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Galena Makes Payment to Investors to Settle Securities Litigation

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Galena Biopharma this week said that it has taken steps to end a dispute with investors that threatened to block the company's planned spinout of RNAi subsidiary RXi Pharmaceuticals.

As reported by Gene Silencing News, Galena was sued by a handful of investment firms alleging that protections within securities-purchase agreements they struck with the company require the biopharmaceutical company to buy back millions in devalued warrants.

The lawsuits sought a combined $5.2 million from Galena.

In an SEC-mandated quiet period over its planned spinout of RXi, Galena made no public comment on the suits, but continued to move forward with the transaction (GSN 3/1/2012).

In a regulatory filing this week, Galena said that it gave the investment groups a total of $355,000 “as payment in full of the repurchase price” for the warrants at issue.

Galena said in the filing that it believes the payment has made “the majority of the claims … moot.”

None of the investment firms have yet withdrawn their legal complaints. Still, Galena indicated this week that the spinout effort continues.

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