The information set forth in Item 8.01 herein is incorporated by reference into this Item 3.02.

Galena Biopharma, Inc. (the “Company”) anticipates that the Settlement Stock (defined below) will be issued, to the terms of the Stipulation of Settlement to be negotiated by the parties, in a transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to Section 3(a)(10) of the Securities Act. The terms and conditions of the issuance of the Settlement Stock are subject to approval by the Court of Chancery of the State of Delaware, to a hearing concerning the fairness of such terms and conditions at which all persons to whom the Settlement Stock would be issued, following the receipt of adequate notice, are permitted to attend.

On July 24, 2017, the Company entered into a binding settlement term sheet, which the parties will use to enter into a Stipulation of Settlement that is intended to settle the litigation currently pending in the Court of Chancery of the State of Delaware (the “Court”), captioned In re Galena Biopharma, Inc., C. A. No. 2017-0423-JTL. The settlement resolves the putative stockholder class action claims against the Company and/or certain of its current and former officers and directors (the “Defendants”), as well as the Company’s petition to validate certain corporate actions. The settlement will not become effective until approved by the Court.

Under the terms of the settlement, the class will receive a settlement payment of $1.3 million, in addition to attorney fees in an amount to be approved. The settlement payment of $1.3 million consists of $50,000 in cash to be paid by the Defendants or their insurers and $1,250,000 in unrestricted shares of the Company’s common stock (“Settlement Stock”), which valuation will be based on the volume-weighted average closing price for the 20 trading days immediately preceding the day before the transfer of the Settlement Stock to the settlement fund to the terms and conditions of the settlement. Any amounts awarded by the Court for attorneys’ fees will be paid in part by the settlement fund and in part by the Company’s insurance carriers.

Upon the effectiveness of the proposed settlement, the Defendants will be released from the claims that were asserted or could have been asserted in the class action by class members participating in the settlement.

About GALENA BIOPHARMA, INC. (NASDAQ:GALE)

Galena Biopharma, Inc. is a biopharmaceutical company. The Company focuses on developing and commercializing targeted oncology therapeutics that address unmet medical needs. The Company’s development portfolio ranges from mid- to late-stage clinical assets, including cancer immunotherapy program led by NeuVax (nelipepimut-S), GALE-301 and GALE-302. The Company’s NeuVax is in Phase III breast cancer clinical trial with several concurrent Phase II trials ongoing both as a single agent and in combination with other therapies. GALE-301 is in a Phase IIa clinical trial in ovarian and endometrial cancers and in a Phase Ib clinical trial given sequentially with GALE-302. The Company’s therapies utilize an immunodominant peptide combined with the immune adjuvant, recombinant human granulocyte macrophage-colony stimulating factor (rhGM-CSF, Leukine), and work by harnessing the patient’s own immune system to seek out and attack any residual cancer cells.