Galmed, Perrigo Tie Up for Mass Production of Aramchol API

Galmed Pharmaceuticals Ltd. (GLMD) announced the signing of a manufacturing services agreement with Perrigo Company’s (PRGO) subsidiary Perrigo API Ltd., for the large-scale production of the active pharmaceutical ingredient (API) in Galmed’s investigational candidate, aramchol.

Galmed is developing aramchol as a disease modifying treatment for fatty liver disorders including non-alcoholic steato-hepatitis (NASH).

Terms of the Deal

Perrigo will manufacture the aramchol API in accordance with current good manufacturing processes (cGMP), provide manufacturing process optimization services for large-scale production of the ingredient and execute additional development services for the optimization of its manufacturing and up-scaling.

The deal has been signed to produce sufficient quantities of the API so as to facilitate potential phase III studies on aramchol (on achieving regulatory approval) in future for the treatment of NASH. However, under this agreement, Perrigo will hold the option of manufacturing commercial supplies of the API in future.

Our Take

We are positive on Galmed’s collaboration with Perrigo. This partnership should be beneficial for Galmed since it has gained a strong partner in the form of Perrigo, a company which has expertise in developing, manufacturing and marketing APIs used by various branded and generic pharmaceutical companies across the world.

Meanwhile, Galmed intends to conduct a phase IIb study on aramchol for the treatment of NASH patients in Israel, Latin America and Europe with interim and final results expected in the second halves of 2015 and 2016, respectively. Aramchol enjoys fast track status in the U.S. for the treatment of NASH.

Investors looking for well-ranked stocks in the pharma/biotech sector may consider Biodel Inc. (BIOD) and Sucampo Pharmaceuticals, Inc. (SCMP). Both carry a Zacks Rank #1 (Strong Buy).

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