Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under
Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements. Such statements include, but are not limited to, statements concerning our anticipated operating
results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and
“would,” “should,” “could” or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are
forward-looking statements, including statements regarding: plans and expectations regarding clinical trials; plans and expectations regarding regulatory approvals; our strategy and expectations for clinical development and commercialization of
our products; potential strategic partnerships; expectations regarding the effectiveness of our products; plans for research and development and related costs; statements about accounting assumptions and estimates; expectations regarding
liquidity and the sufficiency of cash to fund currently planned operations through at least May 15, 2025; our commitments and contingencies; and our market risk exposure. Forward-looking statements are based on current expectations, estimates and
projections about the industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions. These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties
that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties are related to and include, without limitation,
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our early stage of development,
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we have incurred significant operating losses since our inception and cannot assure you that we will generate revenue or profit,
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our dependence on additional outside capital,
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we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates,
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uncertainties related to any litigation,
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uncertainties related to our technology and clinical trials, including expected dates of availability of clinical data,
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we may be unable to demonstrate the efficacy and safety of our developmental product candidates in human trials,
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we may be unable to improve upon, protect and/or enforce our intellectual property,
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we are subject to extensive and costly regulation by the U.S. Food and Drug Administration (FDA) and by foreign regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing
and pricing of such products,
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competition and stock price volatility in the biotechnology industry,
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limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein and from time to time in our SEC reports, and
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the impact resulting from a pandemic or the reemergence of COVID-19, which delayed our clinical trial and development efforts, as well as the impact that such a pandemic has on the volatility of the capital market and our ability to
access the capital market and,
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other risks detailed herein and from time to time in our SEC reports, including our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2023, and our subsequent SEC filings.
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The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes thereto of Galectin Therapeutics appearing elsewhere
herein.
Overview
We are a clinical stage biopharmaceutical company engaged in drug research and development to create new therapies for fibrotic disease, cancer and selected other diseases.
Our drug candidates are based on our method of targeting galectin proteins, which are key mediators of biologic and pathologic functions. We use naturally occurring, readily-available plant products as starting material in manufacturing processes
to create proprietary, patented complex carbohydrates with specific molecular weights and other pharmaceutical properties. These complex carbohydrate molecules are appropriately formulated into acceptable pharmaceutical formulations. Using these
unique carbohydrate-based candidate compounds that largely bind and inhibit galectin proteins, particularly galectin-3, we are undertaking the focused pursuit of therapies for indications where galectin proteins have a demonstrated role in the
pathogenesis of a given disease. We focus on diseases with serious, life- threatening consequences and those where current treatment options are limited specifically in MASH (metabolic dysfunction-associated steatohepatitis) (formerly known as
non-alcoholic steatohepatitis or NASH) with cirrhosis and certain cancer indications. Our strategy is to establish and implement clinical development programs that add value to our business in the shortest period of time possible and to seek
strategic partners when one of our programs becomes advanced and requires significant additional resources.
Our lead galectin-3 inhibitor is belapectin (GR-MD-02), which has been demonstrated in preclinical models to reverse liver fibrosis and cirrhosis and in clinical studies to
decrease portal hypertension and prevent its complication: the development of esophageal varices. Belapectin has the potential to treat many diseases due to galectin-3’s involvement in multiple key biological pathways such as fibrosis, immune
cell function and immunity, cell differentiation, cell growth, and apoptosis (cell death). The importance of galectin-3 in the fibrotic process is supported by experimental evidence. Animals with the galectin-3 gene “knocked-out” can no longer
develop fibrosis in response to experimental stimuli compared to animals with an intact galectin-3 gene. We are using our galectin-3 inhibitor to treat advanced liver fibrosis and liver cirrhosis in NASH patients. We have completed two Phase 1
clinical studies, a Phase 2 clinical study in MASH patients with advanced fibrosis (NASH-FX) and a second Phase 2b clinical trial in NASH patients with compensated cirrhosis and portal hypertension (NASH-CX).
In February 2023, we completed randomizations totaling 357 patients in a large, global Phase 2b/3 clinical trial, the NAVIGATE trial. Our study protocol was filed with the FDA on April 30,
2020, for a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patients with MASH cirrhosis (Further details are available
at www.clinicaltrials.gov under study NCT04365868. In September 2020, the Company received a letter from the FDA providing comments, asking questions and providing guidance on various aspects of the ongoing NAVIGATE trial. These comments were
addressed, and the study proceeded accordingly. An interim analysis of NAVIGATE is expected late in the fourth quarter of 2024.
