What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-15 · 238 added, 244 removed, 175 unchanged (73% of the section changed)

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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,

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, 2022, and our subsequent SEC filings.

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We are a clinical stage biopharmaceutical company engaged in drug research and development to create new therapies for fibrotic disease, cancer and selected other diseases.

Our drug candidates

are based on our method of targeting galectin proteins, which are key mediators of biologic and pathologic functions.

We use naturally occurring, readily available plant products as starting material in manufacturing processes to create

proprietary, patented complex carbohydrates with specific molecular weights and other pharmaceutical properties.

Our drug candidates are based on our

method of targeting galectin proteins, which are key mediators of biologic and pathologic functions.

We use naturally occurring, readily available plant products as starting material in manufacturing processes to create proprietary, patented

complex carbohydrates with specific molecular weights and other pharmaceutical properties.

These complex carbohydrate molecules are appropriately formulated into acceptable pharmaceutical formulations.

Using these unique

carbohydrate-based candidate compounds that largely bind and inhibit galectin proteins, particularly galectin-3, we are undertaking the focused pursuit of therapies for indications where galectin proteins have a demonstrated role in the

pathogenesis of a given disease.

We focus on diseases with serious, life-threatening consequences and those where current treatment options are limited specifically in NASH (non-alcoholic steatohepatitis) with cirrhosis and certain cancer

Our strategy is to establish and implement clinical development programs that add value to our business in the shortest period of time possible and to seek strategic partners when one of our programs becomes advanced and requires

significant additional resources.

Using these unique carbohydrate-based

candidate compounds that largely bind and inhibit galectin proteins, particularly galectin-3, we are undertaking the focused pursuit of therapies for indications where galectin proteins have a demonstrated role in the pathogenesis of a given

Our strategy is to

establish and implement clinical development programs that add value to our business in the shortest period of time possible and to seek strategic partners when one of our programs becomes advanced and requires significant additional resources.

Our lead galectin-3 inhibitor is belapectin (GR-MD-02), which has been demonstrated in preclinical models to reverse liver fibrosis and cirrhosis and in clinical studies to decrease portal hypertension and prevent

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has been filed with the FDA to examine the effects of the drug in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (study details are listed under study NCT04332432 on www.clinicaltrials.gov );

this study became fully enrolled in February 2022.

this study became fully enrolled in February 2022 and results will be presented in an upcoming scientific congress.

We endeavor to leverage our scientific and product development expertise as well as established relationships with outside sources to achieve cost-effective and efficient drug development.

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Galectins are a class of proteins that are made by many cells in the body, but predominantly in cells of the immune system.

As a group, these proteins are able to bind to sugar molecules that

are attached to other proteins, called glycoproteins that are responsible for various functions within the body, most notably inflammation and fibrosis.

Galectins, in particular galectin-3,act as a molecular glue, bringing together molecules that

have sugars on them.

As a group, these proteins are able to bind to sugar molecules that are attached to other

proteins, called glycoproteins that are responsible for various functions within the body, most notably inflammation and fibrosis.

Galectins, in particular galectin-3,act as a molecular glue, bringing together molecules that have sugars on them.

Galectin-3, is known to be markedly increased in a number of significant diseases including inflammatory diseases leading to organs scarring (e.g.

liver, lung, kidney, and heart) and cancers.

The increase in galectin-3, by

creating the so-called galectin-3 fibrosome, promotes the progression of multiple diseases.

The increase in galectin-3, by creating the so-called

galectin-3 fibrosome, promotes the progression of multiple diseases.

Published data substantiating the importance of galectin-3 in the fibrotic process arises from gene knockout experiments in animal studies.

For instance,

mice genetically altered to eliminate the galectin-3 gene, and thus unable to produce galectin-3, do not develop liver fibrosis in response to toxic insult to the liver.

We have one new proprietary chemical entity (NCE) in development, belapectin, which has shown promise in preclinical and clinical studies for the treatment of liver fibrosis, severe skin

disease, and cancer (melanoma and head and neck squamous cell carcinoma).

For instance, mice genetically

altered to eliminate the galectin-3 gene, and thus unable to produce galectin-3, do not develop liver fibrosis in response to toxic insult to the liver.

We have one new proprietary chemical entity (NCE) in development, belapectin, which has shown promise in preclinical and clinical studies for the treatment of liver fibrosis, severe skin disease, and cancer

(melanoma and head and neck squamous cell carcinoma).

Currently, we are focusing on development of belapectin for the treatment of NASH cirrhosis and head and neck cancer.

Belapectin is a proprietary, patented compound derived

from natural, plant-based, starting materials, which following chemical processing, exhibits the properties of binding to and inhibiting galectin.

Belapectin is a proprietary, patented compound derived from natural,

plant-based, starting materials, which following chemical processing, exhibits the properties of binding to and inhibiting galectin.

Our product pipeline is shown below:

Prevention of esophageal varices

Prevention of esophageal

NASH cirrhosis

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IND submitted January 2013.

Results from the Phase 1 interaction trial were reported

in 2014, with final results reported in January 2015.

The Phase 2 NASH FX trial

was conducted in 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 and published in Alimentary Pharmacology

and Therapeutics in 2016.

The Phase 2 NASH CX trial was conducted in patients with compensated cirrhosis

and portal hypertension.

The NASH CX trial top line data was reported in

December 2017 and was published in Gastroenterology in 2020.

Results from the Phase 1 interaction trial were reported in 2014, with final results reported in January 2015.

The Phase 2 NASH FX trial was conducted in 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 and published in Alimentary Pharmacology and Therapeutics in 2016.

