Additional law firms investigate Galectin over potential liver drug

Three more law firms have initiated investigations into potential violations of securities laws by officers of Galectin Therapeutics, according to multiple press releases.

Ryan & Maniskas; Harwood Feffer; and Barrack, Rodos & Bacine have begun investigations against the pharmaceutical company after it announced results earlier this week from its phase 1 clinical trial for GR-MD-02. The galectin inhibitor and complex carbohydrate molecule is used to treat patients with nonalcoholic steatohepatitis and advanced fibrosis.

Earlier this week, Bronstein, Gewirtz & Grossman announced it had begun investigating Galectin on behalf of purchasers of Galectin securities to determine “whether the company and certain of its executives violated federal securities laws,” according to a previous press release. The release said an online article on July 28 alleged that Galectin had hired a stock promotions firm “to tout its stock” and was the reason for the investigation.

According to the release from Harwood Feffer, “according to the [online] report [of July 28], corporate insiders sold millions of dollars in stock during the stock promotion.”

The statement from Ryan & Maniskas said the investigation relates to publication of the July 28 article “that disclosed the company had hired a stock promotions firm to tout its securities.”

Barrack, Rodos & Bacine are investigating possible violations of a federal securities law, including unlawful insider trading, between July 9, 2013 and July 28, 2014, according to a press release. This release said the investigation stems from the same article that alleges Galectin hired “TDM Financial, a penny-stock promotions firm, to undertake promotional campaigns to entice investors to buy its stock.”

Galectin has received negative criticism for the clinical results on various social media sites, indicating that the results for the second cohort in its phase 1 clinical trial of GR-MD-02 showed very little difference from a placebo. Galectin’s stock closed down 60.08% July 29, the day after the results were announced, according to a press release.

Galectin released a statement on July 30 defending the results of its clinical trial with GR-MD-02.

“While the results of the clinical trial were positive, the market reacted negatively to this report,” the statement said. “We believe the reaction was fueled in part by certain commentary on social media sites and the Internet, and we strongly disagree with these interpretations of our data.”