Galectin Therapeutics(GALT) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. Unaudited Condensed Consolidated Financial Statements This section presents Galectin Therapeutics Inc.'s unaudited condensed consolidated financial statements for Q2 2025, detailing balance sheets, operations, cash flows, and stockholders' deficit, with notes on accounting policies and financial instruments Condensed Consolidated Balance Sheets The balance sheet shows a decrease in total assets and an increase in total liabilities from December 31, 2024, to June 30, 2025, primarily driven by changes in convertible notes payable and derivative liabilities, leading to an increased stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------- | :------------ | :---------------- | :----- | :------- | | Cash and cash equivalents | $13,771 | $15,120 | $(1,349) | -8.92% | | Total current assets | $15,427 | $17,252 | $(1,825) | -10.58% | | Total assets | $15,602 | $17,495 | $(1,893) | -10.82% | | Total current liabilities | $10,774 | $35,409 | $(24,635)| -69.57% | | Total liabilities | $132,769 | $120,565 | $12,204 | 10.12% | | Total stockholders' deficit | $(118,890) | $(104,793) | $(14,097)| 13.45% | - Convertible notes payable and accrued interest (non-current) increased significantly from $10,733,000 at December 31, 2024, to $32,308,000 at June 30, 2025[7] - Borrowing and accrued interest under convertible lines of credit (related party) increased from $74,376,000 to $88,150,000[7] Condensed Consolidated Statements of Operations The company reported a reduced net loss for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to a significant decrease in research and development expenses, despite an increase in interest expense and change in fair value of derivative liabilities Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $3,261 | $9,813 | $9,746 | $17,867 | | General and administrative | $1,364 | $1,478 | $2,776 | $3,072 | | Total operating expenses | $4,625 | $11,291 | $12,522 | $20,939 | | Total operating loss | $(4,625) | $(11,291) | $(12,522) | $(20,939) | | Interest expense | $(1,826) | $(1,269) | $(3,570) | $(2,321) | | Change in fair value of derivative | $(1,096) | $109 | $(1,121) | $(760) | | Net loss | $(7,521) | $(12,371) | $(17,152) | $(23,860) | | Net loss per common share | $(0.12) | $(0.20) | $(0.27) | $(0.39) | - Research and development expenses decreased by 67% for the three months ended June 30, 2025, and by 45% for the six months ended June 30, 2025, compared to the prior year periods[9] - Net loss applicable to common stockholders decreased from $(12,435,000) to $(7,584,000) for the three months ended June 30, 2025, and from $(23,932,000) to $(17,189,000) for the six months ended June 30, 2025[9] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities significantly decreased for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower net loss and adjustments for non-cash items. However, net cash flows from financing activities also decreased, leading to a larger net decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(17,152) | $(23,860) | | Net cash from operating activities | $(14,291) | $(20,438) | | Net cash flows from financing activities | $12,942 | $20,376 | | NET DECREASE IN CASH AND CASH EQUIVALENTS | $(1,349) | $(62) | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $13,771 | $25,598 | - Net cash used in operating activities decreased by $6,147,000, from $(20,438,000) in 2024 to $(14,291,000) in 2025[11] - Net cash flows from financing activities decreased by $7,434,000, from $20,376,000 in 2024 to $12,942,000 in 2025, primarily due to decreased borrowings under related party lines of credit[11][160] Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Deficit The statements detail changes in preferred stock and stockholders' deficit, reflecting net losses, preferred stock dividends, common stock issuances from option/warrant exercises, and conversions, leading to an increased accumulated deficit - Total stockholders' deficit increased from $(104,793,000) at December 31, 2024, to $(118,890,000) at June 30, 2025[7][16] - Common stock outstanding increased from 63,157,235 shares at December 31, 2024, to 64,060,262 shares at June 30, 2025[7][16] - Additional paid-in capital increased from $296,217,000 to $299,318,000, while retained deficit increased from $(401,572,000) to $(418,761,000) due to net losses and preferred stock dividends[7][16] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide critical context to the financial statements, detailing the company's business, liquidity challenges, related-party debt, fair value measurements, stock-based compensation, and clinical