Cantor Fitzgerald downgraded Galmed Pharmaceuticals (NASDAQ:GLMD) to “neutral” from “overweight” and slashed its price target to 70 cents from $5 after the company announced a business update along with financials for the second quarter of 2022. Shares of Galmed were quoted at 46 cents at mid-day on Aug. 4.
Among other things, Galmed said it was “unable to estimate if and when” the registrational part of the ARMOR study in NASH will be initiated, and that the company is planning to implement a cost reduction plan and could refocus R&D on advancing Aramchol for new anti-fibrotic indications.
“Therefore, we are newly valuing the company on our estimate of $18-million in cash as of Sept. 30, 2022 (the company ended June 30 with $22.5-million in cash and cash equivalents, restricted cash and marketable debt securities), as we have no insight into any of the development programs moving forward,” writes analyst Kristen Kluska.
“We recognize that a NASH trial is expected to be expensive and think the company will either need significantly more capital (which could prove difficult in this market) or a partner to bring this forward,” she said. “The company is exploring strategic alternatives and structures at this time.”