Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade” or the
“Company”), a clinical stage biopharmaceutical company advancing
oral therapies to aid patients suffering with acute and chronic
gastrointestinal (GI) complications, today provides a business
update and reports its financial results for the year ended
December 31, 2021.
Highlights and Recent
Events
“This past year was a transformative year
for Palisade Bio. In April, we completed the merger of Seneca and
Leading BioSciences and concurrent $22 million in financing. This
was important because it provided the company with financial
resources and access to capital to advance our clinical programs,
add talent, and mature our operations in advance of late-stage
studies. This milestone was followed just a few months later with
we believe to the most important clinical data in our company’s
history—the positive phase 2 clinical trial results of LB1148.
These data demonstrated a statistically significant acceleration of
the return of GI function by more than one day following GI
surgery. These positive findings informed the company’s decision to
progress to phase 3 pivotal clinical studies,” said Tom Hallam,
Ph.D., chief executive officer of Palisade Bio. “We are excited to
be advancing LB1148 to a pivotal clinical study to accelerate the
return of bowel function following surgery. This has the potential
to be transformative to patients suffering from delayed return of
GI function while lowering the cost of quality care healthcare. We
also look forward to building additional pipeline assets for
Palisade Bio given the wide array of health complications caused by
the inflammation and tissue damage produced by rogue digestive
enzymes. We achieved these milestones in 2021 despite a challenging
landscape in the biotech sector. We look forward to building on
this momentum as we advance our drugs through clinical development
and provide ongoing clinical data readouts over the coming
year.”
Pipeline and Corporate
Highlights
Clinical Results
Positive Phase 2 clinical trial results
demonstrated that LB1148 accelerated the time to return of bowel
function in GI surgery patients. LB1148 is an oral
formulation of a broad-spectrum serine protease inhibitor designed
to neutralize the activity of potent digestive proteases released
from the gut during surgery. Scientific evidence suggests that the
release of digestive proteases during surgery contributes to the
temporary loss of normal gastrointestinal function. By inhibiting
the activity of these digestive proteases, LB1148 has the potential
to prevent damage to GI tissues, accelerate the time to return of
normal GI function, and shorten the duration of costly post-surgery
hospital stays. In July 2021, the Company released positive
top-line Phase 2 clinical trial results demonstrating that LB1148
accelerated the time to return of bowel function by 1.1 days in
patients undergoing GI surgery. With these and other data, LB1148
has been demonstrated to accelerate the return of GI function in
three separate clinical studies, in three distinct regions (US,
China and Taiwan), and across an array of surgeries from bowel
resection to open heart surgery. We believe this type of
acceleration in the return of GI function could be broadly
applicable in the surgery settings across the globe. Taken together
these data have allowed Palisade to attain alignment with the US
FDA to proceed with phase 3 study of LB1148 for accelerating the
return of bowel function in patients undergoing abdominal surgery.
This transitions the Company from early-stage clinical development
where the purpose of studies is to identify the proof-of-concept
efficacy signals to late-stage clinical studies to attain the
pivotal data needed to submit a New Drug Application to the FDA,
with the goal of achieving commercial approval. The focus of the
Company now transitions to executing on this pivotal clinical
study. The Company anticipates initiating enrollment of the first
patients in the phase 3 study in the second half of 2022.
Pooled-study analysis demonstrated
LB1148 reduced post-surgical abdominal adhesions. Adhesion
prevalence is historically reported to be >90% in patients who
undergo abdominal surgery and represents a potentially significant
contribution to serious complications such as small bowel
obstruction, subsequent surgery, infertility, and chronic abdominal
pain. Previously the Company had just three patients who had been
assessed for adhesions following GI surgery. Now a pooled-study
analysis demonstrated LB1148 was successful in reducing the risk of
adhesions by 72% and reducing the extent and severity of adhesions
by 92%, while the incidence of adhesions in the placebo group was
similar to the published literature. These data have provided the
basis of the Company’s decision to amend its phase 2 GI surgery
study of LB1148 in the United States to evaluate 70 or more
patients that may have an adhesion assessment to further inform
Palisade’s development program to prevent post-surgical adhesions.
The Company expects to complete enrollment by the end of 2022.
Regulatory
In 2021, the Company received FDA Fast Track
designation for LB1148 for two indications: the treatment of
postoperative gastrointestinal dysfunction associated with
pediatric cardiovascular surgery, and reduction of adhesions
following abdominal and pelvic surgery. The FDA Fast Track program
is intended to facilitate the development and expedite the review
of drugs to treat serious conditions and fill an unmet medical
need. With Fast Track designation, Palisade Bio is eligible for
greater access to the FDA for the purpose of expediting clinical
development and creates eligibility for accelerated approval and
priority review of LB1148. Fast Track Designation represents
another positive step for the development of LB1148 and is a
recognition of the serious need that exists for patients looking to
avoid long-lasting and serious complications from post-surgical
adhesions. The Company looks forward to working closely with the
FDA about the clinical path forward with LB1148 for these
indications.
