Last Updated on January 16, 2019 by Sultan Beardsley
Today September 20th Galectin Therapeutics (NASDAQ: GALT) announced promising results from their phase 1b clinical trial of GR-MD-02 and KEYTRUDA® in Advanced Melanoma and Expansion of the Trial. The key words here being promising and expansion.
At first first glance it appeared the market had read and comprehend the gravity of the data and guidance in the press release. Then when the market opened and GALT went from a 15% spike to merely 6% two things became clear.
1. Investors had not fully digested and grasped the magnitude of the data.
2. Shorts have more balls than brains and attacked 7 minutes after the news release with FAKE NEWS of stock promotion.
The Combo Clearly Works
The phase 1 melanoma trial enrolled 3 cohorts of patients with refractory metastatic melanoma treated with GR-MD-02/Keytruda combo at 5 different doses. Those being 1 mg/kg, 1.5 mg/kg, 2mg/kg in cohort 1, 4mg/kg in cohort 2, and 8mg/kg in cohort 3. Before going any further I want to make something abundantly clear. Refractory melanoma means that the patients were not responding from treatment with Keytruda alone, or their condition was worsening. Judging strictly by objective response and disease control and rates GR-MD-02 unequivocally augments the treatment benefit of Keytruda. The published objective response rate for Keytruda is 33% on first line non-refractory patients who have had no other treatments. We learned today in this phase 1b study design to show safety that the combo is not only better tolerated than Keytruda alone, but the objective response rate nearly doubled to 50% out of 13 patients, and the disease control rate was 64%. Neither should not be taken lightly. Disease control rate (DCR) means the patients experienced a complete response (tumor shrunk completely), partial response (tumor size decreased), or stable response (tumor size remained stable). The waterfall plot generated from the data speaks volumes.
These patients are in the fight of their lives for their lives. Never before has directionality been more important. So, when a therapy such as the GRMD02-Keytruda can boast a 64% DCR that is huge not only for the patients, but the future of GALT. Clearly the scientific rationale that inhibition of Galectin-3 proteins deteriorates tumor immunity is validated. Dr, Curti said something very important I want to highlight.
“The response rates observed overall in advanced melanoma and head and neck cancer patients were better than expected with KEYTRUDA alone and are the basis for moving forward with both tumor types, particularly given the low response rates of anti-PD-1 monotherapy in head and neck cancer. There is a significant clinical need for better options for these patients and our initial objective response rates were encouraging enough to warrant inclusion of additional patients to help determine whether we should also pursue these challenging patient populations in a phase 2 trial.“
What this means is that GALT entered with a melanoma indication with refractory patients and could exit this trial with a Phase 2 trial with first line melanoma patients and Phase 2 for refractory melanoma patients, and Phase 2 for Head and Neck patients. The point is they went in with 1 indication and looks like they are coming out with 3. Each indication in cancer is worth $500 million or more.
The Elephant In The Room
Why does the therapeutic benefit from GRMD02-Keytruda appear to decrease when the dosage increased from 4mg/kg to 8mg/kg?
Simply put: Pharmacokinetics. One of cancers greatest assets in countering the body’s immune defense response are myeloid-derived suppressor cells (MDSC). In healthy individuals these cells help thwart infections and are expressed mainly when a threat is present. However, in malignant tumors MDSC are constitutively expressed and work full time with galectin-3 proteins to protect the tumor from T-cells on search and destroy missions. GRMD02 at 4mg/kg binds (inhibits) the galectin-3 proteins allowing the T-cells to penetrate the tumor microenvironment and target cancer cells without attracting too much attention; kind of like Navy Seals striking swiftly and silently. At 8mg/kg though, the higher concentration of GRMD02 alerts more MDSC’s to the T-cell assault and decreases their efficiency. In other words, at the higher dose the attacking GRMD02 and T-cells get their cover blown compared to the swift and deadly 4mg/kg assault team.