The Phase 2 NASH CX trial was conducted in patients with compensated cirrhosis and portal hypertension.

The NASH CX trial top line data was reported in December 2017 and

was published in Gastroenterology in 2020.

NASH NAVIGATE

Following FDA feedback, the NAVIGATE trial is an adaptive Phase 2b/3 trial for

the prevention of esophageal varices in NASH patients with compensated cirrhosis

and clinical signs of portal hypertension.

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 same primary outcome of efficacy and

a composite clinical endpoint including progression to varices requiring treatment

as a key secondary outcome of efficacy ( www.clinicaltrials.gov NCT04365868).

Following FDA feedback, the NAVIGATE trial is an adaptive Phase 2b/3 trial for the prevention of esophageal varices in NASH patients with compensated cirrhosis and

clinical signs of portal hypertension.

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 same primary outcome of efficacy and a composite clinical endpoint including progression to varices requiring treatment as a key secondary outcome of efficacy ( www.clinicaltrials.gov

NCT04365868).

The final patient was randomized in February 2023.

Phase 1 study:

hepatic insufficiency

A hepatic impairment study is being conducted in subjects with normal hepatic

function and subjects with varying degrees of hepatic impairment

(www.clinicaltrials.gov NCT04332432) and began enrolling patients in the

second quarter of 2020.

insufficiency

A hepatic impairment study has been completed in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (www.clinicaltrials.gov NCT04332432) and began enrolling patients in the second quarter of

The study completed enrollment in February 2022.

Cancer Immunotherapy

Melanoma, Head, Neck Squamous Cell

Melanoma, Head, Neck

Squamous Cell

Carcinoma (HNSCC)

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A Phase 1B study began in Q-1 2016.

Early data was reported in February 2017 and additional data were reported

in September 2018.

Data from an extension trial was reported in July 2021

for additional melanoma and HNSCC patients which provided a rational basis

for additional trials which the Company is exploring.

In the third quarter of 2022,

the Company announced its IND application for belapectin in combination with

a checkpoint inhibitor for the treatment of HNSCC was filed and a Study May

Early data was reported in February 2017 and additional data were reported in September 2018.

Data from an extension trial was reported in July 2021 for additional melanoma and HNSCC patients which provided a rational basis for

additional trials which the Company is exploring.

In the third quarter of 2022, the Company announced its IND application for belapectin in combination with a checkpoint inhibitor for the treatment of HNSCC was filed and a Study May

Proceed letter was received from FDA.

The Company is reviewing options

for financing this trial which will determine when such trial could commence.

The Company is reviewing options for financing this trial which will determine when such trial could commence.

Liver cirrhosis.

Belapectin is our lead product candidate for treatment of compensated NASH cirrhosis in patients with portal hypertension.

preclinical data show that belapectin has a significant therapeutic effect on liver fibrosis as shown in several relevant animal models.

In addition, in NASH animal models, belapectin has been shown to reduce liver fat, inflammation, portal

pressure, and ballooning degeneration (death of liver cells).

Therefore, we chose belapectin as the lead candidate in a development program targeted initially at fibrotic liver disease associated with non-alcoholic steatohepatitis (NASH).

January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with NASH and advanced liver fibrosis to evaluate the safety of belapectin and pharmacodynamics biomarkers of

On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial for belapectin with a development program aimed at obtaining support for a proposed indication of belapectin for treatment of NASH with advanced

Our preclinical data show that belapectin has a significant therapeutic effect on liver fibrosis as shown in several relevant animal models.

In addition, in NASH animal models, belapectin has been shown to reduce liver fat,

inflammation, portal pressure, and ballooning degeneration (death of liver cells).

Therefore, we chose belapectin as the lead candidate in a development program targeted initially at fibrotic liver disease associated with non-alcoholic

steatohepatitis (NASH).

In January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with NASH and advanced liver fibrosis to evaluate the safety of belapectin and

pharmacodynamics biomarkers of disease.

On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial for belapectin with a development program aimed at obtaining support for a proposed indication of belapectin for

treatment of NASH with advanced fibrosis.

The Phase 1 trial was completed and demonstrated that belapectin up to 8 mg/kg Lean Body Mass (LBM), i.v.

was safe and well tolerated.

Additionally, an open label drug-drug phase 1 interaction study was completed in healthy volunteers during the second quarter of 2015 with belapectin and it showed that with 8 mg/kg LBM dose of

belapectin and 2 mg/kg LBM dose of midazolam there was no drug-drug interaction, and no serious adverse events or drug-related adverse events were observed.

The secondary objective was to assess the safety and tolerability of belapectin when

administered concomitantly with midazolam.

Additionally, an open label drug-drug phase 1 interaction study was completed in healthy volunteers during the second quarter of 2015 with belapectin and it showed that with 8 mg/kg LBM dose of belapectin and 2

mg/kg LBM dose of midazolam there was no drug-drug interaction, and no serious adverse events or drug-related adverse events were observed.

The secondary objective was to assess the safety and tolerability of belapectin when administered

concomitantly with midazolam.

Our Phase 2 program in fibrotic disease consisted of two separate human clinical trials.

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NASH-FX Trial:

The NASH-FX trial was a Phase 2a pilot trial for patients with NASH and advanced fibrosis that explored use of three non-invasive imaging

technologies.

It was a short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3) randomized 1:1 to either 9 bi-weekly doses of 8 mg/kg LBM of belapectin or placebo.

The trial did not meet its primary endpoint as

measured using multi-parametric magnetic resonance imaging (LiverMultiScan (R) , Perspectum Diagnostics).

The trial also did not meet secondary endpoints that

measure liver stiffness as a surrogate for fibrosis using, magnetic resonance-elastography and FibroScan ® score.

