UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

 

For the Month of May 2019

 

001-36345

(Commission File Number)

 

GALMED PHARMACEUTICALS LTD.

(Exact name of Registrant as specified in its charter)

 

16 Tiomkin St.

Tel Aviv 6578317, Israel

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover

Form 20-F or Form 40-F.

 

Form 20-F x  Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by

Regulation S-T Rule 101(b)(1): ____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by

Regulation S-T Rule 101(b)(7): ____

  

 

 

 

  

This Form 6-K contains the quarterly report of Galmed Pharmaceuticals Ltd. (the “Company”), which includes the Company’s unaudited consolidated financial statements for the three months ended March 31, 2019, together with related information and certain other information. The Company is not subject to the requirements to file quarterly or certain other reports under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company does not undertake to file or cause to be filed any such reports in the future, except to the extent required by law.

 

On May 7, 2019, the Company issued a press release announcing the filing of its financial results for the three months ended March 31, 2019 with the Securities and Exchange Commission. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

This Form 6-K and the text under the heading “Business Update” and “Financial Summary - First Quarter 2019 vs. First Quarter 2018” in Exhibit 99.1 is incorporated by reference into the Company’s Registration Statement on Form S-8 (Registration No. 333-206292 and 333-227441) and the Company’s Registration Statement on Form F-3 (Registration No. 333-223923). 

 

 

 

  

FINANCIAL INFORMATION

 

Financial Statements

 

GALMED PHARMACEUTICALS LTD.
Consolidated Balance Sheets
U.S. Dollars in thousands, except share data and per share data

 

  

As of

March 31,

2019

  

As of

December 31,

2018

 
   Unaudited   Audited 
Assets          
Current assets          
Cash and cash equivalents  $37,338   $24,159 
Short-term deposits   6,112    6,067 
Marketable debt securities   43,112    59,962 
Other accounts receivable   417    218 
Total current assets   86,979    90,406 
           
Right of use assets   668    - 
Property and equipment, net   189    194 
Total non-current assets   857    194 
           
Total assets  $87,836   $90,600 
           
Liabilities and stockholders' equity          
           
Current liabilities          
Trade payables  $1,797   $1,814 
Other accounts payable   612    892 
Total current liabilities   2,409    2,706 
           
Non-current liabilities          
Lease obligation  $499   $- 
Total non-current liabilities   499    - 
           
Ordinary shares par value NIS 0.01 per share; Authorized 50,000,000; Issued and outstanding: 21,113,066 shares as of March 31, 2019; 21,018,919  shares as of December 31, 2018   58    58 
Additional paid-in capital   174,812    174,322 
Accumulated other comprehensive gain (loss)   25    (11)
Accumulated deficit   (89,967)   (86,475)
Total stockholders' equity   84,928    87,894 
           
Total liabilities and stockholders' equity  $87,836   $90,600 

 

The accompanying notes are an integral part of the interim consolidated financial statements.

 

 

 

  

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Operations (Unaudited)
U.S. Dollars in thousands, except share data and per share data

 

  

Three months ended

March 31,

 
   2019   2018 
Revenue  $-   $268 
           
Research and development expenses   3,269    1,944 
           
General and administrative expenses   771    883 
           
Total operating expenses   4,040    2,559 
           
Financial income, net   (548)   (53)
           
Net loss  $3,492   $2,506 
           
Basic and diluted net loss per share from continuing operation  $0.17   $0.17 
           
Weighted-average number of shares outstanding used in computing basic and diluted net loss per share   21,084,329    14,467,627 

 

The accompanying notes are an integral part of the interim consolidated financial statements.

 

 

 

  

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Comprehensive Loss (Unaudited)
U.S. Dollars in thousands

 

  

Three months ended

March 31,

 
   2019   2018 
Net loss  $3,492   $2,506 
           
Other comprehensive loss (income):          
           
Net unrealized loss (gain) on available for sale securities   (36)   29 
           
Comprehensive loss  $3,456   $2,535 

 

The accompanying notes are an integral part of the interim consolidated financial statements.

