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Galectin: Mark The Date. Drug Data Are Coming And We're Selling Stock.

Galectin Therapeutics (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? 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.


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