GALECTIN THERAPEUTICS INC. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements. Such statements include, but are not limited to, statements concerning our anticipated operating results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" and "would," "should," "could" or "may." All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements, including statements regarding: plans and expectations regarding clinical trials; plans and expectations regarding regulatory approvals; our strategy and expectations for clinical development and commercialization of our products; potential strategic partnerships; expectations regarding the effectiveness of our products; plans for research and development and related costs; statements about accounting assumptions and estimates; expectations regarding liquidity and the sufficiency of cash to fund currently planned operations through at leastSeptember 30, 2022 ; our commitments and contingencies; and our market risk exposure. Forward-looking statements are based on current expectations, estimates and projections about the industry and markets in whichGalectin Therapeutics operates, and management's beliefs and assumptions. These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties are related to and include, without limitation, • our early stage of development,
• we have incurred significant operating losses since our inception and
cannot assure you that we will generate revenue or profit,
• our dependence on additional outside capital,
• we may be unable to enter into strategic partnerships for the
development, commercialization, manufacturing and distribution of our
proposed product candidates,
• uncertainties related to any litigation, including shareholder class
actions and derivative lawsuits filed,
• uncertainties related to our technology and clinical trials, including
expected dates of availability of clinical data,
• we may be unable to demonstrate the efficacy and safety of our
developmental product candidates in human trials,
• we may be unable to improve upon, protect and/or enforce our intellectual
property,
• we are subject to extensive and costly regulation by the
must approve our product candidates in development and could restrict the
sales and marketing and pricing of such products,
• competition and stock price volatility in the biotechnology industry,
• limited trading volume for our stock, concentration of ownership of our
stock, and other risks detailed herein and from time to time in our
reports,
• the impact resulting from the outbreak of
COVID-19,which has delayed and may continue to delay our clinical trial and
development efforts, as well as the impact that
COVID-19
has on the volatility of the capital market and our ability to access the
capital market and,
• other risks detailed herein and from time to time in our SEC reports,
including our Annual Report on Form
10-K
filed with the SEC for the fiscal year ended December 31, 2020 , and our
subsequent SEC filings.
The following discussion should be read in conjunction with the accompanying
consolidated financial statements and notes thereto of Galectin Therapeutics
appearing elsewhere herein. Furthermore, in this Quarterly Report on Form
10-Q,
we refer to other sources of information, such as the information posted on our
website or peer reviewed publications. The information from these sources are
not incorporated by reference to this Quarterly Report on Form
10-Q.
Overview
We are a clinical stage biopharmaceutical company engaged in drug research and
development to create new therapies for fibrotic disease, cancer and selected
other diseases. Our drug candidates are based on our method of targeting
galectin proteins, which are key mediators of biologic and pathologic functions.
We use naturally occurring, readily-available plant products as starting
material in manufacturing processes to create proprietary, patented complex
carbohydrates with specific molecular weights and other pharmaceutical
properties. These complex carbohydrate molecules are appropriately formulated
into acceptable pharmaceutical formulations. Using these unique
carbohydrate-based candidate compounds that largely bind and inhibit galectin
proteins, particularly
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galectin-3,
we are undertaking the focused pursuit of therapies for indications where
galectin proteins have a demonstrated role in the pathogenesis of a given
disease. We focus on diseases with serious, life-threatening consequences and
those where current treatment options, are limited specifically in NASH
(non-alcoholic
steatohepatitis) with cirrhosis and certain cancer indications. Our strategy is
to establish and implement clinical development programs that add value to our
business in the shortest period of time possible and to seek strategic partners
when one of our programs becomes advanced and requires significant additional
resources.
Our lead
galectin-3
inhibitor is belapectin
(GR-MD-02),
which has been demonstrated in preclinical models to reverse liver fibrosis and
cirrhosis. Belapectin has the potential to treat many diseases due to
galectin-3's
involvement in multiple key biological pathways such as fibrosis, immune cell
function and immunity, cell differentiation, cell growth, and apoptosis (cell
death). The importance of
galectin-3
in the fibrotic process is supported by experimental evidence. Animals with the
gene responsible for
galectin-3
"knocked-out"
can no longer develop fibrosis in response to experimental stimuli compared to
animals with an intact
galectin-3
gene. We are using our
galectin-3
inhibitor to treat advanced liver fibrosis and liver cirrhosis in NASH patients.
We have completed two Phase 1 clinical studies, a Phase 2 clinical study in NASH
patients with advanced fibrosis
(NASH-FX)
and a second Phase 2b clinical trial in NASH patients with well compensated
cirrhosis
(NASH-CX)
meaning the liver is scarred but still able to perform most of its basic
functions.
