Galecto has fired 70% of its workforce and is considering a whole list of strategic alternatives a month after announcing the failure of a trial with its lead drug.
In August, the company’s lead candidate, GB0139, failed to meet its primary endpoint in the Phase II trial (NCT03832946) for the treatment of idiopathic pulmonary fibrosis (IPF).
The trial termination decimated the company’s stock, and it has not recovered since then. Still, the 26 September restructuring news has revived the stock to a certain extent. Galecto’s stock was up by over 32% in pre-market trading today. Galecto’s market cap is $17.9m.
The placebo-controlled Phase IIb had a lot of momentum, with the company having no issues with patient recruitment, even during the Covid-19 pandemic. However, all of this was for nought as the trial failed to show a change in the rate of decline of forced vital capacity, a measure of lung function, from baseline at 52 weeks.
Galecto is now considering a merger, asset divestment or acquisition. The company was pragmatic regarding its options and noted that it does not expect any transaction to be “completed on attractive terms, if at all”.
The US-based company is one in a growing list of companies that have downsized due to a multitude of reasons that range from low funding, US Food and Drug Administration (FDA) rejections or decreased sales forecasts for marketed products.
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Other drugs in Galecto’s pipeline include GB1211, which is being evaluated in an open-label Phase II trial (NCT05240131) as a combination therapy with Roche’s Tecentriq (atezolizumab) for non-small cell lung cancer (NSCLC). GB2064 is being evaluated in an open-label Phase IIa trial (NCT04679870) investigating myelofibrosis, a rare blood cancer. The topline results from the trial are expected by the end of 2023.
Galecto also received FDA approval to start a Phase IIa trial for GB1211, an oral galectin-3 inhibitor for the treatment of patients with decompensated non-alcoholic steatohepatitis (NASH) cirrhosis, although the company pointed out that the trial initiation will be contingent on securing additional funding.