On Friday, H.C. Wainwright analyst Ed Arce downgraded Galectin Therapeutics (NASDAQ:GALT) stock from Buy to Neutral following the recent clinical trial results. The $70.6 million market cap company has seen its shares decline over 60% in the past six months, with the stock currently trading at $1.14.
Galectin announced on December 20 that its Phase 2b NAVIGATE trial for belapectin in patients with NASH cirrhosis and portal hypertension did not meet the primary endpoint. The incidence of esophageal varices was reduced by 43.2% after 18 months of treatment in the intention-to-treat (ITT (NYSE:ITT)) population, which was below the targeted reduction.
The trial included a pre-specified per-protocol population (PPP) that completed 18 months of therapy and underwent upper endoscopy at both baseline and at 18 months. In this group, belapectin showed a 48.9% reduction in the incidence of varices, achieving statistical significance but still falling short of the targeted 52.5% reduction. Additionally, patients on belapectin experienced less worsening in liver stiffness, a non-invasive measure of liver health.
Despite the positive results in the PPP, investor sentiment towards Galectin is currently negative. This is the second Phase 2b trial where the primary endpoint was not met, following the NASH-CX trial results published in 2020. According to InvestingPro data, the stock's RSI indicates oversold conditions, while the platform's Financial Health Score remains weak at 1.16 out of 5. The company plans to continue developing belapectin for cirrhotic NASH patients and intends to align with the FDA on a Phase 3 program.
However, with the expectation that pivotal data that could potentially catalyze the stock is several years away, potentially around mid-2028, H.C. Wainwright has removed its price target for Galectin shares.
The firm suggests that only positive results from a pivotal Phase 3 trial could significantly impact the stock and that until then, the shares are likely to trade sideways. InvestingPro subscribers can access 8 additional key insights about GALT's financial health, valuation metrics, and future growth prospects to make more informed investment decisions.
In other recent news, Galectin Therapeutics has shared promising results from its NAVIGATE clinical trial. The study, which spanned over 130 sites worldwide and included 355 patients, focused on the effects of belapectin on patients with Metabolic Dysfunction-Associated Steatohepatitis (MASH) cirrhosis and portal hypertension. The data revealed that belapectin may reduce the development of esophageal varices, with a significant 48.9% reduction in the incidence of varices among patients receiving 2mg/kg of lean body mass.
In addition to these findings, non-invasive measures showed a 50% lower number of subjects with worsening liver stiffness among those treated with belapectin. Despite the drug not meeting the primary endpoint of statistical significance in the broader intent-to-treat population, belapectin's safety profile was favorable, with similar rates of adverse events across all cohorts.
Galectin Therapeutics, despite facing financial challenges and a negative earnings per share of -$0.73, remains optimistic about belapectin's potential. The company is actively seeking pharmaceutical partnerships to advance the drug's development, backed by support from liver health researchers Dr. Naim Alkhouri and Dr. Naga Chalasani. Analysts, while acknowledging the company's financial challenges, maintain an $11 price target, indicating potential upside.
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