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United States securities and exchange commission logo
September 29, 2020
Hans T. Schambye
Chief Executive Officer
Galecto, Inc.
Ole Maaloes Vej 3
DK-2200 Copenhagen N
Denmark
Re: Galecto, Inc.
Draft Registration
Statement on Form S-1
Submitted September
2, 2020
CIK No. 0001800315
Dear Dr. Schambye:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary, page 1
1. In one of the opening
paragraphs, please include your net income and net loss for the most
recent audited period
and any interim stub provided, as applicable. Please also disclose
here that you have not
had any products approved for sale and have not generated any
product revenue, as you
disclose on page 88.
Recent Developments, page 3
2. We note your disclosure
that the "COVID-19 pandemic may negatively impact
[your] business,
financial condition and results of operations by decreasing or delaying the
Hans T. Schambye
FirstName LastNameHans T. Schambye
Galecto, Inc.
Comapany 29,
September NameGalecto,
2020 Inc.
September
Page 2 29, 2020 Page 2
FirstName LastName
enrollment of patients in [your] clinical trials or otherwise causing
interruptions or delays
in our programs and services." Please revise to discuss in greater
detail if and how your
clinical trials have been affected. Please also revise any associated
risk factors to
specifically discuss if and how COVID-19 has actually impacted your
clinical trials. In
this regard, we note the last risk factors on pages 19 and 58 appear
generic and do not
specifically discuss if and how your clinical trials have been
impacted.
Implications of Being an Emerging Growth Company and a Smaller Reporting
Company, page 5
3. Please provide us with supplemental copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
have presented or expect to present to potential investors in reliance
on Section 5(d) of the
Securities Act, whether or not you retained, or intend to retain,
copies of those
communications. Please contact the staff member associated with the
review of this filing
to discuss how to submit the materials, if any, to us for our review.
Cautionary Note Regarding Forward-Looking Statements, page 75
4. We note your reference here to the Private Securities Litigation
Reform Act of 1995.
Please note that the PSLRA safe harbor provisions do not apply to
initial public offerings.
Refer to Section 27A of the Securities Act of 1933. Please either
delete any references to
the Private Securities Litigation Reform Act or make clear that the
safe harbor does not
apply to this offering.
Use of Proceeds, page 78
5. We note your disclosure that you intend to use a portion of the net
proceeds to fund the
clinical development of our programs in myelofibrosis, NASH and
oncology. Please
revise to specify how far in the clinical development of the
associated product candidates
you expect to reach with the net proceeds. In this regard, we note
that you have a number
of clinical trials planned for the associated product candidates,
namely GB1211 and
GB2064.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, Comparison of the Years Ended December 31, 2019 and
2018, page 92
6. As indicated in FRC 501.01, MD&A is intended to give an investor an
opportunity to
view a registrant through the eyes of its management. Given the
significance of your
research and development costs, please consider including
disaggregated disclosure of the
nature of expenses incurred for each period.
Critical Accounting Policies and Significant Judgments and Estimates
Equity-based Compensation, page 97
7. We note from page F-24 that in June 2020, the board of directors
granted 471,500 stock
options. Once you have an estimated offering price or range, please
explain to us how
Hans T. Schambye
Galecto, Inc.
September 29, 2020
Page 3
you determined the fair value of the common stock underlying your
equity issuances and
the reasons for any differences between the recent valuations of your
common stock
leading up to the initial public offering and the estimated offering
price. This information
will help facilitate our review of your accounting for equity
issuances including stock
compensation and beneficial conversion features.
Narrative Disclosure to Summary Compensation Table, page 148
8. Please file the Letter Agreements with Mr. Schambye and Mr. Pedersen
as exhibits to
your registration statement or tell us why you believe this is not
necessary.
Principal Stockholders, page 156
9. Please disclose in a footnote the natural person or persons that have
voting and dispositive
control of the shares for the entities listed in the table as 5% or
greater stockholders.
Please also clarify which entities you are referring to in regards to
Entities Affiliated with
OrbiMed and Entities Affiliated with Bay City Capital, or advise.
Exclusive forum, page 163
10. Please reconcile the disclosure in this section with the disclosure
contained in the last risk
factor on page 73. In this regard, we note that your federal exclusive
forum provision
disclosure appears inconsistent, namely by identifying different
federal jurisdictions for
the adjudication of claims.
Consolidated Financial Statements
Note 2. Summary of Significant Accounting Policies, page F-9
11. Please disclose your accounting policy for cash equivalents. Refer to
ASC 230-10-50-1.
General
12. Please provide us mockups of any pages that include any additional
pictures or graphics to
be presented, including any accompanying captions. Please keep in
mind, in scheduling
your printing and distribution of the preliminary prospectus, that we
may have comments
after our review of these materials.
You may contact Kristin Lochhead at 202-551-3664 or Kate Tillan at
202-551-3604 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Donald Field at 202-551-3680 or Susan Block at 202-551-3210 with any
other questions.
FirstName LastNameHans T. Schambye Sincerely,
Comapany NameGalecto, Inc.
September 29, 2020 Page 3 Division of
Corporation Finance
FirstName LastName Office of Life
Sciences