Corporate
On April 27, 2021, Seneca Biopharma, Inc.
(“Seneca”) completed its previously announced merger transaction
with Leading BioSciences, Inc. (“LBS”), with LBS surviving as a
wholly owned subsidiary of Seneca. Immediately following the
Merger, Seneca changed its name to “Palisade Bio, Inc.
In August 2021, Yuma Regional Medical Center
invested $5.2 million in the Company.
As we advance LB1148 through clinical studies
with the goal of ultimately achieving FDA approval for
commercialization, we continue to build our team. Key recent
additions to our team include Rob McRae, Senior Vice President,
Operations and Strategic Development; Nick McCoy, Vice President,
Clinical Operations; Dawn Hofmeister, Senior Manager of Investor
and Public Affairs; and James Berezniak, Associate Director, SEC
Reporting and Accounting. These recent hires greatly expand our
leadership team and operational capacity to execute on clinical
studies, expand manufacturing, operations, and corporate
communications.
Intellectual Property
We made great progress in advancing our patent
portfolio and intellectual property protections of our lead
clinical asset LB1148, with the European Patent Office granting a
patent covering LB1148 until 2035, and the United States Patent and
Trademark Office granting a new U.S. patent for use in treating
adhesions and postoperative ileus.
In 2021, Palisade Bio entered into a worldwide
exclusive license with the University of California, San Diego for
patent rights covering engineered substrates measuring digestive
protease activity for disease conditions, including cancer-related
indications that had been excluded under preceding licenses with
them.
2022 Milestones
The Company anticipates that its efforts for
2022 will largely focus on advancing LB1148 in the clinic. We plan
to initiate a phase 3 study for accelerating the return of bowel
function in the first half of 2022 and for the first patient to be
enrolled in the second half of 2022. For the phase 2 study focusing
on prevention of post-operative adhesions, the Company plans to
commence enrolling patients under an amended protocol during the
first half of 2022.
Financial Summary for the Year Ended
December 31, 2021
Research and development expenses decreased $0.7
million to $2.4 million in 2021, compared to $3.1 million in 2020.
This decrease is largely the result of a decline in clinical trial
activities due to the onset of the COVID-19 pandemic.
General and administrative expenses increased
$3.1 million to $9.3 million in 2021, compared to $6.2 million in
2020. This increase is primarily due to higher professional fees
associated with regulatory, compliance and governance fees incurred
as a result of becoming a public company through the merger with
Seneca.
Cash and cash equivalents as of December 31,
2021, were $10.5 million, while outstanding debt was less than $0.1
million. Cash used in operations was $14.8 million for the year
ended December 31, 2021, which included $3.7 million that was used
to pay down current liabilities during the year.
About Palisade
Bio, Inc.
Palisade Bio is a late-stage biopharmaceutical
company advancing oral therapies that aid patients suffering with
acute and chronic gastrointestinal complications stemming from
post-operative digestive enzyme damage. Palisade Bio’s lead
clinical asset LB1148 is a protease inhibitor with the potential to
both reduce abdominal adhesions and help restore bowel function
following surgery. Positive data from completed Phase 2 trials of
LB1148 demonstrated safety and tolerability as well as a
statistically significant improvement in return to bowel function
and decrease in length of stay in ICU and hospital compared to
placebo. Palisade Bio believes that its investigational therapies
have the potential to address the myriad health conditions and
complications associated with chronic disruption of the
gastrointestinal epithelial barrier. For more information, please
go to www.palisadebio.com.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as “may,” “will,” “expect,” “plan,”
“anticipate,” “estimate,” “intend,” “should,” “believe,” “would,”
“could,” “potential,” “goal” and similar expressions (as well as
other words or expressions referencing future events, conditions or
circumstances) convey uncertainty of future events or outcomes and
are intended to identify these forward-looking statements.
Forward-looking statements, include, without limitation, statements
related to expectations regarding the potential of LB1148 to
accelerate return to bowl function, prevent damage to GI tissues,
and shorten duration of hospital stays; Palisade’s pipeline assets
and/or therapies in the future; the applicability of acceleration
in the return of GI function; Palisade’s plans for future clinical
development of LB1148; expectations of regulatory approvals of
LB1148; patient enrollment for studies; the Company’s belief that
reduction in adhesions is not likely due to difference in the rates
of minimally invasive approach; Palisade’s decision to amend its
phase 2 GI surgery; and Palisade’s working with the FDA about the
clinical path for LB1148. 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 Palisade’s current expectations and are
based on management's assumptions and estimates as of such date.
Forward-looking statements involve risks and uncertainties.