With a four-month treatment period and a small

number of patients per arm the study was not powered to demonstrate efficacy results in established advanced liver fibrosis.

In the trial however, belapectin was found to be safe and well tolerated with no serious adverse events and showing

evidence of a pharmacodynamic effect.

The NASH-FX trial was a Phase 2a pilot trial for patients with NASH and advanced fibrosis that explored use of three non-invasive imaging technologies.

short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3) randomized 1:1 to either 9 bi-weekly doses of 8 mg/kg LBM of belapectin or placebo.

The trial did not meet its primary endpoint as measured using

multi-parametric magnetic resonance imaging (LiverMultiScan (R) , Perspectum Diagnostics).

The trial also did not meet secondary endpoints that measure liver stiffness

as a surrogate for fibrosis using, magnetic resonance-elastography and FibroScan ® score.

With a four-month treatment period and a small number of patients per arm

the study was not powered to demonstrate efficacy results in established advanced liver fibrosis.

In the trial however, belapectin was found to be safe and well tolerated with no serious adverse events and showing evidence of a pharmacodynamic

These results provided support for further development in NASH.

NASH-CX Trial:

The NASH-CX trial was a larger multi-center clinical trial that explored the use of belapectin for the treatment of patients with well-compensated NASH cirrhosis and portal hypertension.

Enrollment was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM

of belapectin, 8 mg/kg LBM of belapectin or placebo.

The NASH-CX trial was a larger multi-center clinical trial that explored the use of belapectin for the treatment of patients with well-compensated NASH

cirrhosis and portal hypertension.

Enrollment was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM of belapectin, 8 mg/kg LBM of belapectin or placebo.

Approximately 50% of patients at baseline had esophageal varices (a complication of portal hypertension).

The primary endpoint was a reduction in hepatic venous pressure gradient (HVPG), a

hemodynamic measure that estimates portal hypertension.

The primary endpoint was a reduction in hepatic venous pressure gradient (HVPG), a hemodynamic measure that estimates portal hypertension.

Patients received an infusion of belapectin or placebo every other week for one year and were evaluated to determine the change in HVPG as compared with placebo.

Secondary or exploratory

endpoints included evaluation of fibrosis on liver biopsy, measurement of liver stiffness (FibroScan) and assessment of liver metabolism ( 13 C-methacetin breath

Secondary or exploratory endpoints included evaluation of fibrosis on liver biopsy,

measurement of liver stiffness (FibroScan) and assessment of liver metabolism ( 13 C-methacetin breath test).

Top line data readout was reported in December 2017.

The study demonstrated a favorable safety profile and clinically meaningful efficacy results in patients without esophageal varices at baseline as demonstrated by a decrease in portal

pressure associated with the prevention of development of varices when compared to placebo.

study demonstrated a favorable safety profile and clinically meaningful efficacy results in patients without esophageal varices at baseline as demonstrated by a decrease in portal pressure associated with the prevention of development of varices

when compared to placebo.

In the total patient population, the primary endpoint HVPG showed a trend toward benefit with belapectin treatment, but the difference from placebo was not statistically significant.

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The mean change in HVPG from baseline was -0.37 and -0.42 for the 2 mg/kg LBM dose and 8 mg/kg LBM dose of belapectin, respectively.

In those NASH cirrhosis patients with portal hypertension who have not yet developed esophageal varices at baseline (about 50% of the total population), there was a statistically significant

effect of the 2 mg/kg LBM dose of belapectin on the absolute change in HVPG (-1.08 mm Hg, p<0.01).

In those NASH cirrhosis patients with portal hypertension who have not yet developed esophageal varices at baseline (about 50% of the total population), there was a statistically significant effect of the 2 mg/kg LBM

dose of belapectin on the absolute change in HVPG (-1.08 mm Hg, p<0.01).

The effect of the 8 mg/Kg LBM dose of belapectin on absolute or percent change in HVPG from baseline to week 54 was not significant.

Also because of the clinical relevance of this population, a responder analysis was performed on those patients without esophageal varices at baseline.

Analysis was performed looking at two

those with an equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline.

In both cases, the change observed in the

belapectin 2 mg/kg LBM group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.

Over the 54-week treatment period, in patients without varices at baseline there were also a statistically significantly fewer new varices that developed in the belapectin treatment groups (0%

and 4% in the 2 mg/kg LBM and the 8 mg/kg LBM, respectively) vs placebo (18%).

Analysis was performed looking at two groups:

those with an

equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline.

In both cases, the change observed in the belapectin 2 mg/kg LBM

group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.

Over the 54-week treatment period, in patients without varices at baseline there were also a statistically significantly fewer new varices that developed in the belapectin treatment groups (0% and 4% in the 2 mg/kg

LBM and the 8 mg/kg LBM, respectively) vs placebo (18%).

This meant that the decrease seen in portal pressure was associated with a decreased incidence of esophageal varices.

The results were noticeable in the belapectin 2

mg/Kg LBM group as statistical significance against placebo was achieved for both parameters.

As esophageal varices can lead to hemorrhagic complication, which can be fatal, and are a severe complication of liver cirrhosis, we believe the

prevention of esophageal varices may represent a clinically relevant measure of clinical efficacy in patients with NASH cirrhosis.

The results were noticeable in the belapectin 2 mg/Kg LBM group as

statistical significance against placebo was achieved for both parameters.

As esophageal varices can lead to hemorrhagic complication, which can be fatal, and are a severe complication of liver cirrhosis, we believe the prevention of esophageal

varices may represent a clinically relevant measure of clinical efficacy in patients with NASH cirrhosis.

