Palisade Bio Reports Second Quarter Financial Results and Provides Business Update
CARLSBAD, Calif., Aug. 24, 2021 (GLOBE NEWSWIRE) — Palisade Bio, Inc. (Nasdaq: PALI) (“Palisade” or the “Company”), a late-stage biopharma company advancing therapies for acute and chronic gastrointestinal (GI) complications, today provides a business update and releases its financial results for the second quarter ending June 30, 2021.
Recent Corporate Highlights:
- Announced positive topline results from Phase 2 study of LB1148 by partner Newsoara demonstrating accelerated return of bowel function after gastrointestinal surgery
- Entered into worldwide in-licensing agreement with University of California for technology to support target identification, drug discovery, and clinical development
- Launched a Clinical Steering Committee to provide strategic guidance over late-stage clinical program development for its lead investigational drug LB1148
- Hosted a key opinion leader (KOL) webinar on LB1148 with Drs. Steven Wexner, M.D., Cleveland Clinic and Mark A. Talamini, M.D., Northwell Health
- Received FDA Fast Track Designation for LB1148 for reduction of adhesions following abdominal and pelvic surgery
- Closed a $5.2M private investment by the Yuma Regional Medical Center to help advance clinical development of LB1148
Financial Summary:
- R&D expenses declined from $650,000 for the three months ended June 30, 2020 to $314,000 in the three months ended June 30, 2021, primarily due to higher trailing enrollment in the prior period before the COVID-19 pandemic, as well as due to a general decrease in personnel-related costs and stock-based compensation in the current period.
- General and administrative expenses increased from $1.2 million in the quarter ended June 30, 2020 to $2.4 million in the same period of 2021, primarily due to increased compensation and stock compensation expenses, as well as other general and administrative expenses associated with operating as a public company.
- In-process R&D for the quarter ended 2021 was $30.1 million, as compared to $0 in the same period of 2020, and reflects the allocation of the merger price to in-process R&D projects acquired with no alternative future use.
- Cash and cash equivalents as of June 30, 2021 was $12.7 million, while outstanding debt was $1.1 million.
“The recently announced topline Phase 2 data with our partner Newsoara showing LB1148 brought an accelerated return to bowel function in patients following surgery is yet another building block in our efforts to get LB1148 approved for GI treatments. Across our trials to date in both animals and humans, there is a consistent theme that the drug is both safe and effective in accelerating return of bowel function,” stated Tom Hallam, Ph.D., President and CEO of Palisade Bio. “Assuming positive future clinical results that are consistent with our trials to date, we see pathways to regulatory approval for LB1148. Moreover, we expect to build a pipeline of therapies based on our recently announced license agreement with the Regents of the University of California. We are now diligently planning our next strategic activities and look forward to providing additional investor updates as our corporate and clinical progress unfolds.”
About Palisade Bio, Inc.
Palisade Bio is a late-stage biopharma company advancing therapies that help patients with acute and chronic gastrointestinal complications stemming from post-operative digestive enzyme damage. Palisade Bio’s innovative lead asset, LB1148, is a Phase 3-ready protease inhibitor with the potential to both reduce abdominal adhesions and help restore bowel function following surgery. Positive data from two 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 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, plans for building a pipeline of therapies in the future, and plans for additional investor updates 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, related to 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 (formerly known as Seneca Biopharma, Inc.) Quarterly Report on Form 10-Q for the quarter ended June 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:
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 | |||||||
| (in thousands, except share and per share amounts) | |||||||
| June 30, 2021 |
December 31, 2020 |
||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 12,653 | $ | 713 | |||
| Accounts receivable | 59 | 59 | |||||
| Prepaid expenses and other current assets | 2,013 | 124 | |||||
| Total current assets | 14,725 | 896 | |||||
| Restricted cash | 26 | 26 | |||||
| Deferred transaction costs | – | 1,817 | |||||
| Right-of-use asset | 195 | 275 | |||||
| Property and equipment, net | 3 | 5 | |||||
| Total assets | $ | 14,949 | $ | 3,019 | |||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,406 | $ | 2,537 | |||
| Accrued liabilities | 955 | 2,740 | |||||
| Accrued compensation and benefits | 164 | 1,590 | |||||
| Current portion of lease liability | 184 | 168 | |||||
| Current portion of debt | 696 | 578 | |||||
| Current portion of related party debt, net | 445 | 469 | |||||
| Total current liabilities | 3,850 | 8,082 | |||||
| Warrant liability | 20,526 | 1,830 | |||||
| Non-current portion of debt | – | 94 | |||||
| Lease liability, net of current portion | 17 | 112 | |||||
| Total liabilities | 24,393 | 10,118 | |||||
| Series C convertible preferred stock, $0.001 par value; 0 and 33,594,625 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 0 and 11,674,131 shares issued and outstanding at June 30, 2021 and December 31, 2020; liquidation preference of $10.4 million as of December 31, 2020 | – | 9,503 | |||||
| Stockholders’ deficit: | |||||||
