Description

Galera Therapeutics is a clinical stage biopharmaceutical company focused on developing therapies to improve outcomes for cancer patients undergoing radiotherapy. Their lead product candidate, avasopasem manganese (avasopasem), is designed to reduce the severity and duration of severe oral mucositis (SOM) in patients receiving radiotherapy for head and neck cancer. SOM is a significant and debilitating side effect of cancer treatment, particularly radiotherapy and chemotherapy, especially in patients with head and neck cancer. It is characterized by painful inflammation, ulceration, and bleeding of the mucous membranes lining the mouth. This condition can severely impact a patient's ability to eat, drink, and speak.

Galera completed its Phase 3 ROMAN trial for avaspasem in December 2021. It was initially reported that the drug failed to achieve its primary endpoint. However, a subsequent review revealed a statistical programming error by their contract research organization (CRO). Upon correction, the data showed that avasopasem did meet the primary endpoint, demonstrating a 16% reduction in incidence of SOM compared to placebo and a 56% reduction in the number of days of SOM. The trial also showed a 27% reduction in the severity of SOM.

The FDA requested Galera repeat their clinical trial. This request came in the form of a Complete Response Letter (CRL) issued in August of 2023. Prior to receiving the CRL, During a subsequent Type A meeting and in the meeting minutes, the FDA reiterated the need for a second Phase 3 trial to support resubmission of the NDA. Given Galera's current resources, it is not feasible for them to conduct the additional trial.

In response to the CRL, Galera wound down its commercial readiness efforts, reduced headbcount across several departments, and began to pursue strategic alternatives. The company implemented a workforce reduction, approved by its Board of Directors, that reduced the workforce by 70% as of August 2023. 

In October 2023, Galera announced that it had engaged Stifel Nicolaus as its financial advisor to assist in reviewing strategic alternatives with the goal of maximizing value for its stockholders, including a merger, sale, divestiture of assets, or strategic transaction.

Separately, Galera filed a lawsuit against Alira Health Clinic and Iqvia Biotech in Pennsylvania Court of Common Pleas for Chester Country. Specifically, the complaint alleges that the CROs generated invalid statistical reports that incorrectly concluded the trial was unsuccessful, when in fact it had achieved positive results. 

The court trial has been currently ongoing. Over the last several months, however, the parties have submitted requests to the court to postpone the upcoming hearing in each case by only several weeks. The reason for the recent postponements is unclear. One potential possibility could be that the parties are trying to reach a settlement. It is estimated that Galera spent between $60-$100mm on its clinical trial. IQV (one of the two defendants stated earler) is a public company with a market cap of $40 billion so they have sufficient resources to pay Galera if the court rules in Galera's favor.

Galera adopted a limited duration stockholder rights agreement in May 2024. This agreement was in response to one investor (Yair Schneid) who bought almost 30% of Galera's common stock several months ago. These rights become exercisable if any person or group acquires 10% of more of the outstanding shares of Galera in a transaction not approved by the Board. 

The recent decline in the company's stock price was a result of its recent delisting. 

Catalyst

Trial award or potential settlement