The major conclusions from the NASH-CX trial results were that:

(i) belapectin had a statistically significant and clinically meaningful effect in improving HVPG vs placebo in patients with

NASH cirrhosis who did not have esophageal varices at baseline, (ii) Belapectin in the total patient population was associated with a statistically significant improvement in hepatocyte ballooning (ie cell death), (iii) There was a

statistically significant reduction (p=0.02) in the development of new esophageal varices in drug-treated patients compared to placebo.

We believe that the prevention of esophageal varices is a clinically relevant endpoint related to patient

outcomes, (iv) While there was a drug effect in both the 2 mg/kg LBM and 8 mg/kg LBM groups on the development of varices and liver biopsy there was a consistently greater and statistically significant effect of the 2 mg/kg LBM dose of

belapectin, (v) belapectin appears to be safe and well tolerated in this one year clinical trial, a feature that is of prime importance for a cirrhotic population and (vi) This is the first large, randomized clinical trial to demonstrate a

clinically meaningful improvement in portal hypertension in patients with compensated NASH cirrhosis who have not yet developed esophageal varices.

(i) belapectin had a statistically significant and clinically meaningful effect in improving HVPG vs placebo in patients with NASH cirrhosis who did not

have esophageal varices at baseline, (ii) Belapectin in the total patient population was associated with a statistically significant improvement in hepatocyte ballooning (ie cell death), (iii) There was a statistically significant reduction

(p=0.02) in the development of new esophageal varices in drug-treated patients compared to placebo.

We believe that the prevention of esophageal varices is a clinically relevant endpoint related to patient outcomes, (iv) While there was a drug

effect in both the 2 mg/kg LBM and 8 mg/kg LBM groups on the development of varices and liver biopsy there was a consistently greater and statistically significant effect of the 2 mg/kg LBM dose of belapectin, (v) belapectin appears to be safe

and well tolerated in this one year clinical trial, a feature that is of prime importance for a cirrhotic population and (vi) This is the first large, randomized clinical trial to demonstrate a clinically meaningful improvement in portal

hypertension in patients with compensated NASH cirrhosis who have not yet developed esophageal varices.

Further information and details on the NASH-CX results is available in public presentations posted to our website and filed with the SEC and in a peer reviewed publication in Gastroenterology

2020;158:1334–1345.

NASH NAVIGATE Trial:

Building on the experience of the NASH-CX trial, the NAVIGATE Trial is a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patient with non-alcoholic steatohepatitis (NASH) cirrhosis.

features of this innovative Phase 2b/3 study design are:

i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, this trial will assess the effect of belapectin on the incidence

of new varices (the primary endpoint) – as well as assessing the effect of belapectin on the incidence of additional clinically significant cirrhosis-related outcomes (a key secondary efficacy endpoint), (ii) The study targets NASH patients

with a clearly identified unmet medical need:

patients with compensated cirrhosis who have clinical signs of portal hypertension and, thus, are at risk of developing esophageal varices, a potentially life-threatening complication of cirrhosis

(bleeding varices are a cause of death in about one-third of cirrhotic patients).

Building on the experience of the NASH-CX trial, the NAVIGATE Trial is a seamless adaptively-designed Phase 2b/3

clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patient with non-alcoholic steatohepatitis (NASH) cirrhosis.

The major features of this innovative Phase 2b/3

study design are:

i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, this trial will assess the effect of belapectin on the incidence of new varices (the primary endpoint) – as

well as assessing the effect of belapectin on the incidence of additional clinically significant cirrhosis-related outcomes (a key secondary efficacy endpoint), (ii) The study targets NASH patients with a clearly identified unmet medical need:

patients with compensated cirrhosis who have clinical signs of portal hypertension and, thus, are at risk of developing esophageal varices, a potentially life-threatening complication of cirrhosis (bleeding varices are a cause of death in about

one-third of cirrhotic patients).

There is currently no approved treatment for preventing varices in these patients.

In addition, the development of esophageal varices reflects the progression of

hepatic cirrhosis and thus portends the development of other cirrhosis complications such as ascites, hepatic encephalopathy, and liver failure, and (iii) During the first 18 months, two belapectin dose levels (2 mg/kg LBM and 4 mg/kg LBM) will

be compared to placebo (phase 2b).

Then, at the interim analysis (IA), the best belapectin dose will be selected, based on efficacy and safety, for continued evaluation (Phase 3).

The belapectin dose selected for the phase 2b/3 were based on

the analysis of the NASH-CX trial.

Prior belapectin clinical studies have also indicated the good tolerance and safety profile of belapectin with doses of up to 8 mg/kg LBM for up to 52 weeks, an important feature to inform the future risk

benefit analysis in patients with NASH cirrhosis.

In addition, the development of esophageal varices reflects the progression of hepatic cirrhosis and thus portends the

development of other cirrhosis complications such as ascites, hepatic encephalopathy, and liver failure, and (iii) During the first 18 months, two belapectin dose levels (2 mg/kg LBM and 4 mg/kg LBM) will be compared to placebo (phase 2b).

at the interim analysis (IA), the best belapectin dose will be selected, based on efficacy and safety, for continued evaluation (Phase 3).

The belapectin dose selected for the phase 2b/3 were based on the analysis of the NASH-CX trial.

belapectin clinical studies have also indicated the good tolerance and safety profile of belapectin with doses of up to 8 mg/kg LBM for up to 52 weeks, an important feature to inform the future risk benefit analysis in patients with NASH

The study design provides for a pre-specified interim analysis (IA).

