UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2025

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 001-31791

GALECTIN THERAPEUTICS INC.


Nevada		04-3562325
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)


4960 Peachtree Industrial Blvd., Suite 240, Norcross, GA		30071
(Address of Principal Executive Offices)		(Zip Code)

(678) 620 -3186

(Registrant’s Telephone Number, Including Area Code)

Securities registered or to be registered pursuant to Section 12(b) of the Act.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	GALT	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☐

Non-Accelerated Filer	☒	Smaller reporting company	☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the registrant’s common stock as of August 7, 2025 was 64,060,262.

GALECTIN THERAPEUTICS INC.

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2025

	PART I — FINANCIAL INFORMATION	PAGE
ITEM 1.	Unaudited Condensed Consolidated Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	2

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024	3

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	4

	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the Three and Six Months Ended June 30, 2025 and 2024	5

	Notes to Unaudited Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	29

ITEM 4.	Controls and Procedures	30

	PART II — OTHER INFORMATION

ITEM 1.	Legal Proceedings	30

ITEM 1A.	Risk Factors	30

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

ITEM 3.	Defaults Upon Senior Securities	30

ITEM 4.	Mine Safety Disclosures	30

ITEM 5.	Other Information	30

ITEM 6.	Exhibits	30

SIGNATURES		32

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	June 30, 2025			December 31, 2024
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	13,771		$	15,120
Prepaid expenses and other current assets		1,656			2,132
Total current assets		15,427			17,252
Other assets		175			243
Total assets	$	15,602		$	17,495
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	5,865		$	5,656
Accrued expenses and other		4,846			8,204
Accrued dividends payable		63			63
Convertible notes payable and accrued interest, net of discounts – related party (Note 3)		—			21,117
Derivative liabilities (Note 4)		—			369
Total current liabilities		10,774			35,409
Convertible notes payable and accrued interest, net of discounts – related party (Note 3)		32,308			10,733
Derivative liabilities (Note 4)		1,537			47
Borrowing and accrued interest under convertible lines of credit, net of debt discount – related party (Note 9)		88,150			74,376

Total liabilities		132,769			120,565
Commitments and contingencies (Note 11)
Series C super dividend redeemable convertible preferred stock; 1,000 shares authorized, 176 shares issued and outstanding at June 30, 2025 and December 31, 2024, redemption value: $8,018,000, liquidation value: $1,760,000 at June 30, 2025		1,723			1723
Stockholders’ equity (deficit):
Undesignated stock, $0.01 par value; 20,000,000 shares authorized, 20,000,000 designated at June 30, 2025 and December 31, 2024, respectively		—			—
Series A 12% convertible preferred stock; 1,742,500 shares authorized, 1,210,000 and 1,235,000 issued and outstanding at June 30, 2025 and December 31, 2024, respectively, liquidation value $1,210,000 at June 30, 2025		490			500
Common stock, $0.001 par value; 150,000,000 shares authorized at June 30, 2025 and December 31, 2024, 64,060,262 and 63,157,235 issued and outstanding at June 30, 2025 and December 31, 2024, respectively		63			62
Additional paid-in capital		299,318			296,217
Retained deficit		(418,761	)		(401,572	)
Total stockholders’ deficit		(118,890	)		(104,793	)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit	$	15,602		$	17,495

See notes to unaudited condensed consolidated financial statements.

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(in thousands, except per share data)						(in thousands, except per share data)
Operating expenses:
Research and development	$	3,261		$	9,813		$	9,746		$	17,867
General and administrative		1,364			1,478			2,776			3,072
Total operating expenses		4,625			11,291			12,522			20,939
Total operating loss		(4,625	)		(11,291	)		(12,522	)		(20,939	)
Other income (expense):
Interest income		26			80			61			160
Interest expense		(1,826	)		(1,269	)		(3,570	)		(2,321	)
Change in fair value of derivative		(1,096	)		109			(1,121	)		(760	)
Total other income (expense)		(2,896	)		(1,080	)		(4,630	)		(2,921	)
Net loss	$	(7,521	)	$	(12,371	)	$	(17,152	)	$	(23,860	)
Preferred stock dividends		(63	)		(64	)		(37	)		(72	)
Net loss applicable to common stockholders	$	(7,584	)	$	(12,435	)	$	(17,189	)	$	(23,932	)
Net loss per common share — basic and diluted	$	(0.12	)	$	(0.20	)	$	(0.27	)	$	(0.39	)
Weighted average common shares outstanding — basic and diluted		63,447			62,233			63,326			62,104

See notes to unaudited condensed consolidated financial statements.

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Six Months Ended June 30,
	2025			2024
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,152	)	$	(23,860	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Stock-based compensation expense		968			1,342
Amortization of right to use lease asset		12			18
Non-cash interest expense		696			457
Change in fair value of derivative liabilities		1,121			760
Changes in operating assets and liabilities:
Prepaid expenses and other assets		428			361
Accounts payable, accrued expenses and other liabilities		(3,239	)		(1,380	)
Accrued interest on convertible debt - related party		2,875			1,864
Net cash from operating activities		(14,291	)		(20,438	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from exercise of common stock options and warrants		724			376
Net proceeds from issuance of common stock		1,218			—
Net proceeds from convertible line of credit – related party		11,000			20,000
Net cash flows from financing activities		12,942			20,376
NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,349	)		(62	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		15,120			25,660
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	13,771		$	25,598
NONCASH FINANCING ACTIVITIES:
Payment of preferred stock dividends in common stock	$	62		$	72
Noncash right to use lease asset		61			—
Common stock purchase warrants issued in connection with related party line of credit		235			537

See notes to unaudited condensed consolidated financial statements.

GALECTIN THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT (UNAUDITED)

(amounts in thousands except share data)


	Series C Super Dividend Redeemable Convertible Preferred Stock
	Number of Shares		Amount
Balance at December 31, 2023		176	$	1,723
Balance at June 30, 2024		176	$	1,723
Balance at December 31, 2024		176	$	1,723
Balance at June 30, 2025		176	$	1,723


	Series A 12% Convertible Preferred Stock						Common Stock
	Number of Shares			Amount			Number of Shares		Amount		Additional Paid-In Capital		Retained Deficit			Total Stockholders’ Equity (Deficit)
Balance at March 31, 2024		1,235,000		$	500			59,582,253	$	59	$	276,156	$	(321,094	)	$	(44,369	)
Series A 12% convertible preferred stock dividend														(38	)		(38	)
Series C super dividend redeemable convertible preferred stock dividend														(26	)		(26	)
Common stock purchase warrants issued in connection with related party line of credit												260					260
Exercise of common stock options								4,898
Exercise of common stock purchase warrants								125,093		1		375					376
Stock-based compensation expense												738					738
Net loss														(12,371	)		(12,371	)
Balance at June 30, 2024		1,235,000		$	500			62,278,125	$	62	$	293,872	$	(378,304	)	$	(83,870	)
Balance at March 31, 2025		1,235,000		$	500			63,291,585	$	63	$	296,631	$	(411,177	)	$	(113,984	)
Series A 12% convertible preferred stock dividend														(37	)		(37	)
Series C super dividend redeemable convertible preferred stock dividend														(26	)		(26	)
Conversion of Series A convertible preferred to common stock		(25,000	)		(10	)		4,167				10
Common stock purchase warrants issued in connection with related party line of credit												235					235
Exercise of common stock options								346,606				724					724
Issuance of common stock								417,904				1,218					1,218
Stock-based compensation expense												500					500
Net loss														(7,521	)		(7,521	)
Balance at June 30, 2025		1,210,000		$	490			64,060,262	$	63	$	299,318	$	(418,761	)	$	(118,890	)

See notes to unaudited condensed consolidated financial statements.