We are now engaged in a Phase 2b/3 clinical trial. Our study protocol was filed
with the FDA on April 30, 2020 for a seamless adaptively-designed Phase 2b/3
clinical study, the NAVIGATE trial (formerly called
NASH-RX),
evaluating the safety and efficacy of its
galectin-3
inhibitor, belapectin
(GR-MD-02),
for the prevention of esophageal varices in patients with
non-alcoholic
steatohepatitis (NASH) cirrhosis (Further details are available at
www.clinicaltrials.gov
under study NCT04365868); this study began enrolling patients in
Q2-2020.
In September 2020 , the Company received a letter from the FDA providing
comments, asking questions and providing guidance on various aspects of the
ongoing NAVIGATE trial.
Additionally, a study protocol entitled "A Single-dose, Open-label,
Pharmacokinetic Study of
Belapectin
(GR-MD-02)
in Subjects With Normal Hepatic Function and Subjects With Varying Degrees of
Hepatic Impairment" has been filed with the FDA to examine the effects of the
drug in subjects with normal hepatic function and subjects with varying degrees
of hepatic impairment (study details are listed under study NCT04332432 on
www.clinicaltrials.gov
); this study is enrolling patients.
We endeavor to leverage our scientific and product development expertise as well
as established relationships with outside sources to achieve cost-effective and
efficient drug development. These outside sources, amongst others, provide us
with expertise in preclinical models, pharmaceutical development, toxicology,
clinical trial operations, pharmaceutical manufacturing, sophisticated physical
and chemical characterization, and commercial development. We also have
established through our majority-owned joint venture subsidiary, Galectin
Sciences LLC , a discovery program aimed at the targeted development of small
molecules (generally,
non-carbohydrate)
that bind galectin proteins and may afford options for alternative means of drug
delivery (e.g., oral) and as a result expand the potential uses of our
galectin-3
inhibitor compounds. Three series of composition of matter patents covering
discoveries at Galectin Sciences have been filed.
We are also pursuing a development pathway to clinical enhancement and
commercialization for our lead compounds in immuno-oncology for cancer therapy
in collaboration with Providence Portland Cancer Center . However, our clinical
development efforts are primarily focused on liver fibrosis and NASH. All of our
proposed products are presently in development, including
pre-clinical
and clinical trials.
Our Drug Development Programs
Galectins are a class of proteins that are made by many cells in the body, but
predominantly in cells of the immune system. As a group, these proteins are able
to bind to sugar molecules that are part of other proteins, glycoproteins, in
and on the cells of our body. Galectin proteins act as a kind of molecular glue,
bringing together molecules that have sugars on them. Galectin proteins, in
particular
galectin-3,
are known to be markedly increased in a number of important diseases including
inflammatory diseases, scarring of organs (e.g. liver, lung, kidney, and heart)
and cancers of many kinds. The increase in galectin protein promotes the disease
and is detrimental to the patient. Published data substantiating the importance
of
galectin-3
in the fibrotic process arises from gene knockout experiments in animal studies.
Mice genetically altered to eliminate the
galectin-3
gene, and thus unable to produce
galectin-3,
are incapable of developing liver fibrosis in response to toxic insult to the
liver and in fatty liver disease as well as development of fibrosis in other
tissues.
We have one new proprietary chemical entity (NCE) in development, belapectin,
which has shown promise in preclinical and early clinical studies in treatment
of fibrosis, severe skin disease, and in cancer therapy. Currently we are
focusing on development of belapectin intended to be used in the treatment of
liver fibrosis associated with fatty liver disease (NASH) and more specifically
in NASH cirrhosis. We have also leveraged our relationships with well-known
investigators to demonstrate clinical effects of belapectin in treating moderate
to severe plaque psoriasis, severe atopic dermatitis, and in cancer therapy in
combination with immune-system modifying agent(s). Belapectin is a proprietary,
patented compound derived from natural, readily available, plant-based starting
materials, which, following chemical processing, exhibits the properties of
binding to and inhibiting
galectin-3
proteins. A second NCE,
GM-CT-01
is a proprietary, patented compound that is made from a completely different
starting source plant material and also binds and inhibits galectin proteins.
Previously in clinical development for cancer indications,
GM-CT-01
compound has been explored in limited other preclinical studies.
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Our product pipeline is shown below:
Indication Drug Status
Fibrosis
NASH with Advanced belapectin IND submitted January 2013. Results from the
Fibrosis: Phase 1 clinical trial were reported in
NASH-CX 2014, with final results reported in January
trial and 2015.
NASH-FX The Phase 2 NASH FX trial was designed for
trial patients with advanced fibrosis but not
cirrhosis. Its principal purpose was to
evaluate various imaging modalities. The
NASH FX trial top line data was reported in
September 2016
The Phase 2 NASH CX trial, was designed for
patients with well compensated cirrhosis.
The NASH CX trial top line data was reported
in December 2017 and was published in
Gastroenterology
in 2020.