The IA of efficacy and safety data will be conducted after all planned subjects in Phase 2b component have completed at

least 78 weeks (18 months) of treatment and a second esophago-gastro-duodeno endoscopic assessment.

The IA of efficacy and safety data will be conducted after all planned subjects in Phase 2b component have completed at least 78 weeks (18 months)

of treatment and a second esophago-gastro-duodeno endoscopic assessment.

The purpose of the IA is to allow potential seamless adaptive modifications of the study, including:

(1) the selection of the optimal dose of

belapectin for Phase 3, (2) the re-estimation of the study sample size for Phase 3 portion of the trial, (3) the re-evaluation of the randomization ratio for the Phase 3 portion of the trial, (4) the refinement of the inclusion and exclusion

criteria for the Phase 3 portion of the trial, including the cirrhosis status, (5) and/or termination of the study for overwhelming efficacy or for futility.

(1) the selection of the optimal dose of belapectin for Phase 3, (2) the

re-estimation of the study sample size for Phase 3 portion of the trial, (3) the re-evaluation of the randomization ratio for the Phase 3 portion of the trial, (4) the refinement of the inclusion and exclusion criteria for the Phase 3 portion of

the trial, including the cirrhosis status, (5) and/or termination of the study for overwhelming efficacy or for futility.

The trial design also includes a blinded sample size re-estimation (“SSR”) during the Phase 2b, prior to the IA, to allow for potential sample size readjustment.

The SSR will be conducted when

50% of the patients have completed 18 months of therapy.

The SSR will be conducted when 50% of the patients

have completed 18 months of therapy.

This will allow us to confirm the underlying assumption regarding the rate of varices development, currently estimated from our prior Phase 2b trial (NASH-CX).

The study design also

minimizes invasive testing requirements, such as the measurement of HVPG or repeated liver biopsies, which we believe are particularly risky in patients with portal hypertension and will facilitate enrollment and retention of patients.

provides for a seamless transition of patients from the Phase 2b component into the phase 3 stage, including the potential addition of new patients.

The trial design preserves the surrogate end-point concepts (development of new varices versus

variceal hemorrhage) previously discussed with FDA.

We believe that these adaptations taken together are innovative and optimize conduct of the NAVIGATE trial with a clinically relevant primary outcome giving belapectin the best opportunity to

show a positive therapeutic effect to address an unmet medical need.

As a testimony of this innovation, the NAVIGATE trial design was presented to the hepatology community and featured during the last meeting of the American Association for the

Study of Liver Diseases, in November 2021.

The study design also minimizes invasive testing

requirements, such as the measurement of HVPG or repeated liver biopsies, which we believe are particularly risky in patients with portal hypertension and will facilitate enrollment and retention of patients.

It also provides for a seamless

transition of patients from the Phase 2b component into the phase 3 stage, including the potential addition of new patients.

The trial design preserves the surrogate end-point concepts (development of new varices versus variceal hemorrhage)

previously discussed with FDA.

We believe that these adaptations taken together are innovative and optimize conduct of the NAVIGATE trial with a clinically relevant primary outcome giving belapectin the best opportunity to show a positive

therapeutic effect to address an unmet medical need.

As a testimony of this innovation, the NAVIGATE trial design was presented to the hepatology community and featured during the last meeting of the American Association for the Study of Liver

Diseases, in November 2021.

If the IA results of the NAVIGATE trial are compelling, there could be the potential for accelerated FDA approval and/or partnership opportunity with a pharmaceutical company.

In the Phase 3 component of this trial, as proposed in the protocol, the primary endpoint remains the development of varices.

Secondary endpoints include a composite clinical outcomes endpoint,

including varices requiring treatment (development of large varices or varices with a red wale), decompensating events, all-cause mortality, MELD score increase, liver transplant.

Secondary endpoints include a composite clinical outcomes endpoint, including varices

requiring treatment (development of large varices or varices with a red wale), decompensating events, all-cause mortality, MELD score increase, liver transplant.

Also, NASH non-invasive biomarkers will be evaluated.

a population at risk of developing esophageal varices, patient selection will be based on clinical signs of portal hypertension, including, but not limited to, a low platelet count, an increased spleen size and/or evidence of abdominal

collaterals circulation.

The focus and goal of the therapeutic program is to stop the progression of and/or reverse portal hypertension and thereby prevent the development of varices, potentially one of the most

immediately life-threatening complications of cirrhosis.

Based on the results of the NASH-CX trial and subject to confirmation in later stage clinical trials, we believe that this goal is achievable in a significant portion of the NASH

cirrhosis patient population i.e.

those NASH cirrhosis patients with clinical signs of portal hypertension for whom, currently no specific, liver targeted, treatment are available.

The COVID-19 pandemic has delayed and may continue to delay our regulatory and ethics approvals, recruitment of sites, and enrollment of patients for our Phase 2b/3 NAVIGATE trial despite a

recent uptick in screening activities.

Many investigational centers in the United States and Europe have experienced shut-downs, and while some have loosened or removed restrictions, there may be a risk of experiencing new shut-downs and

restrictions.

In some countries, shutdown orders have also affected the regulatory process to authorize study starts.

To target a population at risk

of developing esophageal varices, patient selection will be based on clinical signs of portal hypertension, including, but not limited to, a low platelet count, an increased spleen size and/or evidence of abdominal collaterals circulation.

The focus and goal of the therapeutic program is to stop the progression of and/or reverse portal hypertension and thereby prevent the development of varices, potentially one of the most immediately life-threatening

complications of cirrhosis.

Based on the results of the NASH-CX trial and subject to confirmation in later stage clinical trials, we believe that this goal is achievable in a significant portion of the NASH cirrhosis patient population i.e.

