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October 2013
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Galectin Stands Out in 2013 with Liver Fibrosis Drug


By TDM Financial Biotechnology has been an outperforming sector in 2013 with IBB, iShares
Nasdaq Biotechnology Index Fund, rising about 57 percent through
September 27 highs. BIB, the ProShares Ultra Nasdaq Biotechnology Index
has roared ahead about 135 percent through highs on the same day.

While those gains are certainly robust, the September high of Galectin
Therapeutics Inc. (NASDAQ: GALT) at $13.21 made them seem paltry,
producing gains of more than 550 percent in 2013 for GALT shareholders.
The surge in Galectin’s valuation seems simply a product of corporate
advancements as the company establishes itself as a leader in pioneering
treatments for fibrosis, especially liver fibrosis that results from
fatty liver disease.

Liver fibrosis can be an asymptomatic death sentence with no available
therapeutics to treat the scarring in the liver that leads to liver
complications, co-morbidities and death. The genesis of fibrosis is
fatty liver disease, with the combined conditions, called non-alcoholic
steatohepatitis, or “NASH,” affecting as many as 15 million Americans
today. Some estimates put the number of Americans affected by
nonalcoholic fatty liver disease (NAFLD) as high as 30 percent of the
population, or approximately 94 million people.

With the high diagnosis rate, researchers have mostly focused on
developing therapies to stop the accumulation of fat in the liver, but
with limited success. Companies devoting their resources toward new
treatments for advanced stages of the diseases are minimal, with
Galectin and Gilead Sciences (NASDAQ: GILD) running promising programs
in that space. Meanwhile, the select few other companies targeting
fibrosis are focused on the early stages of the disease, a time where it
can be very difficult to identify which patients will advance to more
serious stages of the disease. Gilead has received plenty of attention
in 2013 for its leadership role in HIV drugs as well as fibrosis efforts
with simtuzumab in mid-stage trials for NASH patients, helping send
shares about 70 percent higher so far this year.

While Galectin has its GM-CT-01 drug candidate in Phase 2 clinical
trials for melanoma, perhaps an even larger driver has been their
research of their galectin protein-inhibiting drugs that shows the
potential for GR-MD-02 to not only treat NASH patients, but also
actually reverse the scarring in the liver. A drug to treat fatty liver
disease and fibrosis has blockbuster potential written all over it, but
one that can actually reverse scarring can revolutionize fibrosis

While this article is only referencing the liver, fibrosis is prominent
in other vital organs as a result of inflammation or damage, such as the
lungs, heart, intestines and more. Galectin has conducted pre-clinical
research on GR-MD-02 to expand into additional indications, with
information released in September disclosing the drug showing a “robust
effect” in reducing lung fibrosis. Separate research has also
demonstrated tumor shrinkage and enhanced survival in immune competent
breast and prostate cancer mouse models treated with GR-MD-02 in
combination with immune checkpoint blockage inhibitors anti-CTLA-4 or

Galectin is evaluating GR-MD-02 in the Phase 1 trial under a Fast Track
designation from the Food and Drug Administration with the first patient
dosed in July. The trial is planned to enroll about 32 patients with
NASH and stage 3 fibrosis across six clinical sites in the U.S.

There is no doubt that the biotech sector has been one of the best market
performers in 2013 and it doesn’t look to be losing any steam. Even as
some of the majors take a breather as the new year approaches,
investors should be looking for developmental companies that are
starting to grow a stronger valuation based upon two things: the data
supporting their drug and the future market potential if successfully
maneuvered down the regulatory pathway. In the case of companies
engaged in fibrosis treatments, market capitalizations in the low
hundreds of millions of dollars should only represent a portion of the
things to come.

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