H.C. Wainwright Downgrades Galectin Therapeutics (GALT) to Neutral
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H.C. Wainwright downgraded Galectin Therapeutics (NASDAQ: GALT) from Buy to Neutral with a price target of $1.50 (from $8.00) after the company reported that the Phase 2 NASH-FX trial missed its primary endpoint, improvement in liver fibrosis measured by cT1 (LiverMultiScan), as well as both secondary endpoints, liver stiffness (a surrogate for fibrosis) as measured by magnetic resonance elastography (MRE) and FibroScan.
Analyst Ed Arce commented, "This unequivocal failure across all three imaging tests of fibrosis is rather surprising to us, in spite of the short four-month duration of treatment, given a prior Phase 1 study showed a cohort of three out of five evaluable patients had improvements in FibroScan scores at Day 63 (four doses) of 25%, 49% and 53%. This earlier study also showed a statistically significant reductions in FibroTest scores, driven by marked reductions in serum alpha-2 maceroglobulin (A2M), a serum marker correlated with liver fibrosis. Nevertheless, we note that, unlike FibroScan, LiverMultiScan has a demonstrated coefficient of variation < 5%, further substantiating the lack of anti-fibrotic activity seen in this Phase 2 study. Furthermore, from a fundamental perspective, in our view, the results of NASH-FX likely carry negative implications for the probability of success (POS) for NASH-FX (see below), due to readout in December 2017. And, from a trading perspective, the 15-month long data catalyst gap likely renders the shares of this microcap as dead money until (or shortly before) then. Thus, given our increased doubts about the true therapeutic effect of GR-MD-02 on fibrosis or cirrhosis, and a clear lack of catalysts for the shares within our 12-month investment horizon, we downgrade GALT shares and reduce our PT to $1.50 from $8 previously."
Shares of Galectin Therapeutics closed at $1.40 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades
Related EntitiesH.C. Wainwright, Ed Arce
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