This morning, Aegis Capital analyst Raghuram Selvaraju published an update on Galectin Therapeutics. Noting GALT’s “commanding patent position,” he writes that Galectin’s GR-MD-02 is very likely to become the “best in class” drug in the liver fibrosis / NASH space, and reiterates Aegis’ Buy rating on GALT and short-term price target of $32.00 per share. He also notes that La Jolla Pharmaceutical’s “competing” GCS-100 gives you a nasty rash: yikes! By contrast, our drug, so far at least, has proven completely safe.

by Raghuram Selvaraju
Aegis Update
April 23, 2014

Galectin Completes Second Cohort Enrollment

Phase 1 Trial Second Cohort Enrollment Ends. This morning, Galectin Therapeutics announced that it has completed the enrollment of eight patients in the second cohort of its ongoing Phase 1 clinical trial of GR-MD-02 in patients with non-alcoholic steatohepatitis (NASH) who have advanced fibrosis. This cohort is receiving GR-MD-02 at a dose level of 4mg/kg, double the dosage given in the first cohort. We anticipate that this second cohort should yield data in late summer 2014. The Phase 1 study is expected to conclude late this year. Since the first cohort data were so encouraging, with indications of GR-MD-02 therapeutic activity on multiple endpoints including biomarkers of both inflammation and fibrosis, we expect even more positive data to be obtained with the second cohort given the increased dose being administered. In anticipation of further evidence of efficacy for GR-MD-02 in liver fibrosis, we reiterate our Buy rating and 15-month price target of $32.00 per share on GALT, our favorite pick in the liver fibrosis space.

Patent Position Commanding, In Our View. We continue to believe that Galectin Therapeutics represents the leader in the domain of galectin inhibition as a therapeutic approach. Suggestions that competitors may hold blocking intellectual property (IP) are spurious, in our view, particularly given the extensive work done by Galectin from the perspective of testing galectin inhibitors in liver fibrosis models and considering the pioneering research by Dr. Anatole Klyosov, Galectin’s founder emeritus, in the areas of carbohydrate-based drug design and characterization of galectin function in diseases. We believe that Galectin holds a commanding position in the galectin inhibition field and that this could permit the company to ascend to the best-in-class position in the domain of liver fibrosis therapy. Competing compounds, particularly GCS-100 from La Jolla Pharmaceutical Co. (LJPC/NASDAQ, Not Rated), have not shown comparable efficacy to GR-MD-02, in our view. Furthermore, GCS-100 has shown dose-limiting toxicity in early human studies consisting primarily of Grade 3 erythematous popular rash, while GR-MD-02 has thus far exhibited a clean safety profile.

Additional Clinical Studies Planned. Pending positive results across all cohorts in the ongoing Phase 1 study of GR-MD-02, Galectin should be ready to begin a robustly-powered Phase 2 trial in NASH patients early in 2015. This trial would be designed to include liver biopsy data, which in our view could conclusively reveal the fibrosis-reversing capacity of GR-MD-02. Further assessment of the activity profile of GR- MD-02 is also planned in both lung and kidney fibrosis. The firm also is working with Providence Portland Medical Center on an investigator- sponsored Phase 1 trial to evaluate Yervoy (ipilimumab) and GR-MD-02 in metastatic melanoma, slated to begin imminently. This trial is based on preclinical data that have shown the synergistic anti-tumor impact of combining immune checkpoint inhibitors like ipilimumab with GR-MD-02 in syngeneic mouse cancer models.


— View the original report from Aegis Capital Corp here.