Galectin Therapeutics Inc.

For the year ended Dec. 31, 2016, Galectin reported a net loss applicable to common shareholders of $22.4 million, or $0.76 per share, versus a net loss of $21.1 million, or $0.88 per share in 2015. Research and development expense was $15.3 million in 2016 compared with $13.1 million in 2015, while general and administrative expense was $6.2 million versus $7.0 million in 2015. Cash and cash equivalents totaled $15.4 million at Dec. 31, 2016, and the company raised an additional $1.5 million in net proceeds in January and February 2017. Management said it believes existing cash is sufficient to fund currently planned operations through Dec. 31, 2017. Forward guidance centered on top-line NASH-CX Phase IIb data expected in December 2017, with the company also saying 2017 R&D and G&A should be similar to 2016.

Peter Traber framed 2016 as a milestone year for GR-MD-02 and reiterated that the company’s lead value driver is NASH cirrhosis. He emphasized the drug’s safety profile, saying thousands of doses have been given with no serious drug-related complications, and pointed to clinical signals in psoriasis, atopic dermatitis, and melanoma combination therapy as evidence of biological activity. His tone was cautiously optimistic, with the main message that December 2017 NASH-CX data could be a major inflection point.

Jack Callicut focused on the year-end financials and runway. He cited the $22.4 million net loss, the increase in R&D to $15.3 million driven mainly by the Phase II NASH-CX trial, and the decline in G&A to $6.2 million due largely to lower stock-based compensation. He said cash was $15.4 million at year-end, with an additional $1.5 million raised early in 2017, and reiterated the company believes it can fund planned operations through the end of 2017; he also said 2017 R&D and G&A should be about the same as 2016.

Analysts focused heavily on NASH-CX design and timing. Management confirmed 10 dropouts out of 162 patients, or about 6%, versus a planned 25% dropout rate, and said the enrolled population had mean HVPG in the 12-15 mmHg range with pre-specified subgroup analyses above and below 10 mmHg, as well as 5-10, 10-15 and 15+ mmHg. They also said the last patient should finish around August or September, database lock is expected in mid-October, and top-line data are targeted for December 2017. On strategy, management said non-cirrhotic NASH is no longer a focus, skin-disease partnering would need to avoid blocking a future NASH deal, and the oncology program is still early, with a Phase II decision dependent on response versus historical pembrolizumab data.