NASH NAVIGATE Based on FDA feedback, the NAVIGATE trial is
an adaptive Phase 2b/3 trial for the
prevention of esophageal varices in NASH
patients with compensated cirrhosis. A Phase
2b interim efficacy analysis will be
incorporated to confirm previous Phase 2
data, select an optimal dose and reaffirm
the risk/benefit of belapectin. The Phase 3
end of study analysis will evaluate the
development of esophageal varices as the
primary outcome of efficacy and a composite
clinical endpoint including progression to
varices requiring treatment as a key
secondary outcome of efficacy. See
www.clinicaltrials.gov NCT04365868. The
first patient was randomized in the third
quarter of 2020.
A hepatic impairment is being conducted in
subjects with normal hepatic function and
subjects with varying degrees of hepatic
impairment (CF: www.clinicaltrials.gov
NCT04332432) and began enrolling patients in
the second quarter of 2020.
Lung Fibrosis belapectin In
pre-clinical
development
Kidney Fibrosis belapectin In
pre-clinical
development
Indication Drug Status
Cardiac and Vascular belapectin and In
Fibrosis GM-CT-01 pre-clinical
development
Cancer Immunotherapy
Melanoma, Head, Neck belapectin Investigator IND study in process. A
Squamous Cell Phase 1B study began in
Carcinoma (HNSCC) Q-1
2016. Early data was reported in February
2017 and additional data were reported in
September 2018. A further expansion cohort
of patients with melanoma and HNSCC was
reported in July 2021.
Psoriasis
Moderate to Severe belapectin IND submitted March 2015. A Phase 2a trial
Plaque Psoriasis in moderate to severe plaque psoriasis
Severe Atopic patients began in January 2016. Interim data
Dermatitis on the first four patients were positive and
were reported in May 2016. Further positive
data was reported in September 2016.
Investigator initiated IND submitted for
treatment of three patients with severe
atopic dermatitis, with positive preliminary
data presented in February 2017. Further
studies are dependent on finding a suitable
strategic partner which is unlikely.
Fibrosis.
Belapectin is our lead product candidate for treatment of fibrotic disease. Our
preclinical data show that belapectin has a significant therapeutic effect on
liver fibrosis as shown in several relevant animal models. In addition, in NASH
animal models, belapectin has been shown to reduce liver fat, inflammation, and
ballooning degeneration (death of liver cells). Therefore, we chose
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belapectin as the lead candidate in a development program targeted initially at
fibrotic liver disease associated with
non-alcoholic
steatohepatitis (NASH). In January 2013 , an Investigational New Drug ("IND") was
submitted to the FDA with the goal of initiating a Phase 1 study in patients
with NASH and advanced liver fibrosis to evaluate the human safety of belapectin
and pharmacodynamics biomarkers of disease. On March 1, 2013 , the FDA indicated
we could proceed with a US Phase 1 clinical trial for belapectin with a
development program aimed at obtaining support for a proposed indication of
belapectin for treatment of NASH with advanced fibrosis. The Phase 1 trial was
completed and demonstrated that belapectin up to 8 mg/kg Lean Body Mass (LBM),
i.v. was safe and well tolerated.
Additionally, an open label drug-drug interaction study was completed in healthy
volunteers during the second quarter of 2015 with belapectin and it showed that
with 8 mg/kg LBM dose of belapectin and 2 mg/kg LBM dose of midazolam there was
no drug-drug interaction and no serious adverse events or drug-related adverse
events were observed. The secondary objective was to assess the safety and
tolerability of belapectin when administered concomitantly with midazolam.
Our Phase 2 program in fibrotic disease consisted of two separate human clinical
trials. The primary clinical trial was the Phase 2b
NASH-CX
study for one year for patients with NASH with compensated cirrhosis, which
began enrolling in June 2015 . This study was the primary focus of our program
and was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b
trial to evaluate the safety and efficacy of belapectin for treatment of liver
fibrosis and resultant portal hypertension in NASH patients with compensated
cirrhosis. A smaller, exploratory
NASH-FX
trial was conducted to explore potential use of various
non-invasive
imaging techniques in NASH patients with advanced fibrosis but not cirrhosis.
NASH-FX
Trial:
The
NASH-FX
trial was a Phase 2a pilot trial for patients with NASH and advanced fibrosis
that explored use of three
non-invasive
imaging technologies. It was a short, single site, four-month trial in 30 NASH
patients with advanced fibrosis (F3), but not cirrhosis (F4), randomized 1:1 to
either
9 bi-weekly
doses of 8 mg/kg LBM of belapectin or placebo. The trial did not meet its
primary biomarker endpoint as measured using multi-parametric magnetic resonance
imaging (LiverMultiScan
(R)
, Perspectum Diagnostics ). The trial also did not meet secondary endpoints that
measure liver stiffness as a surrogate for fibrosis using, magnetic
resonance-elastography and FibroScan
®
score. We, and many experts in the field, now believe that a four-month
treatment period was not sufficient to show efficacy results in established
advanced liver fibrosis. This small study was also not adequately powered for
the secondary endpoints. In the trial, belapectin was found to be safe and well
tolerated with no serious adverse events and evidence of a pharmacodynamic
effect. These results provided support for further development in NASH.
