Palisade Bio, Inc. today provides a business update and releases its financial results for the third quarter ended September 30, 2021.
CARLSBAD, Calif., Nov. 15, 2021 (GLOBE NEWSWIRE) -- Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade” or the “Company”), a clinical stage biopharmaceutical company advancing oral therapies that help patients with acute and chronic gastrointestinal (GI) complications, today provides a business update and releases its financial results for the third quarter ended September 30, 2021.
Third Quarter Highlights:
- In July 2021, the Company released top line Phase 2 clinical trial results from its development partner, Newsoara, that showed a 1.1-day improvement in GI recovery in patients receiving LB1148 vs placebo.
- In July 2021, the Company entered a worldwide exclusive license with the University of California to patent rights covering certain engineered substrates and use in measuring degradative enzymes for disease conditions, including cancer.
- In August 2021, Yuma Regional Medical Center made a private investment of $5.2 million to help advance clinical development of LB1148.
Financial Summary:
- Research and development expenses increased from $412,000 for the three months ended September 30, 2020, to $624,000 for the three months ended September 30, 2021, primarily attributable to an increase in clinical trial activities as non-essential surgical procedures, which were virtually halted following the onset of the COVID-19 pandemic, have begun to return to pre-pandemic levels resulting in more patients enrolled in our clinical trial. The increase was offset partially by a decrease in share-based compensation expense.
- General and administrative expenses increased from $1.4 million for the three months ended September 30, 2020, to $2.4 million for the same period of 2021, primarily related to an increase in other general and administrative expenses associated with operating as a public company, including accounting and legal costs, offset partially by a decrease in share-based compensation expense.
- Cash and cash equivalents as of September 30, 2021, was $14.1 million, while outstanding debt was $568,000.
“The positive results from the Phase 2 study demonstrated that LB1148 accelerated return to bowel function in patients undergoing GI surgery compared to placebo. We’re excited about the read outs of these Phase 2 data as they guide us towards a pathway for late-stage protocols,” stated Tom Hallam, Ph.D., President and Chief Executive Officer of Palisade Bio. “Additionally, we are initiating studies based on technology under the UC license to measure blood protease activity in defined patient groups, with the goal of identifying new biomarkers and therapeutic targets to build our pipeline.”
About Palisade Bio, Inc.
Palisade Bio is a clinical stage biopharmaceutical company advancing oral therapies that help patients with acute and chronic gastrointestinal complications stemming from post-operative digestive enzyme damage. Palisade Bio’s innovative lead asset, LB1148, advancing towards Phase 3 is a protease inhibitor with the potential to both reduce abdominal adhesions and help restore bowel function following surgery. Positive data from 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 of 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 communication contains “forward-looking” statements, including, without limitation, statements related to expectations regarding Palisade’s plans for future clinical development of LB1148, plans for regulatory approvals of LB1148, and plans for building a pipeline of therapies in the future. 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. 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Palisade 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.
Palisade Bio Investor Relations Contact:
Dawn Hofmeister
Manager of Investor and Public Affairs
ir@palisadebio.com
CORE IR
ir@palisadebio.com
Palisade Bio Media Relations Contact:
CORE IR
Jules Abraham
julesa@coreir.com
917-885-7378
Palisade Bio, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
| September 30, 2021 |
December 31, 2020 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 14,104 | $ | 713 | ||||
| Accounts receivable | — | 59 | ||||||
| Prepaid expenses and other current assets | 1,988 | 124 | ||||||
| Total current assets | 16,092 | 896 | ||||||
| Restricted cash | 26 | 26 | ||||||
| Deferred transaction costs | — | 1,817 | ||||||
| Right-of-use asset | 153 | 275 | ||||||
| Property and equipment, net | 3 | 5 | ||||||
| Total assets | $ | 16,274 | $ | 3,019 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,383 | $ | 2,537 | ||||
| Accrued liabilities | 722 | 2,740 | ||||||
| Accrued compensation and benefits | 89 | 1,590 | ||||||
| Current portion of lease liability | 158 | 168 | ||||||
| Current portion of debt | 387 | 578 | ||||||
| Current portion of related party debt, net | 181 | 469 | ||||||
| Total current liabilities | 2,920 | 8,082 | ||||||
| Warrant liability | 9,434 | 1,830 | ||||||
| Non-current portion of debt | — | 94 | ||||||
| Lease liability, net of current portion | — | 112 | ||||||
| Total liabilities | 12,354 | 10,118 | ||||||
| Commitments and contingencies (Note 11) | ||||||||
| Series C convertible preferred stock, $0.001 par value; 0 and 33,594,625 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 0 and 11,674,131 shares issued and outstanding at September 30, 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 September 30, 2021 and December 31, 2020, respectively | 2 | — | ||||||