 

 

 

  

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
U.S. Dollars in thousands, except share data and per share data

 

   Ordinary shares   Additional
paid-in
   Accumulated
other
Comprehensive
   Accumulated     
   Shares   Amount   capital   loss   Deficit   Total 
Balance - December 31, 2018   21,018,919   $58   $174,322   $(11)  $(86,475)  $87,894 
Stock based compensation   -    -    416    -    -    416 
Options and Restricted stock units Exercise   94,147    -    74    -    -    74 
Unrealized loss (gain) from marketable debt securities   -    -    -    36    -    36 
Net loss   -    -    -    -    (3,492)   (3,492)
Balance - March 31, 2019   21,113,066   $58   $174,812   $25   $(89,967)  $84,928 

 

The accompanying notes are an integral part of the interim consolidated financial statements.

 

 

 

  

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Cash Flows (Unaudited)
U.S. Dollars in thousands

 

  

Three months ended

March 31,

 
   2019   2018 
Cash flow from operating activities          
           
Net loss  $(3,492)  $(2,506)
           
Adjustments required to reconcile net loss to net cash used in operating activities          
Depreciation and amortization   9    59 
Stock-based compensation expense   416    330 
Amortization of discount (premium) on marketable debt securities   (39)   9 
Interest income from short-term deposits   (45)     
Loss (gain) from realization of marketable debt securities   (5)   3 
Changes in operating assets and liabilities:          
Increase in other accounts receivable   (199)   (210)
Decrease in trade payables   (17)   (80)
Decrease in other accounts payable   (449)   (802)
Decrease in deferred revenue   -    (268)
Net cash used in operating activities   (3,821)   (3,465)
           
Cash flow from investing activities          
Purchase of property and equipment   (4)   (1)
Investment in available for sale securities   (48,717)   (8,185)
Consideration from sale of available for sale securities   65,647    1,249 
Net cash provided in (used in) investing activities   16,926    (6,937)
           
Cash flow from financing activities          
Proceeds from exercise of options   74    12 
Net cash provided in financing activities   74    12 
           
Decrease (increase) in cash and cash equivalents   13,179    (10,390)
Cash and cash equivalents at the beginning of the period   24,159    13,021 
Cash and cash equivalents at the end of the period  $37,338   $2,631 
           
Supplemental disclosure of cash flow information:          
Cash received from interest  $535   $46 
           
Non-cash transactions          
Recognition of right-of-use asset and lease liability from adoption of ASU 2016-02  $679   $- 

  

The accompanying notes are an integral part of the interim consolidated financial statements.

 

 

 

  

GALMED PHARMACEUTICALS LTD.
Notes to Consolidated Financial Statements

 

Note 1 - Basis of presentation

 

Galmed Pharmaceuticals Ltd. (the “Company”) is a clinical-stage biopharmaceutical company primarily focused on the development of therapeutics for the treatment of liver diseases. The Company was incorporated in Israel on July 31, 2013 and commenced operations on February 2, 2014. The Company holds a wholly-owned subsidiary, Galmed International Ltd., which was incorporated in Malta. Galmed International Ltd. previously held a wholly-owned subsidiary, Galmed Medical Research Ltd., which was incorporated in Israel, and had been an inactive company since 2015 and was liquidated during the first quarter of 2019. The Company also holds a wholly-owned subsidiary, Galmed Research and Development Ltd., which was incorporated in Israel.

  

These unaudited interim consolidated financial statements have been prepared as of March 31, 2019 and for the three months period then ended. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements and the accompanying notes of the Company for the year ended December 31, 2018 that are included in the Company's Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 13, 2019 (the "Annual Report"). The results of operations presented are not necessarily indicative of the results to be expected for the year ending December 31, 2019.

 

Note 2 - Summary of significant accounting policies

 

The significant accounting policies that have been applied in the preparation of the unaudited consolidated interim financial statements are identical to those that were applied in preparation of the Company’s most recent annual financial statements in connection with its Annual Report on Form 20-F except for the adoption of Accounting Standards Update (‘ASU”) 2016-02.

 

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, Leases (Topic 842). This ASU requires entities that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. The Company adopted this ASU effective January 1, 2019 using the modified retrospective application, applying the new standard to leases in place as of the adoption date. Prior periods have not been adjusted.

 

Note 3 - Stockholders' Equity

 

1.During the three months ended March 31, 2019, certain officers and former employees exercised options into 91,023 ordinary shares of the Company, NIS 0.01 par value per share, for total consideration of $74 thousand.

 

2.During the three months ended March 31, 2019, restricted stock units held by certain officers, employees and former employees vested resulting in the issuance of 3,124 ordinary shares of the Company, NIS 0.01 par value per share.