Additionally, a study protocol entitled “A Single-dose, Open-label, Pharmacokinetic Study of Belapectin (GR-MD-02) in Subjects With Normal Hepatic Function and Subjects With
Varying Degrees of Hepatic Impairment” has been filed with the FDA to examine the effects of the drug in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (study details are listed under study
NCT04332432 on www.clinicaltrials.gov); this study became fully enrolled in February 2022 and favorable results were reported in 2023.
We endeavor to leverage our scientific and product development expertise as well as established relationships with outside sources to achieve cost-effective and efficient
drug development. These outside sources, amongst others, provide us with expertise in preclinical models, pharmaceutical development, toxicology, clinical trial operations, pharmaceutical manufacturing, including physical and chemical drug
characterization, and commercial development. We also have established through our majority-owned joint venture subsidiary, Galectin Sciences LLC, a discovery program developing small molecules that inhibit galectin-3 and may afford alternative
drug delivery (e.g., oral) and as a result expand the potential uses of galectin-3 inhibitor beyond belapectin. Three chemical series of composition of matter patents have been filed.
We are also pursuing a development pathway to clinical enhancement and commercialization for our lead compounds in immuno-oncology following our previous successful
collaboration with Providence Portland Cancer Center. In 2022, we filed a new IND with FDA for advanced or metastatic head and neck cancer using belapectin in combination with a checkpoint (PD-1) inhibitor and received a Study May Proceed letter.
The proposed phase 2 trial commencement is dependent on timing of financing.
All of our proposed products are presently in development, including pre-clinical and clinical trials.
Our Drug Development Programs
Galectins are a class of proteins that are made by many cells in the body, but predominantly in cells of the immune system. As a group, these proteins are able to bind to sugar molecules that
are attached to other proteins, called glycoproteins that are responsible for various functions within the body, most notably inflammation and fibrosis. Galectins, in particular galectin-3, act as a molecular glue, bringing together molecules
that have sugars on them. Galectin-3, is known to be markedly increased in a number of significant diseases including inflammatory diseases leading to organs scarring (e.g. liver, lung, kidney, and heart) and cancers. The increase in galectin-3,
by creating the so-called galectin-3 fibrosome, promotes the progression of multiple diseases. Published data substantiating the importance of galectin-3 in the fibrotic process arises from gene knockout experiments in animal studies. For
instance, mice genetically altered to eliminate the galectin-3 gene, and thus unable to produce galectin-3, do not develop liver fibrosis in response to toxic insult to the liver.
We have one new proprietary chemical entity (NCE) in development, belapectin, which has shown promise in preclinical and clinical studies for the treatment of liver fibrosis, severe skin
disease, and cancer (melanoma and head and neck squamous cell carcinoma). Currently, we are focusing on development of belapectin for the treatment of NASH cirrhosis and head and neck cancer. Belapectin is a proprietary, patented compound derived
from natural, plant-based, starting materials, which following chemical processing, exhibits the properties of binding to and inhibiting galectin-3.
Our product pipeline is shown below: |
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Indication
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Drug
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Status
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Prevention of esophageal varices
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in
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NASH cirrhosis
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Phase 1 interaction trial:
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belapectin
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IND submitted January 2013. Results from the Phase 1 interaction trial were reported
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NASH-CX trial and
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in 2014, with final results reported in January 2015.
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NASH-FX trial
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The Phase 2 NASH FX trial was conducted in patients with advanced fibrosis but not
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cirrhosis. Its principal purpose was to evaluate various imaging modalities. The NASH
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FX trial top line data was reported in September 2016 and published in Alimentary
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Pharmacology and Therapeutics in 2016.
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The Phase 2 NASH CX trial was conducted in patients with compensated cirrhosis and
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portal hypertension. The NASH CX trial top line data was reported in December 2017
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and was published in Gastroenterology in 2020.
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NASH NAVIGATE
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Following FDA feedback, the NAVIGATE trial is an adaptive Phase 2b/3 trial for the
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prevention of esophageal varices in MASH patients with compensated cirrhosis and
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clinical signs of portal hypertension. A Phase 2b interim efficacy analysis will be
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incorporated to confirm previous Phase 2 data, select an optimal dose and reaffirm the
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risk/benefit of belapectin. If required, the Phase 3 end of study analysis will evaluate
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the development of esophageal varices as the same primary outcome of efficacy and a
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composite clinical endpoint including progression to varices requiring treatment as a
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key secondary outcome of efficacy (www.clinicaltrials.gov NCT04365868). The final
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patient was randomized in February 2023 and an interim analysis is expected late in
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the fourth quarter of 2024.
