Galectin Therapeutics Inc. (GALT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome. My name is Kevin Freeman, and I'm the Vice Chairman of the Board of Galectin Therapeutics, Inc. I will act as Chair of this meeting and Mr. Jack Callicutt, our Chief Financial Officer and Corporate Secretary, will act as Secretary. Due to the ongoing COVID-19 panic, we are holding this year's annual meeting as an entirely virtual meeting. Stockholders who require technical assistance during the meeting can call Broadridge's technical support line at the number listed on our virtual meeting website. Thank you. I hereby call the 2020 Annual Meeting for Galectin Therapeutics, Inc. to order. At this time, I would like to introduce the current members of the Board of Directors. Dr. Gilbert Amelio, Director, Member of the Compensation Committee and Chair of the Nominating and Corporate Governance Committee; Jim Czirr, Director and Chair of the IR, PR Committee; Kary Eldred, Director and Member of the Audit Committee; Kevin Freeman, that's me, Director, Member of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee; Joel Lewis is Director and President and Chief Executive Officer. Dr. Gil Omenn, Director and Chair of the Compensation Committee; Dr. Marc Rubin, Director and Member of the Nominating and Corporate Governance Committee. Dr. Elissa Schwartz, Director; Dr. Harold Shlevin, Director and Former President and Chief Executive Officer; Richard Dick Uihlein, Chairman of the Board; Rick Zordani, Director and Chair of the Audit Committee. Other members of the Galectin Therapeutics team present today consists of Dr. Pol Boudes, Chief Medical Officer; Dr. Adam Allgood, Vice President, Clinical Development and Clinical Operations; Jack W. Callicutt, Chief Financial Officer, Corporate Treasurer and Corporate Secretary; J Rex Horton, Vice President of Commercial Development, Regulatory Affairs and Quality Assurance; Dr. Elie Zomer, Vice President and Scientific Expert in Manufacturing and Product Development; and Beth Knowles, Executive Assistant and Office Manager. Mrs. Knowles also serves as the inspector of elections for this meeting. Mrs. Knowles has received a certified report from the transfer agent regarding proxies submitted prior to the meeting. We are also joined by Bob Tritt and Brian Lee of Dentons US LLP. Dentons serves as the company's Corporate Secretary and Securities Law Council. Our accounting team is represented by Matt Urbizo of Cherry Bekaert LLP, our independent registered public accounting firm. The Board of Directors set October 13, 2020, as the record date for this stockholders meeting. Mr. Callicutt, please proceed with the administrative portion of the meeting.

Thank you, Mr. Vice Chairman. We have provided a meeting agenda. A link to the meeting agenda is available on the virtual meeting website on the bottom right side of the web page under Meeting Materials. As set forth in the meeting agenda, we will first address the business of the meeting and the results of the stockholder vote followed by a corporate update from Mr. Joel Lewis, our President and Chief Executive Officer; and Dr. Pol Boudes, our Chief Medical Officer. I have a copy of the notice of Annual Meeting of Stockholders dated October 19, 2020, which was sent to all stockholders of record as of the close of business on October 13, 2020. The notice of annual meeting is ordered filed with the records of the company. The first order for business at this meeting is to determine whether shares represented at the meeting either in person or by proxy are sufficient to constitute a quorum for the purpose of transacting business. Mrs. Knowles?

The stockholders list shows that 57,294,139 votes may be cast at this meeting by the holders of shares of common stock and preferred stock. According to the tabulation made before the meeting, there are represented in person or by proxy at least 44,553,104 shares of stock with common voting rights or approximately 78% of all the shares entitled to vote at this meeting. The final report of the meeting will show the final number of shares represented at the meeting in person and by proxy.

