Galecto, Inc. Reports Financial Developments, Restructuring Efforts, and Strategic Shift in Recent 10-Q Filing

Galecto, Inc. reported significant financial developments in its recent 10-Q filing for the quarter ending September 30, 2024. The company, which focuses on developing therapeutics for fibrotic diseases and cancer, has not generated any revenue as none of its products have received regulatory approval.

As of September 30, 2024, Galecto's cash and cash equivalents stood at $19.7 million, a decrease from $21.5 million at the end of 2023. Total current assets also fell to $21.2 million from $36.8 million, while total assets decreased to $23.4 million from $38.2 million during the same period. The company reported total stockholders' equity of $20.9 million, down from $32.3 million at the end of 2023.

Operating expenses for the three months ended September 30, 2024, were $3.8 million, a substantial reduction of 55.3% compared to $8.6 million in the same quarter of 2023. For the nine-month period, operating expenses decreased by 54.4% to $15.2 million from $33.2 million in the prior year. This reduction in expenses contributed to a net loss of $3.9 million for Q3 2024, down from $8.1 million in Q3 2023, and a net loss of $14.7 million for the nine months ended September 30, 2024, compared to $31.9 million for the same period in 2023.

The company undertook significant restructuring efforts, including a workforce reduction of approximately 70% in September 2023, followed by an additional reduction of eight employees in May 2024. These actions were part of a strategic review process initiated to conserve cash resources. As a result, restructuring costs decreased significantly, with no costs incurred in Q3 2024 compared to $2.7 million in Q3 2023.

In a strategic shift, Galecto entered into an Asset Purchase Agreement with Bridge Medicines on October 7, 2024, acquiring global rights to the BRM-1420 program, a dual inhibitor for acute myeloid leukemia (AML), for $4.4 million. This acquisition included the issuance of common and preferred stock. The company is now focusing on the development of BRM-1420 and GB1211, while deciding not to advance its LOXL-2 inhibitor candidate, GB2064.

As of September 30, 2024, Galecto reported an accumulated deficit of $270.8 million since its inception in 2011. The company anticipates significant increases in expenses as it advances its product candidates through clinical development and regulatory approvals, with current cash reserves expected to fund operations for at least the next twelve months. Future funding will depend on various factors, including the progress of product candidates and the ability to raise additional capital.