GALECTIN THERAPEUTICS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) — (Continued)

(amounts in thousands except share data)


	Series A 12% Convertible Preferred Stock						Common Stock
	Number of Shares			Amount			Number of Shares		Amount		Additional Paid-In Capital		Retained Deficit			Total Stockholders’ Equity (Deficit)
Balance at December 31, 2023		1,235,000		$	500			61,852,914	$	61	$	291,847	$	(354,372	)	$	(61,964	)
Series A 12% convertible preferred stock dividend								12,350				30		(30	)
Series C super dividend redeemable convertible preferred stock dividend								17,600				42		(42	)
Exercise of common stock options								19,620
Exercise of common stock purchase warrants								125,093		1		375					376
Common stock purchase warrants issued in connection with related party line of credit												537					537
Stock-based compensation expense, net of shares forfeited to cover tax withholding								250,548				1,041					1,041
Net loss														(23,860	)		(23,860	)
Balance at June 30, 2024		1,235,000		$	500			62,278,125	$	62	$	293,872	$	(378,304	)	$	(83,870	)
Balance at December 31, 2024		1,235,000		$	500			63,157,235	$	62	$	296,217	$	(401,572	)	$	(104,793	)
Series A 12% convertible preferred stock dividend								12,350				15		(15	)
Series C super dividend redeemable convertible preferred stock dividend								17,600				22		(22	)
Conversion of Series A convertible preferred to common stock		(25,000	)		(10	)		4,167				10
Common stock purchase warrants issued in connection with related party line of credit												235					235
Exercise of common stock options								346,606				724					724
Issuance of common stock								417,904				1,218					1,218
Stock-based compensation expense								104,400		1		877					878
Net loss														(17,152	)		(17,152	)
Balance at June 30, 2025		1,210,000		$	490			64,060,262	$	63	$	299,318	$	(418,761	)	$	(118,890	)

See notes to consolidated financial statements.

GALECTIN THERAPEUTICS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Liquidity

Galectin Therapeutics Inc. and subsidiaries (the “Company”) is a clinical stage biopharmaceutical company that is applying its leadership in galectin science and drug development to create new therapies for fibrotic disease and cancer. These candidates are based on the Company’s targeting of galectin proteins which are key mediators of biologic and pathologic function. These compounds also may have application for drugs to treat other diseases and chronic health conditions.

The unaudited condensed consolidated financial statements as reported in this Quarterly Report on Form 10-Q reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of June 30, 2025 and the results of its operations for the three and six months ended June 30, 2025 and 2024 and its cash flows for the six months ended June 30, 2025 and 2024. All adjustments made to the interim financial statements include all those of a normal and recurring nature. Amounts presented in the condensed consolidated balance sheet as of December 31, 2024 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date these financial statements are available to be issued. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. The unaudited condensed consolidated financial statements of the Company should be read in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2024.

These consolidated financial statements have been prepared in accordance with US generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.

The Company has operated at a loss since its inception and has had no revenues. The Company anticipates that losses will continue for the foreseeable future. At June 30, 2025, the company had $13,771,000 of unrestricted cash and cash equivalents available to fund future operations. Additionally, on July 8, 2025, we signed a new line of credit in the amount of $10 million provided by our chairman, Richard Uihlein, (See Note 14). The Company believes there is sufficient cash, including availability of the two lines of credit, to fund currently planned operations through June 30, 2026. To meet its future capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions. However, there can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. The inability of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company was founded in July 2000, was incorporated in the State of Nevada in January 2001 under the name “Pro-Pharmaceuticals, Inc.,” and changed its name to “Galectin Therapeutics Inc.” on May 26, 2011.

2. Accrued Expenses and Other

Accrued expenses consist of the following:


	June 30, 2025		December 31, 2024
	(in thousands)
Legal and accounting fees	$	71	$	74
Accrued compensation		844		1,523
Lease liability		52		19
Accrued research and development costs and other		3,879		6,588
Total	$	4,846	$	8,204

Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside services, contract laboratory costs related to manufacturing drug product, clinical trials and preclinical studies are charged to research and development expense as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received. Our current NAVIGATE clinical trial is being supported by third-party contract research organizations, or CROs, and other vendors. We accrue expenses for clinical trial activities performed by CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses and related expenses associated with the conduct of clinical trials, the significant factors used in estimating accruals include the number of patients enrolled, the number of active clinical sites, and the duration for which the patients have been enrolled in the trial. We monitor patient enrollment levels and related activities to the extent possible through internal reviews, review of contractual terms and correspondence with CROs. We base our estimates on the best information available at the time. We monitor patient enrollment levels and related activities to the extent possible through discussions with CRO personnel and based our estimates of clinical trial costs on the best information available at the time. However, additional information may become available to us which will allow us to make a more accurate estimate in future periods. In that event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain.

3. Convertible Notes Payable – Related Party

On April 16, 2021, the Company and Richard E. Uihlein entered into a debt financing arrangement whereby Mr. Uihlein loaned $10,000,000 to the Company. In consideration for the loan, the Company issued a convertible promissory note (the “April 2021 Note”) in the principal amount of ten million dollars.

The April 2021 Note had an original maturity date of April 16, 2025, is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.00 per share at the option of the noteholder. The April 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2025 and 2024, approximately $54,000 and $53,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2025 and 2024, approximately $107,000 and $104,000, respectively, of interest expense was accrued and included with the principal in the financial statements.

The April 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the April 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the April 2021 Note at its inception. The fair value of the contingent interest derivative liability was $420,000 at note inception (April 16, 2021). The fair value of the contingent interest derivative liability was $650,000 and $47,000 at June 30, 2025 and December 31, 2024, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for the six months ended June 30, 2025 and 2024 of $604,000 and $358,000 respectively, was charged to other expense for the six months ended June 30, 2025 and 2024. The amortization of the original $420,000 debt discount of $31,000 and $52,000 was recorded as additional interest expense for the six months ended June 30, 2025 and 2024, respectively.

On May 14, 2024, Mr. Uihlein, as holder of the April 2021 Note irrevocably elected to convert the entire principal amount of such note, plus accrued and unpaid interest, into shares of common stock of the Company at a price of $5.00 per share, effective as of April 16, 2025, which is the maturity date of the April 2021 Note. In connection with entering into the March 2025 Supplemental Line of Credit (see Note 9), the Company agreed to extend the maturity date of the Convertible Promissory Note dated April 2021 from April 16, 2025 to September 30, 2025. Additionally, in connection with entering into the July 2025 Supplemental Line of Credit (see Note 14), the Company agreed to extend the maturity date of the Convertible Promissory Note dated April 2021 from September 30, 2025 to September 30, 2026. The April 2021 Note will remain outstanding and accrue interest until maturity and no shares of common stock will be issued as a result of this election until September 30, 2026.

The September 2021 Note had an maturity date of September 17, 2025, which was also extended to September 30, 2026 (see Note 14), is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $8.64 per share at the option of the noteholder. The September 2021 Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For the three months ended June 30, 2025 and 2024, approximately $53,000 and $52,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For the six months ended June 30, 2025 and 2024, approximately $106,000 and $104,000, respectively, of interest expense was accrued and included with the principal in the financial statements.

The September 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the September 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the September Note at its inception. The fair value of the contingent interest derivative liability was $433,000 at note inception (September 17, 2021). The fair value of the contingent interest derivative liability was $298,000 and $94,000 and June 30, 2025 and December 31, 2024, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for the six months ended June 30, 2025 and 2024 of $204,000 and $140,000, respectively, was recorded to other expense for six months ended June 30, 2025 and 2024. The amortization of the original $433,000 debt discount of $54,000 and $54,000 was recorded as additional interest expense for the six months ended June 30, 2025 and 2024.