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Phase 1 study: hepatic insufficiency
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A hepatic impairment study was conducted in subjects with normal hepatic function
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and subjects with varying degrees of hepatic impairment (www.clinicaltrials.gov
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NCT04332432) and began enrolling patients in the second quarter of 2020. The study
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completed enrollment in February 2022 and favorable results were presented in 2023.
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Cancer Immunotherapy
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Melanoma, Head, Neck Squamous
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belapectin
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Investigator IND study was completed. A Phase 1B study began in Q-1 2016. Early
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Cell
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data was reported in February 2017 and additional data were reported in September
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Carcinoma (HNSCC)
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2018. Data from an extension trial was reported in July 2021 for additional melanoma
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and HNSCC patients which provided a rational basis for additional trials which the
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Company is exploring. In the third quarter of 2022, the Company announced its IND
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application for belapectin in combination with a checkpoint inhibitor for the treatment
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of HNSCC was filed and a Study May Proceed letter was received from FDA. The
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Company is reviewing options for financing this trial which will determine when such
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trial could commence.
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Liver cirrhosis. Belapectin is our lead product
candidate for treatment of compensated MASH cirrhosis in patients with portal hypertension. Our preclinical data show that belapectin has a significant therapeutic effect on liver fibrosis as shown in
several relevant animal models. In addition, in MASH animal models, belapectin has been shown to reduce liver fat, inflammation, portal pressure, and ballooning degeneration (death of liver cells). Therefore, we chose belapectin as the lead
candidate in a development program targeted initially at fibrotic liver disease associated with MASH. In January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with
MASH and advanced liver fibrosis to evaluate the safety of belapectin and pharmacodynamics biomarkers of disease. On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial for belapectin with a development program
aimed at obtaining support for a proposed indication of belapectin for treatment of MASH with advanced fibrosis. The Phase 1 trial was completed and demonstrated that belapectin up to 8 mg/kg Lean Body Mass (LBM), i.v. was safe and well
tolerated.
Additionally, an open label drug-drug phase 1 interaction study was completed in healthy volunteers during the second quarter of 2015 with belapectin and it showed that with
8 mg/kg LBM dose of belapectin and 2 mg/kg LBM dose of midazolam there was no drug-drug interaction, and no serious adverse events or drug-related adverse events were observed. The secondary objective was to assess the safety and tolerability of
belapectin when administered concomitantly with midazolam.
Our Phase 2 program in fibrotic disease consisted of two separate human clinical trials. The main clinical trial was the Phase 2b NASH-CX study for one year for patients with
MASH with compensated cirrhosis and portal hypertension, which began enrolling patients in June 2015. This study was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy of belapectin
for treatment of liver fibrosis and resultant portal hypertension in MASH patients with compensated cirrhosis. A smaller, exploratory NASH-FX trial was conducted to explore potential use of various non-invasive imaging techniques in MASH patients
with advanced fibrosis but not cirrhosis.
NASH-FX Trial: The NASH-FX trial was a Phase 2a pilot trial for patients with MASH and advanced fibrosis that explored use of three
non-invasive imaging technologies. It was a short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3) randomized 1:1 to either 9 bi-weekly doses of 8 mg/kg LBM of belapectin or placebo. The trial did not meet its
primary endpoint as measured using multi-parametric magnetic resonance imaging (LiverMultiScan(R), Perspectum Diagnostics). The trial also did not meet secondary
endpoints that measure liver stiffness as a surrogate for fibrosis using, magnetic resonance-elastography and FibroScan® score. With a four-month treatment period
and a small number of patients per arm the study was not powered to demonstrate efficacy results in established advanced liver fibrosis. In the trial however, belapectin was found to be safe and well tolerated with no serious adverse events and
showing evidence of a pharmacodynamic effect. These results provided support for further development in MASH.
NASH-CX Trial: The NASH-CX trial was a larger multi-center clinical trial that explored the use of belapectin for the treatment of patients
with well-compensated MASH cirrhosis and portal hypertension. Enrollment was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM of belapectin, 8 mg/kg LBM of
belapectin or placebo. Approximately 50% of patients at baseline had esophageal varices (a complication of portal hypertension). The primary endpoint was a reduction in hepatic venous pressure gradient (HVPG), a hemodynamic measure that
estimates portal hypertension. Patients received an infusion of belapectin or placebo every other week for one year and were evaluated to determine the change in HVPG as compared with placebo. Secondary or exploratory endpoints included
evaluation of fibrosis on liver biopsy, measurement of liver stiffness (FibroScan) and assessment of liver metabolism (13C-methacetin breath test). Top line data
readout was reported in December 2017. The study demonstrated a favorable safety profile and clinically meaningful efficacy results in patients without esophageal varices at baseline as demonstrated by a decrease in portal pressure associated
with the prevention of development of varices when compared to placebo.
