Galectin Therapeutics Inc. (NASDAQ:GALT)’s stock price is up 20% in trading, regaining some of the ground that it lost in yesterday’s sell-off following disappointing clinical drug results, but CEO and president Peter Traber argues that the market is looking at the results the wrong way.

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“The drug was well tolerated and has predictable pharmacokinetics when administered at a 4 milligram per kilogram dose, which is the primary endpoint for this Phase 1 study,” said Traber.

Galectin’s drug appears safe with predictable pharmokinetics

Galectin Therapeutics Inc. (NASDAQ:GALT)’s drug GR-MD-02 is designed to treat late stage fatty (nonalcoholic steatohepatitis or NASH) and fibrosis. NASH is an active area of research, but late stage treatments probably have greater market value because that’s when people are more likely to get medical attention.

The drug is currently in Phase 1 clinical trials, using a battery of biomarkers to test efficacy in patients and watching for adverse effects. The good news is that after two rounds of tests, using 2 mg/kg and 4 mg/kg doses respectively, GR-MD-02 looks pretty safe. The only side effects were mild swelling in joints for less than a day, and that in just two patients. The drug’s pharmokinetics also behaved as Galectin Therapeutics Inc. (NASDAQ:GALT) expected, with the 4 mg/kg dose resulting in twice as much actual drug exposure and no drug accumulation after four doses.

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The Data Safety Monitoring Board (DSMB) gave Galectin Therapeutics Inc. (NASDAQ:GALT) permission to move on to the third cohort with a 8 mg/kg dose, and the company is confident it will get approval to move on to Phase clinical trials with at least a 2 mg/kg – 4 mg/kg range since safety is the biggest consideration for approval at that point.

The bad news is that the drug might not actually do anything.

Biomarkers aren’t promising, CEO says they are no replacement for biopsy

“The current gold standard for the evaluation of both NASH and advanced fibrosis is liver biopsy. There has not yet been a noninvasive test or shear marker that most effectively has been shown to replace liver biopsy as a measure of NASH or fibrosis,” says Traber. “There are those who have put far too much weight on the biomarkers and there are those who, regardless of what we say about the biomarkers, are viewing this as an early study.”

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To test the efficacy of GR-MD-02, Galectin Therapeutics Inc. (NASDAQ:GALT) measured ELF scores (a collection of biomarkers), TGF-alpha, and TGF-beta, and did FibroTests on patients. If you have the background to dig into the details you can check the company’s presentation here, but for all four tests lower scores correlate with less severe fibrosis. The first cohort showed some mild improvement over the placebo group, but the second cohort with the higher dosage had generally worse results and higher variance. Biopsies may give better data, but if the biomarker data were promising Traber wouldn’t be playing them down like this.

Traber says that Galectin Therapeutics Inc. (NASDAQ:GALT) has enough cash to fund a couple more years of research, including the Phase 2 trials, and that investors should wait to see what liver biopsies reveal, assuming it gets that far. Bronstein, Gewirtz & Grossman, LLC announced today that it is investigating potential claims that Galectin hired stock promoters ahead of yesterday’s bad news, giving skeptics another reason to stay away.

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