Galmed forms partnership with OWL for clinical trial of NASH drug

Galmed Pharmaceuticals Ltd. announced it has entered into a Research, Option and License Agreement with One Way Liver Genomics S.L. for the duration of the phase 2b ARREST study to develop a noninvasive blood test that could predict response to aramchol, its investigative drug for nonalcoholic steatohepatitis, according to a press release.

Aramchol, a conjugate of cholic acid and arachidic acid, is indicated for patients with NASH who also are obese and have glucose intolerance, according to Galmed’s website. In the ARREST study, the drug will be randomly assigned to patients from over 70 clinical centers from 12 countries to test the efficacy of aramchol for NASH, and also look at efficacy in patients who are obese or experience insulin resistance.

Under the terms of the License Agreement, One Way Liver Genomics S.L. (OWL) will develop a noninvasive blood test including metabolic biomarkers for aramchol, which will be co-funded by Galmed over the course of the ARREST Study and paid based on reaching development milestones. Upon commercialization, OWL may earn 10% royalties on annual net sales of the companion diagnostic product, according to the release.

In addition to the license agreement, a Share Purchase Agreement has been established and according to the terms, OWL will earn two large payments during the ARREST Study and Galmed will receive shares of OWL based on its most recent valuation, according to the release. OWL also has granted Galmed an option to purchase additional shares up to 19.9% of OWL.

“In order to diagnose and treat the vast number of NASH patients, it is imperative that Galmed takes a comprehensive approach,” Allen Baharaff, president and CEO of Galmed, said in the release. “It's critical that the medical and scientific community collaborate to find validated, noninvasive diagnostic tools. The collaboration with OWL, one of the world's leading metabolomics companies, is an important milestone in our strategic development plan.”

“The studies that we will perform during the ARREST Study, will allow us to obtain a more advanced OWLiver product, our noninvasive test to diagnose NASH and identify surrogate markers linked to aramchol response in patients suffering from NASH,” Pablo Ortiz, MD, PhD, CEO at OWL, said in the release. “We believe that regulatory agencies will recognize the benefits of noninvasive approaches for the diagnosis of NASH.”

The FDA granted fast track designation to Galmed for aramchol in September 2014.

Disclosures: Baharaff reports being employed by Galmed. Ortiz reports being employed by OWL.