NASH-CX
Trial:
The
NASH-CX
trial was a larger multi-center clinical trial that explored the use of
belapectin for the treatment of liver fibrosis and resultant portal hypertension
in patients with well-compensated NASH cirrhosis. Enrollment in this trial was
completed in September 2016 , and a total of 162 patients at 36 sites in the
United States were randomized to receive either 2 mg/kg LBM of belapectin, 8
mg/kg LBM of belapectin or placebo, with 54 patients in each group.
Approximately 50% of patients at baseline had esophageal varices (a complication
of portal hypertension). The primary endpoint was a reduction in hepatic venous
pressure gradient (HVPG). Patients received an infusion of belapectin or placebo
every other week for one year, a total of 26 infusions, and were evaluated to
determine the change in HVPG as compared with placebo. Secondary or exploratory
endpoints included fibrosis on liver biopsy, measurement of liver stiffness
(FibroScan
(R)
) and assessment of liver metabolism (
13
C-methacetin
breath test, Exalenz). Top line data readout was reported in December 2017 . The
study demonstrated a favorable safety profile and clinically meaningful efficacy
results in patients without esophageal varices at baseline demonstrated by a
prevention of development of varices when compared to placebo.
In the total patient population, the primary endpoint HVPG showed a trend toward
benefit with belapectin treatment, but the difference from placebo was not
statistically significant. The mean change in HVPG of placebo from baseline to
week 54 was 0.3 mm Hg. The mean change in HVPG from baseline was
-0.37
and
-0.42
for the 2 mg/kg LBM dose and 8 mg/kg LBM dose of belapectin, respectively.
In those NASH cirrhosis patients without varices at baseline (about 50% of the
total population), there was a statistically significant effect of the 2 mg/kg
LBM dose of belapectin on the absolute change in HVPG
(-1.08
mm Hg, p<0.01). The effect of the 8 mg/Kg LBM dose of belapectin on absolute or
percent change in HVPG from baseline to week 54 was not significant.
Also because of the clinical relevance of this population, a responder analysis
was performed on those patients without varices at baseline. Analysis was
performed looking at two groups: those with an equal to or greater than 2 mm Hg
decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg
and a greater than or equal to 20% decrease in HVPG from baseline. In both
cases, the change observed in the belapectin 2 mg/kg LBM group was statistically
significant (p<0.01) while that of the 8 mg/kg LBM group was not.
Over the
54-week
treatment period, in patients without varices there were statistically
significantly fewer new varices that developed in the belapectin treatment
groups (0% and 4% in the 2 mg/kg LBM and the 8 mg/kg LBM, respectively) vs
placebo (18%). As esophageal varices can lead to hemorrhagic complication, which
can be fatal, we believe the prevention of esophageal varices may represent a
clinically relevant measure of clinical efficacy in patients with NASH
cirrhosis.
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The major conclusions from the
NASH-CX
trial results were that: i) belapectin had a statistically significant and
clinically meaningful effect in improving HVPG vs placebo in patients with NASH
cirrhosis who did not have esophageal varices at baseline. This effect was seen
regardless of the patient's baseline portal hypertension. ii) There was an
important drug effect of belapectin in the total patient population on liver
biopsy with a statistically significant improvement in hepatocyte ballooning (ie
cell death), (iii) There was a statistically significant reduction (p=0.02) in
the development of new esophageal varices in drug-treated patients compared to
placebo. We believe that this is a clinically relevant endpoint related to
patient outcomes, (iv) While there was a drug effect in both the 2 mg/kg LBM and
8 mg/kg LBM groups on the development of varices and liver biopsy there was a
consistently greater and statistically significant effect of the 2 mg/kg LBM
dose of belapectin, (v) belapectin appears to be safe and well tolerated in this
one year clinical trial, a feature that is of prime importance for a cirrhotic
population and (vi) We believe this is the first large, randomized clinical
trial to demonstrate a clinically meaningful improvement in portal hypertension
or liver biopsy in patients with compensated NASH cirrhosis who have not yet
developed esophageal varices.
Further information and details on the
NASH-CX
results summarized above is available in public presentations posted to our
website and filed with the SEC and in a peer reviewed publication in
Gastroenterology
(Gastroenterology 2020;158:1334-1345).