On December 20, 2021, the second of the two promissory notes under the Loan Agreement was executed and delivered, (the “December 2021 Note”) to evidence the second loan in the principal amount of $10,000,000. The December 2021 Note had a maturity date of December 20, 2025, which was also extended to September 30, 2026 (see Note 14), is prepayable at the option of the Company in whole or in part at any time and is convertible into the Company’s common stock at a conversion price equal to $5.43 per share at the option of the noteholder. The December Note bears interest at the rate of two percent (2%) per annum, compounded annually with an effective interest rate of approximately 3%. For three months ended June 30, 2025 and 2024, approximately $53,000 and $52,000, respectively, of interest expense was accrued and included with the principal in the financial statements. For six months ended June 30, 2025 and 2024, approximately $106,000 and $104,000, respectively, of interest expense was accrued and included with the principal in the financial statements.

The December 2021 Note also includes a contingent interest component that requires the Company to pay additional interest at a rate of two and one-half percent (2.5%) per quarter (10% per annum) (the “Additional Interest”) beginning on the date of issuance of this Note and ending on the maturity date, provided however, that such payment is only required if and only if the noteholder elects to convert the entire balance of the December 2021 Note into the Company’s common stock on or prior to maturity. As the contingent event is not based on creditworthiness, such feature is not clearly and closely related to the host instrument and accordingly must be bifurcated and recognized as a derivative liability and a debt discount on the December Note at its inception. The fair value of the contingent interest derivative liability was $415,000 at note inception (December 20, 2021). The fair value of the contingent interest derivative liability was $589,000 and $275,000 at June 30, 2025 and December 31, 2024, respectively, and is recognized as a derivative liability in the consolidated balance sheet. The change in the fair value of the derivative liability for six months ended June 30, 2025 and 2024 of $314,000 and $262,000, respectively was recorded to other expense for six months ended June 30, 2025 and 2024. The amortization of the original $415,000 debt discount of $52,000 and $52,000 was recorded as additional interest expense for six months ended June 30, 2025 and 2024, respectively.

The Company’s contractual cash obligations related to the outstanding convertible notes payable is a repayment of the September 2021 Note of the $10,000,000 plus accrued interest on September 30, 2026 and a repayment of the December 2021 Note of the $10,000,000 plus accrued interest on September 30, 2026, unless converted at the option of the noteholder.

4. Fair Value of Financial Instruments

The Company has certain financial assets and liabilities recorded at fair value. Fair values determined by Level 1 inputs utilize observable data such as quoted prices in active markets. Fair values determined by Level 2 inputs utilize data points other than quoted prices in active markets that are observable either directly or indirectly. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts reflected in the consolidated balance sheets for cash equivalents, accounts payable and accrued expenses approximate their carrying value due to their short-term nature. There were no level 1 or 2 assets or liabilities at June 30, 2025 or December 31, 2024. See below for Fair Value of Derivatives related to Convertible Notes Payable at June 30, 2025 and December 31, 2024, which are level 3 liabilities.

Level 3 assets and liabilities measured and recorded at fair value on a recurring basis at June 30, 2025 and December 31, 2024 were as follows:


		June 30, 2025		December 31, 2024
Derivative Liability – Contingent Interest April Note	$	650,000	$	47,000
Derivative Liability – Contingent Interest September Note	$	298,000	$	94,000
Derivative Liability – Contingent Interest December Note	$	589,000	$	275,000

The April Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2025 and December 31, 2024 are as follows:


			June 30, 2025			December 31, 2024
Stock Price		$	2.11		$	1.29
Conversion Price of conversion feature		$	5.00		$	5.00
Term	1.25 years				0.29 years
Risk Free Interest Rate			3.96	%		4.37	%
Credit Adjusted Discount Rate			13.31	%		12.43	%
Volatility			101	%		152	%
Dividend Rate			0	%		0	%

The roll forward of the April Note derivative liability – contingent interest is as follows for the six months ended June 30, 2025 and 2024:


Balance – December 31, 2024	$	47,000
Fair Value Adjustment		603,000
Balance – June 30, 2025	$	650,000

Balance – December 31, 2023	$	431,000
Fair Value Adjustment		358,000
Balance – June 30, 2024	$	789,000

The September Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2025 and December 31, 2024 are as follows:


	June 30, 2025			December 31, 2024
Stock Price	$	2.11		$	1.29
Conversion Price of conversion feature	$	8.64		$	8.64
Term	1.25 years			0.72 years
Risk Free Interest Rate		3.96	%		4.16	%
Credit Adjusted Discount Rate		13.31	%		12.43	%
Volatility		101	%		111	%
Dividend Rate		0	%		0	%

The roll forward of the September Note derivative liability – contingent interest is as follows:


Balance – December 31, 2024	$	94,000
Fair Value Adjustment		204,000
Balance – June 30, 2025	$	298,000

Balance – December 31, 2023	$	169,000
Fair Value Adjustment		140,000
Balance – June 30, 2024	$	309,000

The December Note derivative liability – contingent interest was valued using a Monte Carlo Geometric Brownian Stock Path Model. The key assumptions used in the model at June 30, 2025 and December 31, 2024 are as follows:


	June 30, 2025			December 31, 2024
Stock Price	$	2.11		$	1.29
Conversion Price of conversion feature	$	5.43		$	5.43
Term	1.25 years			0.97 years
Risk Free Interest Rate		3.96	%		4.16	%
Credit Adjusted Discount Rate		13.76	%		12.43	%
Volatility		101	%		102	%
Dividend Rate		0	%		0	%

The roll forward of the December Note derivative liability – contingent interest is as follows:


Balance – December 31, 2024	$	275,000
Fair Value Adjustment		314,000
Balance – June 30, 2025	$	589,000

Balance – December 31, 2023	$	404,000
Fair Value Adjustment		262,000
Balance – June 30, 2024	$	666,000

5. Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, restricted common stock, common stock warrants and deferred stock units:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	in thousands
Research and development	$	254	$	386	$	530	$	709
General and administrative		246		352		436		633
Total stock-based compensation expense	$	500	$	738	$	966	$	1,342

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2024 through June 30, 2025:


	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2024		6,854,758		$	2.39
Granted		1,211,000			1.23
Exercised		(346,606	)		2.09
Options forfeited/cancelled		(177,334	)		(2.11	)
Outstanding, June 30, 2025		7,541,818		$	2.22

As of June 30, 2025, there was $1,047,000 of unrecognized compensation related to 1,387,836 unvested options, which is expected to be recognized over a weighted–average period of approximately 0.8 years. The weighted-average grant date fair value for options granted during the six months ended June 30, 2025 was $0.87. The Company granted 1,211,000 stock options during the six months ended June 30, 2025.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:


	Six Months Ended June 30,		Six Months Ended June 30,
	2025		2024
Risk-free interest rate	4.48	%	3.88	%
Expected life of the options	5.6 years		5.4 years
Expected volatility of the underlying stock	83	%	75	%
Expected dividend rate	0	%	0	%

In January 2025, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2025. A total of 32,250 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2025 when the stock vests in full. In January 2024, the Company’s board chairman elected to take restricted stock grants in lieu of cash retainers for 2024. A total of 23,256 shares of restricted stock valued at approximately $40,000 is being amortized to expense on a straight-line basis until December 31, 2024 when the stock vests in full.

During the six months ended June 30, 2025, the Company issued 504,000 restricted stock units to its employees valued at $620,000 at the date of grant. These restricted stock units will vest 100% on the earlier of entering into a partnership or December 31, 2025. The Company believes that is probable that the vesting condition will be met and is amortizing the restricted stock unit expense ratably in 2025. The amount of expense recorded during the three and six months ended June 30, 2025 was $143,000 and $267,000, respectively.

