Sign in

You're signed outSign in or to get full access.

PB

PALISADE BIO, INC. (PALI)·Q4 2023 Earnings Summary

Executive Summary

  • Palisade Bio ended FY 2023 with cash, cash equivalents and restricted cash of $12.5M, and expects runway into Q1 2025; full-year net loss was $12.3M and basic/diluted net loss per share was $1.80 .
  • The company shifted strategy in 2H23, terminating LB1148 and advancing PALI-2108 (colon‑targeted PDE4 inhibitor) toward a Phase 1 program with IND/CTA submission and Phase 1a/b initiation targeted before year-end 2024 .
  • Operationally, G&A decreased 26% YoY to $6.2M on cost reductions while R&D was $6.9M (+5% YoY) reflecting investment in PALI‑2108; milestone license revenue recognized in 2023 was $0.25M .
  • Governance/listing was a watch point: Nasdaq notified PALI on March 22, 2024 of audit committee non-compliance (two independent members vs. required three), with a cure period through either the next AGM/Mar 4, 2025 or Sept 3, 2024 timeline depending on AGM date . Shareholders approved a reverse split range (1‑for‑2 to 1‑for‑15) on March 25, 2024 for flexibility .

What Went Well and What Went Wrong

What Went Well

  • Strategic pivot executed: company terminated LB1148 and in‑licensed PALI‑2108 via Giiant, positioning for IBD indications; management guided to IND/CTA and Phase 1 start before end of 2024 .
  • Cost discipline: G&A fell from $8.8M to $6.2M (−26%) in 2023 due to 2022 cost‑reduction plan; decreases seen across salaries/benefits (−$0.9M), stock‑based comp (−$0.5M), professional, IR, consulting, recruiting, and insurance .
  • Strengthened advisory and biomarker strategy: formation of Clinical Advisory Board (KOLs Bruce Sands, MD and Florian Rieder, MD), curation of a precision medicine data pipeline with >1,600 UC patient clinical/biomarker records to enable a potential FDA‑approved test .
  • CEO tone and focus: “2023 was a transformative year…on track to launch the Phase 1 study of PALI‑2108 by the end of 2024” — J.D. Finley, CEO .

What Went Wrong

  • Clinical setback and program termination: Phase 2 PROFILE for LB1148 failed the primary endpoint; program discontinued, and Phase 3 INTEGRITY study was terminated .
  • Ongoing losses and going‑concern disclosure: full‑year net loss of $12.3M; substantial doubt about going concern discussed in Q3 2023 10‑Q given continued operating losses and need for future capital .
  • Nasdaq compliance risk: audit committee size deficiency flagged by Nasdaq; although no immediate delisting, it remains a governance overhang pending cure within stipulated period .

Financial Results

Full-Year Results

MetricFY 2022FY 2023
License Revenue ($USD Millions)$0.000 $0.250
R&D Expense ($USD Millions)$6.547 $6.893
G&A Expense ($USD Millions)$8.764 $6.202
Total Operating Expenses ($USD Millions)$15.721 $13.320
Net Loss ($USD Millions)$14.260 $12.300
Basic & Diluted Net Loss per Share ($USD)$16.53 $1.80
Cash & Equivalents at Year-End ($USD Millions)$12.383 $12.432

Notes:

  • Management states cash runway into Q1 2025 .
  • 2023 other income was $0.770M (dividends/other) offsetting OpEx .

Quarterly Trend (Q2 → Q3 2023)

MetricQ2 2023Q3 2023
License Revenue ($USD Millions)$0.000 $0.000
R&D Expense ($USD Millions)$2.177 $1.742
G&A Expense ($USD Millions)$1.432 $1.674
Net Loss ($USD Millions)$3.393 $3.596
Basic & Diluted Net Loss per Share ($USD)$0.53 $0.49

Notes:

  • Quarterly revenue remained de minimis; margin metrics are not meaningful given near‑zero revenue .

