- GALT’s upcoming phase 3 trial patient population will be without varices and includes an interim analysis.
- An interim analysis creates the opportunity for GALT to submit a New Drug Application (NDA) at the 18 month mark of phase 3. Sales could exceed $3 billion dollars in first year.
- The FDA agreed to phase 3 trial endpoints that were achieved in the patients without varices in Phase 2b, increasing GRMD02’s chances for approval.
- GALT has a strong patent portfolio of novel Galectin blocking carbohydrates worth billions for indications such as autoimmune diseases, cancer, fibrosis/cirrhosis, and skin diseases.
- Only competitor CNAT hid the fact they failed cirrhosis in the POLT trial by combining F5 stage cirrhosis with F3-F4 stage patients and will likely fail to meet endpoints in phase 2b as well.
Nonalcoholic Steatohepatitis (NASH) is the result of untreated or unsuccessfully treated non-alcoholic fatty liver disease (NAFLD), a disease that afflicts millions of people worldwide and represents the next pharma gold-rush estimated to be worth between 35-40 billion dollars by 2025. In the later stages of NASH-cirrhosis patients can develop esophageal varices (bulging veins in the esophagus) and are the number one complication leading to death among NASH patients. In the USA alone, there is an estimated 1.5-3 million patients suffering from NASH-cirrhosis without varices. And therein lies one of Galectin Therapeutic’s (GALT) key advantages.
From Galectin’s Phase 3 NASH Press Release:
“The primary endpoint will be chosen from two endpoints that the FDA agreed may be acceptable: The change in hepatic venous pressure gradient (HVPG), which is a measure of liver blood pressure, or the progression to esophageal varices.” Both of these endpoints were achieved unequivocally in the patients without varices in phase 2b. Importantly, 100% of patients in GALT’s GR2 group from phase 2b met the endpoint of “progression to esophageal varices” (No patient (slide 15) in the GR2 group developed any varices while on the drug). Therefore the selection of progression to esophageal varices would represent a “slam dunk” endpoint for GRMD02. And using Intercept’s PBC Pricing model for Ocaliva, sales could exceed 3 billion in first year. Obviously Galectin is not the only player in the NASH arena. Other companies such as Madrigal Pharma, Viking Therapeutics, Galmed, Intercept, and Gilead all want a slice of the NASH pie. However, Conatus Pharmaceuticals (CNAT) is the only other company specifically targeting the NASH-cirrhosis patient population. The thing the market has not realized yet though, is its really a one horse race and that horse is GALT. Here is why:
CNAT’s lead candidate for NASH, Emricasan, failed to demonstrate efficacy for patients with cirrhosis in their POLT trial. It is worth noting that while the Conatus’ POLT trial was for post transplant patients, or a different patient population, after 2 years of therapy both the F5 and F6-stage groups (the cirrhosis patients) did not improve. While the company didn’t separate out F5-stage results, when doing the math on the patient counts for each group starting with F3-stage patients and looking at the number of drug vs placebo responders, only 1 F5 Cirrhosis patient responded vs 2 placebo cirrhosis responders (the F3, F4-stage patients had 18/19 responders and of the F3, F4, F5-stage patients 19/20 responded.) The F6 treatment group failed to respond entirely!
Conatus’ POLT trial represents the longest treatment for post-transplant cirrhosis patients with Emricasan. The drug did work, while not over the top, in the non-cirrhosis patient groups (F2-F4), yet the overall trial failed to achieve its overall endpoint. So it appears that Emricasan may have a target population that differs entirely from Galectin Therapeutics. It will be necessary to evaluate the data from Conatus’ Phase 2 NASH-Cirrhosis trial coming in the 2nd half of 2018 to conclude the true treatment effect in cirrhosis patients. But one could conclude that even in the case of efficacy, due to different mechanisms of action, that both drug treatments (Conatus and Galectin) would be synergistic to each other for combination therapies.