  

 

 

  

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

 

All references to “we,” “us,” “our,” “the Company” and “our Company”, in this Form 6-K are to Galmed Pharmaceuticals Ltd. and its subsidiaries, unless the context otherwise requires. All references to “shares” or “ordinary shares” are to our ordinary shares, NIS 0.01 nominal par value per share. All references to “Israel” are to the State of Israel. “U.S. GAAP” means the generally accepted accounting principles of the United States. Unless otherwise stated, all of our financial information presented in this Form 6-K has been prepared in accordance with U.S. GAAP. Any discrepancies in any table between totals and sums of the amounts and percentages listed are due to rounding. Unless otherwise indicated, or the context otherwise requires, references in this Form 6-K to financial and operational data for a particular year refer to the fiscal year of our company ended December 31 of that year.

 

Our reporting currency and financial currency is the U.S. dollar. In this Form 6-K, “NIS” means New Israeli Shekel, and “$,” “US$” and “U.S. dollars” mean United States dollars.

 

Cautionary Note Regarding Forward-Looking Statements

 

This Form 6-K contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should,” “anticipate,” “could,” “might,” “seek,” “target,” “will,” “project,” “forecast,” “continue” or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. These forward-looking statements may be included in, among other things, various filings made by us with the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the factors summarized below:

 

·the timing and cost of our planned pivotal Phase 3/4 ARMOR trial, or the ARMOR Study, for our product candidate, Aramchol, or whether a pivotal trial will be conducted at all;

 

·completion and receiving favorable results of the ARMOR Study for Aramchol or any other pre-clinical or clinical trial;

 

·regulatory action with respect to Aramchol by the U.S. Food and Drug Administration, or the FDA, or the European Medicines Authority, including but not limited to acceptance of an application for marketing authorization, review and approval of such application, and, if approved, the scope of the approved indication and labeling;

 

·the commercial launch and future sales of Aramchol and any future product candidates;

 

·our ability to comply with all applicable post-market regulatory requirements for Aramchol in the countries in which we seek to market the product;

 

·our ability to achieve favorable pricing for Aramchol;

 

·our expectations regarding the commercial market for non-alcoholic steato-hepatitis, or NASH, in patients;

 

·third-party payor reimbursement for Aramchol;

 

·our estimates regarding anticipated capital requirements and our needs for additional financing;

 

·market adoption of Aramchol by physicians and patients;

 

·the timing, cost or other aspects of the commercial launch of Aramchol;

 

·the development and approval of the use of Aramchol for additional indications or in combination therapy; and

 

·our expectations regarding licensing, acquisitions and strategic operations.

 

 

 

 

We believe these forward-looking statements are reasonable; however, these statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in our Annual Report on Form 20-F for the year ended December 31, 2018 filed with the SEC on March 13, 2019 in greater detail under the heading “Risk Factors” and elsewhere in the Annual Report and this Form 6-K. Given these uncertainties, you should not rely upon forward-looking statements as predictions of future events. 

  

All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date hereof and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.

    

Overview

 

We are a clinical-stage biopharmaceutical company focused on the development of Aramchol, a liver targeted stearoyl-coenzyme A desaturase-1, or SCD1, modulator, first in class, novel, oral therapy for the treatment of NASH for variable populations. In June 2018, we announced top line data from our ARREST Phase 2b clinical study, a multicenter, randomized, double blind, placebo-controlled study, designed to evaluate the efficacy and safety of Aramchol in 247 subjects with NASH, who are overweight or obese, and who are pre-diabetic or type-II-diabetic. We are currently focused on preparing for our Phase 3/4 pivotal ARMOR Study which we plan on commencing in the third quarter of 2019. 

 

Financial Overview

 

To date, we have funded our operations primarily through proceeds from private placements and public offerings. At March 31, 2019, we had current assets of $87.0 million, which consists of cash and cash equivalents of $37.3 million, short-term deposits of $6.1 million and marketable debt securities of $43.1 million. This compares with current assets of $90.4 million at December 31, 2018, which consisted of cash and cash equivalents of $24.2 million, short-term deposits of $6.1 million and marketable debt securities of $60.0 million. Although we provide no assurance, we believe that such existing funds will be sufficient to continue our business and operations as currently conducted for more than 12 months from the date of issuance of this Form 6-K. However, we will continue to incur operating losses, which may be substantial over the next several years, and we may need to obtain additional funds to further develop our research and development programs.

