Fruit pectin is delicious spread on toast, but can an experimental drug derived from fruit pectin be effective as a treatment for fatty liver disease? Not so much, which explains the steep drop in Galectin Therapeutics ( GALT) Tuesday.
Galectin's experimental drug GR-MD-02 flopped in a phase I study of nonalcoholic steatohepatitis (NASH), a severe form of fatty liver disease. Across just about every biomarker for efficacy Galectin thought to measure, GR-MD-02 showed no difference from placebo. Galectin deemed the updated results from the phase I study to be a success because patients treated with GR-MD-02 reported no serious side effects, but of course, ineffective placebos rarely raise safety concerns.
Shares of Galectin fell 53% to $6.76 in Tuesday trading.
The stock promoters paid by Galectin to entice retail investors into buying the stock face a tougher challenge going forward.
La Jolla Pharmaceuticals ( LJPC) shares were down 12% to $10.35 Tuesday because the company is developing a competing NASH drug which also claims to work in a similar way.