Galectin only requires 2% of the patient population in order to exceed $3 billion in annual sales the first year. Two percent patient uptake from a patient pool of 100% dying patients should not be difficult to achieve.
When we look at the current standard of care for NASH and fatty-liver disease as a whole another advantage for GALT becomes apparent; insurance companies are actually liable to pay for GRMD02. How so you ask?
Current Standard of care: Doctors at the National Institute of Diabetes and Digestive and Kidney Diseases (NIH) recommend maintaining a healthy diet and exercise regime to promote weight loss which lessens fat accumulation in the liver. No drug is approved to treat NAFLD or NASH but there is a screening method called FibroScan capable of detecting fatty liver disease. Unfortunately, in NAFLD and even non-cirrhotic NASH patients often do not exhibit symptoms until cirrhosis, so insurance companies won’t cover it (FLF. 2018). The medical business is not structured to treat seemingly healthy patients and insurers do not want to pay for unprompted health screens (FLF. 2018). Considering this, it’s not a stretch to assume insurers won’t pay for preemptive drugs either. NASH-Cirrhosis is a different story. Serious symptoms emerge including; Easy bleeding/bruising, fatigue, nausea, slurred speech, confusion, and yellowing of the skin and eyes (Jaundice). Sadly, the only option is a liver transplant and life-time preventative organ rejection medication. That is why Galectin is further positioned advantageously, its target patient population has liver-cirrhosis, but not yet esophageal varices. This means the patients will be at the later, symptomatic stages of NASH warranting treatment costs by insurers. However, it is still a good idea to take a look at other companies pursing NAFLD and NASH treatments, their market caps, treatment approaches, and clinical trial data in order to solidify GALT as the leader in NASH-cirrhosis.
Madrigal Pharmaceuticals (MDGL)
Madrigal is a clinical stage biopharmaceutical company primarily focused on a specific thyroid hormone pathway in the liver implicated in cardio-metabolic (fatty heart disease) and liver diseases. MDGL’s lead drug candidate (MGL-3196) is beta-selective thyroid receptor agonist. What does all that jargon mean? Essentially, MGL-3196 is a synthetic thyroid hormone that selectively interacts with only a certain type of thyroid receptor (beta) specific to liver cells (Pramfalk et al. 2010). Binding by MGL-3196 at the receptor site initiates a chain of reactions that ultimately regulates fat metabolism in the liver. That is why people with thyroid hormone deficiencies are more susceptible to NAFLD (Eshraghian et al. 2014).
From a shareholders perspective, MDGL is doing phenomenal. Not only do they have a market cap (MC) of $4.27B and share price of $296 (Nasdaq), but the company also achieved its primary endpoint in a phase 2 trial testing MGL-3196 on patients with Heterozygous Familial Hypercholesterolemia (HeFH). The good news did not stop there. The company went on to announce in another press release on May 31st, 2018 that they achieved their liver biopsy endpoints in a 36 week phase 2 trial on ~150 patients with NASH. The PR does not mention what stage of NASH these patients were in at baseline, but It appears that none were cirrhotic. This is based on a statement made by the CEO Paul Friedman M.D. He stated “Further, considering what we have learned regarding drug exposure and dosing, we believe there is potential to resolve NASH in as little as 9 months in 30-40% of patients receiving only MGL-3196, a well-tolerated once a day oral therapy”. Based on the fact that liver cirrhosis occurs when scar tissue begins to overcome healthy liver cells (Stanford Health Care) putting someone on the brink of liver failure and death, it is hard to conceive resolving the condition in 9 months.