    

Revenues

 

We have entered into a license agreement with Samil Pharma. Co., Ltd., or the Samil Agreement, for the commercialization of Aramchol in Korea. Under the terms of the Samil Agreement, we have received upfront and milestone payments of $3.6 million, and may be eligible to receive up to approximately $4.5 million in additional payments for development and regulatory milestones for Aramchol in the licensed territories.

 

During 2018, when we determined that the achievement of our first milestone was probable, we included the variable consideration of $1.5 million as a part of the transaction price allocated to the combined performance obligation including the delivery of the license and completion of the ARREST study. We will re-evaluate the transaction price in each reporting period when events whose outcomes are resolved or other changes in circumstances occur that would indicate it is appropriate to recognize variable consideration as revenue.

 

 

 

 

Costs and Operating Expenses

 

Our current costs and operating expenses consist of two components: (i) research and development expenses; and (ii) general and administrative expenses.

 

Research and Development Expenses

 

Our research and development expenses consist primarily of outsourced development expenses, salaries and related personnel expenses and fees paid to external service providers, patent-related legal fees, costs of pre-clinical studies and clinical trials and drug and laboratory supplies. We account for all research and development expenses as they are incurred. We expect our research and development expense to remain our primary expense in the near future as we continue to develop Aramchol. Increases or decreases in research and development expenditures are primarily attributable to the number and/or duration of the pre-clinical and clinical studies that we conduct.

 

We expect that a substantial amount of our research and development expense in the future will be incurred in support of our current and anticipated pre-clinical and clinical development projects. Due to the inherently unpredictable nature of pre-clinical and clinical development studies, we are unable to estimate with any certainty the costs we will incur in the continued development of Aramchol for NASH and other indications in our pipeline for potential partnering and/or commercialization. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We currently expect to continue testing Aramchol in pre-clinical studies for toxicology, safety and efficacy, and to conduct additional clinical trials for Aramchol.

 

While we are currently focused on advancing Aramchol's development, our future research and development expenses will depend on the clinical success of Aramchol, as well as ongoing assessments of the Aramchol’s commercial potential. As we obtain results from clinical trials, we may elect to discontinue or delay clinical trials for our product candidate in certain indications in order to focus our resources on more promising indications for such product candidate. Completion of clinical trials may take several years or more, but the length of time generally varies according to the type, complexity, novelty and intended use of a product candidate.

 

We expect our research and development expenses to increase in the future from current levels as we continue to advance of our clinical product development and, potentially, the in-licensing of additional product candidates.

 

The lengthy process of completing clinical trials and seeking regulatory approval for Aramchol requires the expenditure of substantial resources. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Because of the factors set forth above, we are not able to estimate with any certainty when we would recognize any net cash inflows from our projects. 

 

General and Administrative Expenses

 

General and administrative expenses consist primarily of compensation for employees in executive and operational roles, including finance/accounting, legal and other operating positions in connection with our activities. Our other significant general and administrative expenses include non-cash stock-based compensation costs and facilities costs (including the rental expense for our offices in Tel Aviv, Israel), professional fees for outside accounting and legal services, travel costs, investors relations, insurance premiums and depreciation. 

 

Financial Income, Net

 

Our financial income consists mainly of interest income from marketable debt securities and short-term deposits, as well as gains from realization of marketable debt securities and foreign currency gains. Our financial expense consists of fees associated with banking activities and losses from realization of marketable debt securities. 

 

 

 

  

Results of Operations

 

The table below provides our results of operations for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018.

 

   Three months ended March 31, 
   2019   2018 
   (unaudited)   (unaudited) 
   (In thousands, except per share data) 
Revenue   -    268 
Research and development expenses   3,269    1,944 
General and administrative expenses   771    883 
Operating loss   4,040    2,559 
Financial expenses (income), net   (548)   (53)
Net loss   3,492    2,506 
Other comprehensive loss (income):   (36)   29 
Comprehensive loss   3,456    2,535 
Basic and diluted net Loss per share  $0.17   $0.17 

 

Revenue

 

During the three months ended March 31, 2019 we had no licensing revenue, as compared to approximately $0.3 million for three months ended March 31, 2018. The revenue in 2018 resulted from the amortization of the up-front payments under the license agreement with Samil Pharm.

 

Research and Development Expenses

 

Our research and development expenses amounted to approximately $3.3 million during the three months ended March 31, 2019 representing an increase of approximately $1.4 million, or 74%, compared to approximately $1.9 million for the comparable period in 2018.