NASH NAVIGATE Trial:
Building on the experience of the
NASH-CX
trial, the NAVIGATE Trial is a seamless adaptively-designed Phase 2b/3 clinical
study evaluating the safety and efficacy of our
galectin-3
inhibitor, belapectin
(GR-MD-02),
for the prevention of esophageal varices in patient with
non-alcoholic
steatohepatitis (NASH) cirrhosis. The major features of this innovative Phase
2b/3 study design are: i) In patients with NASH cirrhosis and clinical signs of
portal hypertension but without esophageal varices at baseline, this trial will
assess the effect of belapectin on the incidence of new varices (the primary
endpoint) - as well as assessing effect on the incidence of long-term,
clinically significant cirrhosis-related outcomes (a key secondary efficacy
endpoint), (ii) The study targets NASH patients with a clearly identified unmet
medical need: patients with compensated cirrhosis who are at risk of developing
esophageal varices, a potentially life-threatening complication of cirrhosis
(bleeding varices are a cause of death in about
one-third
of cirrhotic patients). There is no approved treatment for preventing varices in
these patients. In addition, the development of esophageal varices reflects the
progression of hepatic cirrhosis and thus portends the development of other
cirrhosis complications such as ascites, hepatic encephalopathy, and liver
failure, and (iii) During the first 18 months, two belapectin dose levels (2
mg/kg LBM and 4 mg/kg LBM) will be compared to placebo (phase 2b). Then, at the
interim analysis (IA), one belapectin dose will be selected based on efficacy
and safety, for continued evaluation (Phase 3). The belapectin dose selected for
the phase 2b/3 are based on the analysis of the
NASH-CX
trial, including a dose response pharmacokinetic analysis of the hepatic venous
gradient pressure (HVPG, a reflection of portal hypertension). Prior belapectin
clinical studies have also indicated the good tolerance and safety profile of
belapectin with doses of up to 8 mg/kg LBM for 52 weeks (Phase 2b Study
NASH-CX),
an important feature of the future risk benefit analysis in patients with NASH
cirrhosis.
The study design provides for a
pre-specified
interim analysis (IA). The IA of efficacy and safety data will be conducted
after all planned subjects in Phase 2b component have completed at least 78
weeks (18 months) of treatment and an esophago-gastro-duodeno endoscopic
assessment. The purpose of the IA is to allow potential seamless adaptive
modifications of the study, including: (1) the selection of the optimal dose of
belapectin for Phase 3, (2) the
re-estimation
of the study sample size for Phase 3 portion of the trial, (3) the
re-evaluation
of the randomization ratio for the Phase 3 portion of the trial, (4) the
refinement of the inclusion and exclusion criteria for the Phase 3 portion of
the trial, including the cirrhosis status, (5) and/or termination of the study
for overwhelming efficacy or for futility.
The trial design also includes a blinded sample size
re-estimation
("SSR") during the Phase 2b, prior to the IA, to allow for potential sample size
readjustment. The SSR will be conducted when 50% of the patients have completed
18 months of therapy. This will allow us to confirm the underlying assumption
regarding the rate of varices development, currently estimated from our prior
Phase 2b trial
(NASH-CX).
The study design also minimizes invasive testing requirements, such as the
measurement of HVPG or repeated liver biopsies, which we believe will facilitate
enrollment and retention of patients. It also provides for a seamless transition
of patients from the Phase 2b component into the phase 3 stage, including the
potential addition of new patients. The trial design preserves the surrogate
end-point
concepts (development of new varices versus variceal hemorrhage) previously
discussed with FDA.
We believe that these adaptations taken together are innovative and optimize
conduct of the NAVIGATE trial with a clinically relevant primary outcome giving
belapectin the best opportunity to show a positive therapeutic effect to address
an unmet medical need. If the IA results of the NAVIGATE trial are compelling,
there could be the potential for accelerated FDA approval and/or partnership
opportunity with a pharmaceutical company.
In the Phase 3 component of this trial, as proposed in the protocol, the primary
endpoint remain the development of varices. Secondary endpoints include a
composite clinical outcomes endpoint, including varices requiring treatment
(development of large varices or varices with a red wale), decompensating
events,
all-cause
mortality, MELD score increase, liver transplant. Also, NASH
non-invasive
biomarkers will be evaluated. To target a population at risk of developing
esophageal varices, patient selection will be based on clinical signs of portal
hypertension, including, a low platelet count, an increased spleen size and/or
evidence of collaterals circulation.
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The focus and goal of the therapeutic program is to stop the progression of
and/or reverse portal hypertension and thereby prevent the development of
varices, potentially one of the most immediately life-threatening complication
of cirrhosis. Based on the results of the
NASH-CX
trial and subject to confirmation in later stage clinical trials, we believe
that this goal is achievable in a significant portion of the NASH cirrhosis
patient population i.e. those NASH cirrhosis patients with clinical signs of
portal hypertension.
The
COVID-19
pandemic has delayed and may continue to delay our recruitment of sites and
enrollment of patients for our Phase 2b/3 NAVIGATE trial. While there has been a
large decline in cases and hospitalizations in the United States because of
vaccinations, the decline in the rate of vaccinations and the emergence of
variants has extended the pandemic within the United States and has caused
continued concern particularly in medical and hospital settings. While many
cities in the United States and Europe had loosened restrictions, many of those
restrictions are being
re-imposed.