development activities, highlighting the going concern uncertainty and reliance on future financing 1. Basis of Presentation and Liquidity Galectin Therapeutics Inc. is a clinical-stage biopharmaceutical company facing going concern uncertainty due to historical losses and no revenue, despite having $13.8 million cash and a new $10 million credit line to fund operations through June 2026 - The Company is a clinical stage biopharmaceutical company developing therapies for fibrotic disease and cancer by targeting galectin proteins[17] - The Company has operated at a loss since its inception and has had no revenues, anticipating continued losses[20] Liquidity Position (in thousands) | Metric | June 30, 2025 | | :-------------------------------- | :------------ | | Unrestricted cash and cash equivalents | $13,771 | | New line of credit (July 8, 2025) | $10,000 | - The Company believes it has sufficient cash, including the new line of credit, to fund planned operations through June 30, 2026, but needs to raise additional capital thereafter[20] 2. Accrued Expenses and Other Accrued expenses decreased significantly from December 31, 2024, to June 30, 2025, primarily due to a reduction in accrued research and development costs and accrued compensation. The company accrues clinical trial expenses based on estimated work completed by CROs Accrued Expenses (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Legal and accounting fees | $71 | $74 | | Accrued compensation | $844 | $1,523 | | Lease liability | $52 | $19 | | Accrued research and development costs | $3,879 | $6,588 | | Total | $4,846 | $8,204 | - Accrued research and development costs decreased by $2,709,000, from $6,588,000 to $3,879,000[22] - Accrued compensation decreased by $679,000, from $1,523,000 to $844,000[22] 3. Convertible Notes Payable – Related Party The company has three convertible promissory notes totaling $30 million from a related party (Richard E. Uihlein), all of which had their maturity dates extended to September 30, 2026. These notes bear 2% annual interest and include a contingent interest component recognized as a derivative liability, which has seen significant fair value changes - Three convertible promissory notes (April 2021, September 2021, December 2021), each for $10,000,000, were issued by Richard E. Uihlein[24][28][30] - All three notes' maturity dates were extended to September 30, 2026, in connection with the July 2025 Supplemental Line of Credit[27][28][30][103] - Contingent interest components of these notes are bifurcated and recognized as derivative liabilities, with fair values increasing significantly from December 31, 2024, to June 30, 2025[26][29][31][34] 4. Fair Value of Financial Instruments The company's Level 3 derivative liabilities, primarily contingent interest on convertible notes, increased substantially from December 31, 2024, to June 30, 2025. These are valued using a Monte Carlo Geometric Brownian Stock Path Model, with key assumptions including stock price, term, risk-free rate, credit-adjusted discount rate, and volatility Level 3 Derivative Liabilities (in thousands) | Derivative Liability | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Contingent Interest April Note | $650 | $47 | | Contingent Interest September Note | $298 | $94 | | Contingent Interest December Note | $589 | $275 | | Total | $1,537 | $416 | - The fair value adjustment for the April Note derivative liability was $603,000 for the six months ended June 30, 2025[35] - Key valuation assumptions for derivatives include a stock price of $2.11 at June 30, 2025 (up from $1.29 at Dec 31, 2024) and volatility ranging from 101% to 102%[35] 5. Stock-Based Compensation Total stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to 2024. Stock option activity included significant grants and exercises, while restricted stock units were issued to employees with vesting tied to a partnership or year-end Stock-Based Compensation Expense (in thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $254 | $386 | $530 | $709 | | General and administrative | $246 | $352 | $436 | $633 | | Total stock-based compensation expense | $500 | $738 | $966 | $1,342 | - 1,211,000 stock options were granted during the six months ended June 30, 2025, with a weighted-average grant date fair value of $0.87[37] - 504,000 restricted stock units valued at $620,000 were issued to employees during the six months ended June 30, 2025, vesting on the earlier of a partnership or December 31, 2025[40] 6. Common Stock Warrants The number of common stock warrants outstanding increased slightly from December 31, 2024, to June 30, 2025, with new grants and some forfeitures. The