Galmed plans Nasdaq IPO at $100m valuation

Galmed Pharmaceuticals, which is developing a treatment for fatty liver disease, could hold the offering by December.

Sources inform ''Globes'' that Galmed Pharmaceuticals Ltd., which is developing proprietary drugs for the treatment of fatty liver disease, is planning to raise tens of millions of dollars on Nasdaq, at a company value of $100 million, before money. The company is already in talks with underwriters. A decision will be made by October, and if the decision is taken to go ahead, the IPO will be held in December.

Galmed chairman Chaim Hurvitz has invested in the company, as well as other life sciences companies, in addition to his position as a director at Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). He told "Globes", "The window of opportunity for IPOs in the US is open for pharmaceutical companies. This is a very interesting opportunity for Galmed. The main question is whether Galmed can organize in time to hold an IPO in December, which is considered the best month for an IPO on the US market."

Galmed was founded by CEO and CFO Allen Baharaff. The company is preparing a Phase IIb clinical trial for Aramchol for the treatment of non-alcoholic steatohepatitis (NASH), or fatty liver disease. At the same time, the company is developing a nutritional supplement for the disease, based on the same technology. The company has raised less than $10 million to date from Hurvitz's CH Health, Nams Europe, and G. Yarom Medical Research Ltd., Brack Capital Properties NV (TASE: BCNV) and its founder Shimon Weintraub, Infopharm Ltd., and private investors.

Galmed is a lean operation, with modest offices and only a few full-time employees, but it has a scientific advisory board comprising leading names in fatty liver disease. It also subcontracts executives from the US and European medical devices industry.

Baharaff once told "Globes" that this structure "makes it possible for us to maintain a low cash burn rate, while keeping a high standard with experienced people who have already brought dozens of products to market. This model has a track record of saving money, and providing access to data collected worldwide."

Fatty liver disease affects one in three people. The liver breaks down lipids (fat cells) in the body, stores them, and excretes the excess. When this does not happen for various reasons, the fat accumulates in the liver. "Fat poisoning" causes inflammation and cirrhosis (scarring) of the liver, which in turn can cause liver cancer or liver disfunction requiring a transplant. Fatty liver is also a leading factor in heart disease. Although the disease primarily affects obese people, this is not always the case. There is no cure, except to reduce fat intake and to become more physically active.

Galmed's treatment targets the liver's lipid breakdown and excretion to prevent or cure liver inflammation. The Phase I clinical trial was successful, but it will have to replicate the results. Galmed is racing against two other companies, which are also in the Phase II stage, after Switzerland's Roche Holdings AG (SWX: ROG) and Gilead Sciences Inc. (Nasdaq: GILD) of the US terminated their trials.

Galmed's Phase II study, which will include 120 patients, is due to begin in a few months. A Phase III clinical trial, which will include 200-300 patients, will cost tens of millions of dollars. Galmed plans to conduct it with a big pharma partner, although if the IPO is successful, the company may decide to go it alone.

Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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