Thank you. Because holders of at least 1/3 of the shares entitled to vote at this meeting are present in person or by proxy, I declare this meeting to be duly convened for purposes of transacting such business as may properly come before it. The next order of business is a description of the matters to be voted on at today's meeting. The first proposal before the stockholders is a proposal for the election of 11 directors to serve until the next annual meeting and until their respective successors are elected and qualified. The Nominating and Corporate Governance Committee of our Board of Directors has nominated 10 members currently serving on our Board to be reelected at this 2020 annual meeting and to serve until the 2021 annual meeting of Stockholders and until their respective successors are elected and qualified. All 10 nominees who have been nominated by the Nominating and Corporate Governance Committee have agreed to serve on the Board, if elected. The Board has recommended that all of such 10 nominees be elected as directors. The 10 nominees are: Dr. Gilbert F. Amelio, Mr. Kary Eldred, Mr. Kevin D. Freeman, Mr. Joel Lewis; Dr. Gilbert S. Omenn; Dr. Marc Rubin; Dr. Elissa J. Schwartz, Dr. Harold Shlevin, Mr. Richard Uihlein, and Mr. Richard Zordani. The 11th nominee for election to our Board of Directors, James C. Czirr, has been nominated by 10X Fund LP pursuant to certain contractual rights that 10X Fund LP holds under common stock purchase warrants held by it. If Mr. Czirr and all 10 nominees recommended by the Board and the Nominating and Corporate Governance Committee are elected at this 2020 annual meeting, our Board of Directors will have 11 members. The second proposal before the stockholders is a proposal to ratify the appointment of Cherry Bekaert LLP as the independent registered public accounting firm to audit the financial statements of the company for the fiscal year ending December 31, 2020. The company knows of no other business to be presented. The polls are now open. If you previously voted by proxy, you do not need to vote today unless you wish to change your votes. All proxies will be voted as the stockholders mark them. If you did not receive a ballot and desire to vote in person today, please do so now on the web portal. To do so, you must be a registered holder of shares of common stock or preferred stock or have a written proxy from a registered agent. [Voting]

Mrs. Knowles that all ballots having been received?

Yes.

Noting that all ballots having been received, I hereby declare the polls closed. The ballots and proxies will be held in the possession of the inspector of elections, who will count the votes. Mrs. Knowles, as inspector of elections, have the ballots and proxies been counted?

Yes. They have.

Will the inspector then please report the preliminary results of the voting?

The ballots have been counted. Based on favorable votes taken together with favorable votes by proxy -- filed by proxy, a plurality of the shares of the company entitled to vote and present at this meeting in person or by proxy, have been voted in favor of each of the 11 nominees for Director. Accordingly, Dr. Gilbert F. Amelio, Mr. Kary Eldred, Mr. Kevin D. Freeman, Mr. Joel Lewis, Dr. Gilbert S. Omenn, Dr. Marc Rubin, Dr. Elissa J. Schwartz, Dr. Harold Shlevin, Mr. Richard Uihlein, Mr. Richard A. Zordani, and Mr. James C. Czirr have been elected as directors of the company to hold office until the 2021 annual meeting of Stockholders and until their successors are duly elected and qualified. With respect to proposal 2, the votes cast for exceed the votes cast against the ratification of Cherry Bekaert LLP as the independent registered public accounting firm to audit the financial statements for the 2020 fiscal year.Accordingly, proposal 2 has been duly passed by the stockholders.

Ms. Knowles, thank you for serving as our inspector of elections for this meeting. Please note that the inspector of elections will provide a written report of the final voting results after the meeting that will be included with the minutes of this meeting. Mr. Vice Chairman, this concludes the results of the voting.

Thank you. The formal portion of the 2020 Stockholders Annual Meeting of Galectin Therapeutics, Inc. is hereby adjourned. I want to thank our stockholders for their continued support and interest in the company. Now I invite Mr. Richard Uihlein, our Chairman, to say a few words prior to a corporate update. Dick?

Thank you, Kevin. First, I would like to thank Jack and Beth for putting together our virtual annual meeting, and to all of you joining us on the call, I appreciate your participation today. Since we cannot be in Atlanta together, I wanted to personally welcome and wish you a joyous and most importantly, a healthy holiday season. I certainly look forward to seeing you next year in person. This has been a challenging year for all of us. But regardless of those challenges, I am pleased that the company is progressing in a positive direction. Joel and the team keep me updated on a regular basis, and I am pleased with the reports they have been providing me. Our management transition this year has been seamless, and I have every confidence that we have the right team in place. Once again, thank you for joining us this morning. And I will now hand the call over to Joel and Pol for our corporate update. Joel?

