Galmed Pharmaceuticals Reports First Quarter 2016 Financial Results and Provides Business Update

TEL AVIV, Israel, May 16, 2016 /PRNewswire/ -- Galmed Pharmaceuticals Ltd. (Nasdaq: GLMD) ("Galmed" or the "Company"), a clinical-stage biopharmaceutical company focused on the development of a once-daily, oral therapy for the treatment of liver diseases, today reported financial results for the three months ended March 31, 2016. The Company will host a conference call and webcast today to discuss the financial results and to provide an update on current developments with respect to its clinical programs for Aramchol™.

Financial Summary – First Quarter 2016 vs. First Quarter 2015:

Net loss of $4.0 million, or $0.36 per share, for the three months ended March 31, 2016, compared to a net loss of $2.5 million, or $0.22 per share, for the three months ended March 31, 2015. This period's net loss included $0.3 million of non-cash, stock-based compensation expense, versus $0.6 million of non-cash stock-based compensation expense incurred during the corresponding period in 2015. The increase in net loss was due primarily to increased research and development expenses.

Research and development expenses of $3.4 million for the three months ended March 31, 2016, compared to $1.4 million for the three months ended March 31, 2015. The increase resulted primarily from an increase in research and development subcontractor expenses of $1.6 million in connection with significant growth in subject screening and patient recruitment, as well as initiating additional clinical testing sites for the ARREST Study.

General and administrative expenses of $0.7 million for the three months ended March 31, 2016, compared to $1.1 million for the three months ended March 31, 2015. The decrease in 2016 resulted primarily from lower non-cash stock-based compensation.

Financial income of $0.1 million for the three months ended March 31, 2016, compared to a financial income of $0.04 million for the three months ended March 31, 2015. The increase in 2016 financial income resulted primarily from movement in foreign currency exchange rates.

Cash and cash equivalents and marketable securities, or current assets, totaled $20.0 million as of March 31, 2016, compared to $23.0 million at December 31, 2015. The decrease in the first quarter of 2016 resulted primarily from our ongoing clinical studies and operational activities. Galmed continues to expect that its cash balance will be sufficient to maintain its current operations into the second half of 2017.

"The significant increase in R&D activities and the momentum we are seeing in the ARREST Study patient recruitment pace continues to support our previously stated timelines concerning the ARREST Study," stated Allen Baharaff, Galmed's President and Chief Executive Officer. "Specifically, as previously disclosed, we are currently on track to have 120 patients enrolled by the end of the second quarter of 2016 and 240 patients by the end of the fourth quarter of 2016."

Mr. Baharaff continued, "Worldwide, we have now screened over 575 subjects for the ARREST Study, a 37% increase since our last public disclosure on March 22, 2016, less than 2 months ago. As of yesterday, May 15, 2016, we had randomized 107 patients (+43% since March 22, 2016) and have another 6 subjects who are eligible to be randomized. In addition, 81 subjects are currently within the screening process, which, again, normally takes between 6-8 weeks."

Josh Blacher, Galmed's Chief Financial Officer, commented, "During the first quarter 2016, our G&A expense decreased by a total of 8% quarter-over-quarter, excluding the effect of non-cash based compensation. Additionally, the expenses associated with R&D and G&A improved from 68% R&D / 32% G&A in the fourth quarter of 2015, to 85% R&D / 15% G&A in the first quarter of 2016. We will continue to remain vigilant about our G&A spend."

Mr. Baharaff continued, "We recently announced an investigator initiated clinical trial agreement with the Icahn School of Medicine at Mount Sinai for a study testing the effect of a combination of Aramchol™ with Vitamin D. Combination therapy has been widely accepted by the scientific community as the future direction of treating NASH. Aramchol™, with its strong safety profile and promising efficacy, together with Vitamin D, which is emerging as an anti-fibrotic agent, is the first NASH combo treatment to enter a Phase IIa study. This innovative dual therapy is a natural expansion of our pipeline in addition to the ongoing ARREST and ARRIVE studies."

Mr. Baharaff concluded, "We are encouraged by the recent preclinical data announced in March demonstrating Aramchol™'s direct anti-fibrotic effect, which, together with its clinically-demonstrated effect on steatosis, provides a strong foundation for Aramchol™ development to address the full spectrum of NAFLD and NASH through a comprehensive portfolio approach, rather than a single 'shot-on-goal."

About Galmed Pharmaceuticals Ltd.:

Galmed is a clinical-stage biopharmaceutical company focused on the development of a novel, once-daily, oral therapy for the treatment of liver diseases utilizing its proprietary first-in-class family of synthetic fatty-acid/bile-acid conjugates, or FABACs. Galmed believes that its product candidate, Aramchol™, has the potential to be a disease modifying treatment for fatty liver disorders, including NASH, which is a chronic disease that Galmed believes constitutes a large unmet medical need. Galmed is currently conducting the ARREST Study, a multicenter, randomized, double blind, placebo-controlled Phase IIb 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. More information about the ARREST Study may be found on ClinicalTrials.gov identifier: NCT02279524.

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. Applicable risks and uncertainties include those identified under the heading "Risk Factors" included in Galmed's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission, or the SEC, on March 22, 2016, 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.

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SOURCE Galmed Pharmaceuticals Ltd.

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