Boston-based biotech firm Galecto is facing a significant workforce reduction of 70%, affecting 29 employees, following the discontinuation of its inhaled treatment for idiopathic pulmonary fibrosis (IPF) due to the failure of a phase 2 trial. The company has undertaken a thorough business review and is now actively exploring various strategic alternatives aimed at maximizing value for shareholders. These options typically include potential acquisitions, mergers, or the sale of the company’s assets. However, Galecto has emphasized that the outcome of these efforts is uncertain and may not result in favorable terms or any transaction at all.
The biotech’s challenges became evident in August when Galecto’s small-molecule galectin-3 inhibitor, known as GB0139, failed to achieve the primary endpoint of slowing the decline in lung function in IPF patients. Notably, patients receiving a 3-mg daily dose of GB0139 for a year experienced a significant decline in forced vital capacity compared to those given a placebo. This outcome was preceded by a recommendation from a data safety and monitoring board in March 2021 to discontinue the 10-mg treatment arm due to an imbalance in serious side effects.
Also Read: August Layoffs: A Recap Of Recent Workforce Reductions In Biotech And Pharma
Following the disappointing results of the 3-mg dose, Galecto shifted its focus to another galectin-3 inhibitor, GB1211, which is in development for the treatment of liver cirrhosis. Galecto disclosed that it had recently concluded discussions with the FDA and was gearing up for a placebo-controlled phase 2 trial in patients with decompensated nonalcoholic steatohepatitis (NASH) cirrhosis, scheduled to commence early next year. Additionally, the company is conducting a phase 2 trial for myelofibrosis with an OXL2 inhibitor named GB2064.
In its recent announcement, Galecto did not clarify whether its restructuring and exploration of strategic alternatives would impact its ongoing plans for these drug candidates. Despite the challenges, the company remains optimistic about securing additional funding to advance its NASH program, with $52.1 million in cash reserves as of the end of June. Galecto’s CEO, Hans Schambye, M.D., Ph.D., had previously expressed confidence in securing fresh capital to support the NASH prospect.
