment (SPA) granted by the FDA, and is currently enrolling in over 100 clinical sites worldwide.

Multiple data presentations of NeuVax at major clinical and scientific meetings demonstrate the safety and efficacy of the vaccine to prevent recurrence in women with HER2 negative breast cancer (low-to-intermediate expression, IHC levels of 1+ or 2+ and a FISH rating of less than 2.0).

Final Phase 2 trial data were presented at the 35^th Annual CTRC-AACR San Antonio Breast Cancer Symposium (SABCS). The combined SN-33 (Node Positive) and SN-34 (Node Negative) Intent-to-treat (ITT) population continued to demonstrate an excellent safety and efficacy profile. Phase 2 HER2 IHC 1+/2+ patients from SN-33 established the Phase 3 patient population. After establishing statistical significance at the 36-month Landmark Analysis, or the same endpoint as the ongoing Phase 3 trial, the 60-month Landmark Analysis demonstrated a 5.6% recurrence rate with NeuVax vs. a 25.9% recurrence rate in the control arm—a recurrence reduction of 78.4%. Booster inoculations, which are included in the PRESENT trial, were shown to be well-tolerated and appear to maintain long-term peptide-specific immunity and reduce disease recurrence rates. In the Phase 1/2 trial, boosted patients have lower recurrence rates and improved disease-free survival compared to patients who did not receive the vaccine.

At the 27^th Annual Meeting of the Society for Immunotherapy of Cancer (SITC), data showed that vaccine treated patients were more likely to show a decrease in Circulating Tumor Cells (CTCs) than control patients. CTCs are cells that have detached from the primary breast tumor and circulate in the bloodstream, and may then cause the growth of additional tumors (metastases) in different tissues. In 16/26 NeuVax treated patients with at least two CTC measurements, the CTCs decreased during the time of treatment, corresponding with an increase in the patients’ E75-specific CD8+ cytotoxic T-lymphocytes (killer T-cells) and an increase in their delayed type hypersensitivity (DTH) reactions. DTH is the measurable signal on the skin that the patient is immunologically responding to the vaccine. None of these patients had a recurrence of their cancer during the five-year follow-up period.

Solidified three key collaborations to advance NeuVax.

Signed an agreement with a subsidiary of Teva Pharmaceutical Industries Limited for the commercialization of NeuVax in Israel. Under the agreement, Teva Israel will assume responsibility for regulatory registration in Israel, provide financial support for local development, and will commercialize the product in the region. Israel is the location of at least four clinical trial sites for the PRESENT study.

Announced a partnership with Leica Biosystems to develop a companion diagnostic for HER2 screening in women with breast cancer. Leica’s Bond Oracle™ HER2 IHC System companion diagnostic will be used to support the selection of the appropriate patients for the NeuVax PRESENT study. Data will be presented at the 2013 American Society of Clinical Oncology (ASCO) Annual Meeting in June.

Based on encouraging results of a Phase 2a trial, a randomized, multicenter investigator sponsored Phase 2b clinical trial has been initiated with the first of 300 patients to study NeuVax in combination with Herceptin^® (trastuzumab; Genentech/Roche). “Trastuzumab has been a breakthrough treatment for breast cancer patients and has clinically validated the HER2 target, yet only addresses 25% of HER2 breast cancer patients,” stated COL George E. Peoples, MD, FACS, Director, Cancer Vaccine Development Program; Deputy Director, United States Military Cancer Institute; Professor (adjunct), Surgical Oncology, M.D. Anderson Cancer Center; Professor, Surgery, Uniformed Services University; Chief, Surgical Oncology, Brooke Army Medical Center (BAMC). “The combination use of NeuVax with Herceptin may expand the use of both products to the remaining 50-60% of breast cancer patients with low-to-intermediate HER2 expression who are not eligible to receive Herceptin therapy. Furthermore, this trial may provide confirmation data of a synergistic effect of the combination that may also extend to those patients already eligible for Herceptin.”

Received approval from the United States Adopted Names (USAN) Council for nonproprietary name, “nelipepimut-S” (pronounced nel i pep’ i mut) for NeuVax. The USAN Council serves health professions of the United States by selecting simple, informative and unique nonproprietary names for drugs by establishing logical nomenclature classifications based on pharmacological and/or chemical relationships.

Issued two key patents:

The U.S. Patent and Trademark Office issued a patent covering the use of NeuVax for inducing immunity to breast cancer recurrence in HER2 negative patients (low-to-intermediate expression, IHC levels of 1+ or 2+ and a FISH rating of less than 2.0). The patent covers the use of NeuVax for treating the Phase 3 target population of low-to-intermediate (IHC 1+/2+) HER2 patients, and provides NeuVax exclusivity for this indication until 2028, not including any patent term extensions.

The Japan Patent Office issued a Folate Binding Protein (FBP) cancer vaccine patent in Japan providing exclusivity until 2022. This Composition of Matter and Treatment patent covers FBP peptide variants for individual or expanded use in combination with the novel FBP vaccine, E39.

Initiated a Phase 1/2 trial with Folate Binding Protein (E39), or FBP, Targeted Peptide Vaccine in Ovarian and Endometrial Cancer Patients. FBP is Galena’s second targeted cancer vaccine, which contains the E39 peptide, an antigen that is over-expressed (20-80 fold) in more than 90% of ovarian and endometrial cancers. Results on the Phase 1 portion of this trial will be reported at the 2013 ASCO Annual Meeting in June.

Significantly strengthened the management team and expanded the Company’s Scientific Advisory Board (SAB) with esteemed oncology experts.

Rosemary Mazanet, M.D., Ph.D., joined Galena as Executive Vice President and Chief Medical Officer, and Lynn Sutton, RN, MN, NP was appointed Vice President, Clinical Operations.

Joining the advisory board were: Hope S. Rugo, M.D., Clinical Professor of Medicine in the Division of Hematology and Oncology at the University of California San Francisco Helen Diller Family Comprehensive Cancer Center; Gabriel N. Hortobagyi, M.D., F.A.C.P., Professor of Medicine and Chairman of the Department of Breast Medical Oncology and holds the Nellie B. Connally Chair in Breast Cancer Research at the University of Texas MD Anderson Cancer Center; and Robert Figlin, M.D., F.A.C.P., Associate Director of the Academic Development Program and Director of the Division of Hematology/Oncology at Cedars-Sinai’s Samuel Oschin Comprehensive Cancer Institute. Dr. Figlin is board-certified in both medical oncology and internal medicine.

Completed the Spin-Off of RXi Pharmaceuticals. One-for-one RXi Pharmaceuticals stock dividend was paid to Galena stockholders as of the payment date in April 2012. Galena retains a significant equity interest in RXi (33.5 million shares of RXi common stock with a value of approximately $9.0 million as of March 11, 2013), with potential to receive up to $45 million in milestone payments.

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