In September 2020, the Company entered into an employment agreement with its new Chief Executive Officer whereby 20% of his base salary and performance bonuses will be paid in cash, and 80% will be paid in the form of deferred stock units (“DSUs”) through December 31, 2022 in accordance with the terms and subject to the provisions set forth in the DSU Agreement. DSUs credited to Mr. Lewis as of any date shall be fully vested and nonforfeitable at all times. Pursuant to an amendment to the DSU Agreement in July 2022, the Company shall issue the shares earned through December 31, 2022 underlying the outstanding whole number of DSUs credited to Mr. Lewis as follows: twenty five percent shall be issued on March 1, 2023, fifty percent shall be issued on March 1, 2024 and twenty five percent shall be issued on September 1, 2028. Additionally, a 2023 DSU Agreement was executed in July 2022, whereby Mr. Lewis would continue to receive 20% of salary in cash and 80% in DSUs through December 31, 2023. The shares under the 2023 DSU Agreement are to be issued fifty percent on March 1, 2025 and fifty percent on January 5, 2026.

On March 1, 2025, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the 2023 DSU Agreement. A total of 137,563 shares were due to be issued; however, 56,420 shares were withheld to cover income tax withholding of $88,579 resulting in 81,144 shares actually issued.

On March 1, 2024, fifty percent of the DSU’s were issued to Mr. Lewis in accordance with the DSU Agreement. A total of 367,800 shares were due to be issued; however, 153,288 shares were withheld to cover income tax withholding of $300,445 resulting in 214,512 shares actually issued.

There is no unrecognized compensation expense related to the DSUs.

6. Common Stock Warrants

The following table summarizes the common stock warrant activity from December 31, 2024 through June 30, 2025:


	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2024		9,595,940		$	4.22
Granted		220,000			3.00
Exercised		—			—
Forfeited/cancelled		(111,510	)		3.00
Outstanding, June 30, 2025		9,704,430		$	4.20

The weighted average expiration of the warrants outstanding as of June 30, 2025 is 1.6 years.

7. Loss Per Share

Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares and other potential common shares then outstanding. Potential common shares consist of common shares issuable upon the assumed exercise of in-the-money stock options and warrants and potential common shares related to the conversion of the preferred stock. The computation of diluted net loss per share does not assume the issuance of common shares that have an anti-dilutive effect on net loss per share.

Dilutive shares which could exist pursuant to the exercise of outstanding stock instruments and which were not included in the calculation because their affect would have been anti-dilutive are as follows:


	June 30, 2025		June 30, 2024
	(shares)		(shares)
Warrants to purchase shares of common stock		9,704,430		9,426,853
Options to purchase shares of common stock		7,541,818		7,369,758
Restricted stock units		496,520		408,000
Shares of common stock issuable upon conversion of convertible notes payable – related party		7,327,374		6,721,188
Shares of common stock issuable upon conversion of convertible line of credit – related party		29,621,834		21,016,837
Shares of common stock issuable upon conversion of preferred stock		495,007		499,174
		55,186,983		45,441,810

8. Common Stock

On May 11, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a sales agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $40.0 million from time to time through the sales agent. Sales of the Company’s common stock through the sales agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the sales agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the sales agent under the 2020 At Market Agreement. During the quarter ended June 30, 2025, 419,904 shares of common stock were issued under the 2020 At Market Agreement for net proceeds of approximately $1,218,000. During the quarter ended June 30, 2024, there were no issuances of shares of common stock under the 2020 At Market Agreement.

For each of the six months ended June 30, 2025 and 2024, the Company issued a total of 29,950 and 29,950 shares of common stock, respectively, for dividends on Series A and Series C Preferred Stock. During the three months ended June 30, 2025, 25,000 shares of Series A Convertible Preferred Stock were converted into 4,167 shares of common stock.

9. Convertible Line of Credit – Related Party and Supplemental Convertible Lines of Credit – Related Party

On July 25, 2022, the Company and Richard E. Uihlein (the “Lender”) entered into a Line of Credit Letter Agreement (the “Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $60.0 million (the “Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Line of Credit through July 31, 2024.

Each advance made pursuant to the Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes were originally due on or before January 31, 2026, however, the maturity date was extended to September 30, 2026 in connection with a new line of credit see Note 14. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

At the election of Lender, the principal and accrued interest on Promissory Note(s) may be converted into the number of shares of the Company’s Common Stock equal to the amount of principal and accrued interest on such Promissory Note divided by the price equal to the closing price of the Common Stock on the date of such Promissory Note, but in no event less than $3.00 per share.

In connection with the Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 1,700,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). Upon execution of the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 500,000 shares of Company’s Common Stock at an exercise price of $5.00 per share, which Warrant is exercisable upon issuance. Further, pursuant to the Credit Agreement, the Company shall issue to the Lender additional Warrants to purchase up to the remaining 1,200,000 shares of the Company’s common stock, ratably, upon borrowings under the Credit Agreement, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029. The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.

The fair value of the 500,000 warrants vested at closing on July 25, 2022 was $738,000 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 92%, risk free interest rate of 3.19% and zero dividends. The fair value of the vested warrants was recorded in other assets (non-current) as a deferred financing cost and will be amortized on a straight-line basis from July 25, 2022 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $52,000 and $52,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $104,000 and $104,000, respectively, was recorded as interest expense.

On December 19, 2022, the Company executed a $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.46% (Applicable Federal Rate for short term loans on date of draw of 4.46% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $1,772,000 and $1,399,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on December 19, 2022 was $160,780 at the date of issuance based on the following assumptions: an expected life of 7 years, volatility of 91%, risk free interest rate of 4.06% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal to be amortized on a straight-line basis, which is not materially different than the effective interest method, from December 19, 2022 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $13,000 and $13,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $26,000 and $26,000, respectively, was recorded as interest expense.

On March 31, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.41% (Applicable Federal Rate for short term loans on date of draw of 4.41% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was approximately $1,547,000 and $1,184,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.26 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on March 31, 2023 was $296,680 at the date of issuance based on the following assumptions: an expected life of 6.33 years, volatility of 88%, risk free interest rate of 3.94% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from March 31, 2023 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $26,000 and $26,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $52,000 and $52,000, respectively, was recorded as interest expense.

On June 30, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.34% (Applicable Federal Rate for short term loans on date of draw of 4.34% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was approximately $1,348,000 and $995,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on June 30, 2023 was $179,920 at the date of issuance based on the following assumptions: an expected life of 6.08 years, volatility of 85%, risk free interest rate of 3.59% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 30, 2023 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $17,000 and $17,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $35,000 and $35,000, respectively, was recorded as interest expense.

On December 29, 2023, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.13% (Applicable Federal Rate for short term loans on date of draw of 5.13% plus 2%). The effective interest rate is approximately 7.5%. Accrued interest on this draw was approximately $1,125,000 and $737,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on December 31, 2023 was $193,745 at the date of issuance based on the following assumptions: an expected life of 5.7 years, volatility of 79%, risk free interest rate of 4.49% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from December 29, 2023 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $23,000 and $23,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $47,000 and $47,000, respectively, was recorded as interest expense.

On March 29, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 6.62% (Applicable Federal Rate for short term loans on date of draw of 4.62% plus 2%). The effective interest rate is approximately 7.1%. Accrued interest on this draw was $860,000 and $508,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.59 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on March 29, 2024, was $277,389 at the date of issuance based on the following assumptions: an expected life of 5.33 years, volatility of 75%, risk free interest rate of 4.19% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from March 29, 2024 through January 31, 2026. Amortization for the three months ended June 30, 2025 and 2024 of $38,000 and $38,000, respectively, was recorded as interest expense. Amortization for the six months ended June 30, 2025 and 2024 of $76,000 and $76,000, respectively, was recorded as interest expense.

On June 28, 2024, the Company executed an additional $10 million Promissory Note under the Line of Credit. The interest rate on this draw is 7.01% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 7.4%. Accrued interest on this draw was $682,000 and $336,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $3.39 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on June 28, 2024, was $260,000 at the date of issuance based on the following assumptions: an expected life of 5.03 years, volatility of 77%, risk free interest rate of 4.29% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from June 28, 2024 through January 31, 2026. Amortization for the three and six months ended June 30, 2025 of $41,000 and $82,000, respectively, was recorded as interest expense.

