Galectin Plunges 34% After FDA Setback for Liver Drug Belapectin
Regulatory uncertainty clouds the future of the company's lead MASH drug candidate after the agency opts for a written response over a key trial design meeting.
Shares of Galectin Therapeutics (NASDAQ: GALT) plunged more than 34% in Tuesday trading after the company revealed a regulatory setback from the U.S. Food and Drug Administration for its lead drug candidate, belapectin, aimed at treating metabolic dysfunction-associated steatohepatitis (MASH), a severe form of fatty liver disease.
The clinical-stage biopharmaceutical firm saw its stock price fall to $4.05, wiping out a significant portion of its market capitalization. The sell-off was triggered by the FDA providing a written response to the company’s plans for a pivotal trial, rather than granting a previously anticipated meeting. This development introduces fresh uncertainty and potential delays into the clinical pathway for Galectin's most critical asset.
Galectin is developing belapectin for patients with MASH cirrhosis, a condition with a significant unmet medical need and no currently approved treatments. The company had sought a Type B meeting with the FDA to finalize the design of a crucial registration trial. Instead, the agency's written feedback necessitates that Galectin request a follow-up Type C meeting to align on trial design and present new biomarker data, pushing back the timeline for starting the next phase of development.
In a press release Tuesday morning, the company attempted to frame the update in a positive light. "Our focus remains on advancing belapectin for patients with MASH cirrhosis and portal hypertension," said Joel Lewis, Chief Executive Officer at Galectin Therapeutics. "We were pleased to receive feedback prior to year-end and look forward to continued dialogue as we work to finalize the next stage of clinical development."
The company stated that the FDA's feedback indicated alignment on the proposed patient population and a previously agreed-upon method for assessing esophageal varices, a life-threatening complication of advanced liver disease. However, investors focused on the procedural delay, which clouds the timeline for bringing belapectin to market.
Underscoring the stakes, MASH, formerly known as nonalcoholic steatohepatitis (NASH), is a multi-billion dollar market that has attracted intense interest from numerous drug developers. The high-profile failure of Intercept Pharmaceuticals' obeticholic acid to secure FDA approval for a similar indication has highlighted the significant challenges in this therapeutic area.
To cushion the impact of the delay and shore up its financial position, Galectin also announced it had secured a new $10 million unsecured, convertible line of credit from its chairman, Richard E. Uihlein. The company noted this financing is expected to be sufficient to cover its expenditures through March 2027, providing a crucial cash runway as it navigates the extended regulatory process.
Despite the sharp decline, Galectin's stock remains above its 52-week low of $0.73, but is far from its high of $7.13. Before the announcement, a lone analyst covering the stock had a target price of $11.00, a level that now seems distant given the renewed regulatory hurdles. Tuesday's trading volume surged to more than 10 times the daily average, signaling a decisive and widespread investor retreat following the news.
Investors and analysts will now be closely watching for the scheduling and outcome of the future Type C meeting, which will be critical in determining the final trial design and the ultimate path forward for belapectin, the cornerstone of Galectin's pipeline.