Galmed (GLMD): Galmed’s 200% Jump Leads Biotechs Higher [another NASH]
By Teresa Rivas
June 12, 2018 11:23 a.m. ET
It's a good day for biotech in general, but a great day for Galmed Pharmaceuticals (GLMD) in particular.
Illustration: Getty Images
Galmed shot up 204% to $21.33 in morning trading, following positive data about its treatment for liver disease nonalcoholic steatohepatitis (NASH).
Jefferies' Michael Yee writes that while Galmed's study formally missed statistical significance on both of its regulatory endpoints, "the trial did show significant trends that could hit significance in a larger trial." Given Galmed's size, he notes that Intercept Pharmaceuticals (ICPT) and Gilead Sciences (GILD), both of which have NASH data due out within the next year, could be another way to play the trend, as he anticipates both moving higher on the data.
The rest of the sector wasn't doing as well, but was generally higher: The iShares Nasdaq Biotechnology ETF (IBB) is up 0.4% to $110.37, and the SPDR S&P Biotech ETF (XBI) is 0.8% higher to $96.70.
That's a reversal from Monday's trends, which saw the sector falling, hurt in part by yet another decline in Nektar Therapeutics' (NKTR) shares, this time on a downgrade from H.C. Wainwright.
Another factor weighing on the sector was CRISPR Therapeutics' (CRSP) 10% slide, on concerns that edited cells could cause cancer. On that front, Chardan Capital Markets' Gbola Amusa has a note out today, arguing that the studies do not indicate that risk.
Amusa writes that the papers in question looked at gene P53, the loss of which is known to contribute to 50% of cancers, "so concern over its integrity is not unreasonable." The papers do show that P53 "is activated in response to breaks in the DNA induced by CRISPR/Cas9," which caused concern, but he notes that that gene has "been known to be activated by DNA breaks for decades, so this should not be surprising."
Moreover, early versions of the papers cited have been available to the public since last summer, so yesterday's drop seems like an overreaction. That's not to say that edited genes are 100% safe, but Amusa writes that "companies, clinicians, regulators, and patients will have to weigh the relative risks and benefits of [gene-editing]-based therapeutics, as with any other treatment."
Crispr shares aren't joining in the biotech bounce, as they're down again today, falling 0.8% to $59.07.
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