In the total patient population, the primary endpoint HVPG showed a trend toward benefit with belapectin treatment, but the difference from placebo was
not statistically significant. The mean change in HVPG of placebo from baseline to week 54 was 0.3 mm Hg. The mean change in HVPG from baseline was -0.37 and -0.42 for the 2 mg/kg LBM dose and 8 mg/kg LBM dose of belapectin, respectively.
In those MASH cirrhosis patients with portal hypertension who have not yet developed esophageal varices at baseline (about 50% of the total population), there was a
statistically significant effect of the 2 mg/kg LBM dose of belapectin on the absolute change in HVPG (-1.08 mm Hg, p<0.01). The effect of the 8 mg/Kg LBM dose of belapectin on absolute or percent change in HVPG from baseline to week 54 was
not significant.
Also because of the clinical relevance of this population, a responder analysis was performed on those patients without esophageal varices at baseline. Analysis was performed
looking at two groups: those with an equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline. In both cases, the change
observed in the belapectin 2 mg/kg LBM group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.
Over the 54-week treatment period, in patients without varices at baseline there were also a statistically significantly fewer new varices that developed in the belapectin treatment groups (0%
and 4% in the 2 mg/kg LBM and the 8 mg/kg LBM, respectively) vs placebo (18%). This meant that the decrease seen in portal pressure was associated with a decreased incidence of esophageal varices. The results were noticeable in the belapectin 2
mg/Kg LBM group as statistical significance against placebo was achieved for both parameters. As esophageal varices can lead to hemorrhagic complication, which can be fatal, and are a severe complication of liver cirrhosis, we believe the
prevention of esophageal varices may represent a clinically relevant measure of clinical efficacy in patients with NASH cirrhosis.
The major conclusions from the NASH-CX trial results were that: (i) belapectin had a statistically significant and clinically meaningful effect in improving HVPG vs placebo in patients with
MASH cirrhosis who did not have esophageal varices at baseline, (ii) Belapectin in the total patient population was associated with a statistically significant improvement in hepatocyte ballooning (i.e. cell death), (iii) There was a
statistically significant reduction (p=0.02) in the development of new esophageal varices in drug-treated patients compared to placebo. We believe that the prevention of esophageal varices is a clinically relevant endpoint related to patient
outcomes, (iv) While there was a drug effect in both the 2 mg/kg LBM and 8 mg/kg LBM groups on the development of varices and liver biopsy there was a consistently greater and statistically significant effect of the 2 mg/kg LBM dose of
belapectin, (v) belapectin appears to be safe and well tolerated in this one year clinical trial, a feature that is of prime importance for a cirrhotic population and (vi) This is the first large, randomized clinical trial to demonstrate a
clinically meaningful improvement in portal hypertension in patients with compensated MASH cirrhosis who have not yet developed esophageal varices.
Further information and details on the NASH-CX results is available in public presentations posted to our website and filed with the SEC and in a peer reviewed publication in
Gastroenterology 2020;158:1334–1345.
NASH NAVIGATE Trial: Building on the experience of the NASH-CX trial, the NAVIGATE Trial is a seamless
adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patient with MASH cirrhosis. The major features of this innovative Phase 2b/3
study design are: i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, evaluated by an esophago-gastro-duodeno endoscopy, this trial will assess the effect of belapectin on the
incidence of new varices (the primary endpoint) – as well as assessing the effect of belapectin on the incidence of additional clinically significant cirrhosis-related outcomes (a key secondary efficacy endpoint), (ii) The study targets MASH
patients with a clearly identified unmet medical need: patients with compensated cirrhosis who have clinical signs of portal hypertension and, thus, are at risk of developing esophageal varices, a potentially life-threatening complication of
cirrhosis (bleeding varices are a cause of death in about one-third of cirrhotic patients). There is currently no approved treatment for preventing varices in these patients. In addition, the development of esophageal varices reflects the
progression of hepatic cirrhosis and thus portends the development of other cirrhosis complications such as ascites, hepatic encephalopathy, and liver failure, and (iii) During the first 18 months, two belapectin dose levels (2 mg/kg LBM and 4
mg/kg LBM) will be compared to placebo (phase 2b). Then, at the interim analysis (IA), assuming the study continues to the next stage, the best belapectin dose will be selected, based on efficacy and safety, for continued evaluation (Phase 3).