NASH cirrhosis patients with clinical signs of portal hypertension for whom, currently no specific, liver targeted, treatment are available.

The COVID-19 pandemic has delayed and may continue to delay our regulatory and ethics approvals, recruitment of sites, and enrollment of patients for our Phase 2b/3 NAVIGATE trial despite a recent uptick in screening

Many investigational centers in the United States and Europe have experienced shut-downs, and while some have loosened or removed restrictions, there may be a risk of experiencing new shut-downs and restrictions.

In some countries,

shutdown orders have also affected the regulatory process to authorize study starts.

Governments and medical facilities focused their resources for battling the COVID-19 pandemic.

For several reasons, the

pandemic made enrolling patients for the NAVIGATE trial more challenging, including because patients eligible for the NAVIGATE trial have liver cirrhosis and, as such, are at a greater health risk of complications from COVID-19.

important to consider the safety of our candidate participants first, as cirrhotic patients with portal hypertension are immune compromised.

As we emerged from the COVID-19 pandemic, site recruitment and patient enrollment accelerated and we

experienced increases in enrollment, particularly in the United States.

For several reasons, the pandemic made enrolling patients for the

NAVIGATE trial more challenging, including because patients eligible for the NAVIGATE trial have liver cirrhosis and, as such, are at a greater health risk of complications from COVID-19.

It is also important to consider the safety of our

candidate participants first, as cirrhotic patients with portal hypertension are immune compromised.

As we emerged from the COVID-19 pandemic, site recruitment and patient enrollment accelerated and we experienced increases in enrollment,

particularly in the United States.

However, we did not see the enrollment in Europe that we anticipated, and conditions there remain uncertain.

Consequently, we activated multiple sites in Latin America.

The final patient was randomized in February 2023, and we expect topline results from the IA in Fall of 2024.

The final patient was randomized in

February 2023, and we expect topline results from the IA in Fall of 2024.

We have activated more than 150 clinical trial sites in 14 countries for the NAVIGATE trial.

Further details on the NAVIGATE trial can be found on www.clinicaltrials.gov under study NCT04365868 and on our NAVIGATE website (navigatenash.com).

The Company also has commenced a Hepatic Impairment Study, which will run in parallel with the phase 2b/3 trial as part of the development program.

The Hepatic Impairment Study is being

conducted at three sites and involves approximately 40 patients (divided amongst normal healthy volunteers, and patients with hepatic impairment categorized as Child-Turcotte-Pugh (CTP) classes A (mild), B (moderate), and C (severe).

subject will receive a single infusion of belapectin (4 mg/kg LBM) and their serum belapectin levels will be monitored for up to approximately two weeks to define the effects of various stages of cirrhosis on serum belapectin levels.

tolerance and safety of belapectin will be evaluated.

Enrollment in this study was completed in February 2022, and the results will be announced when available.

Based on the results from this hepatic impairment study, the Company may consider

including patients with more advanced cirrhosis in the Phase 3 portion of its NAVIGATE trial.

Until dosing and safety profile is further informed in CTP Class B and/or Class C patients, the NAVIGATE trial will enroll only CTP Class A patients.

The Company also has completed a Hepatic Impairment Study, as part of the development program.

The Hepatic Impairment Study was conducted at four sites and involved

38 subjects divided amongst normal healthy volunteers, and patients with hepatic impairment categorized as Child-Turcotte-Pugh (CTP) classes A (mild), B (moderate), and C (severe).

Each subject received a single infusion of belapectin (4 mg/kg

LBM) and their serum belapectin levels were monitored for up to approximately two weeks to define the effects of various stages of cirrhosis on serum belapectin pharmacokinetics.

Enrollment in this study was completed in February 2022, and

results will be presented at an upcoming scientific congress.

In this study, Belapectin at 4 mg/kg LBM, the highest dose evaluated in the ongoing Phase 2b/3 NAVIGATE study, appeared safe and was well tolerated.

Hepatic function had minimal

impact on key PK parameters of belapectin suggesting that no dose adjustment of belapectin will be required for patients with increasing severity of hepatic impairment.

Further details on this hepatic impairment study can be found on www.clinicaltrials.gov study NCT04332432.

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For example, there have been several recent approvals of drugs that enhance a patient’s immune system to fight cancer.

It is our goal to use ourgalectin-3 inhibitor to further enhance the immune system function

to help the body to fight cancer in a way that complements other approaches to this type of therapy.

This hypothesis is supported by the fact that galectin-3 is expressed at high levels in multiple types of tumors and their micro-environment,

where it fosters the malignant nature of the tumors, and protects the tumors from immune attack by the patient’s own defense mechanism.

Our drug candidates provide a promising new therapeutic approach to enhance the activity of the immune

system against cancer cells.

Preclinical studies have indicated that belapectin enhances the immune response to cancer cells, increased tumor shrinkage and enhanced survival in immune competent mice with prostate, breast, melanoma and sarcoma

cancers when combined with one of the immune checkpoint inhibitors, anti-CTLA-4 or anti-PD-1, or with the immune cell activator anti-OX40.

These preclinical data led to the filing of two Investigator-sponsored INDs and the initiation of Phase

1B studies of belapectin in combination with Yervoy ® (ipilimumab) in metastatic melanoma and another phase 1B study in combination with KEYTRUDA (pembrolizumab) in

patients with metastatic melanoma and head and neck squamous cell carcinoma.

It is our goal to use ourgalectin-3 inhibitor to further enhance the immune system function to help the body

to fight cancer in a way that complements other approaches to this type of therapy.

