Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) | |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | |||
Non-Accelerated Filer |
☒ | Smaller reporting company | ||||
Emerging growth company |
PAGE |
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PART I — FINANCIAL INFORMATION |
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ITEM 1. | Unaudited Condensed Consolidated Financial Statements (unaudited) |
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3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
ITEM 2. | 12 | |||||
ITEM 3. | 19 | |||||
ITEM 4. | 20 | |||||
PART II — OTHER INFORMATION |
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ITEM 1. | 20 | |||||
ITEM 1A. | 20 | |||||
ITEM 2. | 20 | |||||
ITEM 3. | 20 | |||||
ITEM 4. | 20 | |||||
ITEM 5. | 20 | |||||
ITEM 6. | 20 | |||||
SIGNATURES | 22 |
March 31, 2021 |
December 31, 2020 |
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(in thousands) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Prepaid expenses and other current assets |
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Total current assets |
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Other assets |
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Total assets |
$ | $ | ||||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses and other |
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Accrued dividends payable |
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Total current liabilities |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 9) |
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Series C super dividend redeemable convertible preferred stock; |
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Stockholders’ equity: |
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Undesignated stock, $ |
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Series A 12% convertible preferred stock; |
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Common stock, $ |
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Additional paid-in capital |
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Retained deficit |
( |
) | ( |
) | ||||
Total stockholders’ equity |
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Total liabilities, redeemable convertible preferred stock and stockholders’ equity |
$ | $ | ||||||
Three Months Ended March 31, |
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2021 |
2020 |
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(in thousands, except per share data) |
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Operating expenses: |
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Research and development |
$ | $ | ||||||
General and administrative |
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Total operating expenses |
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Total operating loss |
( |
) | ( |
) | ||||
Other income (expense): |
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Interest income |
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Interest expense |
( |
) | ( |
) | ||||
Total other income (expense) |
( |
) | ||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Preferred stock dividends |
( |
) | ||||||
Net loss applicable to common stockholders |
$ | ( |
) | $ | ( |
) | ||
Net loss per common share — basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted average common shares outstanding — basic and diluted |
Three Months Ended March 31, |
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2021 |
2020 |
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(in thousands) |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash flows from operating activities: |
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Stock-based compensation expense |
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Amortization of right to use lease asset |
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Non-cash interest expense |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other assets |
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Accounts payable, accrued expenses and other liabilities |
( |
) | ( |
) | ||||
Net cash from operating activities |
( |
) | ( |
) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
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Net proceeds from issuance of common stock and warrants |
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Net cash flows from financing activities |
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NET DECREASE IN CASH AND CASH EQUIVALENTS |
( |
) | ( |
) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
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CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | $ | ||||||
NONCASH FINANCING ACTIVITIES: |
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Payment of preferred stock dividends in common stock |
$ | $ | ||||||
Reclassification of accrued bonus to additional paid in capital |
Series C Super Dividend Redeemable Convertible Preferred Stock |
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Number of Shares |
Amount |
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Balance at December 31, 2019 |
$ |
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Balance at March 31, 2020 |
$ |
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Balance at December 31, 2020 |
$ |
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Balance at March 31, 2021 |
$ |
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Series A 12% Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Retained Deficit |
Total Stockholders’ Equity (Deficit) |
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Number of Shares |
Amount |
Number of Shares |
Amount |
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Balance at December 31, 2019 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Series A 12% convertible preferred stock dividend |
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Series C super dividend redeemable convertible preferred stock dividend |
( |
) | ||||||||||||||||||||||||||
Issuance of common stock for exercise of warrants and options |
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Stock-based compensation expense |
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Net loss |
( |
) | ( |
) | ||||||||||||||||||||||||
Balance at March 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Series A 12% convertible preferred stock dividend |
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Series C super dividend redeemable convertible preferred stock dividend |
( |
) | ||||||||||||||||||||||||||
Issuance of common stock for exercise of options |
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Stock-based compensation expense |
