On September 27, Galectin Therapeutics Inc 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.
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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