Galectin Therapeutics Inc. (NASDAQ: GALT), the leading developer of
therapeutics that target galectin proteins, today released this
open letter to stockholders written by its Board Chair Richard E.
Uihlein. The letter reads as follows:
Dear Fellow Stockholder:
As Chairman of Galectin Therapeutics and its
largest individual shareholder, I wanted to address you
directly.
As you may know, I have been on the board for
slightly over a year and Chairman since May 2018. While my
message relates primarily to the Company’s Rights Offering that was
announced today, I also thought it was important to share some of
my other thoughts about the Company.
Before I speak about anything else, I would like to
categorically state that I believe in free market capitalism and
its inherent power to improve and save lives. No other system
has proven to possess this ability, and in fact other systems tend
to yield the opposite result. My belief in the power of free
market capitalism extends from technical innovation to transparency
in most aspects of society. I intend to cover both aspects as
they relate to Galectin Therapeutics.
My involvement in the Company spans many
years. Like many of you, I was drawn to this investment not
only for its potential return, but also for its goal to save and
change lives. And now that we prepare to commence our NASH-RX
Phase 3 clinical trial of GR-MD-02, I hope to use the power of our
free market system to that end.
In the past and before I became a member of the
Board my large investments in the Company were not effectuated in
public offerings. While these investments were transparent
after their completion, and I believe fairly priced, I have learned
that other stockholders have expressed that they would like to have
been offered the same opportunity to invest and receive the warrant
coverage provided in those transactions, which was typical in
non-public offerings. Regardless of the past,
today the Company under my board leadership is going to change the
trajectory of our equity raises, and I believe in doing so we will
change how we are perceived in the market.
The Rights Offering we are announcing today will
achieve several goals. First, as Chairman and an investor, I
am growing impatient with the perception by some that we lack the
wherewithal to launch and manage a Phase 3 clinical trial.
This Rights Offering responds to that concern and is the lead and
critical first step in the financial plan to fund the
trial.
I am proud of our Board, our management team, our
employees and our researchers for their accomplishments and the
hard work that they have done to get us to this point. I also
appreciate the dedication and commitment of patients who
participated in our year-long Phase 2 trial and of the clinical
investigators who have helped us in the development, design and
execution of our past trials and who have and will continue to work
with us in the design and conduct of this Phase 3 trial. I am
also appreciative of the fact that we have many long-standing
stockholders who have stayed with the Company over the years.
With this last point in mind, there is simply no way I am going to
allow a massive dilution of our stock at this point without first
affording an opportunity to all of our stockholders, large and
small, to maintain their pro-rata ownership. While I can’t
assure you that some type of traditional institutional financing
won’t ever occur in the future, at this time we are not going to
pursue that path. In many cases with companies like ours,
financings require large discounts to market and very significant
warrant coverage. My goal is to limit that dilution.
Instead, I want to invite you, my co-investors, to
invest along side of me. The Registration Statement filed
today details the offer and the risks. When it goes
effective, a copy will be sent to you or your broker. You
should read it carefully. In this Rights Offering, all
stockholders, pro-rata, will have the same deal and the same
opportunity. Through it every stockholder on the record date,
which we have not yet set, will have the ability to help fund our
trial, and by doing so offset the dilution that the stockholder
would otherwise realize. Potential new investors will have to
purchase shares in the open market and hold them on the record date
to participate in the rights offering. Stockholders
participating will also obtain modest warrant coverage. In
addition, stockholders will have the ability to oversubscribe so as
to purchase the shares and obtain the warrants offered to
stockholders who elect not to participate.
My intention is to personally subscribe $20 million
dollars in this offering. This would be a significant portion
of the total we hope to raise in this round.
In my new role as Chairman, I have another goal I
want to achieve. As Chairman of my private company, I always
strive to take an equitable approach to my shareholders, my family,
and my employees. As Chairman of Galectin Therapeutics, it is
my full intention to treat you with the same respect. I hope
this Rights Offering not only demonstrates this but changes the
public perception of our Company. I am listening to you, and
together we can put the Company in a financial position so that it
can embark on the Phase 3 Clinical trial that we hope will
demonstrate the efficacy of our drug candidate, GR-MD-02.
