Galectin Therapeutics Inc (GALT) Springs Up 18% as Illinois Businessman Pours Millions in Credit to Finance NASH Therapy Development
Galectin Therapeutics Inc (NASDAQ:GALT) shares are jumping almost 18% today on the heels of the drug maker walking into a credit line to the sweet tune of $10 million. New director Richard E. Uihlein and Illinois businessman believes that with his company now having an unsecured line of credit facility with stockholders worth millions, GALT in turn gains enough funds to cover pipeline development in NASH into 2019.
“I have been a shareholder and supporter of Galectin Therapeutics for many years, and I am very encouraged by the Company’s positive efficacy results in its NASH-CX trial for patients with cirrhosis due to NASH. My desire to provide this credit line was to assist the Company with favorable financing while it continues to progress the drug towards the goal of bringing therapy and hope to a large number of patients who have no currently approved treatment options,” said Richard E. Uihlein.
Borrowings under the credit line are at the Company’s discretion through December 31, 2018. Advances under the line of credit bear interest at the applicable Federal Rate for short term loans, which is currently 1.51%. Principal and interest are due on December 31, 2019 unless prepaid sooner in the sole discretion of the Company. The Company granted one million stock purchase warrants exercisable at $5.00 per share in connection with entering the line of credit. Half of the warrants vested at signing and half vest ratably with borrowings under the facility.
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Richard E. Uihlein was elected to the board of directors of the Company at its annual meeting of stockholders on December 14, 2017. Mr. Uihlein also owns directly or indirectly more than 5% of the outstanding common stock in the Company.
“Mr. Uihlein is a tremendous supporter of the Company. We very much appreciate his commitment to serve on our board, and we thank him for this additional investment. By eliminating pressure to potentially consummate a very dilutive financing, we now believe we have financing resources to cover currently planned expenditures through 2018 and can focus on strategic plans regarding advancing GR-MD-02 for treatment of NASH patients with cirrhosis without varices,” said Dr. Peter G. Traber, M.D., CEO and CMO of Galectin Therapeutics.
TipRanks points to a Wall Street racing with bulls celebrating GALT's robust financing today, with all 3 analysts polled in the last 3 months rating a Buy on GALT stock. With a meaningful return potential of 163%, the stock's consensus target price stands at $6.00.