Thanks, Dick. And thank you to everyone joining us virtually today. I'm grateful that you are listening, and I sincerely look forward to seeing you in person in Atlanta next year. Please note that certain statements made today are forward-looking in nature. Please see the forward-looking statements disclaimer attached to the agenda for the annual meeting and at the end of this transcript of this presentation. Since this is the forum for today due to COVID-19, and I've been the CEO for precisely one quarter, I think it's important for me to discuss the company in a new way. Shortly, I will turn the discussion over to Pol to give the update on 2 of our trials. Yes, we actually have 3 trials: our Phase IIb/III NASH -- adaptive NASH cirrhosis trial; an investigator-initiated Phase I extension cancer trial evaluating KEYTRUDA in combination with belapectin; and finally, our hepatic impairment study. However, before I ask Pol to give the update on the first 2 trials, I wanted to speak to you about the company as well as the third trial. I get asked all the time about my vision for the company. My opinion is that vision is an overused term, especially in biotech. It also implies that the person delivering his or her vision is a visionary, which I believe is entirely presumptuous. Sadly, in my experience, the only visionaries that are ever discussed are people who have already achieved something. They also happen to be the only ones worth discussing. As a fellow shareholder, I think it's pretty safe to say that we all have the same vision, most commonly defined as the future position of our company. Instead, I think it's far more useful for me to speak about our mission. On our website, we say Galectin Therapeutics develops novel therapies to improve the lives of patients with chronic liver disease in cancer. Today, I want to take a broader approach. Our mission is to monetize our intellectual property as quickly as possible by maximizing the use of our limited resources. There are several strategies we are deploying to achieve that mission. First and foremost, our internal focus is on our adaptive Phase IIb/III NASH cirrhosis trial. Next, we are awaiting the results of the extension cohorts of our investigator-initiated combination cancer immunotherapy trial being conducted at Providence Portland Cancer Center. The results of this cancer immunotherapy trial will inform our decision on how we move forward in contemplating a multicenter Phase II cancer trial. Finally, we are conducting other R&D efforts. Pol will discuss the status of 2 of our trials, but I wanted to take a moment to discuss our R&D efforts and our hepatic impairment study in the context of achieving our mission. This is mostly due to the ever-increasing research on the implication of Galectin-3 in numerous diseases. Additionally, this is an area in which I get many inquiries, especially this year. During my transition and after becoming CEO, we have had numerous internal discussions around this topic, part of how we are approaching our R&D efforts relates to our NASH cirrhosis program. As I mentioned, in combination with our NASH-RX trial, we are also conducting an open-label pharmacokinetic hepatic impairment study. While this study is related to the cirrhotic population we are targeting for belapectin, we intend to fully utilize the knowledge we gained from data derived from the study, not only for regulatory interaction, but to help create a road map for future research. I encourage you to read the details of our study on clinicaltrials.gov. In addition to the data we will capture from the hepatic impairment study in the U.S., we are also conducting the NASH-RX trial in countries around the world, all of which have their own regulatory frameworks. Since we are new to those regulatory agencies, as expected, we have received many inquiries with respect to our data from both preclinical and clinical studies. While many leaders might view this as an inconvenience, those inquiries are actually causing us to undertake one of the most important things for any organization, a critical introspective analysis of the company. This is where we are extremely fortunate. Having Pol as our new Chief Medical Officer, not only brings us the experience and expertise necessary to achieve our mission, it also provides us a fresh set of eyes on all of our data, including data we will be analyzing from all of our studies, past, present and future. While we do not have a specific road map to share with you today, I thought it was imperative for you to hear the methodology we are using to create that agenda. Our discussions have included topics related to hepatic renal interaction, over-expression of macrophages in liver and other organs and cancers in which immuno-oncology therapies are indicated. The message I want you to understand today is that our detailed process will focus on the areas where we have knowledge and data. In the future, when we are ready to discuss a road map for additional research, it will be undertaken in a manner that will help us to exploit our data and achieve our mission. I have a fiduciary obligation to you and the Board, and I fully intend on maximizing our limited resources to achieve our mission of monetizing our intellectual property. Now I would like to turn the discussion over to Pol to discuss our other trials. Pol?