The belapectin doses selected for the phase 2b/3 were based on the analysis of the NASH-CX trial. Prior belapectin clinical studies have also indicated the good tolerance and safety profile of belapectin with doses of up to 8 mg/kg LBM for up
to 52 weeks, an important feature to inform the future risk benefit analysis in patients with MASH cirrhosis.
An interim analysis (IA) of efficacy and safety data will be conducted after all planned subjects in Phase 2b component have completed at least 78 weeks (18 months) of
treatment and a second esophago-gastro-duodeno endoscopic assessment has been performed. The purpose of the IA is to allow potential seamless adaptive modifications of the phase 3 stage of the study, including: (1) the selection of the optimal
dose of belapectin for Phase 3, (2) the re-estimation of the study sample size, (3) the modification of the randomization ratio in favor of the active treatment, (4) and/or termination of the study for overwhelming efficacy or for futility. The
IA results are expected late in the fourth quarter of 2024.
The trial design also included a blinded sample size re-estimation (“SSR”) during the Phase 2b, prior to the IA, to allow for potential sample size readjustment. The SSR was conducted when 50%
of the patients completed 18 months of therapy. The study design also minimizes invasive testing requirements, such as the measurement of HVPG or repeated liver biopsies, which we believe are particularly risky in patients with portal
hypertension and facilitated enrollment of patients and should facilitate their retention. It also provides for a seamless transition of patients from the Phase 2b stage into the phase 3 stage, including the potential addition of new patients.
The trial design introduces the notion of esophageal varices prevention as a primary pivotal outcome previously discussed with FDA.
We believe that these adaptations taken together are innovative and optimize conduct of the NAVIGATE trial with a clinically relevant primary outcome giving belapectin the
best opportunity to show a positive therapeutic effect to address an unmet medical need. As a testimony of this innovation, the NAVIGATE trial design was presented to the hepatology community and featured during the meeting of the American
Association for the Study of Liver Diseases, in November 2021. If the IA results of the NAVIGATE trial are compelling, there could be the potential for accelerated FDA approval pathway and/or partnership opportunity with a pharmaceutical company.
In this trial, as proposed in the protocol, secondary endpoints include a composite clinical outcomes endpoint, including varices requiring treatment (development of large
varices or varices with a red wale), decompensating events, all-cause mortality, MELD score increase, liver transplant. Also, MASH non-invasive biomarkers will be evaluated. To target a population at risk of developing esophageal varices, patient
selection was based on clinical signs of portal hypertension, including, but not limited to, a low platelet count, an increased spleen size, an increased liver stiffness, and/or evidence of abdominal collaterals circulation.
The focus and goal of the therapeutic program is to stop the progression of and/or reverse portal hypertension and thereby prevent the development of
varices, potentially one of the most life-threatening complications of cirrhosis. Based on the results of the NASH-CX trial and subject to confirmation in later stage clinical trials, we believe that this goal is achievable in a significant
portion of the MASH cirrhosis patient population i.e. those MASH cirrhosis patients with clinical signs of portal hypertension for whom, currently, apart from a liver transplantation, no specific liver targeted, treatments are available.
We activated more than 150 clinical trial sites in 14 countries for the NAVIGATE trial.
The COVID-19 pandemic delayed our regulatory and ethics approvals, recruitment of sites, and enrollment of patients for our NAVIGATE trial. For several reasons, the pandemic
made enrolling patients for the NAVIGATE trial more challenging, notably because patients eligible for the NAVIGATE trial have liver cirrhosis and, as such, were at a greater health risk of complications from COVID-19 and needed to be vaccinated
before taking the risk of infection associated with a visit to a healthcare facility. As we emerged from the COVID-19 pandemic, site recruitment and patient enrollment accelerated and we experienced increases in the speed of enrollment,
particularly in the United States. However, we did not see the enrollment in Europe that we anticipated. Consequently, we activated multiple sites in Latin America. A resurgence of the COVID pandemic could again delay the regulatory, ethical and
clinical milestones that we need to meet to conduct our NAVIGATE trial. The last patient from the phase 2b stage was randomized in February 2023, and consequently we expect topline results from the IA late in the fourth quarter of 2024.
Further details on the NAVIGATE trial can be found on www.clinicaltrials.gov under study NCT04365868 and on our NAVIGATE website (navigatenash.com).