Viking Therapeutics (VKTX)
VKTX is a clinical stage biotech company pursuing novel, first-in-class therapies for endocrine and metabolic disorders. A huge highlight for this company is their exclusive worldwide rights to a portfolio consisting of 5 clinical or preclinical studies based on drug candidates licensed from Ligand Pharmaceuticals Inc (LGND). All it takes is for one or two of these drugs to gain FDA approval for VKTX to start generating revenue. Currently, VKTX has a MC of $522.06M, 50.93M shares outstanding, and traded last at $10.25/share (Nasdaq). They have two clinical programs. One is the development of an oral drug, nonsteroidal selective androgen modulator (SARM) for development of selective thyroid hormone receptor activators involved in lipid disorders, one of which is NAFLD. Thus far VKTX has seen promising data in animal models. On June 5th, 2018 Viking announced completion of enrollment of a phase 2 study for patients with Hypercholesterolemia and NAFLD.
Intercept Pharmaceuticals (ICPT)
ICPT focuses on developing drugs to treat non-viral , progressive liver diseases. They have market cap of 2.78B, 29.58M shares outstanding, and traded last at $94.50 (Nasdaq). Intercept’s lead drug candidate is a compound called Obeticholic acid (OCA). It targets a key receptor (FXR) involved in regulating fibrotic and inflammatory pathways. Bile acids produced by catabolism of cholesterol inside the liver (Chiang. 2017) play a pivotal role in the metabolism of lipids, carbs, and fats by activating the FXR gene. So when bile acid biosynthesis gets out of whack people become prone to liver complications (Chiang. 2017). It appears that OCA upregulates FXR expression which combats fat accumulation in the liver, a driver of cirrhosis. In an April press release ICPT reported positive data from a phase 3 sub study supporting OCA’s antifibrotic effects.
ICPT has a diverse pipeline with an MMA/NDL filed for Primary Biliary Cholangitis (PBC), and OCA in phase 3 for NASH. But for fibrotic and metabolic diseases they are still in phase 1. In May of 2018 ICPT released another positive PR announcing Q1 2018 financial results, Ocaliva sales guidance, and business update. In April of 2018 there was an offering in which 2,695,313 shares of common stock were sold for $64 a piece. Currently, Ocaliva is approved for one indication (PBC) in combo with ursodeoxycholic acid (UDCA) which generated $36M in revenue.
Conatus Pharmaceuticals (CNAT)
CNAT is a clinical stage biotech company focused on treating liver diseases. They have a MC of $142.08M, 30.06M shares outstanding, and last traded at $4.75 (Nasdaq). Their lead drug candidate ‘Emricasan’ is an orally administered pan-caspase inhibitor. The scientific rationale is that because caspase enzymes are involved in regulating cell inflammation and apoptosis (cell death) inhibiting them will interfere with NASH progression to liver-cirrhosis. The latest evidence supporting Emricasan’s efficacy was preclinical data in mice showing increased survival rates, decreased fibrosis, and decreased blood pressure in mice liver.
Arguably one of CNAT’s biggest successes came in December 2016 when they entered into an “Exclusive Worldwide Option, Collaboration and License Agreement Covering Development and Commercialization of Emricasan” with pharma giant Novartis (NVS). This was great news for CNAT shareholders because NVS has the cash to support CNAT in bringing Emricasan through clinical trials and into commercialization, providing its effective. Mice is one thing but what works in lower level mammals does not always translate equally in humans. The results from three randomized, double blind, placebo-controlled phase 2 clinical trials testing the efficacy of Emricasan will be a make or break for CNAT. The remainder of the data is expected in Q4 of 2018. Shareholder sentiment is optimistic but as an outsider looking in it is hard not to be concerned about the trial design. The study is being conducted in several locations across the U.S. and E.U. and consists of ~240 patients with a mixture of compensated and decompensated liver-cirrhosis. The latter is whats most concerning. Decompensated liver-cirrhosis is the end of the line and associated with liver failure, jaundice, and fluid accumulation from ruptured cells (Thornton. 2018). Given Emricasan did not demonstrate efficacy on F5/F6 stage patients in the POLT Trial (cirrhosis patients), there is no reason to suspect it will perform any differently in patients with decompensated liver-cirrhosis. Compensated liver-cirrhosis on the other hand is more or less asymptomatic although high liver blood pressure and varices may occur (Thornton. 2018). The mixture of these two conditions in the patient population puts a lot of pressure on Emricasan to perform and achieve statistical significance while combating the worst NASH has to offer.
