Why Galmed Pharmaceuticals (GLMD) Shares Skyrocketed Over 200% Today

Investors love biotech stocks for the lottery ticket-like returns they can offer if a company strikes medical gold. Case in point: Galmed Pharmaceuticals (NASDAQ:GLMD), whose shares are jumping 208% on Tuesday, following positive top-line, 52-week results from the company’s global Phase 2b ARREST study.

According to TipRanks analytics, GLMD is a strong bullish favorite on the Street, with a unanimous Buy from all 4 analysts polled in the last 12 months. With a solid return potential of nearly 28%, the stock’s consensus target price stands at $171.33.

Data Strongly Support Advancement of Aramchol 600mg to Phase 3

In the ARREST study, patients underwent MRS and biopsy at baseline and week 52, which were centrally read, blinded to treatment allocation. The primary endpoint of the study was the change from baseline to end of study in liver triglycerides ratio as measured by MRS (Aramchol 600mg vs. placebo). Secondary endpoints, demonstrated through biopsy, included fibrosis improvement by at least one stage or more without worsening of NASH (defined by an increase of inflammation and or ballooning) and NASH resolution (defined by ballooning score 0 and inflammation score 0-1 at termination) without worsening of fibrosis. Other secondary endpoints included improvement (2 points or more) in NASH activity index, as measured by NAS or SAF, without worsening fibrosis and change in baseline to week 52/termination in ALT (U/L).

247 patients with biopsy-proven NASH who were overweight or obese and had pre-diabetes or type II diabetes mellitus were randomized in a ratio of 2:2:1 (600mg, 400mg and placebo). Baseline histology of enrolled patients demonstrated a population with advanced disease, with 60% having stage 2 and 3 fibrosis and 70% having NAS≥5 at baseline.

Results from the study showed a statistically significant reduction in liver fat by MRS with Aramchol 400mg vs. placebo (p=0.0450) and not with 600mg (p=0.0655). Further, analysis of MRS responders defined by a reduction of ≥5% absolute change from baseline demonstrated a clinically and statistically significant effect of Aramchol 600mg vs placebo (47.0% vs. 24.4%; p=0.0279).

Results for the two biopsy endpoints, which may currently constitute a primary endpoint for a Phase 3 trial to support an FDA marketing application, demonstrated the following: (i) significantly more patients treated with Aramchol 600mg vs. placebo achieved NASH resolution without worsening of fibrosis (16.7% vs. 5.0%; p=0.0514) and NASH resolution (19.2% vs. 7.5%; p=0.0462); and (ii) a higher proportion of patients showed at least one-point improvement in fibrosis score without worsening of NASH in Aramchol 600mg vs. placebo (29.5% vs. 17.5%; p=0.2110).

Statistically significant reductions in live enzymes alanine transaminase (ALT) and aspartate transaminase (AST) were demonstrated in both Aramchol arms vs. placebo (p≤0.0002) and (p≤0.001), respectively.

Secondary endpoints based on NAS and SAF activity score, ≥2 points improvement, show a higher proportion of patients with improvement in the Aramchol arms (600mg>400mg>placebo; P>0.05).

At 52 weeks of treatment, Aramchol continues to show a favorable safety and tolerability profile. Serious Adverse Events (SAEs) were reported in 12.5%, 8.9% and 9.2% of patients in placebo, Aramchol 400mg and 600mg arms, respectively. No clustering of event type or atypical events for the studied population were reported in either Aramchol arms. Early terminations due to adverse events (AEs) occurred in 4.2%, 3.0% and 4.1% in placebo, Aramchol 400mg and 600mg arms, respectively.

“Some studies have shown an effect on NASH and some on fibrosis, while this study has shown an effect on both. Concomitant ALT reduction strengthens the histological findings,” said Prof. Vlad Ratziu, M.D., Principal Investigator of the ARREST study and Professor of Hepatology, Sorbonne Université and Hospital Pitié – Salpêtrière, Paris, France. “Aramchol 400mg is probably sufficient for fat reduction but, biologically, a higher dose is needed for achieving more stringent histological endpoints such as NASH resolution and fibrosis reversal. NASH is a chronic disease with complex comorbidities and Aramchol’s favorable safety and tolerability profile support long-term treatment,” concluded Prof. Ratziu.

“Results seen in the ARREST 52-week study are comparable to other one-year trials recently published or presented in the NASH space.  Pre-clinical studies had demonstrated that Aramchol has a unique mechanism of action that addresses both the metabolic dysfunction and fibrosis directly, and these mechanisms have been validated by findings in the ARREST study,” said Prof. Scott Friedman M.D., Dean for Therapeutic Discovery and Chief Division of Liver Diseases, Icahn School of Medicine at Mount Sinai, New York, NY. “Specifically, data from my laboratory submitted to an upcoming conference confirm by transcriptomic analysis a broad anti-fibrotic effect of Aramchol in fibrogenic hepatic stellate cells, which is complementary to the data seen in this Phase 2b, biopsy-based clinical study. In my view, these results, together with its safety and tolerability, place Aramchol among the leading frontline therapeutic candidates under investigation for NASH.”

“These are exciting data which demonstrate that 600mg of Aramchol improves disease activity, fibrosis and progression to cirrhosis which in the long term may translate to meaningful clinical improvement,” said Prof. Arun Sanyal, M.D., Department of Internal Medicine, Division of Gastroenterology, Hepatology and Nutrition Virginia Commonwealth University and Co-Chair of the Liver Forum at the Forum for Collaborative Research at the University of California, Berkeley, School of Public Health. “Furthermore, the dose dependency of the effects and the fact it was a global study represents the clinical reality of the global NASH pandemic and provides indications that these results are likely to be reproduced in a pivotal phase 3 trial.”

“We have previously shown that MRS and MRI have a strong correlation in assessing liver fat content. A 5% absolute reduction in liver fat on MRS is likely to be clinically significant as demonstrated here with higher rates of resolution of NASH and one-stage improvement in fibrosis and a consistently robust dose-dependent decline in serum ALT with Aramchol in the ARREST Trial,” said Prof. Rohit Loomba, MD, MHSc, Director, NAFLD Research Center, Director of Hepatology, Professor of Medicine University of California at San Diego. “The ARREST trial was notable in that MRS was performed in four continents for the assessment of treatment response.”

“We are excited with the ARREST results that will enable Galmed to meet with the regulators as soon as possible and discuss the pivotal study design,” said Allen Baharaff President and Chief Executive Officer of Galmed. “It is extremely gratifying that Aramchol’s scientific rationale for disease modification of NASH is being translated into clinical coherent results.”



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