On March 29, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the Supplemental Line of Credit through March 31, 2025.

Each advance made pursuant to the Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes were originally due on or before January 31, 2026; however, the maturity date was extended to September 30, 2026 in connection with a new line of credit see Note 14. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

In connection with the Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 200,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

On September 30, 2024, the Company executed a $10 million Promissory Note under the Supplemental Line of Credit. The interest rate on this draw is 6.13% (Applicable Federal Rate for short term loans on date of draw of 5.01% plus 2%). The effective interest rate is approximately 6.4%. Accrued interest on this draw was $469,000 and $154,000 at June 30, 2025 and December 31, 2024, respectively. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 200,000 shares of Company’s Common Stock at an exercise price of $4.13 per share, which Warrant is exercisable upon issuance.

The fair value of the 200,000 warrants vested at closing on September 30, 2024, was $307,780 at the date of issuance based on the following assumptions: an expected life of 4.83 years, volatility of 78%, risk free interest rate of 3.58% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from October 1, 2024 through January 31, 2026. Amortization for the three and six months ended June 30, 2025 of $58,000 and $116,000, respectively, was recorded as interest expense.

On November 14, 2024, the Company and Richard E. Uihlein (the “Lender”) entered into an additional Supplemental Line of Credit Letter Agreement (the “November 2024 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $6.0 million (the “November 2024 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the November 2024 Supplemental Line of Credit, as amended, through May 31, 2025.

Each advance made pursuant to the November 2024 Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

In connection with the November 2024 Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 120,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the November 2024 Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

On April 30, 2025, the Company executed a $6 million Promissory Note under the November 2024 Supplemental Line of Credit. The interest rate on this draw is 6.13% (Applicable Federal Rate for short term loans on date of draw of 4.13% plus 2%). The effective interest rate is approximately 6.4%. Accrued interest on this draw was $61,000 at June 30, 2025. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 120,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 120,000 warrants vested at closing on April 30, 2025, was $102,816 at the date of issuance based on the following assumptions: an expected life of 4.25 years, volatility of 84%, risk free interest rate of 3.65% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from April 30, 2025 through March 31, 2026. Amortization for the three and six months ended June 30, 2025 of $23,000 was recorded as interest expense.

On March 31, 2025, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “March 2025 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $5.0 million (the “March 2025 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the March 2025 Supplemental Line of Credit through September 30, 2025.

Each advance made pursuant to the March 2025 Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before March 31, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

In connection with the March 2025 Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 100,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the March 2025 Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

On June 30, 2025, the Company executed a $5 million Promissory Note under the March 2025 Supplemental Line of Credit. The interest rate on this draw is 5.93% (Applicable Federal Rate for short term loans on date of draw of 3.93% plus 2%). The effective interest rate is approximately 6.4%. The principal and accrued interest is convertible at the option of the Lender at $3.00 per share. In accordance with the Credit Agreement, the Company issued the Lender a Warrant to purchase up to 100,000 shares of Company’s Common Stock at an exercise price of $3.00 per share, which Warrant is exercisable upon issuance.

The fair value of the 100,000 warrants vested at closing on June 30, 2025, was $132,000 at the date of issuance based on the following assumptions: an expected life of 4.08 years, volatility of 86%, risk free interest rate of 3.75% and zero dividends. The proceeds were allocated between the Promissory Note and the warrants issued, and the amount allocated to the warrants was recorded as a debt discount netted against principal amortized on a straight-line basis, which is not materially different than the effective interest method, from April 30, 2025 through January 31, 2026.

The fair value of warrants that vest in the future based on borrowings will be computed when those borrowings occur and amortized over the remaining period through January 31, 2026.

10. Segments

Operating segments are identified as components of an entity about which separate discrete financial information is available for evaluation by the CODM, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s CODM, the Chief Executive Officer, views the Company’s operations as one operating segment, which is focused on creating new therapies for fibrotic disease based on targeting galectin proteins. The Company does not have revenue in the current comparative period, incurs expenses primarily in North America and manages the business activities on a consolidated basis.

The accounting policies of the fibrotic disease therapeutics segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the fibrotic disease therapeutics segment and decides how to allocate resources based on net loss that also is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the balance sheet as cash and cash equivalents.

The Company has not generated any product revenue in the current period and expects to continue to incur significant expenses and operating losses for the foreseeable future as the Company advances its product candidates through all stages of development and clinical trials.

As such, the CODM uses cash forecast models in deciding how to invest into the fibrotic disease therapeutics segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results, net cash used in operating activities for the period and cash on hand are used in assessing performance of the segment.

The table below summarizes the significant expense categories regularly reviewed by the CODM for the six month periods ended June 30, 2025 and 2024 (in thousands).


	Six Months Ended June 30,
	2025			2024
	(in thousands)
Operating expenses:
Research and development	$	9,746		$	17,867
General and administrative		2,776			3,072
Total operating expenses		12,522			20,939
Total operating loss		(12,522	)		(20,939	)
Other income (expense):
Interest income		62			160
Interest expense		(3,570	)		(2,321	)
Change in fair value of derivatives		(1,122	)		(760	)
Total other expense		(4,630	)		(2,921	)
Net loss	$	(17,152	)	$	(23,860	)
Preferred stock dividends		(37	)		(72	)
Net loss applicable to common stockholders	$	(17,180	)	$	(23,932	)

Other segment items included in segment loss includes interest income and interest expense.

The Company is a single operating segment and therefore the measure of segment net loss is the same as consolidated net loss and does not require reconciliation.

For the six month periods ended June 30, 2025 and 2024, the net cash used in operating activities was $14.3 million and $20.4 million, respectively. The table below summarizes the significant asset categories regularly reviewed by the CODM as of June 30, 2025 and December 31, 2024 (in thousands).


	June 30, 2025			December 31, 2024
	(in thousands)
Cash and cash equivalents		$	13,771	$	15,120

11. Commitments and Contingencies

Other Legal Proceedings

The Company records accruals for such contingencies to the extent that the Company concludes that their occurrence is probable, and the related damages are estimable. There are no significant pending legal proceedings.

Clinical Trial and Research Commitments

The Company has entered into agreements with contractors for research and development activities to further its product candidates. The contracts generally may be canceled at any time by providing thirty days’ notice. The Company is involved in a negotiation with a contract vendor for clinical trial management services provided in the United States. The Company has accrued its estimate of the amount owed to the contract vendor.

12. Leases

The Company has one operating lease for its office space which was amended effective March 1, 2022 for a term of 38 months with no residual value guarantees or material restrictive covenants. The amended lease provided for free rent for the first six and a half months of the lease and continues the security deposit of $6,000. In addition to base rental payments included in the contractual obligations table above, the Company is responsible for our pro-rata share of the operating expenses for the building. Our lease cost for the six-month periods ended June 30, 2025 and 2024 was approximately $28,000 for each period and is included in general and administrative expenses. In March 2025, the Company renewed its existing office space lease effective for twelve months at substantially the same terms. As of June 30, 2025, the right to use lease asset consisted of $52,000 and is included in other assets. Also, at June 30, 2025, current lease liability of $52,000 is included in accrued expenses.

Maturity of operating lease as of June 30, 2025 in thousands:


2025	$	33
2026		22
Total		55
Less imputed interest		(3	)
Present value of lease liability	$	52

The discount rate used in calculating the present value of the lease payments was 14%.

