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Biotech Releases 'Unequivocally Positive' Topline NASH Study Results
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An H.C. Wainwright & Co. report relayed the highlights of the new trial data from this Israel-based firm.

In a June 12 research note, Ed Arce indicated that H.C. Wainwright & Co. raised its target price on Galmed Pharmaceuticals Ltd. (GLMD:NASDAQ) following release of "long awaited and highly anticipated" ARREST study results, on June 12, the inaugural International NASH Day. The new target price on the company is $43 per share, which compares to its current share price of $16.67, rising more than 150% after the release of this news.

The year-long, Phase 2b ARREST trial tested Galmed's lead drug candidate Aramchol in 247 patients with biopsy-proven, advanced nonalcoholic steatohepatitis (NASH) and who were overweight or obese and had prediabetes or type 2 diabetes mellitus. About the results, Arce concluded generally, "long considered a steatosis-specific dark horse in the overall NASH field, Aramchol has now established, we believe, positive dose-dependent results."

Specifically, concerning the two biopsy-based endpoints for NASH and for patients on 600 milligrams (600 mg) Aramchol, a number of them "achieved NASH resolution without worsening of fibrosis," explained Arce. A greater proportion of them experienced stable NASH and improved their fibrosis score by at least one point. The analyst described these results as "unequivocally positive."

In terms of safety and tolerability, Aramchol "remains squeaky clean," unlike other NASH drug candidates, Arce noted. As for patients who received 600 mg of Aramchol, 9.2% had serious adverse events and 4.1% withdrew as a result. Of patients getting 400 mg, 8.9% had events and 3% withdrew. Of patients on placebo, 12.5% had reactions and 4.1% quit the study.

H.C. Wainwright's one criticism of ARREST is that the candidate pool was worldwide, thereby potentially introducing greater "patient variability. . .given the various phenotypes of NASH disease and progression seen across ethnicities," Arce wrote.

Next, Galmed will conduct a complete analysis of the ARREST data in preparation for a meeting with the U.S. Food and Drug Administration to determine the design of a subsequent Phase 3 study. "We believe a likely timeline is for Phase 3 initiation in early Q1/19," said Arce.

As for capitalizing the Phase 3, Galmed will need to raise funds. As such, Arce surmised, it will likely conduct an equity raise this quarter. Funding for operations should be covered through H1/20, according to management, by the company's cash in the treasury, $21 million at Q1/18's end.

H.C. Wainwright has a Buy rating on Galmed Pharmaceuticals.

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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from H.C. Wainwright & Co., Galmed Pharmaceuticals Ltd., June 12, 2018

I, Ed Arce, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of Galmed Pharmaceuticals Ltd. (including, without limitation, any option, right, warrant, future, long or short position).

As of May 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Galmed Pharmaceuticals Ltd.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did not receive compensation from Galmed Pharmaceuticals Ltd. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

The Firm does not make a market in Galmed Pharmaceuticals Ltd. as of the date of this research report.

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