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Galecto made no mention of whether its remaining clinical programs would be affected by the workforce restructuring or search for strategic alternatives. A month after halting work on an inhaled treatment for idiopathic pulmonary fibrosis in the wake of a phase 2 trial fail, Galecto is laying off 70% of its workforce as the Boston-based biotech mulls its options. The company has just completed a review of its business and is now conducting a “comprehensive exploration of strategic alternatives focused on maximizing shareholder value.” As is usual for biotechs in dire straits, the potential options include an acquisition, merger or yard sale of the company’s assets. Galecto made the usual caveat that it couldn’t guarantee that any transaction “will be completed on attractive terms, if at all.” But one thing that is for certain is that 29 employees—equivalent to 70% of the company’s entire workforce—will be heading out the door. The writing may have been on the wall for the biotech back in August, when Galecto announced that its small-molecule inhibitor of galectin-3, dubbed GB0139, failed to hit the trial’s primary endpoint of a demonstrating a slowing in decline in the volume of air exhaled from the lungs of patients with idiopathic pulmonary fibrosis. In fact, the average reduction in forced vital capacity was 316.6 ml among patients treated with a 3-mg daily dose of GB0139 for a year, compared to a less pronounced drop of 127.5 ml for those given placebo, meaning treated patients fared much worse. The drug had a bumpy ride to even get to this stage, with a data safety and monitoring board recommending in March 2021 that the company ax the 10-mg treatment arm after an “imbalance” in serious side effects was cropping up. With the 3-mg dose also coming up short last month, the biotech turned its attention to another galectin-3 inhibitor called GB1211, which is in development for liver cirrhosis. Galecto revealed at the time that it had recently wrapped a type C meeting with the FDA and was preparing for a placebo-controlled phase 2 trial in patients with decompensated nonalcoholic steatohepatitis (NASH) cirrhosis that it planned to launch early next year. There’s also an OXL2 inhibitor called GB2064 in a phase 2 trial for myelofibrosis. In its postmarket release yesterday, the company made no mention of whether these plans would be affected by the workforce restructuring or search for strategic alternatives. With $52.1 million in the bank as of the end of June, Galecto CEO Hans Schambye, M.D., Ph.D., had previously said he was optimistic about securing fresh capital to progress the NASH prospect.

Phalguni Deswal @Phalguni_GD The trial termination decimated the company’s stock, and it has not recovered since then. Image Credit: Buravleva stock / Shutterstock. Galecto has fired 70% of its workforce and is considering a whole list of strategic alternatives a month after announcing the failure of a trial with its lead drug. In August, the company’s lead candidate, GB0139, failed to meet its primary endpoint in the Phase II trial (NCT03832946) for the treatment of idiopathic pulmonary fibrosis (IPF). The trial termination decimated the company’s stock, and it has not recovered since then. Still, the 26 September restructuring news has revived the stock to a certain extent. Galecto’s stock was up by over 32% in pre-market trading today. Galecto’s market cap is $17.9m. The placebo-controlled Phase IIb had a lot of momentum, with the company having no issues with patient recruitment , even during the Covid-19 pandemic. However, all of this was for nought as the trial failed to show a change in the rate of decline of forced vital capacity, a measure of lung function, from baseline at 52 weeks. Galecto is now considering a merger, asset divestment or acquisition. The company was pragmatic regarding its options and noted that it does not expect any transaction to be “completed on attractive terms, if at all”. The US-based company is one in a growing list of companies that have downsized due to a multitude of reasons that range from low funding, US Food and Drug Administration (FDA) rejections or decreased sales forecasts for marketed products. Other drugs in Galecto’s pipeline include GB1211, which is being evaluated in an open-label Phase II trial (NCT05240131) as a combination therapy with Roche’s Tecentriq (atezolizumab) for non-small cell lung cancer (NSCLC). GB2064 is being evaluated in an open-label Phase IIa trial (NCT04679870) investigating myelofibrosis , a rare blood cancer. The topline results from the trial are expected by the end of 2023. Galecto also received FDA approval to start a Phase IIa trial for GB1211, an oral galectin-3 inhibitor for the treatment of patients with decompensated non-alcoholic steatohepatitis (NASH) cirrhosis, although the company pointed out that the trial initiation will be contingent on securing additional funding.