In some countries, shutdown orders have also affected the regulatory process to
authorize study starts. Governments and medical facilities continue to focus
their resources for battling the
COVID-19
pandemic. For several reasons, the pandemic makes enrolling patients for the
NAVIGATE trial more challenging, including because patients eligible for the
NAVIGATE trial have liver cirrhosis and, as such, are at a greater health risk
of complications from
COVID-19.
Even with vaccinations being more readily available, we continue to be impacted
by
COVID-19.
We believe that as more people get vaccinated for
COVID-19
in the United States and in other countries, site recruitment and patient
enrollment will accelerate. At this time, we estimate that enrollment completion
will occur around the end of 2021.
We have identified more than 130 clinical trial sites in 11 countries for the
NAVIGATE trial.
Further details on the NAVIGATE trial can be found on
www.clinicaltrials.gov
under study NCT04365868.
The Company also has commenced a Hepatic Impairment Study, which will run in
parallel with the phase 2b/3 trial as part of the development program. The
Hepatic Impairment Study is being conducted at three sites and will involve
approximately 40 patients (divided amongst normal healthy volunteers, and
patients with hepatic impairment categorized as Child-Turcotte-Pugh (CTP)
classes A (mild), B (moderate), and C (severe)). Each subject will receive a
single infusion of belapectin (4 mg/kg LBM) and their serum belapectin levels
will be monitored for up to approximately two weeks to define the effects of
various stages of cirrhosis on serum belapectin levels. The tolerance and safety
of belapectin will be evaluated. Based on the results from this hepatic
impairment study, the Company may consider including patients with more advanced
cirrhosis in the Phase 3 portion of its NAVIGATE trial. Until dosing and safety
profile is further informed in CTP Class B and/or Class C patients, the NAVIGATE
trial will enroll only CTP Class A patients. Further details on this hepatic
impairment study can be found on
www.clinicaltrials.gov
study NCT04332432.
Cancer Immunotherapy.
We believe there is potential for galectin inhibition to play a key role in the
burgeoning area of cancer immunotherapy. For example, there have been several
recent approvals of drugs that enhance a patient's immune system to fight
cancer. It is our goal to use a galectin inhibitor to further enhance the immune
system function to fight cancer in a way that complements other approaches to
this type of therapy. This hypothesis is supported by the fact that
galectin-3
is expressed at high levels in multiple types of tumors, adds to the malignant
nature of the tumors, and protects the tumors from immune system attack. Our
drug candidates provide a promising new therapeutic approach to enhance the
activity of the immune system against cancer cells. Preclinical studies have
indicated that belapectin enhances the immune response to cancer cells,
increased tumor shrinkage and enhanced survival in immune competent mice with
prostate, breast, melanoma and sarcoma cancers when combined with one of the
immune checkpoint inhibitors,
anti-CTLA-4
or
anti-PD-1,
or with the immune cell activator anti-OX40. These preclinical data led to the
filing of two Investigator-sponsored INDs and the initiation of studies of
belapectin in combination with Yervoy
®
(ipilimumab) and KEYTRUDA (pembrolizumab) in Phase 1B studies of patients with
metastatic melanoma. The KEYTRUDA trial has also been expanded to include
patients with
non-small
cell lung cancer and head and neck squamous cell carcinoma. These studies are
being conducted under the sponsorship of Providence Portland Medical Center's
Earle A. Chiles Research Institute (EACRI).
Promising results were reported in the Phase 1b trial combining belapectin with
pembrolizumab (KEYTRUDA
®
). Cohort 1 was completed (n=6, 5 with melanoma, one with head and neck cancer)
with one partial response and one mixed response in the melanoma patients. There
was a rapid and marked tumor response after 3 doses of combined belapectin and
pembrolizumab in the one partial response patient who had failed high-dose
IL-2
and oncolytic virus + ipilimumab. The study is ongoing and progression to
further development will be based on response rate as compared to historical
response rates to pembrolizumab alone. In September 2018 we announced additional
preliminary clinical data from cohort 3 of this investigator-initiated trial.
When aggregated with cohorts previously reported, the data shows a 50% objective
response rate in advanced melanoma with belapectin in combination with KEYTRUDA,
and a significant decrease in the frequency of suppressive myeloid-derived
suppressor cells following treatment in the responding patients (on day 85
post-treatment). Fourteen advanced melanoma patients across three dose cohorts
now have Objective Response Rate (ORR) and Disease Control Rate (DCR) data. Six
patients completed in cohort 3 (8 mg/kg LBM) have now been added to the three
patients completed in cohort 2 (4 mg/kg LBM) and five patients completed in
cohort 1 (2 mg/kg LBM). Cohorts 1 and 3
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each had two patients with an objective response. All three patients in cohort 2
had an objective response. In addition to the fourteen advanced melanoma
patients, six patients with head and neck cancer were enrolled in this trial
with a 33% ORR and 67% DCR. These data, taken together with the observed
favorable safety and tolerability of the combination, in the view of the
principal investigator, provide compelling rationale to move forward. Given that
all three melanoma patients were responders at the 4 mg/kg dose, the
investigators plan to continue the trial with the expansion of the 4 mg/Kg
cohort to include additional advanced melanoma patients and additional head and
neck cancer patients.