Palisade’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
clinical programs and the uncertain and time-consuming regulatory
approval process. Additional risks and uncertainties can be found
in Palisade Bio's Annual Report on Form 10-K for the year ended
December 31, 2021, and in other filings subsequently made by us
with the Securities and Exchange Commission. Palisade Bio
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 Palisade’s expectations
with regard thereto or any change in events, conditions or
circumstances on which any such statements are based, whether as a
result of the receipt of new information, the occurrence of future
events or otherwise.
Palisade Bio Investor Relations
Contact: Dawn HofmeisterManager of Investor and
Public Affairsir@palisadebio.com
Palisade Bio Media Relations Contact: CORE
IRJules Abrahamjulesa@coreir.com 917-885-7378
Palisade Bio,
Inc.Consolidated Balance Sheets
(Audited)(in thousands, except share and per share
amounts)
|
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
10,495 |
|
|
$ |
713 |
|
Accounts receivable |
|
|
— |
|
|
|
59 |
|
Prepaid expenses and other current assets |
|
|
1,879 |
|
|
|
124 |
|
Total current assets |
|
|
12,374 |
|
|
|
896 |
|
Restricted cash |
|
|
26 |
|
|
|
26 |
|
Deferred transaction costs |
|
|
— |
|
|
|
1,817 |
|
Right-of-use asset |
|
|
109 |
|
|
|
275 |
|
Property and equipment, net |
|
|
3 |
|
|
|
5 |
|
Total assets |
|
$ |
12,512 |
|
|
$ |
3,019 |
|
|
|
|
|
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
EQUITY (DEFICIT) |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
1,323 |
|
|
$ |
2,537 |
|
Accrued liabilities |
|
|
463 |
|
|
|
2,740 |
|
Accrued compensation and benefits |
|
|
511 |
|
|
|
1,590 |
|
Current portion of lease liability |
|
|
112 |
|
|
|
168 |
|
Current portion of debt |
|
|
87 |
|
|
|
578 |
|
Current portion of related party debt, net |
|
|
— |
|
|
|
469 |
|
Total current liabilities |
|
|
2,496 |
|
|
|
8,082 |
|
Warrant liability |
|
|
2,651 |
|
|
|
1,830 |
|
Non-current portion of debt |
|
|
— |
|
|
|
94 |
|
Lease liability, net of current portion |
|
|
— |
|
|
|
112 |
|
Total liabilities |
|
|
5,147 |
|
|
|
10,118 |
|
Commitments and contingencies |
|
|
|
|
Series C convertible preferred stock, $0.001 par value; 0 and
33,594,625 shares authorized as of December 31, 2021 and
December 31, 2020, respectively; 0 and 11,674,131 shares
issued and outstanding at December 31, 2021 and
December 31, 2020, respectively; liquidation preference of
$10.4 million as of December 31, 2020 |
|
|
— |
|
|
|
9,503 |
|
Stockholders' equity (deficit): |
|
|
|
|
Series A Convertible Preferred Stock, 7,000,000 shares authorized,
$0.01 par value; 200,000 and 0 shares issued and outstanding at
December 31, 2021 and December 31, 2020,
respectively |
|
|
2 |
|
|
|
— |
|
Common stock, $0.01 par value; 300,000,000 and 6,797,500 shares
authorized as of December 31, 2021 and December 31, 2020,
respectively; 14,239,177 and 2,774,502 shares issued and
outstanding at December 31, 2021 and December 31, 2020,
respectively |
|
|
143 |
|
|
|
28 |
|
Additional paid-in capital |
|
|
101,862 |
|
|
|
51,396 |
|
Accumulated deficit |
|
|
(94,642 |
) |
|
|
(68,026 |
) |
Total stockholders' equity (deficit) |
|
|
7,365 |
|
|
|
(16,602 |
) |
Total liabilities, convertible preferred stock and stockholders'
equity (deficit) |
|
$ |
12,512 |
|
|
$ |
3,019 |
|
|
|
|
|
|
Palisade Bio,
Inc.Consolidated Statements of Operations
(Audited) (in thousands, except share and per
share amounts)
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Operating expenses: |
|
|
|
|
Research and development |
|
$ |
2,430 |
|
|
$ |
3,099 |
|
In-process research and development |
|
|
30,117 |
|
|
|
— |
|
General and administrative |
|
|
9,307 |
|
|
|
6,198 |
|
Total operating expenses |
|
|
41,854 |
|
|
|
9,297 |
|
