MALVERN, Pa. - Galera Therapeutics, Inc. (NASDAQ:OTC:GRTX), a biopharmaceutical company, announced its Board of Directors' approval of a Plan of Liquidation and Dissolution, signaling the company's intent to dissolve under Delaware law.
The plan is subject to stockholder approval at a special meeting expected on or around October 17, 2024. If approved, Galera will file for dissolution and distribute remaining cash to stockholders after settling its obligations. The company also reported a net loss of $4.1 million for the second quarter ended June 30, 2024, a significant reduction from the $20.7 million loss in the same period last year.
Galera's financial results show a decrease in research and development expenses to $1.4 million from $7.6 million the previous year, largely due to cuts in development costs and workforce reductions. General and administrative expenses also fell to $2.8 million from $9.2 million, reflecting the cessation of commercial preparations and personnel reductions. The company's cash and cash equivalents stood at $10.7 million as of June 30, 2024.
The decision for dissolution comes after an extensive review of strategic alternatives aimed at maximizing stockholder value, as explained by President and CEO Mel Sorensen, M.D. The company will continue to explore potential sales of its pipeline assets during the wind-down process. In preparation for dissolution, Galera will reduce its workforce to three employees by August 31, 2024, with consulting agreements in place for key roles to assist in the wind-up activities.
Galera previously focused on developing novel therapeutics for cancer radiotherapy, including its leading product candidate avasopasem manganese, which received Fast Track and Breakthrough Therapy designations from the FDA. The company's other candidate, rucosopasem manganese, targeted non-small cell lung cancer and pancreatic cancer and had orphan drug designation.
This article is based on a press release statement and provides an overview of Galera Therapeutics' plan for dissolution and its second-quarter financial results.
In other recent news, Galera Therapeutics has resolved a legal dispute with two clinical research organizations, Alira Health Clinical, LLC, and IQVIA Biotech, LLC. The lawsuit, which was centered on allegations of contract breach and professional negligence, has been settled for a sum of $975,000 as per a recent SEC filing.
The conflict originated from an error in the statistical program for the Phase 3 ROMAN trial of avasopasem, a drug designed to reduce severe oral mucositis induced by radiotherapy in patients with locally advanced head and neck cancer.
As part of the settlement, the involved parties have agreed to have no further obligations under their contracts. This settlement marks the end of a significant challenge for Galera Therapeutics, allowing the company to proceed without the burden of ongoing litigation. These are recent developments in the company's operations.
InvestingPro Insights
As Galera Therapeutics, Inc. (NASDAQ:GRTX) navigates the process of dissolution, the company faces a challenging financial landscape. According to InvestingPro data, Galera has a market capitalization of merely $2.89 million, reflecting the company's significantly reduced valuation. The adjusted P/E ratio as of the last twelve months leading up to Q1 2024 stands at -0.07, underscoring the lack of profitability. Moreover, the company's return on assets for the same period was deeply negative at -115.3%, indicating the difficulties Galera has faced in generating positive returns from its assets.
InvestingPro Tips highlight several critical issues that investors should consider. The company operates with a significant debt burden, which has likely contributed to its decision to liquidate. This financial strain is further evidenced by Galera's quick cash burn and weak gross profit margins. Furthermore, analysts do not anticipate the company will be profitable this year, and the stock price has experienced considerable volatility, trading near its 52-week low.
For those keeping a close eye on Galera's financial health and stock performance, InvestingPro offers additional insights. There are 19 more InvestingPro Tips available for Galera Therapeutics, which can be accessed for further detailed analysis and investment considerations. These tips provide a comprehensive look at the company's financial position and market performance, which could be invaluable for investors making decisions in light of the company's dissolution plans.
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