weighted average exercise price remained stable Common Stock Warrant Activity | Metric | Shares | Weighted Average Exercise Price | | :-------------------------- | :------- | :------------------------------ | | Outstanding, Dec 31, 2024 | 9,595,940| $4.22 | | Granted | 220,000 | $3.00 | | Forfeited/cancelled | (111,510)| $3.00 | | Outstanding, June 30, 2025 | 9,704,430| $4.20 | - The weighted average expiration of warrants outstanding as of June 30, 2025, is 1.6 years[46] 7. Loss Per Share Basic and diluted net loss per common share decreased for the six months ended June 30, 2025, compared to 2024. A significant number of potential common shares from warrants, options, convertible notes, and preferred stock were anti-dilutive and thus excluded from diluted EPS calculation Net Loss Per Common Share | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Net loss per common share — basic and diluted | $(0.27) | $(0.39) | Anti-Dilutive Shares (shares) | Instrument | June 30, 2025 | June 30, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Warrants to purchase shares of common stock | 9,704,430 | 9,426,853 | | Options to purchase shares of common stock | 7,541,818 | 7,369,758 | | Restricted stock units | 496,520 | 408,000 | | Shares from convertible notes payable – related party | 7,327,374 | 6,721,188 | | Shares from convertible line of credit – related party | 29,621,834 | 21,016,837 | | Shares from preferred stock conversion | 495,007 | 499,174 | | Total Anti-Dilutive Shares | 55,186,983 | 45,441,810 | 8. Common Stock The company issued 419,904 shares of common stock under its At Market Issuance Sales Agreement for net proceeds of $1,218,000 during the quarter ended June 30, 2025. Additionally, shares were issued for preferred stock dividends and conversions - 419,904 shares of common stock were issued under the 2020 At Market Agreement for net proceeds of approximately $1,218,000 during the quarter ended June 30, 2025[49] - No shares were issued under the 2020 At Market Agreement during the quarter ended June 30, 2024[49] - 25,000 shares of Series A Convertible Preferred Stock were converted into 4,167 shares of common stock during the three months ended June 30, 2025[50] 9. Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party The company has multiple convertible lines of credit from a related party, totaling $81 million, with various draws made and associated warrants issued. All maturity dates for these lines of credit were extended to September 30, 2026. Interest rates vary, and the principal and accrued interest are convertible into common stock at the lender's option - The original Line of Credit (July 2022) provided up to $60 million, with its maturity extended to September 30, 2026[51][52][103] - Several promissory notes were executed under this line, each for $10 million, with associated warrants issued to the lender[56][58][60][62][64][66] - New supplemental lines of credit were established in March 2024 ($10M), November 2024 ($6M), and March 2025 ($5M), with draws made and warrants issued under each[69][76][82] - Accrued interest on these lines of credit increased significantly from December 31, 2024, to June 30, 2025, reflecting ongoing borrowings[56][58][60][62][64][66][73][80] 10. Segments The company operates as a single segment focused on fibrotic disease therapeutics, with no product revenue. The Chief Executive Officer, as CODM, assesses performance based on net loss, net cash used in operating activities, and cash on hand, using cash forecast models for resource allocation - The Company's operations are viewed as one operating segment, focused on creating new therapies for fibrotic disease based on targeting galectin proteins[89] - The Company has not generated any product revenue and expects to incur significant expenses and operating losses for the foreseeable future[91] Segment Operating Results (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | | Total operating expenses | $12,522 | $20,939 | | Total operating loss | $(12,522) | $(20,939) | | Net loss | $(17,152) | $(23,860) | | Net cash used in operating activities | $(14,300) | $(20,400) | 11. Commitments and Contingencies The company has no significant pending legal proceedings and accrues for contingencies when probable and estimable. Clinical trial and research commitments are generally cancellable with 30 days' notice, and the company is negotiating with a contract vendor for clinical trial management services - There are no significant pending legal proceedings[98] - Agreements with contractors for R&D activities are generally cancellable with thirty days' notice[99] - The Company has accrued its estimate of