| Common stock, $0.01 par value; 300,000,000 and 6,797,500 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 12,929,911 and 2,774,501 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 130 | 28 | ||||||
| Additional paid-in capital | 99,503 | 51,396 | ||||||
| Accumulated deficit | (95,715 | ) | (68,026 | ) | ||||
| Total stockholders' equity (deficit) | 3,920 | (16,602 | ) | |||||
| Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $ | 16,274 | $ | 3,019 | ||||
Palisade Bio, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | $ | 624 | $ | 412 | $ | 1,630 | $ | 2,314 | ||||||||
| In-process research and development | — | — | 30,117 | — | ||||||||||||
| General and administrative | 2,392 | 1,404 | 6,080 | 3,738 | ||||||||||||
| Total operating expenses | 3,016 | 1,816 | 37,827 | 6,052 | ||||||||||||
| Loss from operations | (3,016 | ) | (1,816 | ) | (37,827 | ) | (6,052 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Gain on forgiveness of PPP loan | — | — | 279 | — | ||||||||||||
| Loss on issuance of secured debt | — | — | (686 | ) | — | |||||||||||
| Gain on change in fair value of warrant liability | 12,764 | — | 17,939 | — | ||||||||||||
| Gain on change in fair value of share liability | 18 | — | 91 | — | ||||||||||||
| Interest expense | (26 | ) | (28 | ) | (2,393 | ) | (39 | ) | ||||||||
| Other income | 20 | 1 | 36 | 13 | ||||||||||||
| Loss on issuance of LBS Series 1 Preferred Stock | — | — | (1,881 | ) | — | |||||||||||
| Loss on issuance of warrants | (1,673 | ) | — | (3,247 | ) | — | ||||||||||
| Total other income (expense) | 11,103 | (27 | ) | 10,138 | (26 | ) | ||||||||||
| Net income (loss) | $ | 8,087 | $ | (1,843 | ) | $ | (27,689 | ) | $ | (6,078 | ) | |||||
| Earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.42 | $ | (0.66 | ) | $ | (3.50 | ) | $ | (2.19 | ) | |||||
| Diluted | $ | 0.42 | $ | (0.66 | ) | $ | (4.13 | ) | $ | (2.19 | ) | |||||
| Weighted average shares used in computing earnings (loss) per share: | ||||||||||||||||
| Basic | 12,100,292 | 2,774,502 | 7,902,104 | 2,774,237 | ||||||||||||
| Diluted | 12,106,771 | 2,774,502 | 7,952,998 | 2,774,237 | ||||||||||||
| Net income (loss) attributable to common shares - basic | $ | 5,118 | $ | (1,843 | ) | $ | (27,689 | ) | $ | (6,078 | ) | |||||
| Net income (loss) attributable to common shares - diluted | $ | 5,119 | $ | (1,843 | ) | $ | (32,808 | ) | $ | (6,078 | ) | |||||
Palisade Bio, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Nine Months Ended September 30, |
||||||||
| 2021 | 2020 | |||||||
| Net loss | $ | (27,689 | ) | $ | (6,078 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2 | 2 | ||||||
| In-process research and development | 30,117 | — | ||||||
| Noncash transaction costs shared with Seneca | (135 | ) | — | |||||
| Noncash lease expense | 122 | 105 | ||||||
| Gain on forgiveness of PPP loan | (279 | ) | — | |||||
| Accretion of debt discount and non-cash interest expense | 2,334 | 32 | ||||||
| Loss on issuance of LBS Series 1 Preferred Stock | 1,881 | — | ||||||
| Loss on issuance of secured debt | 686 | — | ||||||
| Loss on issuance of warrants | 3,247 | — | ||||||
| Change in fair value of warrant liabilities | (17,939 | ) | — | |||||
| Change in fair value of share liability | (91 | ) | — | |||||
| Stock-based compensation | 1,208 | 1,544 | ||||||
| Accrued and unpaid interest | — | 7 | ||||||
| Other | 191 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | 84 | (53 | ) | |||||
| Prepaid and other assets | (1,264 | ) | 24 | |||||
| Accounts payable and accrued liabilities | (2,527 | ) | 1,299 | |||||
| Accrued compensation | (1,544 | ) | — | |||||
| Operating lease liabilities | (122 | ) | (102 | ) | ||||
| Net cash used in operating activities | (11,718 | ) | (3,220 | ) | ||||
| 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 | — | (5 | ) | |||||
| Net cash used in investing activities | (54 | ) | (5 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on debt | (949 | ) | — | |||||
| Proceeds from issuance of debt | 1,250 | 379 | ||||||
| Proceeds from issuance of LBS Series 1 Preferred Stock | 19,900 | — | ||||||
| Proceeds from issuance of common stock and warrants | 5,209 | — | ||||||
| Redemption of warrants | (99 | ) | — | |||||
| Payment of debt issuance costs | (148 | ) | — | |||||
| Net cash provided by financing activities | 25,163 | 379 | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 13,391 | (2,846 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 739 | 3,623 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 14,130 | $ | 777 | ||||
| Reconciliation of cash, cash equivalents and restricted cash to the balance sheets: | ||||||||
| Cash and cash equivalents | 14,104 | 751 | ||||||
| Restricted cash | 26 | 26 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 14,130 | $ | 777 | ||||
| Supplemental disclosure of cash flows: | ||||||||
| Interest paid | $ | 61 | $ | — | ||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Equity issuance costs included in accounts payable | $ | 67 | $ | — | ||||
| Transaction costs shared with Seneca | $ | 135 | $ | — | ||||
| Acquisition costs related to stock issuance | $ | 1,184 | $ | — | ||||
| Issuance of common stock to former Seneca stockholders | $ | 28,728 | $ | — | ||||
| Conversion of LBS Series C Preferred stock into common stock | $ | 9,503 | $ | — | ||||
| Net assets acquired in the Merger | $ | 2 | $ | — | ||||
| Acquisition related vesting of RSU’s assumed in the Merger | $ | 41 | $ | — | ||||
| Acquisition related fair value change in warrant liability assumed in the Merger | $ | 51 | $ | — | ||||
