Galena Updates Federal False Claims Act Probe

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Galena Biopharma says it faces greater risks as it learns more about a 12/16/15 subpoena from the U.S. Attorney in New Jersey for records relating to the company’s marketing and promotional practices for Abstral (fentanyl), which it sold in the fourth quarter of that year. The company says in an SEC filing that prosecutions under healthcare fraud and abuse and false claims laws and regulations have increased in recent years and the company may become subject to such prosecutions or related litigations under those laws and could face substantial penalties if it has not fully complied with the laws.

The notice also says that a federal investigation of two of the high-prescribing doctors for Abstral has resulted in their criminal prosecution for alleged violations of the False Claims Act and other laws in a trial that began 1/4. The company says it has received a trial subpoena for documents relating to that investigation and has been in contact with the Alabama U.S. Attorney. It says it is cooperating in producing the documents.

Galena further reports there have been federal and state investigations of a company that has a product that competes with Abstral in the same therapeutic class and says it has learned that FDA and other government agencies are investigating Abstral promotion practices.

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