Gilead Sciences Inc. (GILD)
GILD is a researched based biopharmaceutical company that strives to commercialize innovative medicine and fulfill unmet medical needs. Compared to clinical stage biotech companies like CNAT, VKTX, and GALT Gilead is well established with ~30 products approved since 1987. They have a MC of $97.79B, 1.3B shares outstanding, and traded last at $75.30 per share (Nasdaq). Their pipeline has many drug candidates for a variety of indications such as HIV/AIDS, Hematology/Oncology, and Liver Diseases. Under the umbrella of Gilead’s liver disease clinical research program, 3 of its molecules are directed at treating NASH. One is an FXR agonist (induces greater FXR activity), the same receptor targeted by ICPT’s lead molecule OCA, and is in phase 2 of development. FXR is a protein which activates genes that maintain a healthy balance of bile acids, fats, and cholesterol in the liver (Zhu et al. 2011). The second compound is an Apoptosis signal-regulating kinase 1 (ASK-1) inhibitor. ASK-1 belongs to the MAP3K protein family that mediates cell growth and death (Fiedler et al. 2014). Inhibition of ASK-1 by knocking out the gene responsible for its production reduced liver fibrosis and cell death in mice (Schuster et al. 2017). In October of 2016 Gilead announced top-line results from a phase 2 trial testing the efficacy of ASK-1 inhibition at treating NASH in humans. Gilead scientists determined that GS-4997 (the ASK-1 inhibitor) demonstrated antifibrotic activity and warranted advancement to phase 3. From reading the PR it appeared few to none of the patients had liver cirrhosis and were still in the earlier stages of NASH when symptoms may not be present. Gilead’s third NASH candidate is an Acetyl CoA Carboxylase (ACC) inhibitor.
Fatty-acid (FA) synthesis and degradation is stringently controlled in our body based on physiological demands (NCBI. 2002). For example, when carbs are plentiful and FAs are low, biosynthesis of FAs is maximized (NCBI. 2002). The rationale here is that because ACC plays a central role in the biosynthesis of FAs (NCBI. 2002) inhibiting them will prevent fat accumulation and thus liver fibrosis/cirrhosis. In an October of 2017 PR Gilead announced the drug (GS-0976) significantly reduced liver fat and fibrosis. The study was a randomized, placebo-controlled trial with two dosage groups (5mg and 20mg) administered once daily orally for 12 weeks. The study included 126 patients diagnosed with NASH stages 1-3. None were cirrhotic (Stage 4).
Galmed Pharmaceuticals (GLMD)
GLMD is a biopharmaceutical company developing a once daily oral drug (Aramchol) for NASH but also other liver disorders. First let’s break down the science behind Aramchol and see just how this thing works. Aramchol is a targeted SCD-1 modulator with dual action by both decreasing liver fibrosis AND a promoting positive effect on Hepatic Stellate Cells (HSC’s), aka collagen cells. SCD-1 stands for stearoyl-CoA desaturase and catalyzes the rate limiting step in biosynthesis of fatty acids. So it is only logical that if GLMD wanted less fat accumulation in the liver then they should knock out or at least knock down the gene encoding SCD-1. Well that is essentially what they did in mice and saw that it decreased obesity, increased energy expenditure, and increased the expression of genes promoting fatty acid oxidation and reducing fibrosis.