Head and Neck Cancer
What is so exciting about this news announcement was more related to head and neck cancer as opposed to melanoma. Most don’t realize but Keytruda as monotherapy in HNSCC only has a 16% ORR. In this clinical trial of combination therapy 6 patients with head and neck cancer had an equally remarkable response with a 67% DCR. This is over 4X the current standard of care. That means combination therapy make Keytruda 4X better. When something is 4X better there is a very good likelihood that it will pass the test for Breakthrough Therapy Designation (BTD). There isn’t one BTD that isn’t $500 million +. As a minimum GALT should be trading at this valuation which put the price over $8.50. This news is going to digest slowly but it will get factored in and price should rise upon additional data.
Bottom Line: Keytruda ALONE is a anti-PD1 monotherapy. Its efficacy in treating metastatic melanoma and head and neck cancer is lacking with a 33% and 16% ORR respectively. When combination therapy shows 50% and 67% its easy to conclude that Keytruda is in critical need of improvement. In the phase 1b trial we saw a better than expected improvement in patient responses by supplementing Keytruda with GR-MD-02. Meaning GR-MD-02 could be the missing puzzle piece. Moving forward Providence is expanding their investigation to include head and neck cancer patients in the next study. Which begs the question; how many other cancer indications can this combo therapy work for? The short answer, many. You can read all about the synergy between GR-MD-02 and Keytruda in this article.
Biomarkers Support Efficacy
This is where I think some investors get lost in the science jargon. Looking at response rates is the one way to gauge efficacy. However, response rate data always needs support from measuring changes in the levels of metabolites correlated with cancer cell health, growth, and reduction. In the press release we learned there was a significant decrease in the frequency of suppressive myeloid-derived suppressor cells (MDSC) (cells that inhibit the body’s immune response). That’s huge and means the combo therapy aids the body mount an immune defensive response. Thus, there are two levels of data (ORR/DCR, and MDSC reduction) supporting the observation that GRMD02 bolstered the efficacy of Keytruda in treating melanoma and head and neck cancer. Furthermore, as noted by Dr. Shlevin the collaboration between GALT and Providence Medical Center empowers further exploration of immunological biomarkers indicative of treatment efficacy, and optimally design a phase 2 study. Based on the fact that at the 4mg/kg dose 100% of the patients had objective responses this will be the target dose moving forward. Again, such insight was not expected from a phase 1 study. The fact that they have already honed in on what appears to be the optimal dose is huge and could empower advancement straight to a phase 2 pivotal trial.
Today’s update was pivotal for GALT and puts doubts perpetuated by bears to rest regarding GRMD02’s efficacy at suppressing cancer immunity. It clearly does and the optimal dose is around 4mg/kg. And the fact that they are expanding the trial to include more patients in a second cancer indication reflects their bullish sentiments regarding the clinical potential for this combo therapy.
GALT and Providence Medical Center are taking a prudent approach at advancing the study from here, as they should. Before initiating a phase 2 trial they are gathering all the data they can from the patients dosed in cohorts 1-3. This means thoroughly analyzing biomarkers to make informed decisions in constructing phase 2 design and inclusion criteria. Investors should be happy they have not rushed to start phase 2 tomorrow. They are doing their own due diligence just as we do before investing in a stock to ensure maximum return on investment. This lull is an excellent buying opportunity. Let shorts do their thing trying salvage their positions. Soon enough they will run out of steam and GALT will fly. In the meantime we will be accumulating shares. And do not forget there are additional upcoming catalyst. GALT is due for a NASH update and if our thesis is correct, the company is gearing up to fund phase 3 via warrant conversion. That in conjunction with these promising cancer results will undoubtedly attract big pharma and potentially ignite a bidding war between suitors like Merck (NASDAQ: MRK) and Bristol Myers Squibb (NASDAQ: BMY). In our opinion a double digit share price is not far away. Hold strong longs, our bull thesis has only been strengthened after today.
I am/we are long GALT.
This article reflects my own opinions. I was not compensated to write it. I don’t have any business ties with Galectin Therapeutics.
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