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  $— 
     



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