This hypothesis is supported by the fact that galectin-3 is expressed at high levels in multiple types of tumors and their micro-environment, where it fosters the

malignant nature of the tumors, and protects the tumors from immune attack by the patient’s own defense mechanism.

Our drug candidates provide a promising new therapeutic approach to enhance the activity of the immune system against cancer cells.

of the immune checkpoint inhibitors, anti-CTLA-4 or anti-PD-1, or with the immune cell activator anti-OX40.

These preclinical data led to the filing of two Investigator-sponsored INDs and the initiation of Phase 1B studies of belapectin in

combination with Yervoy ® (ipilimumab) in metastatic melanoma and another phase 1B study in combination with KEYTRUDA (pembrolizumab) in patients with metastatic

melanoma and head and neck squamous cell carcinoma.

These studies were conducted under the sponsorship of Providence Portland Medical Center’s Earle A.

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Promising results were reported in the Phase 1b trial combining belapectin with pembrolizumab (KEYTRUDA ® ).

aggregated cohorts are combined, in advanced melanoma, a 50% objective response rate with belapectin in combination with KEYTRUDA, was documented.

When aggregated cohorts are

combined, in advanced melanoma, a 50% objective response rate with belapectin in combination with KEYTRUDA, was documented.

In addition, a 33% response rate was documented in patients with head and neck cancer.

results have been published in 2021 in a highly rated peer reviewed journal (Curti et al.

The results have been published in

2021 in a highly rated peer reviewed journal (Curti et al.

Journal of Immunotherapy of cancer 2021;9:e002371).

There was also a suggestion that the combination of belapectin with pembrolizumab could decrease the

auto-immune side-effect induced by pembrolizumab.

These side-effects, which are directly linked to the mechanism of action of pembrolizumab, can be poorly tolerated and even severe enough to lead to treatment interruption, even if the effect on

the cancer was encouraging.

This is, a very frustrating situation for patients who have to discontinue an active treatment but have no other options available to them.

We believe these data, taken together with the observed favorable safety and

tolerability of the combination, provide a rationale to move the belapectin program in oncology forward.

There was also a suggestion that the combination of belapectin with pembrolizumab could decrease the auto-immune side-effect induced by

pembrolizumab.

These side-effects, which are directly linked to the mechanism of action of pembrolizumab, can be poorly tolerated and even severe enough to lead to treatment interruption, even if the effect on the cancer was encouraging.

a very frustrating situation for patients who have to discontinue an active treatment but have no other options available to them.

We believe these data, taken together with the observed favorable safety and tolerability of the combination,

provide a rationale to move the belapectin program in oncology forward.

Late in 2021, we engaged three noted physicians – Dr.

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Nishant Agrawal and Dr.

Ari Rosenberg, both from University of Chicago Medical Center – as

consultants to help define the path forward in oncology.

In consultation with our oncology experts, we have now selected the treatment of recurrent or metastatic head and neck cancer as the lead indication to pursue for belapectin in

combination with an immune checkpoint inhibitor.

Ari Rosenberg, both from University of Chicago Medical Center – as consultants to help

define the path forward in oncology.

In consultation with our oncology experts, we have now selected the treatment of recurrent or metastatic head and neck cancer as the lead indication to pursue for belapectin in combination with an immune

checkpoint inhibitor.

The decision is notably based on the lack of available treatments for these patients, the limited number of therapies in development, and the resulting very high medical need.

We filed an IND

with FDA and are planning a phase 2 trial to be filed with the FDA oncology division.

We filed an IND with FDA and are planning a

phase 2 trial to be filed with the FDA oncology division.

Results of Operations

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Three and Six Months Ended June 30, 2023 Compared to Three and Six Months Ended June 30, 2022

Research and Development Expense.

Ended March 31,

Three Months Ended

Six Months Ended

2023 as Compared to 2022

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Research and development

We generally categorize research and development expenses as either direct external expenses, comprised of amounts paid to third party vendors for services, or all other research and development expenses, comprised of employee payroll and

general overhead allocable to research and development.

We consider a clinical program to have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at which time we begin

tracking expenditures by the product candidate.

Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient dosing and

monitoring, data collection and management, oversight of the trials and reports of results.

Pre-clinical expenses comprise all research and development amounts incurred before human trials begin, including payments to vendors for services related

to product experiments and discovery, toxicology, pharmacology, metabolism, and efficacy studies, as well as manufacturing process development for a drug candidate.

of employee payroll and general overhead allocable to research and development.

We consider a clinical program to have begun upon acceptance by the FDA, or similar agency outside of the United States, to commence a clinical trial in humans, at

which time we begin tracking expenditures by the product candidate.

Clinical program expenses comprise payments to vendors related to preparation for, and conduct of, all phases of the clinical trial, including costs for drug manufacture, patient

dosing and monitoring, data collection and management, oversight of the trials and reports of results.

Pre-clinical expenses comprise all research and development amounts incurred before human trials begin, including payments to vendors for

services related to product experiments and discovery, toxicology, pharmacology, metabolism, and efficacy studies, as well as manufacturing process development for a drug candidate.

Our research and development expenses were as follows:

Three Months Ended

Six Months Ended

Direct external expenses:

(in thousands)

Clinical activities

Clinical programs

Pre-clinical activities

All other research and development expenses

Clinical programs expenses decreased primarily due to timing of activities associated with the NAVIGATE clinical trial.

Pre-clinical activities increased primarily due to non-clinical activities associated with the

NASH cirrhosis program.

Other research and development expenses increased primarily due to additional employees hired after the first quarter of 2022.

Both the time required and costs we may incur in order to commercialize a drug candidate that would result in material net cash inflow are subject to numerous variables, and therefore we are unable at this stage of

our development to forecast useful estimates.

