Galectin Therapeutics (NASDAQ:GALT) has pulled back 25% in the past week from the $4.40 range to $3.29, thereby opening up a potentially great entry opportunity. There are several reasons why I believe GALT shares have tremendous upside potential. I will discuss four primary reasons below:
1) First in class compounds that inhibit galectin proteins
a. Technology Basis - Galectins are a class of proteins that are made by many cells in the body, but most concentrated normally in immune cells. As a group, these proteins are able to bind to sugar molecules that are part of other proteins in and on the cells of our body. Galectin proteins act as a kind of glue, bringing together molecules that have sugars on them. Galectin proteins are known to be markedly increased in a number of important diseases including scaring of organs (eg. liver, lung, kidney, and heart) and cancers of many kinds. The increase in galectin protein promotes the disease and is detrimental to the patient
b. Focus Diseases - The primary focus of the company is to use galectin inhibitors to block galectin-3 and treat organ scarring in the liver. All diseases that affect the liver (viral hepatitis, alcoholic liver disease, and fatty liver as examples) lead to the development of scaring of the liver. When this scaring becomes advanced, the only therapy available is a liver transplantation. The first indication for our drugs is fatty liver with fibrosis which is estimated to affect between 9 and 15 million people in the US. Their drugs are also potentially useful in scaring of other organs such as lung and kidney which expands the possibilities for therapeutic indications. According to a company publication, "One condition in particular that frequently leads to cirrhosis is non-alcoholic steatohepatitis (NYSEARCA:NASH), or fatty liver, a liver disease characterized by the accumulation of fat in the liver with associated inflammation and fibrosis which can lead to end-stage cirrhosis requiring liver transplantation. The National Institute of Health estimates that 9 to 15 million Americans are affected by NASH and forecasts that the number of Americans affected by this disease is growing due to obesity and diabetes, with the potential to become the leading cause of liver cirrhosis and liver transplantation in the future. Liver transplantation is currently the only therapeutic approach to NASH or other forms of liver fibrosis as, to the best of our knowledge, there are no drug therapies on the market." Galectin's compounds have low toxicity potential because they are carbohydrates with no toxic metabolites.
c. FDA Acceptance - On March, 5, 2013 Galectin Therapeutics Inc. announced that it received the OK from the FDA to Proceed with the First Human Clinical Trial for Treatment of Fatty Liver Disease with Advanced Fibrosis. The first-in-man Phase I clinical trial will support a proposed indication of GR-MD-02 for treatment of non-alcoholic steatohepatitis (NASH, or fatty liver disease) with advanced fibrosis. According to the press release, "There are currently no approved medical treatments available for patients with NASH and advanced fibrosis."
2) Proprietary ownership of discoveries ; strong patents; no licenses granted
Galectin has proprietary rights to all of its compounds and has patented its discoveries without the need for licensing to another company.
3) Experienced Mgmt in biotech and pharmaceuticals with strong record of success
a. CEO - Dr. Traber is President Emeritus of Baylor College of Medicine, where he was Chief Executive Officer from 2003 to 2008. From 2000 to 2003 he was Senior Vice President of Clinical Development and Medical Affairs and Chief Medical Officer of GlaxoSmithKline plc. Dr. Traber served as Chief Executive Officer of the University of Pennsylvania Health System and was Chair of the Department of Internal Medicine and Chief of Gastroenterology for the University of Pennsylvania School of Medicine. Dr. Traber has also managed a molecular biology research laboratory and published over 100 articles of original research, reviews, and book chapters.
b. COO- Dr. Shlevin is a bioscience industry executive with 25 years of senior management experience in the development and commercialization of pharmaceuticals, diagnostics and vaccines. Before joining Galectin therapeutics, Dr. Shlevin led Georgia Institute of Technology's Advanced Technology Development Center (ATDC) as Principle and Manager of bioscience commercialization efforts, where he served as a catalyst for new bioscience startup companies. His leadership roles have included: President and CEO of Solvay Pharmaceuticals, where he oversaw the successful launch of the first topical testosterone gel product in the US; co-founder of CIBA Vision Ophthalmics, a specialty ophthalmic drug company, where he headed efforts leading to the approval of the first non-steroidal agent for treatment of ocular inflammation and several other drug products; founder, President & CEO of Tikvah Therapeutics, a company focused on clinical development of therapeutics for treatment of neurological diseases; and VP and Head of Operations & Commercial Development for Altea Therapeutics Corporation, a clinical-stage drug delivery company with platform technology applicable to the transdermal delivery of biologics.
c. Executive Director of Regulatory Affairs - Dr. Rex Horton Mr. Horton is an experienced industry professional with 20 years of management and leadership experience in global regulatory affairs matters including drugs, biologics and vaccines. He has broad range of regulatory affairs and quality leadership experience that is directly relevant to Galectin Therapeutics development programs, with expertise spanning preclinical development through new drug approvals in diverse therapeutic areas, including gastroenterology. He was most recently was Director of Regulatory Affairs at Chelsea Therapeutics, where he successfully led the organization through its first NDA filing and favorable FDA Advisory Committee Meeting. In past leadership roles at Solvay Pharmaceuticals and Abbott Laboratories, he led approval efforts for key products including Androgel® Stickpack, Creon® Capsules and Luvox® CR Capsules. He has also provided chemistry, manufacturing and controls (CMC) regulatory leadership and support of INDs and NDAs, including Estrogel® and Androgel® Pump. Mr. Horton was a member of the executive leadership team that successfully implemented solutions to significant regulatory issues encountered by Solvay in its interactions with the FDA. He earned his Bachelor's degree in industrial/manufacturing & systems engineering from The Georgia Institute of Technology. He is a member of the Regulatory Affairs Professional Society (RAPS), Drug Information Association (DIA) and American Association of Pharmaceutical Scientists (AAPS).
4) Great Market Opportunities
Nearly 500,000 patients have cirrhosis in the United States with close to 50,000 losing their lives yearly. Only a fraction of patients' lives were saved by liver transplantation at a cost of $350,000 per transplantation. One condition in particular that frequently leads to cirrhosis is non-alcoholic steatohepatitis (NASH), or fatty liver, a liver disease characterized by the accumulation of fat in the liver with associated inflammation and fibrosis which can lead to end-stage cirrhosis requiring liver transplantation. The National Institute of Health estimates that 9 to 15 million Americans are affected by NASH and forecasts that the number of Americans affected by this disease is growing due to obesity and diabetes, with the potential to become the leading cause of liver cirrhosis and liver transplantation in the future. Liver transplantation is currently the only therapeutic approach to NASH or other forms of liver fibrosis as, to the best of our knowledge, there are no drug therapies on the market. Organ transplantation is a difficult, risky and costly procedure as organ availability is scarce and there is the risk of developing cirrhosis in the transplanted liver from the same disease that damaged the patient's original liver and therefore, there is a great need for other therapeutic options. This is a multi-billion dollar market.
At current levels, GALT can represent a tremendous buying opportunity for a speculative investor or trader. With a 25% retracement off of its recent high and only a $54 million market cap, there is tremendous potential for GALE to trade much higher in the near future. Given the management, the technology and the market opportunity, GALT could be trading at multiples of this level.
Disclosure: I am long GALT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Please do your own due diligence and/or consult with a qualified investment advisor before investing. I may buy or sell any of the stocks mentioned in this article at anytime.