Galera Therapeutics Reports $5.6M Net Loss, Faces Financial Challenges and Workforce Reduction

Galera Therapeutics, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company recorded a net loss of $5.6 million for the third quarter, a notable improvement from a net loss of $15.1 million during the same period in 2023. For the nine months ended September 30, 2024, the net loss was $14 million, compared to $53.5 million in the prior year. The reduction in losses was attributed to decreased operating expenses, particularly in research and development, which fell from $20.9 million to $3.2 million year-over-year, as the company ceased all clinical trial activities.

The company's total assets decreased significantly from $26.1 million at the end of 2023 to $8.9 million by September 30, 2024. This decline was primarily due to a reduction in cash and cash equivalents, which dropped from $18.3 million to $8.5 million over the same period. Current liabilities also decreased from $5 million to $914,000, reflecting a strategic effort to reduce operational costs. However, Galera continues to face a substantial accumulated deficit of $451.4 million.

Strategically, Galera has undergone significant organizational changes, including a workforce reduction of approximately 70% in August 2023, which resulted in the layoff of 22 employees. This decision was made in response to the FDA's Complete Response Letter regarding its lead product candidate, avasopasem, which indicated that additional clinical trials would be necessary for resubmission. Following this, the company halted its clinical trials for both avasopasem and rucosopasem, leading to a complete cessation of product development activities. As of September 30, 2024, the company had only three employees remaining.

In terms of operational metrics, Galera's engagement with its product candidates has diminished significantly, with no ongoing clinical trials and a focus on exploring strategic alternatives, including potential mergers or asset sales. The company has engaged Stifel, Nicolaus & Company, Inc. as a financial advisor to assist in this review process. The board of directors had previously approved a plan for dissolution, which was not supported by shareholders in an October 2024 vote, leaving the company to consider other strategic options.

Looking ahead, Galera's management has indicated that the future capital requirements will depend on the strategic alternatives pursued, which may include a voluntary dissolution or continued product development. The company expects its existing cash reserves will sustain operations for at least the next twelve months, but it remains uncertain about the potential for future revenue generation, given the halted development of its product candidates. The company’s stock is now traded on the OTC Pink Market following its delisting from Nasdaq, further complicating its financial outlook.