Segment Breakdown and KPIs

  • Segment reporting: single operating segment (R&D) per CEO as CODM .
  • Selected KPIs/operational items:
    • Contingent consideration liability for Giiant milestones recorded at $0.212M as of 9/30/23 (Level 3 fair value) .
    • Workforce reduction: additional ~$0.2M severance/benefits to be recognized in Q4 2023 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
IND/CTA‑enabling toxicology completionBy end Q2 2024n/aComplete by end Q2 2024 n/a
Nonclinical IND/CTA‑enabling activities completionBy end Q3 2024n/aComplete by end Q3 2024 n/a
IND/CTA submissionPrior to end 2024n/aSubmit prior to end 2024 n/a
Phase 1a/b initiation (UC)Prior to end 2024n/aInitiate prior to end 2024 n/a

Note: Company did not provide financial guidance; development timeline is the principal guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2023)Trend
Program strategyQ2/Q3: Terminated LB1148 after Phase 2 miss; pivot to in‑licensing; Giiant collaboration for PALI‑2108 Emphasis on advancing PALI‑2108; milestones laid out Pivot completed; execution phase underway
R&D executionQ2: Increased trial activity (dose optimization), higher R&D; Q3: R&D moderated as trials closed; IPR&D expenses for Giiant contingent consideration IND/CTA‑enabling and biomarker precision approach development Transition from clinical close‑out to preclinical/enablement
Cost disciplineQ2/Q3: Material G&A reductions from 2022 plan Reinforced lower G&A in FY 2023 Sustained
Regulatory/legalQ2/Q3: Going concern; need for capital Nasdaq audit‑committee non‑compliance notice; cure period defined Governance risk to monitor
Precision medicine/biomarkersNot prominent in Q2; pipeline build >1,600 UC patient data curated; aiming toward FDA‑approved test Emerging thesis enabler

Management Commentary

  • “2023 was a transformative year for Palisade Bio…we are on track to launch the Phase 1 study of PALI‑2108 by the end of 2024.” — J.D. Finley, CEO .
  • Cash runway: “As of December 31, 2023, the Company had cash, cash equivalents and restricted cash of $12.5 million…sufficient cash to fund…into the first quarter of 2025.” .
  • Strategy: Development plan milestones for PALI‑2108 (IND/CTA‑enabling through Q3 2024; submission and Phase 1 start prior to end of 2024) .
  • Precision medicine: Collaborations and data curation to identify likely responders to PDE4 therapy; groundwork for potential FDA‑approved test .

Q&A Highlights

  • No earnings call transcript was available in the document set; Q&A highlights are not applicable.

Estimates Context

  • Wall Street consensus (S&P Global) for quarterly EPS/revenue was unavailable at the time of request due to access limits; as a result, estimate comparisons are not provided.

Key Takeaways for Investors

  • Execution focus: Near‑term catalysts are IND/CTA submission and initiation of Phase 1a/b for PALI‑2108 by year‑end 2024; follow progress on tox and nonclinical enabling activities .
  • Operating runway: ~$12.5M cash at year‑end 2023 with runway into Q1 2025, but going‑concern language and need for future capital persist; financing windows remain central to the story .
  • Expense profile: Structural G&A reductions were sustained in 2023; watch R&D cadence as PALI‑2108 advances into clinical stage .
  • Governance/listing: Monitor audit‑committee remediation and reverse split authorization; listing compliance remains a potential stock overhang/catalyst .
  • Thesis evolution: Precision medicine approach and UC/Crohn’s focus may improve differentiation and trial success probability; validate biomarker strategy as details emerge .
  • Risk management: Prior clinical miss underscores binary risk typical of small‑cap biotech; diversify position sizing and watch regulatory timelines .
  • Trading implications: Stock likely reacts to regulatory milestones (IND/CTA clearance, first‑in‑human dosing), funding transactions, and governance updates; no consensus estimates available to frame near‑term beats/misses.