 

The increase during the three months ended March 31, 2019 primarily resulted from an increase of approximately $0.9 million in drug development expenses in connection with the manufacturing of Aramchol for our planned ARMOR study, as compared to such expenses for the comparable period in 2018.

 

General and Administrative Expenses

 

Our general and administrative expenses amounted to approximately $0.8 million during the three months ended March 31, 2019 representing a decrease of approximately $0.1 million, or 11%, compared to approximately $0.9 million for the comparable period in 2018.

 

The decrease during the three months ended March 31, 2019 primarily resulted from a decrease of approximately $0.1 million in professional fees, as compared to such expenses for the comparable period in 2018.

 

Operating Loss

 

As a result of the foregoing, for the three months ended March 31, 2019, our operating loss was approximately $4.0 million, representing an increase of $1.4 million, or 54%, as compared to approximately $2.6 million for the comparable prior year period. The increase for the three months ended March 31, 2019 primarily resulted from an increase in our research and development expenses.

 

Financial Income, Net

 

Our financial income, net amounted to approximately $0.5 million during the three months ended March 31, 2019, compared to $0.05 million for the comparable period in 2018. The increase during the three months ended March 31, 2019 primarily resulted from an increase in interest income as compared to such income for the comparable period in 2018.

 

Net Loss

 

As a result of the foregoing, for the three months ended March 31, 2019, our net loss was $3.5 million, representing an increase of $1.0 million, or 40%, as compared to approximately $2.5 million for the comparable prior year period.

 

 

 

  

Liquidity and Capital Resources

 

To date, we have funded our operations primarily through proceeds from private placements and public offerings. Under our existing “at the market” equity offering program, or the ATM offering, as of the date hereof, we may sell, from time to time, up to approximately $32.0 million of additional ordinary shares.

 

We have incurred substantial losses since our inception. As of March 31, 2019, we had an accumulated deficit of approximately $90.0 million and positive working capital (current assets less current liabilities) of approximately $85.0 million. We expect that operating losses will continue for the foreseeable future.

 

As of March 31, 2019, we had cash and cash equivalents of approximately $37.4 million, short-term deposits of approximately $6.1 million and marketable debt securities of approximately $43.1 million invested in accordance with our investment policy, totaling approximately $86.6 million, as compared to approximately $24.2 million, $6.1 million and $60.0 million as of December 31, 2018, totaling approximately $90.2 million. The decrease is mainly attributable to our $3.8 million negative cash flow from operating during the three months ended March 31, 2019.

 

We had negative cash flow from operating activities of approximately $3.8 million for the three months ended March 31, 2019, as compared to negative cash flow from operating activities of approximately $3.5 million for the three months ended March 31, 2018. The negative cash flow from operating activities for the three months ended March 31, 2019 is mainly attributable to our net loss of approximately $3.5 million.

 

We had positive cash flow from investing activities of approximately $17.0 million for the three months ended March 31, 2019, as compared to a negative cash flow from investing activities of approximately $7.0 million for the three months ended March 31, 2018. The positive cash flow from investing activities for the three months ended March 31, 2019 was primarily due to the net sale of marketable debt securities.

 

We had positive cash flow from financing activities of approximately $0.1 million for the three months ended March 31, 2019, as compared to a positive cash flow from financing activities of approximately $0.01 million for the three months ended March 31, 2018. The positive cash flow from financing activities for the three months ended March 31, 2019 was due to proceeds from exercise of options.

 

Although we provide no assurance, we believe that such existing funds will be sufficient to continue our business and operations as currently conducted for more than 12 months from the date of issuance of this Form 6-K.

 

Our future capital requirements will depend on many other factors, including: 

 

  · the progress and costs of our pre-clinical studies, clinical trials and other research and development activities;

 

  · the scope, prioritization and number of our clinical trials and other research and development programs;

 

  · the amount of revenues and contributions we receive under future licensing, development and commercialization arrangements with respect to Aramchol;

 

  · the costs of the development and expansion of our operational infrastructure;

 

  · the costs and timing of obtaining regulatory approval for Aramchol;

 

  · the ability of us, or our collaborators, to achieve development milestones, marketing approval and other events or developments under our potential future licensing agreements;

 

  · the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

 

  · the costs and timing of securing manufacturing arrangements for clinical or commercial production;

 

  · the costs of contracting with third parties to provide sales and marketing capabilities for us;

 

  · the costs of acquiring or undertaking development and commercialization efforts for any future products, product candidates or platforms;

 

  · the magnitude of our general and administrative expenses; and

 

  · any cost that we may incur under future in- and out-licensing arrangements relating to Aramchol.