Loss from operations |
|
|
(41,854 |
) |
|
|
(9,297 |
) |
Other income (expense): |
|
|
|
|
Gain on forgiveness of PPP loan |
|
|
279 |
|
|
|
— |
|
Loss on issuance of secured debt |
|
|
(686 |
) |
|
|
(841 |
) |
Gain on change in fair value of warrant liability |
|
|
23,033 |
|
|
|
38 |
|
Gain on change in fair value of share liability |
|
|
91 |
|
|
|
— |
|
Interest expense |
|
|
(2,398 |
) |
|
|
(235 |
) |
Other income |
|
|
47 |
|
|
|
13 |
|
Loss on issuance of LBS Series 1 Preferred Stock |
|
|
(1,881 |
) |
|
|
— |
|
Loss on issuance of warrants |
|
|
(3,247 |
) |
|
|
— |
|
Total other income (expense) |
|
|
15,238 |
|
|
|
(1,025 |
) |
Net loss |
|
$ |
(26,616 |
) |
|
$ |
(10,322 |
) |
Loss per common share: |
|
|
|
|
Basic |
|
$ |
(2.86 |
) |
|
$ |
(3.72 |
) |
Diluted |
|
$ |
(3.39 |
) |
|
$ |
(3.72 |
) |
Weighted average shares used in computing loss per common
share: |
|
|
|
|
Basic |
|
|
9,309,774 |
|
|
|
2,774,370 |
|
Diluted |
|
|
9,347,944 |
|
|
|
2,774,370 |
|
Net loss attributable to common shares - basic |
|
$ |
(26,616 |
) |
|
$ |
(10,322 |
) |
Net loss attributable to common shares - diluted |
|
$ |
(31,735 |
) |
|
$ |
(10,322 |
) |
|
|
|
|
|
Palisade Bio,
Inc.Consolidated Statements of Cash Flows
(Audited) (in thousands)
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
Net loss |
|
$ |
(26,616 |
) |
|
$ |
(10,322 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
2 |
|
|
|
3 |
|
In-process research and development |
|
|
30,117 |
|
|
|
— |
|
Noncash transaction costs shared with Seneca |
|
|
(135 |
) |
|
|
— |
|
Noncash lease expense |
|
|
166 |
|
|
|
143 |
|
Gain on forgiveness of PPP loan |
|
|
(279 |
) |
|
|
— |
|
Accretion of debt discount and non-cash interest expense |
|
|
2,339 |
|
|
|
202 |
|
Loss on issuance of LBS Series 1 Preferred Stock |
|
|
1,881 |
|
|
|
— |
|
Loss on issuance of secured debt |
|
|
686 |
|
|
|
841 |
|
Loss on issuance of warrants |
|
|
3,247 |
|
|
|
— |
|
Change in fair value of warrant liabilities |
|
|
(23,033 |
) |
|
|
(38 |
) |
Change in fair value of share liability |
|
|
(91 |
) |
|
|
— |
|
Stock-based compensation |
|
|
1,891 |
|
|
|
2,014 |
|
Other |
|
|
(192 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
Trade and other receivables |
|
|
84 |
|
|
|
(59 |
) |
Prepaid and other assets |
|
|
(1,157 |
) |
|
|
89 |
|
Accounts payable and accrued liabilities |
|
|
(2,395 |
) |
|
|
1,006 |
|
Accrued compensation |
|
|
(1,120 |
) |
|
|
1,494 |
|
Operating lease liabilities |
|
|
(168 |
) |
|
|
(141 |
) |
Net cash used in operating activities |
|
|
(14,773 |
) |
|
|
(4,768 |
) |
Cash flows from investing activities: |
|
|
|
|
Cash acquired in connection with the Merger |
|
|
3,279 |
|
|
|
— |
|
Acquisition related costs paid |
|
|
(3,333 |
) |
|
|
— |
|
Purchases of property and equipment |
|
|
— |
|
|
|
(6 |
) |
Net cash used in investing activities |
|
|
(54 |
) |
|
|
(6 |
) |
Cash flows from financing activities: |
|
|
|
|
Payments on debt |
|
|
(1,433 |
) |
|
|
(27 |
) |
Proceeds from issuance of debt |
|
|
1,250 |
|
|
|
379 |
|
Proceeds from the issuance of related party debt |
|
|
— |
|
|
|
450 |
|
Proceeds from issuance of LBS Series 1 Preferred Stock |
|
|
19,900 |
|
|
|
— |
|
Proceeds from issuance of common stock and warrants |
|
|
5,209 |
|
|
|
1,175 |
|
Redemption of warrants |
|
|
(99 |
) |
|
|
— |
|
Payment of equity issuance costs |
|
|
(67 |
) |
|
|
— |
|
Payment of debt issuance costs |
|
|
(151 |
) |
|
|
(87 |
) |
Net cash provided by financing activities |
|
|
24,609 |
|
|
|
1,890 |
|
Net increase (decrease) in cash, cash equivalents and restricted
cash |
|
|
9,782 |
|
|
|
(2,884 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
|
739 |
|
|
|
3,623 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
10,521 |
|
|
$ |
739 |
|
|
|
|
|
|
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