On Thursday, Oppenheimer maintained its Outperform rating on Galecto (NASDAQ: GLTO) stock and increased the price target to $10.00 from the previous $9.00. The new target reflects confidence following Galecto's recent strategic transaction, which has sharpened the company's focus on developing treatments for oncology and liver diseases.
The transaction in question involved Galecto's acquisition of global rights to BRM-1420 from Bridge Medicine, a dual ENL-YEATS and FLT3 inhibitor aimed at treating multiple genetic subsets of Acute Myeloid Leukemia (AML).
This acquisition is seen as a strategic addition to Galecto's pipeline, providing a potentially differentiated asset that could meet the needs of approximately 30% of all AML patients who are currently underserved by existing therapies.
Galecto plans to file an Investigational New Drug (IND) application for BRM-1420 around the end of 2025. In the meantime, the company is also advancing its development of GB1211, with ongoing Investigator-Sponsored Trials (IST) in melanoma and Head and Neck Squamous Cell Carcinoma (HNSCC). Updates on these trials are anticipated in the near future.
The analyst from Oppenheimer highlighted the financial efficiency of the acquisition, noting that it allows for the continued development of GB1211. Moreover, the firm expects Galecto's quarterly operating expenses to be in the range of approximately $2.5-3.0 million, which should provide the company with a cash runway extending into 2026. This financial position supports Galecto's ongoing research and development efforts.
In other recent news, Galecto has made significant strides in its strategic focus on oncology and liver diseases. The biotech company has acquired global rights to BRM-1420, a novel therapy developed by Bridge Medicine, which targets multiple genetic subsets of acute myeloid leukemia (AML). Analysts from Oppenheimer have adjusted their price target for Galecto to $10, up from the previous $9, following this strategic acquisition.
In addition to this, Galecto has executed a 1-for-25 reverse stock split, reducing its outstanding common shares from approximately 27.1 million to around 1.1 million. This move aligns with the company's efforts to adjust its capital structure.
The company has also appointed Dr. Amy Wechsler to its Board of Directors, a move that is expected to provide valuable industry knowledge and leadership skills to the company's growth and development strategies.
Furthermore, Galecto has announced that its quarterly operating expenses are likely to be in the range of approximately $2.5 to $3.0 million. This projection is expected to extend the company's cash runway into 2026, providing a solid financial foundation for its research and development activities in the coming years. These recent developments highlight Galecto's ongoing commitment to its strategic focus and financial stability.
InvestingPro Insights
Recent InvestingPro data provides additional context to Galecto's financial situation and market performance. The company's market capitalization stands at $7.28 million, reflecting its current valuation in the biotech sector. Notably, Galecto's price-to-book ratio is 0.31, suggesting the stock may be undervalued relative to its book value.
InvestingPro Tips highlight that Galecto holds more cash than debt on its balance sheet, which aligns with the analyst's positive outlook on the company's financial efficiency. This strong cash position supports the projected cash runway into 2026, as mentioned in the article. Additionally, the tip indicating that Galecto's liquid assets exceed short-term obligations further reinforces the company's financial stability as it pursues its development pipeline.
However, it's important to note that Galecto is not currently profitable, with a negative EBITDA of -$21.91 million for the last twelve months as of Q2 2024. This aligns with the InvestingPro Tip suggesting that analysts do not anticipate the company to be profitable this year, which is common for biotech companies in the development stage.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Galecto, providing a deeper understanding of the company's financial health and market position.
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