Palisade Bio, Inc. Common Stock H.C. Wainwright 28th Annual Global Investment Conference

Sure. I will give a little bit of background on our lead asset we are developing right now. I think that will give you a sense of where we have come from. We are developing a PDE4 inhibitor for IBD, and this is an asset that was originally developed out of the Merck Frosst labs in Montreal. When they closed that lab down in 2010, the medicinal chemists who had been working on that, a few of them had taken this compound with them, the active ingredient, and continued to develop it into what is now PALI-2108, which is a prodrug formulation. Interestingly, the company that had pulled this out had been seeing the effects of PDE4s in the IBD space with drugs like apremilast and knew about the adverse effects that came with PDE4 inhibitors typically.

They specifically engineered this asset with a prodrug formulation to improve the therapeutic index of the PDE4 inhibitor. That is how we got the asset. It is a bit of serendipity. They had a $20 million commitment from 7 Canadian VCs to develop this asset in Canada. Along the way, the president of Giant Pharma decided to go to work for one of those VC members, which then blew up the syndicate. They lost their financing, so now you had a company with no financing and no leadership. Mitch had been following this company for quite a while, and we were able to get in and acquire that asset fairly quickly. They were in the middle of preclinical development.

We acquired it, we continued, completed the preclinical development, moved it into a phase I study, where we treated 84 healthy human volunteers. Then we moved on to 2 phase I-B studies, one in ulcerative colitis, where we treated 5 patients for a week. Then earlier this year, we completed a 5-patient study in FSCD that read out in January or early February. That is how we have gotten to where we are today, and now we are in the process of launching a phase II study in ulcerative colitis, and we will follow that with a phase II study in Crohn's disease.

Yeah, maybe I will speak a little bit about PALI-2108 and PDE4 inhibitors in general. The first generation PDE4 inhibitors were drugs like roflumilast, BID drugs for COPD developed by AstraZeneca, poorly tolerated. Generation 2 included drugs like Otezla. As J.D. points out, Merck was set on developing a sort of Otezla better when the medicinal chemist that started Giant Pharma and developed this asset decided to borrow some of the aspects of a previous prodrug called sulfasalazine, which is used to deliver 5-ASA mesalamine, which is first-line treatment in IBD, in ulcerative colitis and Crohn's patients. That drug has been marketed for Crohn's and colitis patients for 40 years. It relies on a microbiome enzyme, an azo reductase, to deliver the payload, the 5-ASA, locally and topically. The developers of PALI-2108 wanted to glucuronidate the drug.

Instead of using a sulfa leaving group, they decided to glucuronidate it because there was a nausea associated with the sulfa group, containing group. Still, they wanted to have the PDE4 inhibitor delivered locally and topically. Even in this past year, companies like Verona developed an inhaled PDE3/4, were acquired by Merck for $10 billion plus. Arcutis has a topical form of roflumilast. Why those two examples are important, they are both PAN inhibitors, one generation one generation two. Obviously, pretty significant success in delivering PDE4 inhibitors topically, locally, seeing better efficacy, better safety. As well, Hemei Pharma is a Chinese company that has reported last year PDE4 inhibitor data, twice daily mufemilast in a 90-patient double-blinded RCT in China. They saw best in indication 44% remission. They saw a dose response at the 30 and 45 mg BID dosing.

Between the phase II data for Otezla at 20% remission above placebo and the mufemilast data at 45 and 60 mg up to 44% remission even at 12-week point and then 24-week point presented at DDW, I think there is a really good thesis that PDE4 inhibitors, when delivered at the right dose locally and topically is one of the things that we are trying to do, can achieve highest rates of remission in inflammatory bowel disease. One other point, there are selective PDE4 inhibitors that have been developed. Boehringer has an approval just last year in IPF with a PDE4B inhibitor in IPF again, and there are others. Our approach is to use a pharmacologic approach to avoid some of the tolerability issues J.D. had pointed out. Some of those are GI issues.

We do that by having a prodrug that is released locally and topically and avoiding the upper gut, as well as releasing the drug slowly. That gives us the ability to go once daily, and it also gives us the ability to avoid the peaks that cause nausea and headache. One last point. We have done a lot of work on the target. In taking biopsy samples, you do Western blots and look at PDE4A, B, C, and D. About 30, 40% of patients express and overexpress other isoforms, not just B. You cannot go in with just a B-specific isoform in hopes of avoiding some of the tolerability issues, because locally you have got overexpression in about 30, 40% of patients by Western.

We confirm that with expression level data, and a lot of those data will be presented at the upcoming conferences at UEG Week in Barcelona and at ACG. I think it is here in the United States. I forget which city right now.

Well, I will let Mitch weigh in on this as well. I guess first and foremost, we have learned that the drug is very tolerable and is working as designed. As Mitch talked about, a lot of these other PDE4 inhibitors that have been used in IBD, they are being used or they are being repurposed from another indication, typically psoriasis, whereas we have been designed specifically for IBD from the beginning for the tolerability issues. Getting some of that data about tolerability, I think, has been critical. The other part of your question was where are we going? The FSCD cohort that we treated, and now we are moving into broader luminal Crohn's. That has nothing to do with the results we saw from the FSCD cohort. In fact, we were very, very pleased with those results.

But the issue is that the regulatory landscape in fibrostenosing Crohn's disease is still somewhat uncertain, and rather than spending a lot of time going down that path and not being certain that we will have FDA approval, we have chosen to start with an open label study in luminal Crohn's, and we will gather some fibrotic data from that study as well that will help inform us later. But we are not going to go into FSCD until we have greater certainty on the regulatory pathway. Anything you want to add, Mitch?