the amount owed to a contract vendor for clinical trial management services[99] 12. Leases The company has one operating lease for office space, renewed in March 2025 for twelve months. The lease liability and right-to-use asset are $52,000 as of June 30, 2025 - The Company renewed its office space lease in March 2025 for twelve months, effective March 1, 2022[100] Operating Lease Maturity (in thousands) | Year | Amount | | :--- | :----- | | 2025 | $33 | | 2026 | $22 | | Total| $55 | | Less imputed interest | $(3) | | Present value of lease liability | $52 | - The discount rate used for lease payments is 14%[101] 13. Galectin Sciences LLC Galectin Therapeutics Inc. co-owns Galectin Sciences LLC, a joint venture for galectin-3 inhibitor research. The company's ownership increased to 85.4% as of June 30, 2025, due to disproportionate funding contributions, and it accounts for the LLC as a consolidated, less than wholly owned subsidiary - Galectin Sciences LLC is a collaborative joint venture co-owned by SBH Sciences, Inc., focused on researching and developing small organic molecule inhibitors of galectin-3[102] - As of June 30, 2025, the Company's ownership percentage in the LLC was 85.4%, up from an initial 50%, due to providing more funding[102] - The Company has contributed a total of $4,166,000 to the LLC cumulatively as of June 30, 2025[102] 14. Subsequent Event On July 8, 2025, the company secured a new $10 million Supplemental Line of Credit from its chairman, Richard E. Uihlein, extending the maturity dates of all existing convertible notes and lines of credit to September 30, 2026. This new line also includes the issuance of warrants to the lender - On July 8, 2025, the Company entered into a new $10 million Supplemental Line of Credit with Richard E. Uihlein[103] - The maturity dates of all Convertible Notes Payable – Related Party and all borrowings under Convertible Lines of Credit – Related Party were extended to September 30, 2026[103] - In connection with this new line, the Company agreed to issue warrants to purchase up to 200,000 shares of common stock to the lender[106][107] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operations, focusing on its clinical-stage drug development, particularly belapectin for NASH and cancer, and financial performance for Q2 2025, including R&D, G&A, and liquidity Overview Galectin Therapeutics is a clinical-stage biopharmaceutical company developing therapies for fibrotic diseases and cancer by targeting galectin proteins, particularly galectin-3. Its lead candidate, belapectin, is in development for NASH cirrhosis (NAVIGATE trial results presented) and cancer immunotherapy (Phase 2 trial planned for head and neck cancer) - The company is a clinical stage biopharmaceutical company focused on developing new therapies for fibrotic disease, cancer, and other conditions by targeting galectin proteins[112] - Belapectin (GR-MD-02) is the lead galectin-3 inhibitor, demonstrated in preclinical models to reverse liver fibrosis and cirrhosis, and in clinical studies to decrease portal hypertension[113] - Top-line results from the NAVIGATE Phase 2b/3 clinical trial for NASH cirrhosis showed a 49.3% reduction in varices incidence in the per-protocol population (p<0.05) and a 68.1% reduction in U.S. completer patients (p=0.02) for the belapectin 2 mg/kg dose group[115][140] - A Phase 2 trial for advanced or metastatic head and neck cancer using belapectin in combination with a checkpoint inhibitor is planned, pending financing[121][152] Results of Operations Operating expenses decreased significantly for both the three and six months ended June 30, 2025, compared to 2024, primarily driven by a substantial reduction in research and development expenses due to the conclusion of the NAVIGATE clinical trial. General and administrative expenses also saw a modest decrease Operating Expenses (in thousands) | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :----------------------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Research and development | $3,261 | $9,813 | -67% | $9,746 | $17,867 | -45% | | General and administrative | $1,364 | $1,478 | -8% | $2,776 | $3,072 | -10% | | Total operating expenses | $4,625 | $11,291 | -59% | $12,522 | $20,939 | -40% | - The decrease in research and development expenses is primarily due to lower expenses related to the NAVIGATE clinical trial, which ended in the first quarter of 2025[155] - General and administrative expenses decreased due to lower stock compensation expense and investor relations/business development expense[158] Liquidity and Capital Resources The company's cash and cash equivalents stood at $13.8 