 

 

 

 

Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through the net proceeds from our initial public offering, debt or equity financings (such as the ATM Offering) or by out-licensing applications of Aramchol. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of or eliminate research or development plans for, or commercialization efforts with respect to, one or more applications of Aramchol. This may raise substantial doubts about the Company’s ability to continue as a going concern.

  

Trend Information

 

We are a development stage company, and it is not possible for us to predict with any degree of accuracy the outcome of our research, development or commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

  

Controls and Procedures

 

As a “foreign private issuer”, we are only required to conduct the evaluations required by Rules 13a-15(b) and 13a-15(d) of the Exchange Act as of the end of each fiscal year and therefore have elected not to provide disclosure regarding such evaluations at this time.

 

 

 

  

EXHIBIT INDEX

 

Exhibit No.   Description
     
99.1   Press Release, dated May 7, 2019

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Galmed Pharmaceuticals Ltd.
     
Date:  May 7, 2019 By: /s/ Allen Baharaff
    Allen Baharaff
    President and Chief Executive Officer

 

 

 

 

Exhibit 99.1

 

Galmed Pharmaceuticals Provides Business Update and Reports First Quarter 2019 Financial Results

 

- Conference Call and Webcast Today at 8:30 a.m. EST / 5:30 a.m. PST -

 

TEL AVIV, Israel, May 7, 2019 - Galmed Pharmaceuticals Ltd. (Nasdaq: GLMD) (“Galmed” or the “Company”), a clinical-stage biopharmaceutical company focused on the development of the liver targeted SCD1 modulator Aramchol™, an oral therapy for the treatment of nonalcoholic steatohepatitis, or NASH and fibrosis, provides today updated information on the Company’s clinical development program and reports financial results for the three months ended March 31, 2019. The Company will host a conference call and webcast at 08:30 ET today.

 

Business Update

 

Completion of End of Phase 2 Meeting With FDA

 

In April 2019, the Company announced that it completed its End-of-Phase 2 meeting with the Food and Drug Administration (FDA) and reached general agreement on key aspects of the Phase 3/4 development and registration plan for Aramchol and on the pivotal registration study ARMOR. General agreement has been reached with FDA on key aspects of the ARMOR study including patient population, study endpoints, study dose and treatment duration.

 

Updates on the ARMOR study design

 

The planned Phase 3/4 ARMOR study is a multi-national, multi-center, randomized, double blind, placebo-controlled study designed to evaluate the efficacy and safety of Aramchol as compared to placebo in subjects with NASH and fibrosis. The ARMOR study will enroll subjects with pre-diabetes or type II diabetes, overweight or obese and a baseline fibrosis score of 2-3. The study is designed to consist of two parts. In the first part (histology-based) subjects will be treated with Aramchol or matching placebo for 52 weeks until the second biopsy. In the second part (clinically-based), subjects will continue with the same treatment assignment until study completion to confirm clinical efficacy. Assuming the results in the first part are positive, the Company plans to submit a marketing authorization application under regulatory provisions of accelerated/conditional approval.

 

The ARMOR study will evaluate the safety and efficacy of Aramchol and is expected to enroll approximately 2000 patients dosed with 300mg of Aramchol twice daily or placebo in a 2:1 randomization ratio. The Company plans to perform an analysis of the primary histology-based endpoints after the first 1,200 patients complete 52 weeks of treatment. The trial is being powered to meet the two alternative key histology-based endpoints: (i) NASH resolution without worsening of liver fibrosis, and (ii) fibrosis improvement without NASH worsening. Under FDA guidance, meeting one of these endpoints is expected to suffice for the study success of the first part.

 

The Company plans on opening around 150 recruiting sites around the globe including in the U.S., Europe, Latin America and Asia.

 

The Company is on track to submit its study protocol and other design elements of its ARMOR trial to the FDA this quarter with study commencement expected in the third quarter of 2019. Following commencement, the Company anticipates completion of randomization within 18 months and based on current timelines, the Company aims to report the results of the first part of the study in the fourth quarter of 2022.

  

Financial Summary - First Quarter 2019 vs. First Quarter 2018:

 

·Cash and cash equivalents, short-term deposits and marketable debt securities totaled $86.6 million as of March 31, 2019, compared to $90.2 million at December 31, 2018.

