Galecto Completes Strategic Review to Focus on Oncology and Liver Disease and Acquires Acute Myeloid Leukemia Preclinical Asset from Bridge Medicines

Rhea-AI Summary

Galecto, Inc. (NASDAQ: GLTO) has announced a strategic shift to focus on cancer and liver disease, leveraging its clinical-stage asset GB1211. The company has also acquired global rights to BRM-1420, a novel dual ENL-YEATS and FLT3 inhibitor for acute myeloid leukemia (AML), from Bridge Medicines.

Key points:

• GB1211 has shown positive results in non-small cell lung cancer and decompensated cirrhosis studies
• BRM-1420 has potential for enhanced clinical effectiveness compared to FLT3 inhibitors alone
• Galecto issued 62,594 shares of common stock and 160.562 shares of new Series A preferred stock to Bridge Medicines as consideration
• Matthew Kronmiller, Bridge Medicine's CEO, will join Galecto as EVP of Strategy and Chief Business Officer

The strategic review aims to build value and develop breakthrough treatments for oncology and liver conditions.

Positive

• Acquisition of global rights to BRM-1420, a novel dual ENL-YEATS and FLT3 inhibitor for AML
• Strategic focus on cancer and liver disease, leveraging existing clinical-stage asset GB1211
• GB1211 has shown positive results in NSCLC and decompensated cirrhosis clinical studies
• BRM-1420 shows potential for enhanced clinical effectiveness and synergistic effects with standard-of-care therapies
• Addition of Matthew Kronmiller to Galecto's management team as EVP of Strategy and Chief Business Officer

Negative

• Issuance of new shares and preferred stock to Bridge Medicines, potentially diluting existing shareholders
• Shift in company focus may lead to discontinuation of other ongoing projects or research areas

Insights

Oncology Research Analyst

The acquisition of BRM-1420 significantly enhances Galecto's oncology pipeline, particularly in Acute Myeloid Leukemia (AML). This dual ENL-YEATS and FLT3 inhibitor shows promise in addressing genetic subsets of AML, a challenging area with high unmet need. The synergistic effects observed with standard-of-care therapies and menin inhibitors in preclinical models suggest potential for improved clinical outcomes.

Galecto's strategic shift to focus on oncology and liver disease, leveraging GB1211, appears well-timed. The positive results from GB1211 in non-small cell lung cancer (NSCLC) and decompensated cirrhosis studies provide a solid foundation for this new direction. The addition of BRM-1420 complements this strategy, potentially offering a more comprehensive approach to cancer treatment.

This move could position Galecto more competitively in the oncology space, particularly in AML, where prognosis remains poor despite available treatments. The transaction structure, involving both common and preferred stock, indicates a significant commitment to this new asset while managing dilution for existing shareholders.

Financial Analyst

Galecto's strategic pivot and asset acquisition represent a significant shift in the company's focus and potential value proposition. The deal structure is noteworthy:

• Issuance of 62,594 common shares (4.99% of outstanding shares)
• 160.562 shares of new Series A preferred stock, convertible to 160,562 common shares (12.8% of common stock)

This structure allows Galecto to acquire a valuable asset while managing immediate dilution. The preferred stock conversion, subject to stockholder approval, provides flexibility in timing the full impact on share structure.

The addition of Matthew Kronmiller as EVP of Strategy and CBO brings valuable expertise to guide Galecto's new direction. While financial terms weren't disclosed, the involvement of Leerink Partners and Lazard as financial advisors suggests a well-structured deal.

Investors should monitor for updates on BRM-1420's development timeline and potential synergies with GB1211, as these will be key drivers of future value. The company's ability to advance both programs efficiently will be important for financial performance.

