Galectin Shares Downgraded As NASH-FX Failure Likely Degrades The Prognosis For NASH-CX

On September 27, Galectin Therapeutics Inc (NASDAQ: GALT) announced its Phase 2 NASH-FX trial had failed to achieve both the primary and secondary endpoints.

H.C. Wainwright’s Ed Arce downgraded the rating on the company to Neutral while lowering the price target from $8.00 to $1.50.

Surprising Failure

“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,” Arce mentioned.

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The earlier trial had revealed statistically significant reductions in the FibroTest scores, due to a meaningful reduction in serum alpha-2 maceroglobulin, a serum marker associated with liver fibrosis.

On the other hand, LiverMultiScan demonstrated a coefficient of variation that was less than 5 percent, giving further evidence of a lack of anti-fibrotic activity seen in this Phase 2 NASH-FX study.

Stock ‘Dead Money’

“Furthermore, from a fundamental perspective, in our view, the results of NASH-FX likely carry negative implications for the probability of success for NASH-FX, due to readout in December 2017,” the analyst stated.

According to the H.C. Wainwright report, the 15-month long data catalyst gap potentially leaves the stock as “dead money” until the results are revealed.

At time of publication, Galectin shares were seen trading at $1.28, down 8.57 percent on the day.

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