 

·Net loss amounted to $3.5 million, or $0.17 per share, for the three months ended March 31, 2019, compared to a net loss of $2.5 million, or $0.17 per share, for the three months ended March 31, 2019.

 

·Research and development expenses amounted to approximately $3.3 million for the three months ended March 31, 2019, compared to approximately $1.9 million for the three months ended March 31, 2018. The increase resulted primarily from an increase in expenses in connection with the manufacturing of Aramchol for the ARMOR study.

 

·General and administrative expenses amounted to approximately $0.8 million for the three months ended March 31, 2019, compared to approximately $0.9 million for the three months ended March 31, 2018. The decrease in general and administrative expenses for the three months ended March 31, 2019 resulted primarily from a decrease in professional fees.

 

·Financial income, net amounted to $0.5 million for the three months ended March 31, 2019, compared to financial income, net of $0.1 million for the three months ended March 31, 2018. The increase primarily relates to an increase in financial income from financial assets.

 

 

 

 

 

 

 

Conference Call & Webcast:

Tuesday, May 7th @ 8:30am Eastern Time.
Within the US: 1-855-327-6837
Outside the US: 1-631-891-4304
Israel Toll Free: 1 809 458 327
Conference ID: 10006680
Webcast: http://public.viavid.com/index.php?id=134310
   
Replay Dial-In Numbers
Toll Free:  1-844-512-2921
Toll/International:  1-412-317-6671
Replay Pin Number:  10006680
Replay Start:  Tuesday May 7, 2019, 11:30 AM ET
Replay Expiry:  Tuesday May 21, 2019, 11:59 PM ET

 

About Aramchol and Non-alcoholic Steatohepatitis (NASH)

Aramchol (arachidyl amido cholanoic acid) is a novel fatty acid bile acid conjugate, inducing beneficial modulation of intra-hepatic lipid metabolism. Aramchol's ability to modulate hepatic lipid metabolism was discovered and validated in animal models, demonstrating downregulation of the three key pathologies of NASH: steatosis, inflammation and fibrosis. The effect of Aramchol on fibrosis is mediated by downregulation of steatosis and directly on human collagen producing cells. Aramchol has been granted Fast Track designation status by the FDA for the treatment of NASH.

 

NASH is an emerging world crisis impacting an estimated 3% to 5% of the U.S. population and an estimated 2% to 4% globally. It is the fastest growing cause of liver cancer and liver transplant in the U.S. due to the rise in obesity. NASH is the progressive form of non-alcoholic fatty liver disease that can lead to cardiovascular disease, cirrhosis and liver-related mortality.

 

About Galmed Pharmaceuticals Ltd.

Galmed is a clinical-stage biopharmaceutical company focused on the development of Aramchol, a first in class, novel, oral therapy for the treatment of NASH for variable populations. Galmed recently announced top-line results of the ARREST Study, a multicenter, randomized, double blind, placebo-controlled Phase 2b clinical study designed to evaluate the efficacy and safety of Aramchol in subjects with NASH, who are overweight or obese, and who are pre-diabetic or type-II-diabetic. Galmed is currently preparing to initiate a Phase 3/4 clinical study in the third quarter of 2019. 

 

Forward-Looking Statements:

This press release may include forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to Galmed's objectives, plans and strategies, as well as statements, other than historical facts, that address activities, events or developments that Galmed intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as "believes," "hopes," "may," "anticipates," "should," "intends," "plans," "will," "expects," "estimates," "projects," "positioned," "strategy" and similar expressions and are based on assumptions and assessments made in light of management's experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Many factors could cause Galmed's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: the timing and cost of Galmed's planned pivotal Phase 3/4 ARMOR trial, or the ARMOR Study or whether a pivotal trial will be conducted at all; completion and receiving favorable results of the ARMOR Study for Aramchol or any other pre-clinical or clinical trial; regulatory action with respect to Aramchol by the FDA or the EMA; the commercial launch and future sales of Aramchol or any other future products or product candidates; Galmed's ability to comply with all applicable post-market regulatory requirements for Aramchol in the countries in which it seeks to market the product; Galmed's ability to achieve favorable pricing for Aramchol; Galmed's expectations regarding the commercial market for NASH patients; third-party payor reimbursement for Aramchol; Galmed's estimates regarding anticipated capital requirements and Galmed's needs for additional financing; market adoption of Aramchol by physicians and patients; the timing, cost or other aspects of the commercial launch of Aramchol; the development and approval of the use of Aramchol for additional indications or in combination therapy; and Galmed's expectations regarding licensing, acquisitions and strategic operations. More detailed information about the risks and uncertainties affecting Galmed is contained under the heading "Risk Factors" included in Galmed's most recent Annual Report on Form 20-F filed with the SEC on March 13, 2019, and in other filings that Galmed has made and may make with the SEC in the future. The forward-looking statements contained in this press release are made as of the date of this press release and reflect Galmed's current views with respect to future events, and Galmed does not undertake and specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