The Company also has completed a Hepatic Impairment Study, which ran in parallel with the phase 2b/3 trial as part of the development program. The Hepatic Impairment Study
was conducted at three sites and involved approximately 40 patients (divided amongst normal healthy volunteers, and patients with hepatic impairment categorized as Child-Turcotte-Pugh (CTP) classes A (mild), B (moderate), and C (severe). Each
subject received a single infusion of belapectin (4 mg/kg LBM) and their serum belapectin levels were monitored for up to approximately two weeks to define the effects of various stages of cirrhosis on serum belapectin levels. The tolerance and
safety of belapectin was evaluated. Enrollment in this study was completed in February 2022, and the final results were presented the The Liver Meeting™ 2023, hosted by the American Association for the Study
of Liver Diseases. The data indicated that belapectin exposure did not increase with the degree of hepatic insufficiency, a property that is consistent with the observed distribution of the drug into
activated macrophages.Further details on this hepatic impairment study can be found on www.clinicaltrials.gov study NCT04332432.
Cancer Immunotherapy. We believe there is potential for galectin inhibition to play a key role in the innovative
area of cancer immunotherapy. For example, there have been several recent approvals of drugs that enhance a patient’s immune system to fight cancer. It is our goal to use ourgalectin-3 inhibitor to
further enhance the immune system function to help the body to fight cancer in a way that complements other approaches to this type of therapy. This hypothesis is supported by the fact that galectin-3 is expressed at high levels in multiple
types of tumors and their micro-environment, where it fosters the malignant nature of the tumors, and protects the tumors from immune attack by the patient’s own defense mechanism. Our drug candidates provide a promising new therapeutic
approach to enhance the activity of the immune system against cancer cells. Preclinical studies have indicated that belapectin enhances the immune response to cancer cells, increased tumor shrinkage and enhanced survival in immune competent
mice with prostate, breast, melanoma and sarcoma cancers when combined with one of the immune checkpoint inhibitors, anti-CTLA-4 or anti-PD-1, or with the immune cell activator anti-OX40. These preclinical data led to the filing of two
Investigator-sponsored INDs and the initiation of Phase 1B studies of belapectin in combination with Yervoy® (ipilimumab) in metastatic melanoma and another phase
1B study in combination with KEYTRUDA (pembrolizumab) in patients with metastatic melanoma and head and neck squamous cell carcinoma. These studies were conducted under the sponsorship of Providence Portland Medical Center’s Earle A. Chiles
Research Institute (EACRI).
The phase IB study in combination with Yervoy was rapidly discontinued after the first patients were recruited because of the availability of new treatment in the selected
population.
Promising results were reported in the Phase 1b trial combining belapectin with pembrolizumab (KEYTRUDA®). When aggregated cohorts are combined, in advanced melanoma, a 50% objective response rate with belapectin in combination with KEYTRUDA, was documented. In addition, a 33% response rate was documented in patients with head
and neck cancer. The results have been published in 2021 in a highly rated peer reviewed journal (Curti et al. Journal of Immunotherapy of cancer 2021;9:e002371). There was also a suggestion that the combination of belapectin with pembrolizumab
could decrease the auto-immune side-effect induced by pembrolizumab. These side-effects, which are directly linked to the mechanism of action of pembrolizumab, can be poorly tolerated and even severe enough to lead to treatment interruption, even
if the effect on the cancer was encouraging. This is, a very frustrating situation for patients who have to discontinue an active treatment but have no other options available to them. We believe these data, taken together with the observed
favorable safety and tolerability of the combination, provide a rationale to move the belapectin program in oncology forward.
Late in 2021, we engaged three noted physicians – Dr. Chetan Bettegowda, from Johns Hopkins, and Dr. Nishant Agrawal and Dr. Ari Rosenberg,
both from University of Chicago Medical Center – as consultants to help define the path forward in oncology. In consultation with our oncology experts, we have now selected the treatment of recurrent or metastatic head and neck cancer as the
lead indication to pursue for belapectin in combination with an immune checkpoint inhibitor. The decision is notably based on the lack of available treatments for these patients, the limited number of therapies in development, and the resulting
very high medical need. We filed an IND with FDA and are planning a phase 2 trial to be filed with the FDA oncology division.
Results of Operations
Three and Six Months Ended June 30, 2024 Compared to Three and Six Months Ended June 30, 2023
Research and Development Expense.