• Galecto will focus on cancer and liver disease, leveraging existing clinical stage asset GB1211
• Bolsters pipeline by obtaining global rights to BRM-1420, a novel dual ENL-YEATS and FLT3 inhibitor for multiple genetic subsets of acute myeloid leukemia (AML)
• BRM-1420 has the potential for enhanced clinical effectiveness compared to FLT3 inhibitors alone and has shown synergistic effects with SOC in preclinical models
  

BOSTON, Oct. 07, 2024 (GLOBE NEWSWIRE) -- Galecto, Inc. (NASDAQ: GLTO), a clinical-stage biotechnology company focused on the development of novel treatments for cancer and fibrosis, today announced that, following an intensive strategic review process, Galecto has determined to focus on cancer and liver disease, leveraging its existing clinical stage asset GB1211, which has shown positive results in non-small cell lung cancer (NSCLC) and decompensated cirrhosis clinical studies. Galecto further announced that it has bolstered its pipeline with the acquisition of the global rights to BRM-1420, a novel, first-in-class asset developed by Bridge Medicines, a company co-founded by Takeda.

“Our strategic review process concluded that our best opportunity for building value and changing the lives for patients with severe diseases was to focus on our existing clinical stage compound GB1211 and increase our chance for success by acquiring complementary assets. The addition of BRM-1420 represents a significant advancement in our mission to develop and deliver breakthrough treatments for oncology and liver conditions,” said Dr. Hans Schambye, CEO of Galecto. “We are particularly optimistic about BRM-1420's potential to address challenging genetic subsets of AML and its observed synergistic effects with standard-of-care therapies and menin inhibitors.”

“AML is the most common acute leukemia in adults, yet despite available treatments, patient prognosis remains poor with significant unmet needs,” said Miles Gerson, Head of Takeda Ventures and Takeda’s Representative to Bridge Medicines. “Bridge Medicines has made considerable progress in recent years developing this new class of drugs and Galecto’s team is well positioned to continue advancing BRM-1420.”

As consideration for the acquisition of the global rights of BRM-1420, Galecto issued 62,594 shares of common stock to Bridge Medicines, representing 4.99% of the outstanding shares of Galecto’s common stock as of the date of the asset purchase, and 160.562 shares of a newly-issued Series A preferred stock convertible into 160,562 shares of common stock, or approximately 12.8% of Galecto’s common stock, upon receipt of stockholder approval.

Matthew Kronmiller, Bridge Medicine’s Chief Executive Officer, will be joining Galecto’s management team as the Executive Vice President of Strategy and Chief Business Officer. The transaction was approved by the Boards of Directors of both companies.

Leerink Partners served as the exclusive financial advisor to Galecto and Lazard served as exclusive financial advisor to Bridge Medicines. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is serving as legal counsel to Galecto. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP is serving as legal counsel to Bridge Medicines.

About BRM-1420
BRM-1420 is a potent and selective ENL-YEATS and FLT3 inhibitor of multiple genetic subsets of AML. It disrupts key oncogenic pathways by inhibiting these domains, showing potent activity in MLLr and NPM1c cell lines. Promising preclinical and in vivo results highlight its efficacy in inhibiting leukemia cell growth and extending survival in AML models. In animal models, BRM-1420 exhibited superior efficacy to both FLT3 and menin inhibitors and was shown to inhibit cell proliferation in primary AML patient samples across multiple genotypes, including MLL-r, NPM1m, cKIT+, FLT3+,   TET2+, and TP53+. These mutations are often seen in AML and, in total, could account for greater than 30% of the AML patient population. Many of these mutations have proven difficult to treat with currently available regimens and therefore represent a significant unmet medical need. The Company believes, based on preclinical data, that BRM-1420 could be additive or synergistic when used in combination with the current standard of care (azacitidine, venetoclax, cytarabine, gilteritinib), as well as current therapies under development, such as menin inhibitors.

Galecto plans to file an IND for BRM-1420 in the US in late 2025 or early 2026 and initiate clinical studies in patients with AML thereafter. Exclusive global rights to the program were assigned by Bridge Medicines to Galecto through a license with The Rockefeller University. The pioneering discoveries were a result of collaboration between the Rockefeller University and the Tri-Institutional Therapeutics Discovery Institute (Tri-I TDI), followed by licensing by Bridge Medicines.

