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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 208 added, 187 removed, 226 unchanged (64% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under

Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements.

Such statements include, but are not limited to, statements concerning our anticipated operating

results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and

“would,” “should,” “could” or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are

forward-looking statements, including statements regarding:

In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under Section 21E of the

Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements.

Such statements include, but are not limited to, statements concerning our anticipated operating results, research and

development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and “would,” “should,” “could”

or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements,

including statements regarding:

plans and expectations regarding clinical trials;

plans and expectations regarding regulatory approvals;

our strategy and expectations for clinical development and commercialization of

our products;

potential strategic partnerships;

our strategy and expectations for clinical development and commercialization of our products;

strategic partnerships;

expectations regarding the effectiveness of our products;

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statements about accounting assumptions and estimates;

expectations regarding

liquidity and the sufficiency of cash to fund currently planned operations through at least December 31, 2024;

expectations regarding liquidity and the sufficiency of

cash to fund currently planned operations through at least December 31, 2024;

our commitments and contingencies;

and our market risk exposure.

Forward-looking statements are based on current expectations,

estimates and projections about the industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions.

These statements are not guarantees of future performance and involve certain known and unknown risks and

uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Forward-looking statements are based on current expectations, estimates and projections about the

industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions.

These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause

actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties are related to and include, without limitation,

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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

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 indications.

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 disease.

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 indications.

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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In February 2023, we completed randomizations totaling 357 patients in a large, global Phase 2b/3 clinical trial.

Our study protocol was filed with the FDA on April 30, 2020, for a seamless adaptively-designed

Phase 2b/3 clinical study, the NAVIGATE trial, evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patients with non-alcoholic steatohepatitis (NASH) cirrhosis (Further details

are available at www.clinicaltrials.gov under study NCT04365868);

Our study protocol was filed with the FDA on April 30, 2020, for a seamless adaptively-designed Phase

2b/3 clinical study, the NAVIGATE trial, evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patients with non-alcoholic steatohepatitis (NASH) cirrhosis (Further details are

available at www.clinicaltrials.gov under study NCT04365868);

this study began enrolling patients in Q2-2020.

In September 2020, the Company received a letter from the FDA providing comments, asking questions and providing guidance on

various aspects of the ongoing NAVIGATE trial.

In September 2020, the Company received a letter from the FDA providing comments, asking questions and providing guidance on various

aspects of the ongoing NAVIGATE trial.

These comments were addressed, and the study proceeded accordingly.

Additionally, a study protocol entitled “A Single-dose, Open-label, Pharmacokinetic Study of Belapectin (GR-MD-02) in Subjects With Normal Hepatic Function and Subjects With Varying Degrees of Hepatic Impairment”

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 and results will be presented in an upcoming scientific congress.

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);

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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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.

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:

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Phase 1 interaction trial:

IND submitted January 2013.

Results from the Phase 1 interaction trial were reported

NASH-CX trial and

in 2014, with final results reported in January 2015.

The Phase 2 NASH FX trial was

NASH-FX trial

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.

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

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).

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:

A hepatic impairment study has been completed in subjects with normal hepatic

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

function and subjects with varying degrees of hepatic impairment

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

quarter of 2020.

The study completed enrollment in February 2022.

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Melanoma, Head, Neck

Squamous Cell

Carcinoma (HNSCC)

Investigator IND study was completed.

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

Squamous Cell

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

Carcinoma (HNSCC)

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.

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.

Liver cirrhosis.

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

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.

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).

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.

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.

The main clinical trial was the Phase 2b NASH-CX study for one year for patients with NASH with

compensated cirrhosis and portal hypertension, which began enrolling patients in June 2015.

This study was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy of belapectin for

treatment of liver fibrosis and resultant portal hypertension in NASH patients with compensated cirrhosis.

A smaller, exploratory NASH-FX trial was conducted to explore potential use of various non-invasive imaging techniques in NASH patients

with advanced fibrosis but not cirrhosis.

The main clinical trial was the Phase 2b NASH-CX study for one year for patients with NASH with compensated cirrhosis and

portal hypertension, which began enrolling patients in June 2015.

This study was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy of belapectin for treatment of liver fibrosis and

resultant portal hypertension in NASH patients with compensated cirrhosis.

A smaller, exploratory NASH-FX trial was conducted to explore potential use of various non-invasive imaging techniques in NASH patients with advanced fibrosis but not

NASH-FX Trial :

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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

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.

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.

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).

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.

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 test).

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 (13C-methacetin breath test).

Top line data readout was reported in December 2017.

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.

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.

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.

change in HVPG of placebo from baseline to week 54 was 0.3 mm Hg.

The mean change in HVPG of

placebo from baseline to week 54 was 0.3 mm Hg.

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.

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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.

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.

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).

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

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).

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.

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

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.

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

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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.

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.

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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We believe there is potential for galectin inhibition to play a key role in the innovative area of cancer immunotherapy.

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.

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.

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.

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

Chiles Research Institute (EACRI).

Chiles Research

Institute (EACRI).

The phase IB study in combination with Yervoy was rapidly discontinued after the first patients were recruited because of the availability of new treatment in the selected population.

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

When 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.

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.

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.

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

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.

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

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Results of Operations

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

Three and Nine Months Ended September 30, 2023 Compared to Three and Nine Months Ended September 30, 2022

Research and Development Expense.

Three Months Ended

Six Months Ended

Nine Months Ended

2023 as Compared to 2022

September 30,

(In thousands, except %)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Direct external expenses:

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Clinical programs

Pre-clinical activities

Non-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.

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

Non-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 half 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.

General and Administrative Expense.

Ended June 30,

2023 as Compared to 2022

Ended September 30,

(In thousands, except %)

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 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.

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 nine months ended September 30, 2023 as compared to the same period in 2022 is due to a decrease non-cash stock based compensation expenses of approximately

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.

During the three and nine months ended September 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.

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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 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.

As of September 30, 2023, we raised a net total of $274.5 million from these

At September 30, 2023, the Company had $20.4 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.

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

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 $4,446,000 to $28,263,000 for the nine months ended September 30, 2023, as compared to $23,817,000 for the nine months ended September 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

financial statements.

Application of Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related

disclosure of contingent assets and liabilities.

The preparation of condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent

assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to accrued expenses, stock-based compensation, contingencies and litigation.

We base our estimates on historical experience,

terms of existing contracts, our observance of trends in the industry, information available from other outside sources and on various other factors that we believe to be appropriate under the circumstances.

Actual results may differ from these

estimates under different assumptions or conditions.

We base our estimates on historical experience, terms of existing

contracts, our observance of trends in the industry, information available from other outside sources and on various other factors that we believe to be appropriate under the circumstances.

Actual results may differ from these estimates under

different assumptions or conditions.

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

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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