GALT just upgraded $3.00 to $5.00 price target
https://sgsecurities.bluematrix.com/sellside/...ource=mail
Highlights:
We remind investors that NASH-CX missed its 1EP but there was a silver lining. As we've stated previously, there’s no sugar coating it: The NASH-CX Phase IIb trial with GR-MD-02 did not meet its primary endpoint (1EP) of change in HVPG from baseline in the overall study population (i.e., patients with portal hypertension [PH] with HVPG ≥6mm Hg, -0.8mm Hg change from a mean baseline HVPG of 12.2mm Hg, p > 0.05, not significant). However, results from a responder analysis showed GR-MD-02 was very effective in reducing HVPG (i.e., -1.2mm Hg change from a mean baseline HVPG of 10.6mm Hg, p = 0.01, significant) in the subset of patients that had no esophageal varices at baseline (50% of the study subjects), with positive results in the study’s secondary EPs as well. Thus, as clinically significant PH (≥10mm Hg) is confirmed when endoscopic examination of the esophagus shows the presence of varices, screening for esophageal varices pointed to the path forward for GR-MD-02. GALT has determined that the 1EP of the Phase III trial will be chosen from two EPs the FDA agreed may be acceptable: Change in HVPG or progression to esophageal varices. We favor the latter EP, we think NASH-CX showed that HVPG is suboptimal and may be best as the starting point for adequately capturing how the cirrhotic liver responds to treatment.
GR-MD-02 is one of only a handful of players in NASH cirrhosis. As there are no approved drugs for treating NASH cirrhosis, the first mover to gain approval would have a high-value asset. For example, the NASH cirrhosis market represents an untapped, $10B estimated market opportunity, where GR-MD-02 is one of only a handful of candidates in late-stage clinical development. We think there is room in NASH cirrhosis for multiple players, and there likely will be, as each drug candidate, i.e., emricasan by Conatus Pharmaceuticals (CNAT, Buy) and obeticholic acid by Intercept Pharmaceuticals (ICPT, Buy), targets different sub-populations of NASH cirrhosis.
Financial snapshot. On May 11 after the close, GALT reported a Q1 net loss of $4.5MM or ($0.12)/sh. With $4.0MM in liquid cash assets at the end of Q1, we look for GALT to conduct a near-term financing or tap into its $10MM credit line by year-end 2018.
Seaport Global Securities LLC
Equity Sales & Trading Toll-Free: (855) 447-3100
Research: (949) 274-8052
www.seaportglobal.com
https://sgsecurities.bluematrix.com/sellside/...ource=mail
Highlights:
We remind investors that NASH-CX missed its 1EP but there was a silver lining. As we've stated previously, there’s no sugar coating it: The NASH-CX Phase IIb trial with GR-MD-02 did not meet its primary endpoint (1EP) of change in HVPG from baseline in the overall study population (i.e., patients with portal hypertension [PH] with HVPG ≥6mm Hg, -0.8mm Hg change from a mean baseline HVPG of 12.2mm Hg, p > 0.05, not significant). However, results from a responder analysis showed GR-MD-02 was very effective in reducing HVPG (i.e., -1.2mm Hg change from a mean baseline HVPG of 10.6mm Hg, p = 0.01, significant) in the subset of patients that had no esophageal varices at baseline (50% of the study subjects), with positive results in the study’s secondary EPs as well. Thus, as clinically significant PH (≥10mm Hg) is confirmed when endoscopic examination of the esophagus shows the presence of varices, screening for esophageal varices pointed to the path forward for GR-MD-02. GALT has determined that the 1EP of the Phase III trial will be chosen from two EPs the FDA agreed may be acceptable: Change in HVPG or progression to esophageal varices. We favor the latter EP, we think NASH-CX showed that HVPG is suboptimal and may be best as the starting point for adequately capturing how the cirrhotic liver responds to treatment.
GR-MD-02 is one of only a handful of players in NASH cirrhosis. As there are no approved drugs for treating NASH cirrhosis, the first mover to gain approval would have a high-value asset. For example, the NASH cirrhosis market represents an untapped, $10B estimated market opportunity, where GR-MD-02 is one of only a handful of candidates in late-stage clinical development. We think there is room in NASH cirrhosis for multiple players, and there likely will be, as each drug candidate, i.e., emricasan by Conatus Pharmaceuticals (CNAT, Buy) and obeticholic acid by Intercept Pharmaceuticals (ICPT, Buy), targets different sub-populations of NASH cirrhosis.
Financial snapshot. On May 11 after the close, GALT reported a Q1 net loss of $4.5MM or ($0.12)/sh. With $4.0MM in liquid cash assets at the end of Q1, we look for GALT to conduct a near-term financing or tap into its $10MM credit line by year-end 2018.
Seaport Global Securities LLC
Equity Sales & Trading Toll-Free: (855) 447-3100
Research: (949) 274-8052
www.seaportglobal.com