| Series A convertible preferred stock, 7,000,000 shares authorized, $0.01 par value; 200,000 and 0 shares issued and outstanding at June 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 June 30, 2021 and December 31, 2020, respectively; 11,398,698 and 2,774,502 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 114 | 28 | |||||
| Additional paid-in capital | 94,242 | 51,396 | |||||
| Accumulated deficit | (103,802 | ) | (68,026 | ) | |||
| Total stockholders’ deficit | (9,444 | ) | (16,602 | ) | |||
| Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ | 14,949 | $ | 3,019 | |||
| Palisade Bio, Inc. | |||||||||||||||||
| Condensed Statements of Operations | |||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | $ | 314 | $ | 650 | $ | 1,006 | $ | 1,902 | |||||||||
| In-process research and development | 30,117 | – | 30,117 | – | |||||||||||||
| General and administrative | 2,427 | 1,191 | 3,688 | 2,334 | |||||||||||||
| Total operating expenses | 32,858 | 1,841 | 34,811 | 4,236 | |||||||||||||
| Loss from operations | (32,858 | ) | (1,841 | ) | (34,811 | ) | (4,236 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| Gain on forgiveness of debt | – | – | 279 | – | |||||||||||||
| Loss on issuance of secured debt | – | – | (686 | ) | – | ||||||||||||
| Change in fair value of warrant liability | 5,133 | – | 5,175 | – | |||||||||||||
| Change in fair value of share liability | 73 | – | 73 | – | |||||||||||||
| Interest expense | (655 | ) | (11 | ) | (2,367 | ) | (11 | ) | |||||||||
| Other income | 16 | 1 | 16 | 12 | |||||||||||||
| Loss on issuance of LBS Series 1 Preferred Stock | (1,881 | ) | – | (1,881 | ) | – | |||||||||||
| Issuance cost of warrants | (1,574 | ) | – | (1,574 | ) | – | |||||||||||
| Total other income (expense) | 1,112 | (10 | ) | (965 | ) | 1 | |||||||||||
| Net loss | $ | (31,746 | ) | $ | (1,851 | ) | $ | (35,776 | ) | $ | (4,235 | ) | |||||
| Loss per share: | |||||||||||||||||
| Basic | $ | (3.59 | ) | $ | (0.67 | ) | $ | (6.17 | ) | $ | (1.53 | ) | |||||
| Diluted | $ | (4.10 | ) | $ | (0.67 | ) | $ | (6.96 | ) | $ | (1.53 | ) | |||||
| Weighted average shares used in computing loss per share: | |||||||||||||||||
| Basic | 8,831,517 | 2,774,296 | 5,803,010 | 2,274,237 | |||||||||||||
| Diluted | 8,984,198 | 2,774,296 | 5,879,351 | 2,774,237 | |||||||||||||
| Net loss attributable to common stockholders – basic | $ | (31,746 | ) | $ | (1,851 | ) | $ | (35,776 | ) | $ | (4,235 | ) | |||||
| Change in fair value of warrants | $ | (5,119 | ) | $ | – | $ | (5,119 | ) | $ | – | |||||||
| Net loss attributable to common stockholders – diluted | $ | (36,865 | ) | $ | (1,851 | ) | $ | (40,895 | ) | $ | (4,235 | ) | |||||
| Palisade Bio, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows Operations | ||||||||
| (in thousands) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| (unaudited) | ||||||||
| Net loss | $ | (35,776 | ) | $ | (4,235 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 2 | 1 | ||||||
| In-process research and development | 30,117 | – | ||||||
| Noncash transaction costs shared with Seneca | (135 | ) | – | |||||
| Noncash lease expense | 80 | 3 | ||||||
| Gain on forgiveness of PPP loan | (279 | ) | – | |||||
| Accretion of debt discount and non-cash interest expense | 2,203 | 12 | ||||||
| Loss on issuance of LBS Series 1 Preferred Stock | 1,881 | – | ||||||
| Loss on issuance of debt | 686 | – | ||||||
| Issuance cost allocated to warrant | 1,574 | – | ||||||
| Change in fair value of warrant liabilities | (5,175 | ) | – | |||||
| Change in fair value of share liability | (73 | ) | – | |||||
| Stock-based compensation | 1,064 | 880 | ||||||
| Write off of accounts payable | 183 | – | ||||||
| RSU vesting expense | 41 | – | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | 25 | (53 | ) | |||||
| Prepaid and other assets | (1,294 | ) | 43 | |||||
| Accounts payable and accrued liabilities | (2,499 | ) | 998 | |||||
| Accrued compensation | (1,518 | ) | – | |||||
| Operating lease liabilities | (79 | ) | – | |||||
| Net cash used in operating activities | (8,972 | ) | (2,351 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Cash acquired in connection with the Merger | 3,279 | – | ||||||
| Acquisition related costs paid | (2,985 | ) | – | |||||
| Purchases of property and equipment | – | (6 | ) | |||||
| Net cash provided by (used in) investing activities | 294 | (6 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Payments on debt | (285 | ) | – | |||||
| Proceeds from issuance of debt | 1,250 | 279 | ||||||
| Proceeds from issuance of LBS Series 1 Preferred Stock | 19,900 | – | ||||||
| Redemption of warrants | (99 | ) | – | |||||
| Payment of debt issuance costs | (148 | ) | – | |||||
| Net cash provided by financing activities | 20,618 | 279 | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 11,940 | (2,078 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 739 | 3,623 | ||||||
| Cash, cash equivalents and restricted cash, ending of period | 12,679 | 1,545 | ||||||
| Reconciliation of cash, cash equivalents and restricted cash to the balance sheets: | ||||||||
| Cash and cash equivalents | 12,653 | 1,519 | ||||||
| Restricted cash | 26 | 26 | ||||||
| Total cash, cash equivalents and restricted cash | 12,679 | 1,545 | ||||||
| Supplemental disclosure of cash flows: | ||||||||
| Interest paid | $ | 50 | $ | – | ||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Transaction costs shared with Seneca | $ | 135 | $ | – | ||||
| Acquisition related costs included in accounts payable and accrued liabilities | $ | 367 | $ | – | ||||
| Acquisition costs related 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 | $ | – | ||||