13. Galectin Sciences LLC

In January 2014, we created Galectin Sciences, LLC (the “LLC” or “Investee”), a collaborative joint venture co-owned by SBH Sciences, Inc. (“SBH”), to research and develop small organic molecule inhibitors of galectin-3 for oral administration. The LLC was initially capitalized with a $400,000 cash investment to fund future research and development activities, which was provided by the Company, and specific in-process research and development (“IPR&D”) contributed by SBH. The estimated fair value of the IPR&D contributed by SBH, on the date of contribution, was $400,000. Initially, the Company and SBH each had a 50% equity ownership interest in the LLC, with neither party having control over the LLC. Accordingly, from inception through the fourth quarter of 2014, the Company accounted for its investment in the LLC using the equity method of accounting. Under the equity method of accounting, the Company’s investment was initially recorded at cost with subsequent adjustments to the carrying value to recognize additional investments in or distributions from the Investee, as well as the Company’s share of the Investee’s earnings, losses and/or changes in capital. The estimated fair value of the IPR&D contributed to the LLC was immediately expensed upon contribution as there was no alternative future use available at the point of contribution. The operating agreement provides that if either party does not desire to contribute its equal share of funding required after the initial capitalization, then the other party, providing all of the funding, will have its ownership share increased in proportion to the total amount contributed from inception. In the fourth quarter of 2014, after the LLC had expended the $400,000 in cash, SBH decided not to contribute its share of the funding required. Cumulatively as of June 30, 2025, the Company has contributed a total of $4,166,000, including $36,000 and $233,000 for the six months ended June 30, 2025 and 2024, respectively, for expenses of the LLC. Since the end of 2014, SBH has contributed $711,000 for expenses in the LLC. As of June 30, 2025, the Company’s ownership percentage in the LLC was 85.4%. The Company accounts for the interest in the LLC as a consolidated, less than wholly owned subsidiary. Because the LLC’s equity is immaterial, the value of the non-controlling interest is also deemed to be immaterial.

14. Subsequent Event

On July 8, 2025, the Company and Richard E. Uihlein (the “Lender”) entered into a Supplemental Line of Credit Letter Agreement (the “July 2025 Supplemental Credit Agreement”), pursuant to which the Lender shall provide the Company a line of credit of up to $10.0 million (the “July 2025 Supplemental Line of Credit”) to finance the Company’s working capital needs. The Company may draw upon the July 2025 Supplemental Line of Credit through April 30, 2026. Additionally, in connection with the July 2025 Supplemental Credit Agreement, the maturity dates of the Convertible Notes Payable – Related Party and all borrowings under the Convertible Lines of Credit – Related Party were extended to September 30, 2026.

Each advance made pursuant to the July 2025 Supplemental Credit Agreement shall be evidenced by an unsecured, convertible promissory note (individually, a “Promissory Note,” and collectively, the “Promissory Notes”), and bear interest at the Applicable Federal Rate for short term loans, plus two (2%) percent. Principal and interest on the Promissory Notes are due on or before September 30, 2026. Only with the consent of the Lender, may the Promissory Notes be prepaid, in whole or in part, at any time without premium or penalty, but with interest on the amount or amounts prepaid.

In connection with the July 2025 Supplemental Credit Agreement, the Company agreed to issue the Lender warrants to purchase up to an aggregate of 200,000 shares of the Company’s common stock, par value $0.001 per share (collectively, the “Warrants”). The Company shall issue to the Lender Warrants ratably, upon borrowings under the July 2025 Supplemental Line of Credit, with exercise prices equal to 150% of the closing price of the Company’s common Stock on the date of the Promissory Note evidencing such draw, but in no event more than $10.00 per share nor less than $3.00 per share. The Warrants expire on July 31, 2029.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements as defined under Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created therein for forward-looking statements. Such statements include, but are not limited to, statements concerning our anticipated operating results, research and development, clinical trials, regulatory proceedings, and financial resources, and can be identified by use of words such as, for example, “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and “would,” “should,” “could” or “may.” All statements, other than statements of historical facts, included herein that address activities, events, or developments that the Company expects or anticipates will or may occur in the future, are forward-looking statements, including statements regarding: plans and expectations regarding clinical trials; plans and expectations regarding regulatory approvals; our strategy and expectations for clinical development and commercialization of our products; potential strategic partnerships; expectations regarding the effectiveness of our products; plans for research and development and related costs; statements about accounting assumptions and estimates; expectations regarding liquidity and the sufficiency of cash to fund currently planned operations through June 30, 2026; our commitments and contingencies; and our market risk exposure. Forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Galectin Therapeutics operates, and management’s beliefs and assumptions. These statements are not guarantees of future performance and involve certain known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties are related to and include, without limitation,

•

our early stage of development,

•

we have incurred significant operating losses since our inception and cannot assure you that we will generate revenue or profit,

•

our dependence on additional outside capital,

•

we may be unable to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates,

•

uncertainties related to any litigation,

•

uncertainties related to our technology and clinical trials, including expected dates of availability of clinical data,

•

we may be unable to demonstrate the efficacy and safety of our developmental product candidates in human trials,

•

we may be unable to improve upon, protect and/or enforce our intellectual property,

•

we are subject to extensive and costly regulation by the U.S. Food and Drug Administration (FDA) and by foreign regulatory authorities, which must approve our product candidates in development and could restrict the sales and marketing and pricing of such products,

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competition and stock price volatility in the biotechnology industry,

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limited trading volume for our stock, concentration of ownership of our stock, and other risks detailed herein and from time to time in our SEC reports, and

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the impact resulting from a pandemic or the reemergence of COVID-19, which delayed our clinical trial and development efforts, as well as the impact that such a pandemic has on the volatility of the capital market and our ability to access the capital market and,

•

other risks detailed herein and from time to time in our SEC reports, including our Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2024, and our subsequent SEC filings.

The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes thereto of Galectin Therapeutics appearing elsewhere herein.

Overview

We are a clinical stage biopharmaceutical company engaged in drug research and development to create new therapies for fibrotic disease, cancer and selected other diseases. Our drug candidates are based on our method of targeting galectin proteins, which are key mediators of biologic and pathologic functions. We use naturally occurring, readily-available plant products as starting material in manufacturing processes to create proprietary, patented complex carbohydrates with specific molecular weights and other pharmaceutical properties. These complex carbohydrate molecules are appropriately formulated into acceptable pharmaceutical formulations. Using these unique carbohydrate-based candidate compounds that largely bind and inhibit galectin proteins, particularly galectin-3, we are undertaking the focused pursuit of therapies for indications where galectin proteins have a demonstrated role in the pathogenesis of a given disease. We focus on diseases with serious, life-threatening consequences and those where current treatment options are limited specifically in NASH (non-alcoholic steatohepatitis) with cirrhosis and certain cancer indications. Our strategy is to establish and implement clinical development programs that add value to our business in the shortest period of time possible and to seek strategic partners when one of our programs becomes advanced and requires significant additional resources.

Our lead galectin-3 inhibitor is belapectin (GR-MD-02), which has been demonstrated in preclinical models to reverse liver fibrosis and cirrhosis and in clinical studies to decrease portal hypertension and prevent its complication: the development of esophageal varices. Belapectin has the potential to treat many diseases due to galectin-3’s involvement in multiple key biological pathways such as fibrosis, immune cell function and immunity, cell differentiation, cell growth, and apoptosis (cell death). The importance of galectin-3 in the fibrotic process is supported by experimental evidence. Animals with the galectin-3 gene “knocked-out” can no longer develop fibrosis in response to experimental stimuli compared to animals with an intact galectin-3 gene. We are using our galectin-3 inhibitor to treat advanced liver fibrosis and liver cirrhosis in NASH patients. We have completed two Phase 1 clinical studies, a Phase 2 clinical study in NASH patients with advanced fibrosis (NASH-FX) and a second Phase 2b clinical trial in NASH patients with compensated cirrhosis and portal hypertension (NASH-CX).