The expansion cohort enrolled nine melanoma patients and five head and neck
squamous cell carcinoma cancer patients. Compared to the initial phase 1b
patients, reported earlier, the cohort in this extension study was heavily
pretreated with systemic therapy, including chemotherapy, immunotherapy with
checkpoint inhibitors and cytokines, melanoma mutation-directed therapies (BRAF
inhibitors and MEK inhibitors), as well as surgery and radiation therapies
(external and radio-labeled). Patients also had a high burden of metastasis,
with the lungs, soft tissues, and the liver being the most frequently involved
organs. Four of the nine melanoma patients had a choroidal (ocular) tumor as a
primary site of their cancer and had also developed liver metastasis. The
treatment consisted of Belapectin 4 mg/Kg of lean body mass administered every
three weeks by infusion, after the infusion of pembrolizumab. Pembrolizumab was
administered according to its label. Patients' response was evaluated at day 85,
according to the Response Evaluation Criteria in Solid Tumors (RECIST) criteria.
The median number of treatment cycles was four (range
3-15)
for melanoma patients and five (range
4-8)
for head and neck cancer patients. Melanoma patient results included one partial
response, four stable disease, and four progressive disease, providing a disease
control rate of 56% (five out of nine patients). Head and neck cancer patients
observed included two stable disease and three progressive disease, providing a
disease control rate of 40% (two out of five patients). The combination of
Belapectin and pembrolizumab was well tolerated and appeared safe. The most
frequent adverse event related to pembrolizumab, in six patients, was grade 1
(mild) pruritus (itching), a known and labeled side-effect of pembrolizumab. The
second most frequent adverse event related to pembrolizumab was grade 2 fatigue
in three patients. All other adverse events were mild (grade 1). There were no
grade 3 or above adverse events. Similar to the initial phase 1 study results,
the frequency and severity of toxicities related to pembrolizumab, notably
immune-mediated adverse events, was less than anticipated. No adverse event was
deemed related to belapectin.
Discussions are ongoing about the planning and feasibility of a multicenter
Phase 2 study.
Results of Operations
Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended
June 30, 2020
Research and Development Expense.
Three Months Ended Six Months Ended 2021 as Compared to 2020
June 30, June 30, Three Months Six Months
2021 2020 2021 2020 $ Change % Change $ Change % Change
(In thousands, except %)
Research and development $ 6,450 $ 4,681 $ 11,349 $ 6,825 $1,769 38 % $ 4,524 66 %
We generally categorize research and development expenses as either direct
external expenses, comprised of amounts paid to third party vendors for
services, or all other research and development expenses, comprised of employee
payroll and general overhead allocable to research and development. We consider
a clinical program to have begun upon acceptance by the FDA, or similar agency
outside of the United States , to commence a clinical trial in humans, at which
time we begin tracking expenditures by the product candidate. Clinical program
expenses comprise payments to vendors related to preparation for, and conduct
of, all phases of the clinical trial, including costs for drug manufacture,
patient dosing and monitoring, data collection and management, oversight of the
trials and reports of results.
Pre-clinical
expenses comprise all research and development amounts incurred before human
trials begin, including payments to vendors for services related to product
experiments and discovery, toxicology, pharmacology, metabolism and efficacy
studies, as well as manufacturing process development for a drug candidate.
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Our research and development expenses were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
(in thousands)
Direct external expenses:
Clinical programs $ 5,878 $ 3,779 $ 10,161 $ 4,798
Pre-clinical
activities 70 121 181 363
All other research and development expenses 502 781 1,007 1,664
$6,450 $4,681 $11,349 $6,825
Clinical programs expenses increased primarily due to costs related to our
NAVIGATE trial during the three and six months ended June 30, 2021 .
Both the time required and costs we may incur in order to commercialize a drug
candidate that would result in material net cash inflow are subject to numerous
variables, and therefore we are unable at this stage of our development to
forecast useful estimates. Variables that make estimates difficult include the
number of clinical trials we may undertake, the number of patients needed to
participate in the clinical trial, patient recruitment uncertainties, trial
results as to the safety and efficacy of our product, and uncertainties as to
the regulatory agency response to our trial data prior to receipt of marketing
approval. Moreover, the FDA or other regulatory agencies may suspend clinical
trials if we or an agency believes patients in the trial are subject to
unacceptable risks or find deficiencies in the conduct of the clinical trial.
Delays or rejections may also occur if governmental regulation or policy changes
during our clinical trials or in the course of review of our clinical data. Due
to these uncertainties, accurate and meaningful estimates of the ultimate cost
to bring a product to market, the timing of costs and completion of our program
and the period during which material net cash inflows will commence are
unavailable at this time.
