Stifel starts Galmed Pharma at buy; PT $35

iStock-461064735.jpg

Stifel launched coverage of Galmed Pharmaceuticals (NASDAQ:GLMD) with a “buy” rating and price target of $35. The stock closed at $12.77 on July 12.

“We think Galmed's lead, wholly-owned asset, Aramchol, has proven itself in a recent Phase 2b trial (ARREST) as a clearly active and very safe compound for treating NASH, a highly unmet medical need and a projected multi-billion dollar market opportunity,” writes analyst Adam Walsh. 

“We and key opinion leaders view the data positively, particularly the strong trends observed on the two NASH regulatory approvable endpoints (nearly statistical significance on one … despite not being powered for this), as well as clinically meaningful NASH resolution,” he added. 

Mr. Walsh expects full data to be released at American Association for the Study of Liver Diseases conference in November 2018. 

He said a Phase 3 trial is planned for the first half of 2019 and “we think an Aramchol partnership deal (either geographic or for combination use) has a decent chance of materializing ahead of that.” 

With a legitimate late-stage NASH drug in Aramchol, and a market cap of less than $300-million, compared with competitors Madrigal at $4.5-billion and Intercept Pharmaceuticals at $2.4-billion, “Galmed holds excellent upside potential, in our view,” Mr. Walsh said. 

Stephen Kilmer