Galecto scraps lung disease treatment after trial failure, shares tank

[August 16, 2023]  (Reuters) -Galecto will stop developing its therapy for a disease that causes lung scarring after it failed to meet the main goal of a mid-stage study, the drug developer said on Tuesday, sending its shares tumbling 67%.

The stock opened at 77 cents, falling below the $1 mark for the first time since listing in October 2020. The company had a market value of roughly $64 million, through Monday's close.

Boston-based Galecto, which had cash resources of about $49 million as of July 31, will focus on its portfolio of experimental liver disease treatments to save enough cash to run operations into 2025.

The company was developing the inhaled treatment, GB0139, for idiopathic pulmonary fibrosis, a disease that causes difficulty in breathing and affects about 100,000 people in the U.S.

The trial failed to meet its main goal of improving the maximum amount of air a patient can forcibly exhale from the lungs after fully inhaling.

The company aims to initiate a mid-stage trial early next year for the development of another drug called GB1211 in patients to treat liver cirrhosis or scarring in patients with non-alcoholic steatohepatitis.

(Reporting by Sriparna Roy in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila)

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