If there are questions or comments, I invite you to
reach out to me via email to chairman@galectintherapeutics.com or
phone at 1 (202) 450-8142.
Sincerely,
Richard E. Uihlein
About Galectin Therapeutics
Galectin Therapeutics is dedicated to developing
novel therapies to improve the lives of patients with chronic liver
disease and cancer. Galectin’s lead drug (GR-MD-02) is a
carbohydrate-based drug that inhibits the galectin-3 protein which
is directly involved in multiple inflammatory, fibrotic, and
malignant diseases. The lead development program is in
non-alcoholic steatohepatitis (NASH) with cirrhosis, the most
advanced form of NASH related fibrosis. This is the most common
liver disease and one of the largest drug development opportunities
available today. Additional development programs are in treatment
of severe atopic dermatitis, moderate-to-severe plaque psoriasis,
and in combination immunotherapy for advanced melanoma and other
malignancies; advancement of these additional clinical programs is
largely dependent on finding a suitable partner. Galectin seeks to
leverage extensive scientific and development expertise as well as
established relationships with external sources to achieve
cost-effective and efficient development. Additional information is
available at www.galectintherapeutics.com.
About Richard E. Uihlein
Richard E. Uihlein, a director since 2017,
co-founded Uline, Inc. (a leading distributor of shipping,
packaging and industrial supplies) in 1980, and has served as its
Chief Executive Officer and Chairman since its founding. Prior to
founding Uline Inc., Mr. Uihlein was employed at General Bindings
Corp., Northbrook, IL from 1967 to 1980. Mr. Uihlein graduated from
Stanford University, Palo Alto, CA. with a BA degree in history in
1967.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements relate to future events or
future financial performance, and use words such as “may,”
“estimate,” “could,” “expect”, “intend” and others. They are based
on management’s current expectations and are subject to factors and
uncertainties that could cause actual results to differ materially
from those described in the statements. These statements include
those regarding the hope that Galectin’s development program for
GR-MD-02 will lead to the first therapy for the treatment of fatty
liver disease with cirrhosis and those regarding the hope that our
lead compounds will be successful in the treatment of severe atopic
dermatitis, moderate-to-severe plaque psoriasis and in cancer
immunotherapy and in other therapeutic indications. Factors that
could cause actual performance to differ materially from those
discussed in the forward-looking statements include, among others,
that Galectin may not be successful in developing effective
treatments and/or obtaining the requisite approvals for the use of
GR-MD-02 or any of its other drugs in development; the Company may
not be successful in scaling up manufacturing and meeting
requirements related to chemistry, manufacturing and control
matters; the Company’s currently planned clinical trial and any
future clinical studies may not produce positive results in a
timely fashion, if at all, and could prove time consuming and
costly; plans regarding development, approval and marketing of any
of Galectin’s drugs are subject to change at any time based on the
changing needs of the Company as determined by management and
regulatory agencies; regardless of the results of any of its
development programs, Galectin may be unsuccessful in developing
partnerships with other companies or raising additional capital
that would allow it to further develop and/or fund any studies or
trials. Galectin has incurred operating losses since
inception, and its ability to successfully develop and market drugs
may be impacted by its ability to manage costs and finance
continuing operations. For a discussion of additional factors
impacting Galectin’s business, see the Company’s Annual Report on
Form 10-K for the year ended December 31, 2018, and subsequent
filings with the SEC. You should not place undue reliance on
forward-looking statements. Although subsequent events may cause
its views to change, management disclaims any obligation to update
forward-looking statements.
Contact:Jack Callicutt, Chief Financial
Officer(678) 620-3186ir@galectintherapeutics.com
Galectin Therapeutics and its associated logo is
a registered trademark of Galectin Therapeutics Inc.
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