Full Press Release Details
– Transformational transaction jumpstarts development pipeline into high-value inflammatory bowel disease (IBD) market
– Lead program, PALI-2108, oral prodrug therapy for the treatment of moderate-to-severe ulcerative colitis (UC) is anticipated to commence Phase 1 clinical study in 2024
– Strong financial position with cash to execute on strategy and achieve significant milestones into 2025
Carlsbad, CA, Nov. 10, 2023 (GLOBE NEWSWIRE) -- Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade”, “Palisade Bio” or the “Company”), a biopharmaceutical company focused on developing novel therapeutics for serious chronic gastrointestinal (GI) diseases, today reported its financial results for the third quarter 2023 and provided a business outlook.
Recent Corporate Developments
Entered into an exclusive worldwide licensing agreement with Giiant Pharma, Inc. for multiple oral drug candidates targeting IBD;
Appointed GI clinical expert and biotech entrepreneur Mitch Jones, M.D., PhD as Chief Medical Officer; and
Bolstered cash runway with a $2 million, common-stock-only registered direct offering priced at market under Nasdaq rules.
“The past quarter was marked by a transformative transaction for Palisade. The IBD market is large, well established, and expected to grow to $20 billion by 2031. We believe that novel therapeutics which demonstrate safety and efficacy have the potential to gain significant market share. Palisade has the only PDE4 inhibitor prodrug under development for the treatment of ulcerative colitis, our lead indication,” commented J.D. Finley, Chief Executive Officer. “We are committed to advancing the clinical development of PALI-2108 and expect to launch our Phase 1 study in UC in 2024. Importantly, we have a strong cash position to fund operations through value-driving milestones and believe we are positioned to build shareholder value in the near and long term.”
PALI-2108 is an orally administered, locally acting colon-specific phosphodiesterase-4B (PDE4B) inhibitor prodrug in development for patients affected by moderate-to-severely active ulcerative colitis (UC).
Key Program Highlights
Preferential enzymatic inhibition of PDE4B limiting the potential for off-target effects;
Isoenzyme inhibition profile superior to other PDE4 inhibitors and comparable to marketed anti-inflammatory and anti-fibrotic PDE4B selective inhibitors;
20 times more potent at inhibiting lipopolysaccharide (LPS)-induced tumor necrosis factor-α (TNF-α) when compared to apremilast in human whole blood;
Demonstrated PDE4B target engagement comparable to apremilast in vivo;
Shown to be locally bioactivated within the colon in mouse studies and ex vivo in normal healthy subjects and in ulcerative colitis patient fecal samples;
Nonclinical data demonstrating prodrug significantly limits systemic drug exposure;
Nonclinical data demonstrating complete prevention of emesis, a well-known side effect limiting the use of PDE4 inhibitors in humans, at therapeutic doses of oral prodrug and compared with the active PDE4 moiety only; and
Shown to be effective and demonstrated a dose response across multiple nonclinical colitis studies.
Ongoing IND/CTA-enabling tox studies;
Complete nonclinical IND/CTA-enabling activities by the end of the third quarter of 2024;
Submit initial IND/CTA prior to the end of 2024; and
Initiate Phase 1a/b before the end of 2024.
Summary of Financial Results for the Third Quarter Ended September 30, 2023
As of September 30, 2023, the Company had cash and cash equivalents of $15.3 million. The Company believes it has sufficient cash to fund its currently planned operations into the first quarter of 2025.
Net loss was $3.6 million for the three months ended September 30, 2023, compared to $4.0 million for the same period in 2022.
Research and development expenses for the three months ended September 30, 2023, were $1.7 million, a decrease of approximately $0.2 million, or 10%, compared to $1.9 million for the same period last year. The decrease was primarily attributable to the Company concluding its U.S. Phase 2 PROFILE study of LB1148 in early third quarter of 2023 and its completion of enrollment in its dose-optimization study of LB1148 in the second quarter of 2023. The Company has subsequently concluded it will no longer pursue the development of LB1148 and has closed its PROFILE study. Comparatively, in the third quarter of 2022, the Company was actively enrolling its U.S. Phase 2 PROFILE study and incurring expenses while initiating its U.S. Phase 3 INTEGRITY study for the accelerated return of bowel function following GI surgery. Accordingly, drug-manufacturing related expenses decreased by approximately $0.5 million, investigator site fees decreased by approximately $0.2 million, and clinical trial consultants and contract labor decreased by approximately $0.1 million in the three months ended September 30, 2023, compared to the three months ended September 30, 2022. Also contributing to the year-over-year decrease was lower research and development salaries and benefits by approximately $0.1 million in the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to a decrease in research and development employee headcount.
General and administrative expenses decreased by approximately $0.4 million, or 19%, from $2.1 million for the three months ended September 30, 2022, to $1.7 million for the three months ended September 30, 2023, primarily because of a $0.3 million decrease in salaries and benefits and a $0.1 million decrease in stock-based compensation expense.
In connection with the entering into the research collaboration and license agreement with Giiant Pharma, Inc., in the three months ended September 30, 2023, the Company recognized In-process research and development expenses in the amount of $0.4 million consisting of certain contingent consideration obligations incurred as well as direct transaction-related costs.
Palisade Bio is a biopharmaceutical company focused on developing novel therapeutics for serious chronic gastrointestinal diseases. The Company believes that by using a targeted approach with its novel therapeutics it will transform the treatment landscape. For more information, please go to www.palisadebio.com.
