Galectin Therapeutics(GALT) - 2021 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section provides the company's financial statements and management's analysis of its financial condition and operations Unaudited Condensed Consolidated Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, highlighting a net loss of $14.8 million and future financing needs - The company is a clinical-stage biopharmaceutical firm focused on therapies for fibrotic disease and cancer by targeting galectin proteins[19] - The company has operated at a loss since inception and anticipates continued losses, with current cash of $31.6 million plus a $10 million line of credit expected to fund operations through September 30, 2022, but an additional $30-$35 million will be needed for the NAVIGATE trial's interim analysis in the second half of 2023[21][98] Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $31,598 | $27,142 | | Total current assets | $33,334 | $29,465 | | Total assets | $33,405 | $29,600 | | Total current liabilities | $6,054 | $5,399 | | Convertible note payable - related party | $9,643 | $0 | | Total liabilities | $16,289 | $5,407 | | Total stockholders' equity | $15,393 | $22,470 | Condensed Consolidated Statements of Operations This section outlines the company's revenues and expenses over specific periods, culminating in its net income or loss Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $6,450 | $4,681 | $11,349 | $6,825 | | General and administrative | $1,743 | $1,421 | $3,161 | $2,861 | | Total operating loss | ($8,193) | ($6,102) | ($14,510) | ($9,686) | | Net loss | ($8,449) | ($6,114) | ($14,787) | ($9,670) | | Net loss per common share | ($0.15) | ($0.11) | ($0.26) | ($0.17) | Condensed Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods Cash Flow Summary for Six Months Ended June 30 (in thousands) | Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash flows from operating activities | $(12,359) | $(6,975) | | Net cash flows from financing activities | $16,815 | $263 | | Net increase (decrease) in cash | $4,456 | $(6,712) | | Cash and cash equivalents, end of period | $31,598 | $40,768 | - Financing activities in the first six months of 2021 included $10 million from a convertible note payable, $6.8 million from issuance of common stock, and non-cash financing activities related to a derivative liability of $420,000[12] Notes to Unaudited Condensed Consolidated Financial Statements This section provides additional details and explanations for the figures presented in the financial statements, including significant accounting policies and material transactions - On April 16, 2021, the company received $10 million from a convertible promissory note issued to Richard E. Uihlein, Chairman of the Board, which matures in 2025, has a 2% interest rate, and is convertible at $5.00 per share[27][28] - The company has a $10 million undrawn line of credit with Richard E. Uihlein, available through December 31, 2021, with repayment due December 31, 2022[25] - During the six months ended June 30, 2021, the company issued 845,214 shares of common stock under its "At Market Issuance Sales Agreement" for net proceeds of $3.9 million[43] - The company's ownership in its joint venture, Galectin Sciences, LLC, was 84% as of June 30, 2021, accounted for as a consolidated, less-than-wholly-owned subsidiary[49] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business, clinical development, and financial performance, focusing on the belapectin trial and increased R&D expenses, while noting future capital requirements - The company's lead drug candidate is belapectin (GR-MD-02), a galectin-3 inhibitor being developed for NASH with cirrhosis, with the ongoing NAVIGATE trial being a seamless, adaptively-designed Phase 2b/3 study to evaluate belapectin for preventing esophageal varices in these patients[56][57] - The COVID-19 pandemic has delayed patient enrollment for the NAVIGATE trial, with the company now estimating enrollment completion around the end of 2021[83] Comparison of Operating Expenses (in thousands) | Expense Category | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Research and Development | $11,349 | $6,825 | +66% | | General and Administrative | $3,161 | $2,861 | +10% | - The 66% increase in R&D expenses for the six months ended June 30, 2021, was primarily driven by costs related to the NAVIGATE clinical trial[95] - As of June 30, 2021, the company had $31.6 million in cash and a $10 million undrawn line of credit, expected to fund operations through September 30, 2022, but an additional $30-$35 million is required to fund the NAVIGATE trial to its interim analysis[98] Quantitative and Qualitative Disclosures about Market Risk The company states that it is not subject to any material market risk exposure, preserving cash for operations by holding cash and equivalents in bank accounts and money market funds - The company's investment activities aim to preserve cash until required for operations[105] - To minimize risk, the portfolio of cash and cash equivalents is maintained in operating bank accounts and money market funds, making it not subject to material market risk from interest rate changes[105] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control over financial reporting during the quarter - Management evaluated disclosure controls and procedures and concluded they were effective as of June 30, 2021[106] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2021, that materially affected, or are reasonably likely to materially affect, internal controls[108] PART II — OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company reported no significant pending legal proceedings as of the filing date - None[110] Risk Factors This section directs readers to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - The report refers to the risk factors detailed in Item 1A of the company's Form 10-K for the year ended December 31, 2020[111] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[112] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[112] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[112] Other Information The company reported no other information for this item - Not Applicable[112] Exhibits This section lists all exhibits filed with the Form 10-Q, primarily including CEO and CFO certifications and financial data in Inline XBRL format - The exhibits filed include CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[112] - The filing includes financial statements formatted in Inline Extensible Business Reporting Language (Inline XBRL)[112][114]