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Net loss |
( |
) | ( |
) | ||||||||||||||||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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March 31, 202 1 |
December 31, 2020 |
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(in thousands) | ||||||||
Legal and accounting fees |
$ | $ | ||||||
Accrued compensation |
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Lease liability |
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Accrued research and development costs and other |
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Total |
$ | $ | ||||||
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|
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Three Months Ended March 31, |
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2021 |
2020 |
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Research and development |
$ | $ | ||||||
General and administrative |
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|
|
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Total stock-based compensation expense |
$ | $ | ||||||
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Shares | Weighted Average Exercise Price |
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Outstanding, December 31, 2020 |
$ | |||||||
Granted |
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Exercised |
( |
) | ||||||
Options forfeited/cancelled |
( |
) | ||||||
|
|
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Outstanding, March 31, 2021 |
$ | |||||||
|
|
Three Months Ended March 31, |
Three Months Ended March 31, |
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2021 | 2020 | |||||||
Risk-free interest rate |
% | % | ||||||
Expected life of the options |
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Expected volatility of the underlying stock |
% | % | ||||||
Expected dividend rate |
% | % |
Shares | Weighted Average Exercise Price |
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Outstanding, December 31, 2020 |
$ | |||||||
Granted |
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Exercised |
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Forfeited/cancelled |
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Outstanding, March 31, 2021 |
$ | |||||||
|
|
March 31, 2021 (shares) |
March 31, 2020 (shares) |
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Warrants to purchase shares of common stock |
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Options to purchase shares of common stock |
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Shares of common stock issuable upon conversion of preferred stock |
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2021 |
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2022 |
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Total |
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Less imputed interest |
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$ | ||||
• | 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 U.S. Food and Drug Administration (FDA) and by foreign regulatory authorities, which 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 SEC 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. |
Indication |
Drug |
Status | ||
Fibrosis |
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NASH with Advanced Fibrosis: NASH-CX trial andNASH-FX trial |
belapectin | IND submitted January 2013. Results from the Phase 1 clinical trial were reported in 2014, with final results reported in January 2015. The Phase 2 NASH FX trial was designed for 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 | ||||
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 Fibrosis | belapectin and GM-CT-01 |
In pre-clinical development | ||
Cancer Immunotherapy |
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Melanoma, Head, Neck Squamous Cell Carcinoma (HNSCC) |
belapectin | Investigator IND study in process. A Phase 1B study began in Q-1 2016. Early data was reported in February 2017 and additional data were reported in September 2018. The trial is ongoing to expand the dataset of melanoma and HNSCC patients and determine if a Phase 2 trial is warranted. | ||
Psoriasis | ||||
Moderate to Severe Plaque Psoriasis Severe Atopic Dermatitis |
belapectin | IND submitted March 2015. A Phase 2a trial in moderate to severe plaque psoriasis patients began in January 2016. Interim data 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. |
Three Months Ended March 31, |
2021 as Compared to 2020 Three Months |
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2021 | 2020 | $ Change | % Change | |||||||||||||
(In thousands, except %) | ||||||||||||||||
Research and development |
$ | 4,899 | $ | 2,144 | $ | 2,755 | 128 | % |
Three Months Ended March 31, |
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2021 | 2020 | |||||||
(in thousands) | ||||||||
Direct external expenses: |
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Clinical activities |
$ | 4,283 | $ | 1,019 | ||||
Pre-clinical activities |
111 | 243 | ||||||
All other research and development expenses |
505 | 882 | ||||||
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|
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$ | 4,899 | $ | 2,144 | |||||
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Three Months Ended March 31, |
2021 as Compared to 2020 Three Months |
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2021 | 2020 | $ Change | % Change | |||||||||||||
(In thousands, except %) | ||||||||||||||||
General and administrative |
$ | 1,418 | $ | 1,440 | $ | (22 | ) | (2 | )% |
Exhibit Number |
Description of Document |
Note Reference |
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31.1* | Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||
31.2* | Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||
32.1** | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
32.2** | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
101.INS | XBRL Instance Document** |
Exhibit Number |
Description of Document |
Note Reference |
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101.SCH | XBRL Taxonomy Extension Schema Document** | |||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document** | |||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document** | |||||
101.LAB | XBRL Taxonomy Label Linkbase Document** | |||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document** |
* | Filed herewith. |
** | Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
GALECTIN THERAPEUTICS INC. | ||
By: | /s/ Joel Lewis | |
Name: | Joel Lewis | |
Title: | Chief Executive Officer and President (principal executive officer) | |
By: | /s/ Jack W. Callicutt | |
Name: | Jack W. Callicutt | |
Title: | Chief Financial Officer (principal financial and accounting officer) |