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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Palisade Bio Reports Second Quarter Financial Results and Provides Business Update

August 24, 2021 GMT

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

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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.  

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“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  $-