On 06/12/2018 GLMD more than doubled (~$7-$27) in value during the pre-market on news of positive results from its Global Phase-2b ARREST 52-week Study in NASH patients. A statistically significant reduction in liver fat was detected in patients via Magnetic Resonance Spectroscopy (MRS) compared to a placebo group. In another treatment group given a higher dosage they found significantly more patients compared to the placebo groupp had NASH resolution without worsening of fibrosis. This was a huge win for the company no doubt, but it appears the market overreacted. Since its spike to a high of $27.06/share (Nasdaq)the price has come down substantially as investors took profits and the reality of the results set in. And the reality is not a bad one. The thing is these patients were not cirrhotic and likely not showing symptoms, therefore falling into the category of ‘ineligible for NAFLD detection/preventative measures like FibroScan. The next stock up has a reasonable likelihood to surpass the recent performance of Galmed in the authors opinion, but when this one moves, there won’t be any coming back down. And if you have not guessed already, it is Galectin Therapeutics.
Galectin Therapeutics (GALT)
GALT is in a clinical stage biotech company leveraging their scientific understanding of galectin proteins to treat chronic liver diseases, skin diseases, and cancer. Galectin’s lead drug candidate (GR-MD-02) is a carbohydrate isolated from apples that inhibits galectin proteins, specifically Galectin-3 (Gal-3) implicated in fibrosis/cirrhosis (Li et al. 2014). The rational for advancing GRMD02 through phase 1, 2, and now into phase 3 is thus easy to follow: Galectin-3 is implicated in causing fibrosis/cirrhosis of the liver, GR-MD-02 inhibits galectin-3 activity and patients with liver-cirrhosis without varices who took the drug had substantial, statistically significant, decreases in liver blood pressure compared to placebo patients (liver blood pressure is considered a good bio-indicator of NASH severity/progression/status) and none of the patients in the GR2 (2mg) and only one patient in the GR8 (8mg) treatment groups respectively developed varices compared to 6 in the placebo group in the phase 2b study.
The data clearly supports GR-MD-02’s efficacy on patients with NASH-cirrhosis without varices, a criteria that half of the 3-5 million patients in the United States with NASH-cirrhosis meet. Furthermore, there have been zero concerns regarding safety. Considering the favorable choice of endpoints (change in liver blood pressure OR progression of varices) and safety profile for GRMD02, GALT is positioned to blow phase 3 out of the water and gain FDA approval within 18 months. Something else that is impressive about GALT is the strength of their patent portfolio of novel carbohydrates and the seemingly versatility of GR-MD-02 as demonstrated in refractory melanoma patients.
Galectin is engaged in ‘Keytruda’ combo study with Merck Pharmaceuticals (MRK) treating patients already on Keytruda but not responding.What’s so impressive aside from the clinical response from patients considered ‘out of options’ was it being in a phase 1b study designed to show safety, not efficacy, yet they saw efficacy! An article written by Michael Sheikh, “Cancers Last Stand-GR-MD-02 Nearly Doubles Response Rates when added to Keytruda” covers this nicely.
How much is it to buy into a company with such a promising outlook? The answer may or may not surprise you. As of July 8th, 2018 GALT has a market cap of $253.22M, 37.57M shares outstanding, and traded last at $6.84 per share. Given the sequence of recent events and upcoming catalysts; approval of phase 3 with favorable end-points, 8k filed 5/29/18 with ‘transaction incentives’ up to 300% for top execs base salary, ‘retention bonuses’ 75% of base salary, hiring of Back Bay Life Sciences Advisors, appointment of billionaire Richard Uihlein as board chairman, receiving of a patent for GR for method and treatment of pulmonary fibrosis, and replacement of CEO Dr. Traber with COO Dr. Shlevin known for making deals happen, the time is now to buy GALT in the authors opinion before a buyout, partnership, licensing agreement, and/or groundbreaking cancer data sends the share price soaring.
Sultan F. Beardsley
I am/we are long GALT
About the Author: Sultan F Beardsley is a Doctoral student studying Plant Genetics at the University of Florida performing important research related to increasing crop sustainability and output. He is well educated on plant derived complex carbohydrates and therefore is interested in GRMD02 as a treatment for a broad category of diseases where Galectin’s are over-expressed leading to 45% of all deaths globally.