CONTACT:

Guy Nehemya, Chief Operating Officer

Galmed Pharmaceuticals Ltd.

guy@galmedpharma.com

 

 

 

 

 

 

GALMED PHARMACEUTICALS LTD.
Consolidated Balance Sheets

U.S. Dollars in thousands, except share data and per share data

 

  

As of

March 31,

2019

  

As of

December 31,

2018

 
   Unaudited   Audited 
Assets          
Current assets          
Cash and cash equivalents  $37,338   $24,159 
Short-term deposits   6,112    6,067 
Marketable debt securities   43,112    59,962 
Other accounts receivable   417    218 
Total current assets   86,979    90,406 
           
Right of use assets   668    - 
Property and equipment, net   189    194 
Total non-current assets   857    194 
           
Total assets  $87,836   $90,600 
           
Liabilities and stockholders' equity          
           
Current liabilities          
Trade payables  $1,797   $1,814 
Other accounts payable   612    892 
Total current liabilities   2,409    2,706 
           
Non-current liabilities          
Lease obligation  $499   $- 
Total non-current liabilities   499    - 
           
Ordinary shares par value NIS 0.01 per share; Authorized 50,000,000; Issued and outstanding: 21,113,066 shares as of March 31, 2019; 21,018,919  shares as of December 31, 2018   58    58 
Additional paid-in capital   174,812    174,322 
Accumulated other comprehensive gain (loss)   25    (11)
Accumulated deficit   (89,967)   (86,475)
Total stockholders' equity   84,928    87,894 
           
Total liabilities and stockholders' equity  $87,836   $90,600 

 

 

 

 

 

 

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Operations (Unaudited)

U.S. Dollars in thousands, except share data and per share data

 

  

Three months ended

March 31,

 
   2019   2018 
Revenue  $-   $268 
           
Research and development expenses   3,269    1,944 
           
General and administrative expenses   771    883 
           
Total operating expenses   4,040    2,559 
           
Financial income, net   (548)   (53)
           
Net loss  $3,492   $2,506 
           
Basic and diluted net loss per share from continuing operation  $0.17   $0.17 
           
Weighted-average number of shares outstanding used in computing basic and diluted net loss per share   21,084,329    14,467,627 

 

 

  

 

 

 

 

GALMED PHARMACEUTICALS LTD.
Consolidated Statements of Cash Flows (Unaudited)

U.S. Dollars in thousands

 

  

Three months ended

March 31,

 
   2019   2018 
Cash flow from operating activities          
           
Net loss  $(3,492)  $(2,506)
           
Adjustments required to reconcile net loss to net cash used in operating activities          
Depreciation and amortization   9    59 
Stock-based compensation expense   416    330 
Amortization of discount (premium) on marketable debt securities   (39)   9 
Interest income from short-term deposits   (45)   - 
Loss (gain) from realization of marketable debt securities   (5)   3 
Changes in operating assets and liabilities:          
Increase in other accounts receivable   (199)   (210)
Decrease in trade payables   (17)   (80)
Decrease in other accounts payable   (449)   (802)
Decrease in deferred revenue   -    (268)
Net cash used in operating activities   (3,821)   (3,465)
           
Cash flow from investing activities          
Purchase of property and equipment   (4)   (1)
Investment in available for sale securities   (48,717)   (8,185)
Consideration from sale of available for sale securities   65,647    1,249 
Net cash provided in (used in) investing activities   16,926    (6,937)
           
Cash flow from financing activities          
Proceeds from exercise of options   74    12 
Net cash provided in financing activities   74    12 
           
Decrease (increase) in cash and cash equivalents   13,179    (10,390)
Cash and cash equivalents at the beginning of the period   24,159    13,021 
Cash and cash equivalents at the end of the period  $37,338   $2,631 
           
Supplemental disclosure of cash flow information:          
Cash received from interest  $535   $46 
           
Non-cash transactions          
Recognition of right-of-use asset and lease liability from adoption of ASU 2016-02  $679   $-