Forward Looking Statements
This communication contains “forward-looking” statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the Company’s intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the extent of our cash runway; our ability to successfully develop our licensed technologies; estimates about the size and growth potential of the markets for our product candidates, and our ability to serve those markets, including any potential revenue generated; future regulatory, judicial, and legislative changes or developments in the United States (U.S.) and foreign countries and the impact of these changes; our ability to maintain the Nasdaq listing of our securities; our ability to build a commercial infrastructure in the U.S. and other markets; our ability to compete effectively in a competitive industry; our ability to identify and qualify manufacturers to provide API and manufacture drug product; our ability to enter into commercial supply agreements; the success of competing technologies that are or may become available; our ability to attract and retain key scientific or management personnel; the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; our ability to obtain funding for our operations; our ability to attract collaborators and strategic partnerships; and the impact of the COVID-19 pandemic or any global event on our business, and operations, and supply. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the Company’s ability to advance its nonclinical and clinical programs, the uncertain and time-consuming regulatory approval process; and the Company’s ability to secure additional financing to fund future operations and development of its product candidates. Additional risks and uncertainties can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 22, 2023, as well as the Company’s Quarterly Report on Form 10-Q, for the three and nine months period ended September 30, 2023, filed with the SEC on November 9, 2023. These forward-looking statements speak only as of the date hereof and the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Investor Relations Contact
Source: Palisade Bio
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 15,312 | $ | 12,383 | ||||
| Prepaid expenses and other current assets | 954 | 2,350 | ||||||
| Total current assets | 16,266 | 14,733 | ||||||
| Restricted cash | 26 | 26 | ||||||
| Property and equipment, net | 10 | 10 | ||||||
| Right-of-use asset | 224 | 300 | ||||||
| Other noncurrent assets | 541 | 694 | ||||||
| Total assets | $ | 17,067 | $ | 15,763 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 950 | $ | 1,759 | ||||
| Accrued liabilities | 794 | 574 | ||||||
| Accrued compensation and benefits | 529 | 486 | ||||||
| Current portion of lease liability | 117 | 105 | ||||||
| Debt | 259 | 88 | ||||||
| Total current liabilities | 2,649 | 3,012 | ||||||
| Warrant liability | 2 | 61 | ||||||
| Contingent consideration obligation | 212 | — | ||||||
| Lease liability, net of current portion | 122 | 211 | ||||||
| Total liabilities | 2,985 | 3,284 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Series A Convertible Preferred Stock, $0.01 par value, 7,000,000 shares authorized; 200,000 issued and outstanding at September 30, 2023 and December 31, 2022 | 2 | 2 | ||||||
| Common stock, $0.01 par value; 280,000,000 shares authorized; 9,210,751 and 2,944,306 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 92 | 30 | ||||||
| Additional paid-in capital | 132,523 | 121,637 | ||||||
| Accumulated deficit | (118,535 | ) | (109,190 | ) | ||||
| Total stockholders' equity | 14,082 | 12,479 | ||||||
| Total liabilities and stockholders' equity | $ | 17,067 | $ | 15,763 |
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| License revenue | $ | — | $ | — | $ | 250 | $ | — | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,742 | 1,928 | 5,160 | 4,204 | ||||||||||||
| In-process research and development | 362 | — | 362 | — | ||||||||||||
| General and administrative | 1,674 | 2,075 | 4,644 | 7,259 | ||||||||||||
| Restructuring costs | — | 410 | — | 410 | ||||||||||||
| Total operating expenses | 3,778 | 4,413 | 10,166 | 11,873 | ||||||||||||
| Loss from operations | (3,778 | ) | (4,413 | ) | (9,916 | ) | (11,873 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (8 | ) | (4 | ) | (11 | ) | (10 | ) | ||||||||
| Other income | 190 | 426 | 598 | 2,453 | ||||||||||||
| Loss on issuance of warrants | — | — | — | (1,110 | ) | |||||||||||
| Total other income, net | 182 | 422 | 587 | 1,333 | ||||||||||||
| Net loss | $ | (3,596 | ) | $ | (3,991 | ) | $ | (9,329 | ) | $ | (10,540 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.49 | ) | $ | (4.10 | ) | $ | (1.55 | ) | $ | (18.40 | ) | ||||
| Basic and diluted weighted average shares used in computing basic and diluted net loss per common share | 7,344,351 | 974,197 | 6,031,099 | 572,684 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Net loss | $ | (9,329 | ) | $ | (10,540 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 4 | 1 | ||||||
| Noncash lease expense | 76 | 140 | ||||||
| Loss on issuance of warrants | — | 1,110 | ||||||
| Fair value of contingent consideration obligation | 212 | — | ||||||
| Change in fair value of warrant liabilities | (59 | ) | (2,403 | ) | ||||
| Stock-based compensation and related charges | 439 | 946 | ||||||
| Other | (108 | ) | (213 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid and other assets and other noncurrent assets | 596 | 744 | ||||||
| Accounts payable and accrued liabilities | (184 | ) | 706 | |||||
| Accrued compensation | 43 | (418 | ) | |||||
| Operating lease liabilities | (77 | ) | (127 | ) | ||||
| Net cash used in operating activities | (8,387 | ) | (10,054 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (4 | ) | — | |||||
| Net cash used in investing activities | (4 | ) | — | |||||
| Cash flows from financing activities: | ||||||||
| Payments on debt | (290 | ) | (524 | ) | ||||
| Proceeds from issuance of common stock and warrants | 9,419 | 14,401 | ||||||
| Proceeds from the exercise of warrants | 2,758 | — | ||||||
| Payment of equity issuance costs | (567 | ) | (333 | ) | ||||
| Net cash provided by financing activities | 11,320 | 13,544 | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 2,929 | 3,490 | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | 12,409 | 10,521 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 15,338 | $ | 14,011 | ||||
| Reconciliation of cash, cash equivalents and restricted cash to the balance sheets: | ||||||||
| Cash and cash equivalents | $ | 15,312 | $ | 13,985 | ||||
| Restricted cash | 26 | 26 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 15,338 | $ | 14,011 |