Galectin Therapeutics Inc. (NASDAQ: GALT) is screaming for the top in the market this morning, squeezing the shorts out of their positions after announcing a paper published in a peer-reviewed Journal surrounding belapectin. Here’s what’s going on:
GALT Announces Data Publication
In the press release, Galectin therapeutics announced that data from a study of its candidate, belapectin, has been published in the peer-reviewed Journal for ImmunoTherapy of Cancer, also known as JITC.
The paper, titled “Enhancing Clinical and Immunological Effects of anti-PD-1 with Belapectin, a Galectin-3 Inhibitor” describes results from an ongoing Phase 1 clinical trial taking place as a collaboration between Galectin Therapeutics and Providence Cancer Institute.
Importantly, JITC is the highest ranked fully open access immunology journal.
The paper published in the journal provided data that suggests that belapectin, in combination with KEYTRUDA, significantly enhances tumor response to immunotherapy in patients with advanced metastatic melanoma as well as head and neck squamous cell carcinoma.
In the release, GALT went on to explain that the publication follows the recent publication of preclinical results showing the inhibition of galectin-3 in combination with an agonist anti-OX40 monoclonal antibody reprograms the tumor microenvironment to favor anti-tumor activity.
The ongoing Phase 1 clinical trial was designed to test the clinical hypothesis that galectin-3 blockade with belapectin in combination with pembrolizumab enhances tumor responses for patients with advanced MM or HNSCC.
Data from the study to date shows an objective response rate was observed in 50% of MM and 33% of HNSCC patients. This compares favorably to published response rates of pembrolizumab as a stand alone treatment.
Moreover, the authors of the paper pointed to the fact that the combination led to fewer immune-mediated adverse events than anticipated. Moreover, tumor tissue analysis revealed reduced monocytic myeloid-derived suppressor cells and increased effector memory T-cell activation responders compared with non-responders.
Finally, an increased baseline expression of galectin-3 positive tumor cells correlated with clinical response.
In a statement, Dr. Brendan Curti, M.D., of the Earle A. Chiles Research Institute, a division of Providence, and the first author of the paper, had the following to offer:
Immunotherapy is a significant breakthrough in the treatment of many cancers, but tumor-induced immune suppression contributes to treatment resistance. Galectin-3 is an important driver of this tumor-induced immunosuppression, and this clinical study constitutes proof-of-concept that the addition of belapectin, a galectin-3 inhibitor, to a PD-1 inhibitor can benefit cancer patients.
The above statement was followed up by Pol F. Boudes, M.D., CMO at GALT. Here’s what he had to say:
The analysis of patients’ tumor tissues is consistent with previously published pre-clinical data with belapectin and confirms the ability of belapectin to modulate the tumor microenvironment to favor anti-tumor activity. The possibility to improve the tolerance and safety of immunotherapy is also very exciting.
These proof-of-concept clinical data provide a strong rationale to initiate a randomized placebo-controlled phase 2 clinical trial to evaluate the efficacy and safety of belapectin in combination with a PD-1 inhibitor compared to a PD-1 inhibitor alone in this cancer patient population. We look forward to continuing our work with Providence Cancer Institute, and we anticipate the upcoming release of additional data from the expansion cohort in this study.
A Short Squeeze In The Making
While the news released by Galectin Therapeutics is exciting on its own, it’s not the only reason the stock is making a run for the top in the market this morning. In fact, the move seems to be the beginning of a short squeeze.
Short squeezes take place when heavily shorted stocks begin to tick up. Those with short positions, or positions that bank on the idea that the stock will move down, begin to lose their money and are forced to cover their positions to stop the bleeding by purchasing new shares.
This flood of purchasing leads to heavy volume in the stock, followed by significant price appreciation.
At the moment, GALT stock tradings with short interest in the 30% range, which is overwhelmingly high. Considering the heavy short interest on the stock, we could be experiencing the beginning of a short squeeze that may result in much more significant gains as the session continues.
The Bottom Line
The bottom line here is simple. Oncology is a high-value field, and when new, more effective therapeutic options are created, the revenue and profit potential associated with those offerings are hard to ignore.
The data out of Galectin Therapeutics has been overwhelmingly positive to date, suggesting that it may be sitting on one of these blockbuster therapies.
Beyond the long-term potential here, the short term is looking bright as well. With such heavy short interest and such positive news being generated, a short squeeze could ultimately lead to gains in multiples, making GALT stock one to watch in both the short and long term.