13 Jun

Why Galmed Pharmaceuticals Stock Rose 151% on June 12

WRITTEN BY Daniel Collins FEATURED IN Company News, Insights, & Analysis

Stock performance

Galmed Pharmaceuticals (GLMD) stock rose 151.3% on June 12. The stock closed at $17.59, which represents a 387% increase from its 52-week low of $3.61 on February 14, 2018.

Why Galmed Pharmaceuticals Stock Rose 151% on June 12

Reason for stock price surge

Galmed stock rose after the company announced top-line results from the global 52-week phase 2b ARREST trial. The company is conducting the phase 2b ARREST trial to evaluate the safety and efficacy of its Aramchol for the treatment of individuals with non-alcoholic steatohepatitis (or NASH).

After 52 weeks of treatment, patients in the trial receiving Aramchol 400-mg demonstrated a statistically significant reduction in liver fat as measured by magnetic resonance spectroscopy compared to patients on placebo therapy.

In the trial, the biopsy results showed that 16.7% of patients receiving Aramchol 600-mg achieved NASH resolution without the deterioration of fibrosis compared to 5.0% of patients on placebo therapy. Also, 29.5% of the patients receiving Aramchol 600-mg demonstrated at least one point of progress in their fibrosis score without deterioration of NASH compared to 17.5% patients on the placebo.

The biopsy results presently constitute the primary endpoint for the continuation of the phase 3 trial. The ARREST clinical trial also demonstrated positive results in the secondary endpoints of the trial including reductions in live enzymes (alanine transaminase and aspartate transaminase) in both Aramchol 600-mg and 400-mg arms compared to the placebo.

The success in the phase 2b clinical trial should help Galmed proceed towards its pivotal phase 3 clinical trial. Studies estimate that 3% to 5% of the US population is affected by NASH and 2–4% of the population worldwide is affected.

Analysts’ recommendations for Galmed and its peers

All five of the analysts tracking Galmed in June recommended a “buy” rating. On June 12, Galmed Pharmaceuticals had a consensus 12-month target price of $33.2, which represents an ~88.7% return on investment over the next 12 months.

All five of the analysts tracking Urogen Pharma (URGN) in June 2018 recommended a “buy” on the stock. Among the three analysts tracking Vascular Biogenics (VBLT), all of them recommended a “hold” rating. Of the five analysts tracking Foamix Pharmaceuticals (FOMX) in June, all of them recommended a “buy.”

On June 12, Urogen Pharma, Vascular Biogenics, and Foamix Pharmaceuticals had consensus 12-month target prices of $73.25, $3, and $14.8, respectively. These targets represent ~29.4%, ~12.2%, and ~184.6% returns on investment over the next 12 months, respectively.

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