In February 2023, we completed randomizations totaling 357 patients in a large, global Phase 2b/3 clinical trial, the NAVIGATE trial. Our study protocol was filed with the FDA on April 30, 2020, for a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patients with non-alcoholic steatohepatitis (NASH) cirrhosis Further details are available at www.clinicaltrials.gov under study NCT04365868. The information contained therein is not incorporated herein by reference. In September 2020, the Company received a letter from the FDA providing comments, asking questions and providing guidance on various aspects of the ongoing NAVIGATE trial. These comments were addressed, and the study proceeded accordingly.

Based on feedback from the U.S. Food and Drug Administration (FDA), the Company decided to analyze stage 1 of the NAVIGATE clinical trial results as a stand-alone trial. Therefore, the decision was made to present full top-line efficacy and safety results, following last patient last visit and database lock which occurred in fall 2024. In December 2024, we presented top-line results of the NAVIGATE clinical trial. In the intent-to-treat (ITT) population (N=355), while the incidence of varices was 43.2% reduced in the belapectin 2 mg/kg dose group vs placebo, the composite endpoint did not reach statistical significance. The per-protocol population (PPP) was pre-defined as subjects who completed 18 months of therapy with upper endoscopy performed at both baseline and 18 months. In the PPP (n=287), the incidence of varices was reduced by 49.3% (compared to the targeted 52.5% reduction) in the belapectin 2 mg/kg dose group (p-value < 0.05). The Company further analyzed the two thirds of the completer patients in the NAVIGATE trial enrolled in the U.S. (n=186). The incidence of varices in this population was significantly reduced by 68.1% (p=0.02) in patients treated with belapectin 2 mg (4 out of 60) vs placebo (13 out of 62) in the U.S. While all three cohorts of patients in the U.S. had a higher percentage use of GLP-1 and statins than the rest of the world, the belapectin cohorts performed much better than placebo in the U.S. The Company continues to analyze trial data and expects to report additional information as it becomes available.

As in prior trials, the safety profile of belapectin remains highly encouraging with incidence of adverse events and serious adverse events comparable across the three cohorts. Rates of discontinuation, adverse events (AEs), and serious adverse events (SAEs) were comparable to placebo, with no drug-related SAEs reported in the NAVIGATE trial.

The Company continues to analyze data from approximately 55 patients that completed 36 months of treatment prior to the ending of the trial in February 2025. While data from this group would not change the results of the NAVIGATE clinical trial for patients completing 18 months of treatment, the Company believes that any encouraging results from this group of patients may draw interest from potential strategic partners.

Additionally, a study protocol entitled “A Single-dose, Open-label, Pharmacokinetic Study of Belapectin (GR-MD-02) in Subjects With Normal Hepatic Function and Subjects With Varying Degrees of Hepatic Impairment” has been filed with the FDA to examine the effects of the drug in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (study details are listed under study NCT04332432 on www.clinicaltrials.gov); this study became fully enrolled in February 2022 and favorable results were reported in 2023. The information contained therein is not incorporated herein by reference.

We endeavor to leverage our scientific and product development expertise as well as established relationships with outside sources to achieve cost-effective and efficient drug development. These outside sources, amongst others, provide us with expertise in preclinical models, pharmaceutical development, toxicology, clinical trial operations, pharmaceutical manufacturing, including physical and chemical drug characterization, and commercial development. We also have established through our majority-owned joint venture subsidiary, Galectin Sciences LLC, a discovery program developing small molecules that inhibit galectin-3 and may afford alternative drug delivery (e.g., oral) and as a result expand the potential uses of galectin-3 inhibitor beyond belapectin. Three chemical series of composition of matter patents have been filed.

We are also pursuing a development pathway to clinical enhancement and commercialization for our lead compounds in immuno-oncology following our previous successful collaboration with Providence Portland Cancer Center. In 2022, we filed a new IND with FDA for advanced or metastatic head and neck cancer using belapectin in combination with a checkpoint (PD-1) inhibitor and received a Study May Proceed letter. The proposed phase 2 trial commencement is dependent on timing of financing.

All of our proposed products are presently in development, including pre-clinical and clinical trials.

Our Drug Development Programs

Galectins are a class of proteins that are made by many cells in the body, but predominantly in cells of the immune system. As a group, these proteins are able to bind to sugar molecules that are attached to other proteins, called glycoproteins that are responsible for various functions within the body, most notably inflammation and fibrosis. Galectins, in particular galectin-3, act as a molecular glue, bringing together molecules that have sugars on them. Galectin-3, is known to be markedly increased in a number of significant diseases including inflammatory diseases leading to organs scarring (e.g. liver, lung, kidney, and heart) and cancers. The increase in galectin-3, by creating the so-called galectin-3 fibrosome, promotes the progression of multiple diseases. Published data substantiating the importance of galectin-3 in the fibrotic process arises from gene knockout experiments in animal studies. For instance, mice genetically altered to eliminate the galectin-3 gene, and thus unable to produce galectin-3, do not develop liver fibrosis in response to toxic insult to the liver.

We have one new proprietary chemical entity (NCE) in development, belapectin, which has shown promise in preclinical and clinical studies for the treatment of liver fibrosis, severe skin disease, and cancer (melanoma and head and neck squamous cell carcinoma). Currently, we are focusing on development of belapectin for the treatment of NASH cirrhosis and head and neck cancer. Belapectin is a proprietary, patented compound derived from natural, plant-based, starting materials, which following chemical processing, exhibits the properties of binding to and inhibiting galectin-3.

Our product pipeline is shown below:


Indication Prevention of esophageal varices in NASH cirrhosis	Drug	Status

Phase 1 interaction trial: NASH-CX trial and NASH-FX trial	belapectin	IND submitted January 2013. Results from the Phase 1 interaction trial were reported in 2014, with final results reported in January 2015. The Phase 2 NASH FX trial was conducted in patients with advanced fibrosis but not cirrhosis. Its principal purpose was to evaluate various imaging modalities. The NASH FX trial top line data was reported in September 2016 and published in Alimentary Pharmacology and Therapeutics in 2016. The Phase 2 NASH CX trial was conducted in patients with compensated cirrhosis and portal hypertension. The NASH CX trial top line data was reported in December 2017 and was published in Gastroenterology in 2020.

NASH NAVIGATE		Following FDA feedback, the NAVIGATE trial was for the prevention of esophageal varices in NASH patients with compensated cirrhosis and clinical signs of portal hypertension.. The final patient was randomized in February 2023 and top-line results were presented in December 2024. Additional analysis from the trial has been presented in 2025 and continues.

Phase 1 study: hepatic insufficiency		A hepatic impairment study was conducted in subjects with normal hepatic function and subjects with varying degrees of hepatic impairment (www.clinicaltrials.gov NCT04332432) and began enrolling patients in the second quarter of 2020. The study completed enrollment in February 2022 and favorable results were presented in 2023.

Cancer Immunotherapy

Melanoma, Head, Neck Squamous Cell Carcinoma (HNSCC)	belapectin	Investigator IND study was completed. A Phase 1B study began in Q-1 2016. Early data was reported in February 2017 and additional data were reported in September 2018. Data from an extension trial was reported in July 2021 for additional melanoma and HNSCC patients which provided a rational basis for additional trials which the Company is exploring. In the third quarter of 2022, the Company announced its IND application for belapectin in combination with a checkpoint inhibitor for the treatment of HNSCC was filed and a Study May Proceed letter was received from FDA. The Company is reviewing options for financing this trial which will determine when such trial could commence.

