Palisade Bio, Inc. Common Stock Stifel 2026 Virtual Immunology and Inflammation Forum

Great. Well, thanks for having us, Alex. It's great to be here. Palisade Bio is a clinical stage company focused on developing next generation prodrugs for inflammatory and fibrotic diseases. Our lead program is PALI-2108, and it's a once-daily oral PDE4 inhibitor in a prodrug design. That design allows it to be bioactivated in the terminal ileum and the colon. Earlier this year, we completed our phase I program. Now we're initiating phase II programs in both ulcerative colitis and in Crohn's disease. It's really the totality of our phase I data that gave us the confidence to move forward into phase II. Namely, we saw favorable safety and tolerability. We saw sustained drug exposure in plasma above the IC90 threshold. We saw targeted ileal and colonic distribution.

We saw activity across key inflammatory and fibrotic pathways. Then we saw encouraging early clinical and endoscopic signals. As you know, we received our US IND in June for ASCENTRA-UC, which is our global phase IIb study in moderately to severely active ulcerative colitis. Today we announced that we received CTA clearance in Canada as well for that study. The study will enroll 204 patients across North America and Europe, and we're making steady progress in activating U.S. sites as we speak. This is where we plan to first start enrolling patients. Then, as you probably saw yesterday, we also announced IND clearance for ASCENTRA-CD, which is our phase II study in Crohn's disease. In that study, we expect to enroll approximately 60 patients with moderate to severe disease. So now we're currently executing against both major forms of IBD.

Our thesis is really simple. PDE4 inhibition is a well-validated and an anti-inflammatory mechanism. But historically, PDE4 inhibitors have been constrained in addressing IBD because of the limited therapeutic window. What makes us unique is that PALI-2108 was specifically engineered to address that limitation through targeted bioactivation in the distal ileum and the colon. We've been able to show a sustained exposure profile through that design. We believe this design profile allows us to unlock more of the value of using a PDE4 inhibitor in IBD.

Sure, I'll take that. Thanks, Alex. PDE4 is a validated anti-inflammatory and anti-fibrotic mechanism where there's commercial approvals and examples of each. The historical challenge with PDE4s has been achieving sufficient activity without the side effects that limit dosing. Twice daily apremilast has been evaluated in UC with a clinical remission rate of over 31%, approximately 20% above placebo. Further support comes from afamelanotide, another twice-daily PDE4 inhibitor developed by China's Hengrui Pharma, where in a blinded RCT, a phase II study conducted in China, the company reported remission rates of approximately 57% at the high dose versus 13% with placebo. That's a 44 percentage point difference.

Our thesis with PALI-2108 is straightforward. Deliver an established mechanism directly to the disease tissue, and this targeted approach has other precedents. You think about last year, Verona's inhaled PDE4 therapy acquired by Merck. Arcutis now has a topical PDE4 therapy that it's quite successful with. With PALI-2108, our goal is to deliver PDE4 directly to disease tissue, achieving wider therapeutic windows and sustained activity that supports once daily dosing.

Some of the tolerability issues with PDE4s, direct exposure to the upper GI tissues. It is a CFTR-driven secretory diarrhea that results. With a prodrug approach where we are locally bioactivating, we do not expose upper GI tissues to active PDE4 inhibitor. The headache and nausea really come from peaks or changes in concentration, spikes in the bloodstream that contribute to tolerability limitations there. By having a slowly released, locally bioactivated prodrug to active drug, it is able to overcome some of those tolerability issues.

Our phase I program was designed to go beyond safety and basic pharmacokinetics. In healthy volunteers, we characterized dose exposure and the pharmacology supporting once-daily dosing. Then we studied small groups, cohorts of UC patients and also fibrostenotic disease patients, Crohn's patients, where 2108 was working as intended, and we wanted to figure that out in the smaller disease cohorts. In ulcerative colitis, after just 7 days, all five patients achieved clinical response, and two achieved endoscopic response and remission. We also saw supportive improvements in histology, inflammatory markers, and pharmacodynamic measures. In the fibrostenotic Crohn's disease study, after just 14 days, we observed 47.5% mean reduction in SES-CD score, and we had two of five patients that achieved endoscopic response and remission.

These are small exploratory cohorts, but the clinical signals were supported by the direct evidence of drug exposure and target engagement in the intestinal tissues themselves.

Yeah, what gives us the confidence is the consistency across multiple measures. In the UC study, clinical response was accompanied by improvements in the modified Mayo components themselves. This was supported by histologic findings, inflammatory findings, pharmacodynamic findings. In the Crohn's disease study, we saw objective endoscopic improvement along with direct evidence of tissue exposure and engagement, even in the proximal parts of the terminal ileum. We saw rapid onset with anti-inflammatory. This rapid onset has been seen in other anti-inflammatory Yeah therapies, including JAK inhibitors such as RINVOQ.