million as of June 30, 2025, supplemented by a new $10 million line of credit, which is expected to fund operations through June 30, 2026. Net cash used in operations decreased, but cash provided by financing activities also declined, indicating a continued need for future capital Liquidity and Cash Flow (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Cash and cash equivalents | $13,800 | $25,600 | | Net cash used in operations (6 months) | $(14,291) | $(20,438) | | Cash from financing activities (6 months) | $12,942 | $20,376 | - The Company had $13.8 million in unrestricted cash and cash equivalents at June 30, 2025, and secured a new $10 million line of credit in July 2025[159] - Management believes current cash and available credit are sufficient to fund operations through June 30, 2026, but additional financing will be required thereafter[159] Off-Balance Sheet Arrangements The company has no off-balance sheet arrangements that are reasonably likely to materially affect its liquidity or capital resources - The Company has not created, and is not a party to, any special-purpose or off-balance sheet entities[161] Application of Critical Accounting Policies and Estimates The preparation of financial statements requires significant estimates and judgments, particularly concerning accrued expenses, stock-based compensation, and contingencies. Critical accounting policies include stock-based compensation, accrued expenses, and income taxes - Critical accounting policies include stock-based compensation, accrued expenses, and income taxes[163] - Estimates are based on historical experience, contract terms, industry trends, and other factors, with actual results potentially differing under various assumptions[162] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk exposure is to changes in U.S. interest rates. However, due to its short-term investments in operating bank accounts and money market funds, the company believes it is not subject to any material market risk - The primary market risk is the risk of loss due to changes in U.S. interest rates[164] - The Company maintains its cash and cash equivalents in operating bank accounts and money market funds[164] - Due to the short-term duration of investments, the Company believes it is not subject to any material market risk exposure[164] ITEM 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[165] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[167] - Management acknowledges that no control system can provide absolute assurance against all errors and fraud[166] PART II — OTHER INFORMATION ITEM 1. Legal Proceedings There are no significant pending legal proceedings to report - No significant pending legal proceedings are reported[169] ITEM 1A. Risk Factors The company refers readers to the comprehensive list of risk factors detailed in its Annual Report on Form 10-K for the year ended December 31, 2024, which could materially impact its business, financial condition, or future results - Readers are directed to the risk factors in the Annual Report on Form 10-K for the year ended December 31, 2024[170] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds to report[171] ITEM 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report - No defaults upon senior securities to report[171] ITEM 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable[171] ITEM 5. Other Information The company announced its 2025 Annual Meeting of Stockholders will be a virtual meeting on December 3, 2025, and provided updated deadlines for stockholder proposals and nominations. Additionally, all three executive officers adopted Rule 10b5-1 trading arrangements during the quarter - The 2025 Annual Meeting of Stockholders is scheduled for December 3, 2025, as a virtual meeting[171] - Stockholder proposals for inclusion in the proxy statement must be received by September 1, 2025[173] - All three executive officers adopted Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[176] ITEM 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications, XBRL taxonomy documents, and the interactive data file - Exhibits include Certifications Pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350[177] - Inline XBRL Instance Document and Taxonomy Extension Documents are also included[177][178] SIGNATURES The report is duly signed on behalf of Galectin Therapeutics Inc. by Joel Lewis, Chief Executive Officer and President, and Jack W. Callicutt, Chief Financial Officer, on August 14, 2025 - The report was signed by Joel Lewis, Chief Executive Officer and President, and Jack W. Callicutt, Chief Financial Officer[183] - The signing date for the report was August 14, 2025[182]