Galmed reports net loss of $2.5 million for first quarter 2015

Galmed Pharmaceuticals Ltd.May 13 2015

Galmed Pharmaceuticals Ltd. (Nasdaq: GLMD) ("Galmed" or the "Company"), a clinical-stage biopharmaceutical company focused on the development and commercialization of a once-daily, oral therapy for the treatment of liver diseases, today announced financial results for the three months ended March 31, 2015.

Financial Summary – First Quarter 2015 vs. First Quarter 2014:

• Net loss of $2.5 million, or $0.22 per share, for the three months ended March 31, 2015, compared to a net loss of $2.2 million, or $0.27 per share, for the three months ended March 31, 2014. This period's net loss included $0.6 million of non-cash, stock-based compensation expense versus $0.2 million of non-cash stock-based compensation expense incurred during the corresponding period in 2014.
• Research and development expenses of $1.4 million for the three months ended March 31, 2015, compared to $1.5 million for the three months ended March 31, 2014.
• General and administrative expenses of $1.1 million for the three months ended March 31, 2015, compared to $0.6 million for the three months ended March 31, 2014. The increase in 2015 primarily resulted from higher non-cash, stock-based compensation.
• Financial income of $0.04 million for the three months ended March 31, 2015, compared to a financial expense of $0.03 million for the three months ended March 31, 2014. The 2015 financial income resulted primarily from interest income earned on short-term deposit and marketable securities.
• Cash and cash equivalents, short-term deposits and marketable securities totaled $29.9 million as of March 31, 2015, compared to $31.9 million at December 31, 2014. The decrease in 2015 primarily resulted from our ongoing clinical studies and operational activities. Galmed continues to expect that its cash balance will be sufficient to maintain its current operations into 2017.

"As you know, we officially announced the commencement of the ARREST Study during the first quarter of 2015, as well as the affiliation of Professor Vlad Ratziu as the ARREST Study's principal investigator, and Professor Rohit Loomba as the Study's U.S. principal investigator; these were major accomplishments," stated Allen Baharaff, Galmed's President and Chief Executive Officer. "The multinational ARREST Study of aramchol is expected to take place in approximately 80 centers in 12 countries."

Galmed's ARREST Study is a multi-center, randomized, double-blind, placebo-controlled, dose-ranging Phase IIb clinical trial of aramchol. The trial's primary end-point is a statistically significant reduction of liver fat content measured by Magnetic Resonance Spectroscopy, or MRS, and the trial's secondary end-point is the complete resolution of Non-Alcoholic Steato-Hepatitis, or NASH, as measured by two biopsies (at the beginning and at the end of the ARREST Study), the improvement of the NAFLD Activity Score (NAS) and an improvement in the markers of liver inflammation and various metabolic biomarkers.

In addition, Galmed announced that it has expanded its clinical activities to include patient recruitment for the ARREST Study in the United States. Mr. Baharaff stated, "We believe that U.S.-based patient recruitment will shorten the recruitment time for our ARREST Study, as well as improve the study's breadth and relevance." Galmed currently expects to release interim results of the ARREST Study in the first half of 2016. Galmed further reaffirmed that it expects to release top-line data by the end of 2016.

As previously communicated, during the fourth quarter of 2014, we initiated a single-center, double blind, randomized Phase IIa placebo-controlled proof-of-concept clinical trial of aramchol in 36 patients for the treatment of newly formed cholesterol gallstones following bariatric surgery. Enrollment pace of the study has tracked significantly slower than anticipated. Therefore, the Company decided to expand the trial into 3 additional centers. Unfortunately, notwithstanding the significant efforts involved in the opening of the additional sites, enrollment has still continued to disappoint. Consequently, we have filed a request with the principal investigator to cease enrollment in the underperforming center. Accordingly, the Company is taking this opportunity to reexamine the study design in order to achieve a better recruitment. We remain committed to the development for aramchol for cholesterol gallstones and hope to provide a revised strategy in the coming quarters.

Mr. Baharaff concluded, "our priorities for the rest of the year are very clear: To ensure the highest quality, and timely execution of the ARREST Study. All hands are on deck and we expect that it will stay that way."