Liver cirrhosis. Belapectin is our lead product candidate for treatment of compensated NASH cirrhosis in patients with portal hypertension. Our preclinical data show that belapectin has a significant therapeutic effect on liver fibrosis as shown in several relevant animal models. In addition, in NASH animal models, belapectin has been shown to reduce liver fat, inflammation, portal pressure, and ballooning degeneration (death of liver cells). Therefore, we chose belapectin as the lead candidate in a development program targeted initially at fibrotic liver disease associated with non-alcoholic steatohepatitis (NASH). In January 2013, an Investigational New Drug (“IND”) was submitted to the FDA with the goal of initiating a Phase 1 study in patients with NASH and advanced liver fibrosis to evaluate the safety of belapectin and pharmacodynamics biomarkers of disease. On March 1, 2013, the FDA indicated we could proceed with a US Phase 1 clinical trial for belapectin with a development program aimed at obtaining support for a proposed indication of belapectin for treatment of NASH with advanced fibrosis. The Phase 1 trial was completed and demonstrated that belapectin up to 8 mg/kg Lean Body Mass (LBM), i.v. was safe and well tolerated.

Additionally, an open label drug-drug phase 1 interaction study was completed in healthy volunteers during the second quarter of 2015 with belapectin and it showed that with 8 mg/kg LBM dose of belapectin and 2 mg/kg LBM dose of midazolam there was no drug-drug interaction, and no serious adverse events or drug-related adverse events were observed. The secondary objective was to assess the safety and tolerability of belapectin when administered concomitantly with midazolam.

Our Phase 2 program in fibrotic disease consisted of two separate human clinical trials. The main clinical trial was the Phase 2b NASH-CX study for one year for patients with NASH with compensated cirrhosis and portal hypertension, which began enrolling patients in June 2015. This study was a randomized, placebo-controlled, double-blind, parallel-group Phase 2b trial to evaluate the safety and efficacy of belapectin for treatment of liver fibrosis and resultant portal hypertension in NASH patients with compensated cirrhosis. A smaller, exploratory NASH-FX trial was conducted to explore potential use of various non-invasive imaging techniques in NASH patients with advanced fibrosis but not cirrhosis.

NASH-FX Trial: The NASH-FX trial was a Phase 2a pilot trial for patients with NASH and advanced fibrosis that explored use of three non-invasive imaging technologies. It was a short, single site, four-month trial in 30 NASH patients with advanced fibrosis (F3) randomized 1:1 to either 9 bi-weekly doses of 8 mg/kg LBM of belapectin or placebo. The trial did not meet its primary endpoint as measured using multi-parametric magnetic resonance imaging (LiverMultiScan^(R), Perspectum Diagnostics). The trial also did not meet secondary endpoints that measure liver stiffness as a surrogate for fibrosis using, magnetic resonance-elastography and FibroScan^® score. With a four-month treatment period and a small number of patients per arm the study was not powered to demonstrate efficacy results in established advanced liver fibrosis. In the trial however, belapectin was found to be safe and well tolerated with no serious adverse events and showing evidence of a pharmacodynamic effect. These results provided support for further development in NASH.

NASH-CX Trial: The NASH-CX trial was a larger multi-center clinical trial that explored the use of belapectin for the treatment of patients with well-compensated NASH cirrhosis and portal hypertension. Enrollment was completed in September 2016, and a total of 162 patients at 36 sites in the United States were randomized to receive either 2 mg/kg LBM of belapectin, 8 mg/kg LBM of belapectin or placebo. Approximately 50% of patients at baseline had esophageal varices (a complication of portal hypertension). The primary endpoint was a reduction in hepatic venous pressure gradient (HVPG), a hemodynamic measure that estimates portal hypertension. Patients received an infusion of belapectin or placebo every other week for one year and were evaluated to determine the change in HVPG as compared with placebo. Secondary or exploratory endpoints included evaluation of fibrosis on liver biopsy, measurement of liver stiffness (FibroScan) and assessment of liver metabolism (¹³C-methacetin breath test). Top line data readout was reported in December 2017. The study demonstrated a favorable safety profile and clinically meaningful efficacy results in patients without esophageal varices at baseline as demonstrated by a decrease in portal pressure associated with the prevention of development of varices when compared to placebo.

In the total patient population, the primary endpoint HVPG showed a trend toward benefit with belapectin treatment, but the difference from placebo was not statistically significant. The mean change in HVPG of placebo from baseline to week 54 was 0.3 mm Hg. The mean change in HVPG from baseline was -0.37 and -0.42 for the 2 mg/kg LBM dose and 8 mg/kg LBM dose of belapectin, respectively.

In those NASH cirrhosis patients with portal hypertension who have not yet developed esophageal varices at baseline (about 50% of the total population), there was a statistically significant effect of the 2 mg/kg LBM dose of belapectin on the absolute change in HVPG (-1.08 mm Hg, p<0.01). The effect of the 8 mg/Kg LBM dose of belapectin on absolute or percent change in HVPG from baseline to week 54 was not significant.

Also because of the clinical relevance of this population, a responder analysis was performed on those patients without esophageal varices at baseline. Analysis was performed looking at two groups: those with an equal to or greater than 2 mm Hg decrease in HVPG from baseline or those with an equal to or greater than 2 mm Hg and a greater than or equal to 20% decrease in HVPG from baseline. In both cases, the change observed in the belapectin 2 mg/kg LBM group was statistically significant (p<0.01) while that of the 8 mg/kg LBM group was not.

Over the 54-week treatment period, in patients without varices at baseline there were also a statistically significantly fewer new varices that developed in the belapectin treatment groups (0% and 4% in the 2 mg/kg LBM and the 8 mg/kg LBM, respectively) vs placebo (18%). This meant that the decrease seen in portal pressure was associated with a decreased incidence of esophageal varices. The results were noticeable in the belapectin 2 mg/Kg LBM group as statistical significance against placebo was achieved for both parameters. As esophageal varices can lead to hemorrhagic complication, which can be fatal, and are a severe complication of liver cirrhosis, we believe the prevention of esophageal varices may represent a clinically relevant measure of clinical efficacy in patients with NASH cirrhosis.

The major conclusions from the NASH-CX trial results were that: (i) belapectin had a statistically significant and clinically meaningful effect in improving HVPG vs placebo in patients with NASH cirrhosis who did not have esophageal varices at baseline, (ii) Belapectin in the total patient population was associated with a statistically significant improvement in hepatocyte ballooning (i.e. cell death), (iii) There was a statistically significant reduction (p=0.02) in the development of new esophageal varices in drug-treated patients compared to placebo. We believe that the prevention of esophageal varices is a clinically relevant endpoint related to patient outcomes, (iv) While there was a drug effect in both the 2 mg/kg LBM and 8 mg/kg LBM groups on the development of varices and liver biopsy there was a consistently greater and statistically significant effect of the 2 mg/kg LBM dose of belapectin, (v) belapectin appears to be safe and well tolerated in this one year clinical trial, a feature that is of prime importance for a cirrhotic population and (vi) This is the first large, randomized clinical trial to demonstrate a clinically meaningful improvement in portal hypertension in patients with compensated NASH cirrhosis who have not yet developed esophageal varices.

Further information and details on the NASH-CX results is available in public presentations posted to our website and filed with the SEC and in a peer reviewed publication in Gastroenterology 2020;158:1334–1345.

NASH NAVIGATE Trial: Building on the experience of the NASH-CX trial, the NAVIGATE Trial was designed as a seamless adaptively-designed Phase 2b/3 clinical study evaluating the safety and efficacy of our galectin-3 inhibitor, belapectin, for the prevention of esophageal varices in patient with non-alcoholic steatohepatitis (NASH) cirrhosis. The major features of this innovative Phase 2b/3 study design are: i) In patients with NASH cirrhosis and clinical signs of portal hypertension but without esophageal varices at baseline, evaluated by an esophago-gastro-duodeno endoscopy, this trial will assess the effect of belapectin on the incidence of new varices (the primary endpoint) – as well as assessing the effect of belapectin on the incidence of additional clinically significant cirrhosis-related outcomes (a key secondary efficacy en

SEC Form 10-Q filed by Galectin Therapeutics Inc.