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Three Months Ended
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Six Months Ended
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2024 as Compared to 2023
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June 30,
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June 30,
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2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
$ Change
|
|
|
% Change
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except %)
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
9,813
|
|
|
$
|
7,371
|
|
|
$
|
17,867
|
|
|
$
|
16,170
|
|
|
$
|
2,442
|
|
|
|
33
|
%
|
$
|
|
1,697
|
|
|
|
10
|
%
|
We generally categorize research and development expenses as either direct external expenses, comprised of amounts paid to third party vendors for services, or all other
research and development expenses, comprised of employee payroll and general overhead allocable to research and development. We consider a clinical program to have begun upon acceptance by the FDA, or similar agency outside of the United States,
to commence a clinical trial in humans, at which time we begin tracking expenditures by the product candidate. Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial,
including costs for drug manufacture, patient dosing and monitoring, data collection and management, oversight of the trials and reports of results. Pre-clinical expenses comprise all research and development amounts incurred before human trials
begin, including payments to vendors for services related to product experiments and discovery, toxicology, pharmacology, metabolism, and efficacy studies, as well as manufacturing process development for a drug candidate.
Our research and development expenses were as follows:
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Direct external expenses:
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical programs
|
|
$
|
7,858
|
|
|
$
|
5,494
|
|
|
$
|
13,729
|
|
|
$
|
12,314
|
|
Pre-clinical activities
|
|
|
182
|
|
|
|
776
|
|
|
|
743
|
|
|
|
1,548
|
|
All other research and development expenses
|
|
|
1,773
|
|
|
|
1,100
|
|
|
|
3,395
|
|
|
|
2,308
|
|
|
|
$
|
9,813
|
|
|
$
|
7,371
|
|
|
$
|
17,867
|
|
|
$
|
16,170
|
|
Clinical activities increased primarily due to timing of incurrence of expenditures related to our NAVIGATE clinical trial. Other research and development expenses increased
primarily due to additional employees hired after the first and second quarters of 2023.
Both the time required and costs we may incur in order to commercialize a drug candidate that would result in material net cash inflow are subject to numerous variables, and
therefore we are unable at this stage of our development to forecast useful estimates. Variables that make estimates difficult include the number of clinical trials we may undertake, the number of patients needed to participate in the clinical
trial, patient recruitment uncertainties, trial results as to the safety and efficacy of our product, and uncertainties as to the regulatory agency response to our trial data prior to receipt of marketing approval. Moreover, the FDA or other
regulatory agencies may suspend clinical trials if we or an agency believes patients in the trial are subject to unacceptable risks or find deficiencies in the conduct of the clinical trial. Delays or rejections may also occur if governmental
regulation or policy changes during our clinical trials or in the course of review of our clinical data. Due to these uncertainties, accurate and meaningful estimates of the ultimate cost to bring a product to market, the timing of costs and
completion of our program and the period during which material net cash inflows will commence are unavailable at this time.
General and Administrative Expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
|
|
2024 as Compared to 2023
|
|
|
|
|
|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
$ Change
|
|
|
% Change
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except %)
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
$
|
1,478
|
|
|
$
|
1,632
|
|
|
$
|
3,072
|
|
|
$
|
3,175
|
|
|
$
|
(154
|
)
|
|
|
(9
|
)%
|
$ |
|
(103
|
)
|
|
|
(3
|
)%
|
General and administrative expenses consist primarily of salaries including stock-based compensation, legal and accounting fees, insurance, investor relations, business
development and other office related expenses. The primary reasons for the decrease in general and administrative expenses for the three-months ended June 30, 2024 as compared to the same period in 2023 is due to a decrease in stock compensation
expense of $31,000 and a decrease in investor relations/business development of $95,000. The primary reasons for the decrease in general and administrative expenses for the six-months ended June 30, 2024 as compared to the same period in 2023
is due to a decrease in legal expense of $69,000 and a decrease in insurance expense of $65,000.
Liquidity and Capital Resources
Since our inception on July 10, 2000, we have financed our operations from proceeds of public and private offerings of debt and equity. As of March 31, 2024, we raised a net total of $304.5
million from these offerings. At June 30, 2024, the Company had $25.6 million of unrestricted cash and cash equivalents in addition to $10 million remaining available under two lines of credit provided by our chairman available to fund future
operations. The Company believes there is sufficient cash to fund currently planned operations approximately through May 15, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of 12
months from the issuance date of this Form 10-Q. The ability of the Company to continue as a going concern is likely dependent on the results of the Interim Analysis of the Company’s NAVIGATE clinical trial expected in December 2024 and its
ability to raise capital; however, the Company’s cash position may not be sufficient to support its daily operations in May 2025. We will require more cash to fund our operations after May 15, 2025 and believe we will be able to obtain additional
financing. The currently planned operations include costs related to our adaptively designed NAVIGATE Phase 2b/3 clinical trial. However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that
such financing will be on terms favorable to us.
