Galectin: Mark The Date. Drug Data Are Coming And We're Selling Stock.
(GALT) issued a press release this morning, informing investors that results from a phase I study of its galectin inhibitor GR-MD-02 in fatty liver disease (NASH) would be announced on March 31.
You might think Galectin is doing everyone a favor -- a helpful reminder to mark our calendars for next week. That's naive. What Galectin told us today (implicitly, of course) is management has the GR-MD-02 data in hand and is already crafting a press release for next week to shine results with high gloss.
Management's stock promotion is working. Galectin shares are up 18% to $17.21 today.
Last November, Galectin CEO Peter Traber told me the first slug of GR-MD-02 data would be announced in January, so next week's announcement is three months late. In this interregnum, fatty liver disease -- non-alcoholic steatohepatitis -- has become somewhat of an investor's darling given the stratospheric rise in the value of Intercept Pharmaceuticals. Galectin wants a piece of the NASH pie.
Unfortunately, this phase I study of GR-MD-02 won't tell anyone very much. Its primarily a safety study with a total enrollment of just 24 "invited" NASH patients. The data to be announced next week comes from 8 patients - six dosed with weekly intravenous infusions of GR-MD-02 and two patients offered placebo. You can look at the study details here -- the primary endpoint is safety. GR-MD-02 is derived from fruit pectin, so let's hope the drug is safe.
At the bottom of the list of secondary endpoints is an examination of liver enzyme levels -- ALT and AST -- which I assume Galectin will try to spin as a positive suggestion of the drug's efficacy in NASH. If you're looking for an Intercept-esque demonstration of clinical benefit from GR-MD-02, you won't find it here. The study of Intercept's drug OCA was stopped early for success based on liver biopsies. There are no liver biopsy data in Galectin's phase I study.
Galectin used the delay in announcing the phase I GR-MD-02 NASH data to raise money. In January and February, the company tapped out the $30 million At-The-Market equity finance agreement with MLV & Co. Last Friday, March 21, Galectin filed a new shelf registration statement for the potential sale of up to $100 million in stock.
At the same time, Galectin also established another $30 million ATM equity sales agreement with MLV.
Today's "Mark the Date" press release makes much more sense now, doesn't it?