About Galecto’s Pipeline
Galecto continues to develop GB1211, its first-in-class, oral small molecule, galectin-3 inhibitor for the treatment of oncology and severe liver cirrhosis. GB1211 is currently being studied in an investigator-initiated Phase 2 trial at Providence Portland Medical Center’s Earle A. Chiles Research Institute (EACRI). GB1211 is being administered in combination with the standard therapeutic dose of pembrolizumab (Keytruda®) in patients with unresectable or metastatic melanoma or recurrent or metastatic HNSCC progressing during or after platinum-containing chemotherapy. This trial is designed to evaluate the safety and efficacy of GB1211 in combination with pembrolizumab and determine whether the addition of GB1211 increases the response rate of pembrolizumab in metastatic melanoma and HNSCC patients. This trial was initiated and enrolled its first patient in the second quarter of 2024.

In addition, during the second half of 2023, Galecto concluded its Phase 1b/2a trial examining GB1211 in combination with atezolizumab, a PD-L1 checkpoint inhibitor, for the treatment of first-line non-small cell lung cancer (NSCLC). Four patients in this trial showed a partial response according to RECIST criteria (version 1.1), and two of these four patients continue to receive treatment in the extension phase of the trial.

As part of the strategic alternative review process, Galecto has determined not to further advance GB2064, its LOXL-2 inhibitor candidate, at this time.

About Galecto
Galecto is a clinical-stage biopharmaceutical company committed to realizing the promise of novel treatments for cancer and liver diseases. The Company’s pipeline consists of first-in-class small molecule drug candidates that target cancer and fibrosis signaling pathways, including (i) an orally active galectin-3 inhibitor (GB1211) for the treatment of liver cirrhosis; (ii) an orally active galectin-3 inhibitor (GB1211) in combination with a checkpoint inhibitor for various oncology indications; and (iii) a preclinical dual inhibitor of ENL-YEATS and FLT3 (BRM-1420) for multiple genetic subsets of AML. Galecto intends to use its website as a means of disclosing material non-public information. For regular updates about Galecto, visit www.galecto.com.

Forward-Looking Statements
Certain statements in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements include statements about Galecto’s preclinical and clinical development plans for BRM-1420; BRM-1420's potential to address challenging genetic subsets of AML and its observed synergistic effects with standard-of-care therapies and menin inhibitors; that BRM-1420 has the potential to transform the treatment of AML; that the MLL-r, NPM1m, cKIT+, FLT3+, TET2+, and TP53+ mutations could account for greater than 30% of the AML patient population; and that BRM-1420 could be additive or synergistic when used in combination with current standard of care as well as current therapies under development. Such forward-looking statements include statements about Galecto’s focus and plans for preclinical and clinical development of its product candidates and pipeline. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. For such statements, Galecto claims the protection of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from Galecto's expectations. Factors that could cause actual results to differ materially from the forward-looking statements include risks and uncertainties related to the development of Galecto’s product candidates and their therapeutic potential, having adequate funds and their use, and those disclosed in Galecto’s filings with the Securities and Exchange Commission (SEC), including, but not limited to, Galecto’s Annual Report on Form 10-K, as filed with the SEC on March 8, 2024. These forward-looking statements represent Galecto's judgment as of the time of this release. Galecto disclaims any intent or obligation to update these forward-looking statements, other than as may be required under applicable law.

For more information, contact:

Investors/US	Media/EU
Ashley R. Robinson arr@lifesciadvisors.com	Sandya von der Weid svonderweid@lifesciadvisors.com
+1 617 430 7577	+41 78 680 0538

FAQ

What is Galecto's new strategic focus after the review?

Galecto's new strategic focus is on cancer and liver disease, leveraging its existing clinical-stage asset GB1211.

What asset did Galecto acquire from Bridge Medicines?

Galecto acquired the global rights to BRM-1420, a novel dual ENL-YEATS and FLT3 inhibitor for acute myeloid leukemia (AML).

How did Galecto (GLTO) pay for the acquisition of BRM-1420?

Galecto issued 62,594 shares of common stock and 160.562 shares of a new Series A preferred stock to Bridge Medicines as consideration for BRM-1420.

What potential does BRM-1420 have in treating AML?

BRM-1420 has the potential for enhanced clinical effectiveness compared to FLT3 inhibitors alone and has shown synergistic effects with standard-of-care therapies in preclinical models.

Who will be joining Galecto's management team after the acquisition?

Matthew Kronmiller, Bridge Medicine's Chief Executive Officer, will join Galecto as the Executive Vice President of Strategy and Chief Business Officer.