Net cash used in operations decreased by $188,000 to $20,438,000 for the six months ended June 30, 2024, as compared to $20,626,000 for the six months
ended June 30, 2023. Cash operating expenses decreased principally due to timing of payment of expenses related to our NAVIGATE clinical trial with belapectin.
Off-Balance Sheet Arrangements
We have not created, and are not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our
business that are not consolidated into our financial statements. We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity
or the availability of capital resources.
Application of Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses,
and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to accrued expenses, stock-based compensation, contingencies and litigation. We base our estimates on historical
experience, terms of existing contracts, our observance of trends in the industry, information available from other outside sources and on various other factors that we believe to be appropriate under the circumstances. Actual results may differ
from these estimates under different assumptions or conditions.
Critical accounting policies are those policies that affect our more significant judgments and estimates used in preparation of our consolidated financial statements. We
believe our critical accounting policies include our policies regarding stock-based compensation, accrued expenses and income taxes. For a more detailed discussion of our critical accounting policies, please refer to our 2023 Annual Report on
Form 10-K.
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Market risk represents the risk of loss that may impact our financial position, operating results or cash flows due to changes in the U.S. interest rates. The primary
objective of our investment activities is to preserve cash until it is required to fund operations. To minimize risk, we maintain our portfolio of cash and cash equivalents in operating bank accounts and money market funds. Since our investments
are short-term in duration, we believe that we are not subject to any material market risk exposure.
Item 4.
|
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934) and concluded that, as of June 30, 2024, our disclosure controls and procedures were effective.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will
prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have been detected.
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2024, no change in our internal control over financial reporting has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. |
Legal Proceedings
|
None.
The information set forth in this report should be read in conjunction with the risk factors set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form
10-K for the year ended December 31, 2023, which could materially impact our business, financial condition or future results.
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
None
Item 3. |
Defaults Upon Senior Securities
|
None
Item 4. |
Mine Safety Disclosures
|
Not Applicable
Item 5. |
Other Information
|
Securities Trading Plans of Directors and Executive Officers
No officers or directors, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in
Regulation S-K Item 408, during the fiscal quarter ended June 30, 2024.
2024 Annual Meeting of Shareholders and Shareholder Nominations
On August 8, 2024, the Company’s board of directors of established January 23, 2025 as the
date of the Company’s 2024 annual meeting of shareholders (the “Annual Meeting”).
Because the date of the Annual Meeting has changed by more than 30 days from the anniversary
of the date of the Company’s 2023 annual meeting of shareholders, in accordance with Rule 14a-5(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is informing stockholders of such change. Additionally,
new deadlines have been set for submission of proposals by shareholders intended to be presented at the Annual Meeting and included in the Company’s proxy statement for the Annual Meeting.
In accordance with Rule 14a-8 under the Exchange Act (“Rule 14a-8”), if a stockholder wishes
to present a proposal for inclusion in the proxy materials for the Annual Meeting, the Company’s Secretary must receive written notice of such proposal at the Company’s principal executive offices no later than the close of business on November
14, 2024, which the Company has determined to be a reasonable time before it expects to begin to print and send its proxy materials. Any such proposal must (i) meet the requirements set forth in the rules and regulations of the Securities and
Exchange Commission (the “SEC”), including Rule 14a-8, in order to be eligible for inclusion in the proxy materials for the Annual Meeting and (ii) contain the information specified in, and otherwise comply with, the Company’s Amended and
Restated Bylaws (the “Bylaws”).
In addition to satisfying the procedures set forth in the Bylaws, to comply with the universal
proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act,
no later than November 24, 2024, which is 60 calendar days prior to the date of the Annual Meeting.
Exhibit
Number
|
|
Description of Document
|
|
Note
Reference
|
|
|
|
|
|
|
|
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
|
|
|
|
|
|
|
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document** (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
|
|
Exhibit
Number
|
|
Description of Document
|
|
Note
Reference
|
|
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document**
|
|
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Calculation Linkbase Document**
|
|
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document**
|
|
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Label Linkbase Document**
|
|
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Presentation Linkbase Document**
|
|
|
|
|
|
|
|
104*
|
|
Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101)
|
|
|
** |
Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on August 13, 2024.
|
GALECTIN THERAPEUTICS INC.
|
|
|
|
|
By:
|
/s/ Joel Lewis
|
|
Name:
|
Joel Lewis
|
|
Title:
|
Chief Executive Officer and President
|
|
|
(principal executive officer)
|
|
|
|
|
By:
|
/s/ Jack W. Callicutt
|
|
Name:
|
Jack W. Callicutt
|
|
Title:
|
Chief Financial Officer
|
|
|
(principal financial and accounting officer)
|