General and Administrative Expense.
2021 as Compared to 2020
Three Months Six Months
Ended June 30, Ended June 30, Three Months Six Months
2021 2020 2021 2020 $ Change % Change $ Change % Change
(In thousands, except %)
General and administrative $ 1,743 $ 1,421 $ 3,161 $ 2,861 $ 322 23 % $ 300 10 %
General and administrative expenses consist primarily of salaries including
stock-based compensation, legal and accounting fees, insurance, investor
relations, business development and other office related expenses. The primary
reasons for the increase in general and administrative expenses for the three
months ended June 30, 2021 as compared to the same period in 2020 are due to
increases in insurance expense of $130,000 , investor relations/business
development expense of $209,000 and
non-cash
stock based compensation expense of $181,000 partially offset by decrease in
legal fees expense of $174,000 . The primary reasons for the increase in general
and administrative expenses for the six months ended June 30, 2021 as compared
to the same period in 2020 are due to increases in insurance expense of
$254,000 , investor relations/business development expense of $135,000 and
non-cash
stock based compensation expense of $95,000 partially offset by decrease in
legal fees expense of $192,000 .
Liquidity and Capital Resources
Since our inception on July 10, 2000 , we have financed our operations from
proceeds of public and private offerings of debt and equity. As of June 30,
2021 , we raised a net total of $214.5 million from these offerings. We have
operated at a loss since our inception and have had no significant revenues. We
anticipate that losses will continue for the foreseeable future. At June 30,
2021 , the Company had $31.6 million of unrestricted cash and cash equivalents
available to fund future operations. The Company also has a $10 million
unsecured line of credit facility with stockholder and director, Richard E.
Uihlein . The Company has not drawn under the line of credit. The Company
believes there is sufficient cash, including availability of the line of credit,
to fund currently planned operations at least through September 30, 2022 . We
will require more cash to fund our operations after September 30, 2022 and
believe we will be able to obtain additional financing. The currently planned
operations include costs related to our adaptively designed NAVIGATE Phase 2b/3
clinical trial. Currently, we expect to require an additional approximately
$30-$35 million
to cover costs of the trial to reach the planned interim analysis estimated to
occur in the second half of 2023 along with drug manufacturing and other
scientific support activities and general and administrative costs. However,
there can be no assurance that we will be successful in obtaining such new
financing or, if available, that such financing will be on terms favorable to
us.
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Net cash used in operations increased by $5,384,000 to $12,359,000 for the six
months ended June 30, 2021 , as compared to $6,975,000 for the six months ended
June 30, 2020 . Cash operating expenses increased principally due to the
preparations and expenses related to our NAVIGATE clinical trial with
belapectin.
Net cash provided by financing activities for the six months ended June 30,
2021 , of $16,815,000 represents proceeds of $10,000,000 from a convertible note
payable, $2,951,000 from the exercise of common stock warrants and $3,864,000 in
net proceeds from issuance of common shares under our ATM. Net cash provided by
financing activities for the six months ended June 30, 2020 , of $263,000
represents proceeds of $219,000 from the exercise of common stock options and
$44,000 in net proceeds from issuance of common shares under our ATM.
Off-Balance
Sheet Arrangements
We have not created, and are not a party to, any special-purpose or
off-balance
sheet entities for the purpose of raising capital, incurring debt or operating
parts of our business that are not consolidated into our financial statements.
We do not have any arrangements or relationships with entities that are not
consolidated into our financial statements that are reasonably likely to
materially affect our liquidity or the availability of capital resources.
Application of Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, expenses, and related disclosure of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates, including those
related to accrued expenses, stock-based compensation, contingencies and
litigation. We base our estimates on historical experience, terms of existing
contracts, our observance of trends in the industry, information available from
other outside sources and on various other factors that we believe to be
appropriate under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.
Critical accounting policies are those policies that affect our more significant
judgments and estimates used in preparation of our consolidated financial
statements. We believe our critical accounting policies include our policies
regarding stock-based compensation, accrued expenses, derivatives and income
taxes. For a more detailed discussion of our critical accounting policies,
please refer to our 2020 Annual Report on Form
10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk represents the risk of loss that may impact our financial position,
operating results or cash flows due to changes in the U.S. interest rates. The
primary objective of our investment activities is to preserve cash until it is
required to fund operations. To minimize risk, we maintain our portfolio of cash
and cash equivalents in operating bank accounts and money market funds. Since
our investments are short-term in duration, we believe that we are not subject
to any material market risk exposure.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rule
13a-15(e)
promulgated under the Securities Exchange Act of 1934) and concluded that, as of
June 30, 2021 , our disclosure controls and procedures were effective.
Our management, including our Chief Executive Officer and Chief Financial
Officer, does not expect that our disclosure controls and procedures or our
internal controls will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected.
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2021 , no change in our internal control over
financial reporting has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
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