Roth Still Loves Galmed Pharma, Keeps $20 Price Target And 'Buy' Rating

Shares of Galmed Pharmaceuticals Ltd GLMD fell 3.34 percent on Wednesday, after the company announced the “inlicensing of a companion diagnostic test candidate for the co-development with the company's drug Aramchol for the treatment of NASH” (Roth).

Following the event, Roth Capital Partners analyst Elemer Piros reiterated a Buy rating and a $20.00 12-month price target on the stock, which implies that he expects the stock to more than double in value over the next year.

Liver Diagnostics

The current method available for diagnosis and measurement of a drug effect in the NASH (nonalcoholic steatohepatitis) indication involves an invasive liver biopsy.

As far as Roth knows, Galmed is the first company to make public a formal development of a companion diagnostic for a drug in this indication.

Licensor and co-developmental partner, One Way Liver Genomics has developed a test (OWLiver®) that should identify NASH patients. In a paper published not long ago, the researchers involved in the trial said that, “with a panel of 540 serum metabolites NASH could be predicted with a sensitivity of 0.71 and a specificity of 0.92.”

Now, where does Galmed come in here?

Well, Galmed will co-fund the ongoing Phase 2b trial (ARREST) clinical trial with up to €437,000. The aim is to identify “whether these or perhaps additional biomarkers could identify Aramchol responders.”

Assuming launch in 2020, Roth estimates that Aramchol may reach roughly $3 billion in annual peak sales by 2024.