Thanks, Joel. I will provide a brief update on the progress of our seamless adaptive clinical Phase IIb/III of belapectin to prevent the development of esophageal varices in patients with compensated NASH cirrhosis. As a reminder, we screened the first patient in June and randomized this first patient in August. This was done in accordance with our previously communicated expectations. Please realize that the time it takes for a patient to sign a consent to participate, which is the beginning of the screening process and the randomization for treatment when all the eligibility criteria have been verified, including the qualifying esophageal gastric endoscopy, is up to a maximum of 8 weeks. Now our goal is to randomize the last 315 patients by the end of next summer. The study has started in the U.S. and sites are actively screening patients for participation in the study. The processes of U.S. sites initiation are ongoing, and we plan to have a total of approximately 60 sites in the U.S. The study has not yet started outside of the U.S. where we expect to have approximately 70 sites in multiple countries in Canada, Mexico, Europe, Israel, South Korea and Australia. Compared to the U.S., as expected, the site initiation process ex U.S. takes longer. Each ex U.S. country, and we are currently planning 11 countries, needs to go through a registration process that is an equivalent to a U.S. investigational new drug application, the so-called IND. In addition to ethics committees' approvals, many of which we have been already receiving an import licenses applications. We anticipate the first ex U.S. sites will be in a position to screen a patient before the end of this year. We get questions on the impact of the COVID-19 pandemic on the initiation and the conduct of the study. So let me briefly address this. Overall, and until very recently, we have not faced major issues. The situation is, however, very dynamic and varies from countries to countries and within a country from clinical site to clinical sites. We are addressing issues on a side-by-side basis as they arise with the well-being of our patients and the team taking care of them being the absolute priority. Luckily, so far, we have not seen an impact on the care of patients who have been enrolled in the study. Recently, we have seen a first widespread disruption of the study due to a shortage of laboratory kits from our central laboratory. This potentially could impact screening of new patients, and we are trying to minimize the impact of this shortage, which we were told was related to a disruption of the supply chain due to COVID-19. We are hopeful that this will be quickly resolved. I also want to provide you with an update on the cancer immunotherapy trial being conducted with belapectin in combination with KEYTRUDA at Providence Portland Cancer Center. We previously reported that on the first cohort of 20 patients and a manuscript is in preparation. Following the positive results of this cohort showing a 50% objective response observed in melanoma and 33% objective response in head and neck cancer, an expansion cohort has been initiated. To date, an additional 13 patients have been enrolled and 2 more are in screening. The recruitment of this cohort will stop at the end of the year. And we anticipate that enough follow-up will be available on the last patient to report this additional results in the second quarter of 2021. The expansion cohort will also comprise patients with advanced melanoma and patients with head and neck cancer, and we anticipate having twice as many patients with melanoma than with head and neck cancer. Even though patients in the expansion cohort appear to be more advanced in their disease, we are already encouraged by the apparent good turnaround and safety profile seen in the expansion cohorts. This seems to confirm and reinforce what we saw in the initial cohorts. As you may know, PD-1 inhibitors, such as KEYTRUDA, can be remarkably efficacious, but these life-saving treatments might have to be stopped because of immune-related toxicity. Based on the documented safety profile of investigators -- that our investigators have seen so far, we can be hopeful that the combination of belapectin with KEYTRUDA may indeed decrease the incidence of this autoimmune toxicity. Our colleagues at Providence have already concluded that the Phase II combination program, where the combination of belapectin into KEYTRUDA could be compared to KEYTRUDA alone would be justified. First, to confirm the efficacy of the combination, but also to test the hypothesis on the reduction of autoimmune toxicity associated with PD-1 inhibitor monotherapy. We are currently evaluating the best options regarding the financing as well as the operational conduct of such a study that could identify an important advance for patients affected with these cancers. And with this, I will turn the call back over to Joel. Joel?

Thanks, Pol. I wanted to quickly summarize some of Pol's points. With respect to the NASH-RX trial, despite COVID-19 creating some administrative challenges, our goal was and remains to complete enrollment by the end of next summer. We monitor enrollment on a daily basis, including site start-up and patient screenings, and we are making sure the process continues to move forward. On the investigator-initiated combination cancer trial, our investigators are optimistic. Recruitment of the trial will end on December 31, and it is expected to take until the second quarter of next year to fully analyze all of the data. As Pol mentioned, the participants in the expansion cohort are more advanced in their disease progression than were the participants in the first cohort. While we do not know the efficacy results, the researchers have expressed that the favorable side effect profile appears similar to the first cohort. Despite the fact that full results are not expected until the second quarter of next year, we have had preliminary discussions surrounding a potential multicenter Phase II trial. As we continue our discussions with them and learn more tangible information, we will update you. Thank you again for joining us on the call today. Have a great holiday season. And with that, operator, please end the call.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.