Variables that make estimates difficult include the number of clinical trials we may undertake, the number of patients needed to participate in the clinical trial, patient recruitment uncertainties,

trial results as to the safety and efficacy of our product, and uncertainties as to the regulatory agency response to our trial data prior to receipt of marketing approval.

Moreover, the FDA or other regulatory agencies may suspend clinical

trials if we or an agency believes patients in the trial are subject to unacceptable risks or find deficiencies in the conduct of the clinical trial.

Delays or rejections may also occur if governmental regulation or policy changes during our

clinical trials or in the course of review of our clinical data.

Due to these uncertainties, accurate and meaningful estimates of the ultimate cost to bring a product to market, the timing of costs and completion of our program and the period

during which material net cash inflows will commence are unavailable at this time.

Both the time required and costs we may incur in order to commercialize a drug candidate that would result in material net cash inflow are subject to numerous variables, and therefore we are

unable at this stage of our development to forecast useful estimates.

Variables that make estimates difficult include the number of clinical trials we may undertake, the number of patients needed to participate in the clinical trial, patient

recruitment uncertainties, trial results as to the safety and efficacy of our product, and uncertainties as to the regulatory agency response to our trial data prior to receipt of marketing approval.

Moreover, the FDA or other regulatory agencies

may suspend clinical trials if we or an agency believes patients in the trial are subject to unacceptable risks or find deficiencies in the conduct of the clinical trial.

Delays or rejections may also occur if governmental regulation or policy

changes during our clinical trials or in the course of review of our clinical data.

Due to these uncertainties, accurate and meaningful estimates of the ultimate cost to bring a product to market, the timing of costs and completion of our program

and the period during which material net cash inflows will commence are unavailable at this time.

General and Administrative Expense.

Ended March 31,

Ended June 30,

2023 as Compared to 2022

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General and administrative

General and administrative expenses consist primarily of salaries including stock-based compensation, legal and accounting fees, insurance, investor relations, business

development and other office related expenses.

The primary reasons for the decrease in general and administrative expenses for the three-months ended March 31, 2023 as compared to the same period in 2022 is due to a decrease insurance expense of

67,000 and decrease in non-cash stock based compensation expenses of approximately $241,000.

General and administrative expenses consist primarily of salaries including stock-based compensation, legal and accounting fees, insurance, investor relations, business development and other

office related expenses.

The primary reasons for the decrease in general and administrative expenses for the six-months ended June 30, 2023 as compared to the same period in 2022 is due to a decrease non-cash stock based compensation expenses of

approximately $351,000.

Other Income and Expense

During the three and six months ended June 30, 2023 and 2022, other income and expense consisted of interest income, interest expense and

amortization of debt discounts on convertible notes payable and convertible line of credit and the change in fair value of derivatives related to the convertible notes payable.

Interest income increased in 2023 due to higher interest rates

and cash on deposit.

Interest expense and amortization of debt discounts increased due to borrowings on the convertible line of credit.

The fair value of derivatives vary based on variables including the Company’s stock price.

Liquidity and Capital Resources

Since our inception on July 10, 2000, we have financed our operations from proceeds of public and private offerings of debt and equity.

As of December 31, 2022, we raised a net total of $254.5

million from these offerings.

At March 31, 2023, the Company had $17.8 million of unrestricted cash and cash equivalents in addition to $40 million remaining available under a line of credit provided by our chairman available to fund future

The Company believes there is sufficient cash to fund currently planned operations at least through December 31, 2024.

We will require more cash to fund our operations after December 31, 2024 and believe we will be able to obtain

additional financing.

The currently planned operations include costs related to our adaptively designed NAVIGATE Phase 2b/3 clinical trial.

However, there can be no assurance that we will be successful in obtaining such new financing or, if

available, that such financing will be on terms favorable to us.

Net cash used in operations increased by $2,751,000 to $10,793,000 for the three months ended March 31, 2032, as compared to $8,042,000 for the three months ended March 31, 2022.

Cash operating expenses increased

principally due to the preparations and expenses related to our NAVIGATE clinical trial with belapectin.

As of June 30, 2023, we raised a net total of $264.5 million from these

At June 30, 2023, the Company had $18.0 million of unrestricted cash and cash equivalents in addition to $30 million remaining available under a line of credit provided by our chairman available to fund future operations.

believes there is sufficient cash to fund currently planned operations at least through December 31, 2024.

We will require more cash to fund our operations after December 31, 2024 and believe we will be able to obtain additional financing.

currently planned operations include costs related to our adaptively designed NAVIGATE Phase 2b/3 clinical trial.

However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that such financing

will be on terms favorable to us.

Net cash used in operations increased by $5,156,000 to $20,626,000 for the six months ended June 30, 2023, as compared to $15,470,000 for the six months ended June 30, 2022.

Cash operating

expenses increased principally due to the preparations and expenses related to our NAVIGATE clinical trial with belapectin and the hiring of additional employees.

Off-Balance Sheet Arrangements

We have not created, and are not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not

consolidated into our financial statements.

We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability

of capital resources.

We have not created, and are not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating parts of our business that are not consolidated into

our financial statements.

Application of Critical Accounting Policies and Estimates

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Critical accounting policies are those policies that affect our more significant judgments and estimates used in preparation of our consolidated financial statements.

We believe our critical

accounting policies include our policies regarding stock-based compensation, accrued expenses and income taxes.

We believe our critical accounting policies

include our policies regarding stock-based compensation, accrued expenses and income taxes.

For a more detailed discussion of our critical accounting policies, please refer to our 2022 Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis