Okay, cool. Good afternoon, everyone. Thanks so much for coming. My name is Xander Guarna. I'm from the Jefferies Healthcare Investment Banking group, it's my pleasure to announce J.D. and Mitchell from Palisade Bio.
Thanks, Xander. I'm J.D. Finley. I'm the CEO of Palisade Bio, and with me is Dr. Mitchell Jones. He's our President and Chief Medical Officer. We want to first thank you for taking an interest in our company. I know we're the last guys standing in the way between you and the bar, so we're going to try and make this as efficient as possible. I'm very excited to talk to you today about our lead drug. It's a PDE4 inhibitor. A quick background on how we acquired the drug. It was developed originally out of the Merck labs in Montreal. The medicinal scientists who were working on that, when Merck closed down those labs in around 2010, they took that molecule with them, the active ingredient, and then they continued to develop it in a prodrug formulation.
That is the molecule that we are developing right now. They had taken it through some preclinical work, then we have taken it from there and finished up the preclinical work. About two years ago, we took it into the clinic, have treated 84 healthy volunteers with the drug, fasted, fed, SAD, MAD, the typical phase I-A study, then we've moved it into two phase I-B cohorts, one five-patient cohort in ulcerative colitis and one in Crohn's disease. Mitch will get into the specifics of the science, but it's important to know that this drug was, unlike most IBD drugs that have been repurposed from other indications, this particular drug was initially developed specifically for IBD. The prodrug formulation is really one of the key components of that formulation that has improved therapeutic index.
Again, Mitch will get into the specifics of how all that works. We read out our phase I-B data in August of last year, that was a catalyst for us raising about $138 million with a group of top-tier healthcare funds, it literally transformed our company, we're now happy to say that we are very well capitalized. We are about to start a phase II study in ulcerative colitis, that'll be followed by a phase II study in Crohn's disease. With that brief overview, let me turn it over to Mitch.
I'll try to move through these slides so there's time at the end for questions and answers. This is really just our corporate deck, so try and hit the key points. 2108 is a PDE4 inhibitor prodrug delivered orally. It's the only oral PDE4 targeting terminal ileum and colon. Obviously, PDE4 has commercial approvals in psoriasis, psoriatic arthritis, Behçet's disease, COPD, inflammatory indications, but also in indications that are fibrotic like idiopathic pulmonary fibrosis with the approval of nerandomilast this past year. As J.D. pointed out, we have phase I-A and phase I-B data in UC and SES-CD, clearly a dual mechanism of action, pleiotropic, anti-inflammatory, anti-fibrotic, and we also have developed a precision medicine test that we'll use post hoc for predicting responders. Our lead program's in ulcerative colitis, the second program in Crohn's disease.
We're expecting IND clearance in our lead program first half of 2026, with a first patient dose second half, and efficacy readout planned in the second half of 2027. Crohn's disease is just behind that with an IND clearance second half of this year. First subject dosed probably end of year. Then an interim readout and a primary readout first half of 2028. We don't have to go through the multi-billion dollar IBD market in ulcerative colitis and Crohn's disease. Mechanism of action, pleiotropic, anti-inflammatory, anti-fibrotic. Both of them are intracellular mechanisms, much like a JAK inhibitor. Intracellular cyclic AMP is one of the messengers that causes the production of inflammatory cytokines and is affecting immune cell trafficking and affects fibroblast activation.
By inhibiting the PDE4 enzyme, which is elevated in cells that enter the inflamed tissues of the colon, you increase intracellular cyclic AMP, which has downstream effects on inflammation and on fibrosis. You can see the inflammatory indications that we just discussed on the left, and then the fibrosis indications on the right with their respective drugs. 2108 is designed, as J.D. pointed out, specifically for inflammatory bowel disease, targeting the ileum and colon. By prodrug, we mean that it is designed to be gut restricted and then activated locally at the site of disease where the disease tissue, as drugs like sulfasalazine historically were designed as oral prodrugs, and sulfasalazine delivers 5-ASA, which is mesalamine, which is the first line for ulcerative colitis by the release of a sulfa leaving group after the action of an azoreductase enzyme.
The designers of 2108 used that historical data on a drug that works in ulcerative colitis and Crohn's to deliver 5-ASA. They used that same idea for the design and development of 2108, and they glucuronidated the drug instead of using a sulfa leaving group. Here there's a sugar leaving group. Our prodrug is delivered in tablet format, dissolves mid small intestine, acted on by beta-glucuronidase enzyme, as it's traveling through the gut in a restricted fashion. The active PDE4 is released by colonic bacterium that build up in the terminal parts of the ileum and colon, locally, topically at the site of disease. The active actually spills into the systemic circulation and contributes to circulating active, which has a free fraction and contributes to approaching IC50, IC90. We had mentioned, I think, the sort of historical development of PDE4 inhibitors.
Roflumilast may have been the first COPD drug by AstraZeneca. Amgen developed a gen 2 drug, or actually Amgen bought Celgene's gen 2 drug, apremilast, which is another BID oral for psoriasis, psoriatic arthritis, and Behçet's. This past year, Verona was acquired by Merck, they developed a PDE3/4 inhibitor that is inhaled. Arcutis, where the roflumilast cream is doing well. Mufemilast is a China company, Hengrui Pharma, has developed a drug, Mufemilast, which is used in psoriasis and reported data last year on in ulcerative colitis that is basically some of the best data reported to date for any molecule in UC, with 44% placebo-adjusted remission rates at the high dose 60 mg BID group. We put those sort of in the pan inhibitor group. There's selective inhibitors.
To make the PDE4 isoform selective, Boehringer developed nerandomilast, which is a PDE4B selective inhibitor, targeting idiopathic pulmonary fibrosis and ILD as well. Union Therapeutics has a PDE4B/D that's kind of targeting atopic derm. We call ours a next gen prodrug because we're using pharmacologic properties of prodrugs to deliver locally and avoid some of the tolerability issues. Diarrhea is one of the tolerability issues which comes from upper GI exposure, and then headache and nausea, which comes from immediate release of the drug and changes in drug concentration over time, whereas our drug is released slowly. We're differentiated, once daily dosing, no other PDE4 is once daily. This is a novel target, not approved yet in IBD. It's gut activated and improves the tolerability, dual action mechanism and perfect to act as a backbone in combination therapy as well.
We've done a UC study. Here's a summary. We've done a phase I-A SAD, MAD, and food effect study, as well as, you'll see a phase I-B study here in ulcerative colitis patients. We dosed normal healthy volunteers up to 450 and had no adverse events until we got to 450, where we saw some usual PDE4-related nausea, headache, diarrhea, that kind of thing. We dosed BID 15 all the way up to 50, and we saw some tolerability findings again, Grade 1 PDE4 events at 50, and then decided to go with the 30 mg titrated dose, which had no adverse effects and took that into the phase I-B study in UC patients. That 30 mg was BID, and you're going to see later that these are really massive doses for our drug.
You'll see here some of the summary of the AE findings that we just summarized. This on the left, you'll see the single ascending dose, and on the right, you have the multiple dosing. In the middle, represents the C trough, the concentration trough, you've got the dotted line below at the IC50 and the dotted line above the IC90. You can see that there's two dose groups here in normal healthy volunteers, the 15 twice daily, that's 30 daily, and the 30 twice daily, that's a total of 60 daily, which had no adverse events, at least the 30 when titrated and are well above the C trough as well above the IC90. In this particular study, we evaluated colon tissue samples 36 hours after dosing.
Just the way the study worked, we couldn't get patients in there earlier than the next day. You can see here with doses with no adverse effects and with C trough above IC90, you still have tissue levels approaching IC90 even 36 hours after withdrawing dosing. That 30 mg titrated dose, what we considered a max tolerable dose, BID dose in UC, we took into a UC patient cohort, five patients. These patients were not on steroids. There were no steroid tapers. We had one patient not on background, one 5-ASA, two 5-ASA, one REMICADE, one ENTYVIO, and we treated those patients just for one week. Again, primary endpoints in UC are usually eight to 12 weeks, and clinical remission is the primary endpoint. Here you can see we had around a 27-plus increase in cyclic AMP.
We had tissue lymphocytes were down 29%, colon tissue by 71%, fecal calprotectin reduced by 70%, plasma CRP by 15%. We had improvements in histology scores as well, even over one week, 30%-60%. We had a modified Mayo Score reduction that was significant in almost 63%. As you can see on the right, all the patients saw pretty nice reductions on changes from baseline. We had 100% response and 40% remission. The modified Mayo Score is made up just to remind everyone of stool frequency, rectal bleeding which are symptomatic. This was done in a confined setting, so patients were monitored very carefully. The endoscopy score.
I'll just point out, these are the data that were a major catalyst in the fundraising we were able to complete in September and October of last year.
This is our planned study, our planned phase II study that's upcoming. We designed a definitive study, really powered for the 12-week induction primary endpoint of clinical remission. A high-low versus placebo group. Really powered to see a 20% difference given a placebo of 12.5% clinical remission in the placebo group. We designed in a blinded maintenance extension. You can see here responders will be extended based on dose, and then the non-responders will go into a double-blinded induction maintenance extension here we have 52 weeks. We've also just recently completed an SES-CD study. We've reported those a few months back. We treated five patients in a phase I-B study. These are all Crohn's patients with a history of fibrostenosis. A long history of Crohn's can lead to waxing and waning inflammation, chronic inflammation, which can eventually result in stenosis, often of the small bowel.
85% of fibrostenotic Crohn's patients have stenosis of the ileum. Around 75% of all Crohn's patients have to have surgery because of ileal stenosis. It's a common condition that comes with chronic inflammation. Here we treated five patients. I think two were on background IL-23s and two were on TNF inhibitors, and I think one was on background 5-ASA. We treated them for two weeks here. We didn't have any withdrawals. Compliance was good. Again, 80% on concomitant biologics. We treated two patients. After the first SAD/MAD study and the UC study, we populated a PopPK model, which suggested because there was not differences in pharmacologic measures between normal healthy volunteers and UC patients. The half-life of the drug's long, so we could go to QD dosing. Here we're using once daily dosing.
The PopPK model suggested that we could get to systemic IC90 at 30. We started at 20, wanted to start below 30, then work our way up, 25, then we treated also one patient with 30 over a two-week period. Patients were 15 years diagnosed, baseline of eight, concomitant biologics of 80%, fecal calpro in the low hundreds, much like the AgomAb study, if any of you follow the FSCD space. We had two adverse effects over the 10 patient weeks total. Not two patients, but two total of AEs, one abdominal discomfort and one in fatigue. All patients achieved IC90 systemically, we had over six, as you can see, tissue plasma ratio when looking at drug ratio to tissue in all compartments.
We had a 59% decrease in fecal calpro, which was correlated tightly with our PDE biomarker, cyclic AMP, which was increased 33%. We had a 47.5% decrease, which was significant from baseline and endoscopic score, 40% response and 40% remission. Just to compare to, say, for instance, Agomab, they had a 7.4 baseline with a two-point reduction. Here there's an eight-point baseline with a 3.8-point reduction and 40% response in remission. Well-tolerated, robust PK. Again, strong target engagement with our cyclic AMP data. Clear mechanistic evidence here. Clinical activity was confirmed in Crohn's disease. We've decided to move forward with a luminal Crohn's study because the safety's very good in this refractory population, and we found that we have broad anti-inflammatory activity, including improvements in SES-CD score.
We will be announcing our future developments, but we're thinking more along the lines of an open-label study, more along the lines of a Prometheus-type study of 50-60 patients, open-label, moderate to severe.
Yeah, I think it's important to put into context why we did an FSCD cohort to begin with. At the time we originally designed that study, we were still a sub-$10 million market cap company, and we were needing a way to differentiate ourselves. Once we completed our financing, we got a lot of feedback from our KOLs and our investors that said, "You really should put all your emphasis on a UC study." At the same time, we were getting feedback from the AgomAb studies that made it clear that the regulatory pathway there is still very uncertain. Rather than go down a path with a study that we're not clear on what is the regulatory approval pathway, we decided to broaden that to a broader Crohn's population. That's what we're going to be designing the study around.
We're still going to gather some fibrotic biomarkers in that Crohn's study, because I think we still have an opportunity to be best in class in fibrostenotic Crohn's as well, given that this drug is pleiotropic, and it's got both anti-inflammatory as well as anti-fibrotic effect. As we mentioned, we closed on about a $138 million financing, first week of October of last year. We have enough cash to get us through both the UC study as well as the Crohn's study, and still have about a year's worth of runway left over after that. By the way, very clean cap table. If you go back to the prior slide, that raise back in October was a common-only raise, no warrants.
Well, in our cap table right now, we have something like $40 million unexercised pre-funded warrants still outstanding, so you have to factor that in to get the effective market cap of our company. We still have just over $8 million legacy warrants that are at $0.90 a share. That's a slight overhang on our cap table as well. Other than that, a very clean cap table, no debt, nothing else. We have a very strong team. One of the things that we were probably proudest of is that following the financing, we were able to attract some top talent from biotech, from some of the top pharma in the country. We're very well positioned to move this forward beyond phase II and into phase III with our current team.
Mitch, do you want to mention a little bit about the clin-ad board that we've got here? This is kind of the crème de la crème.
Yeah. We've also attracted a clin-ad board, sort of world-class. Of course, Bruce Sands, David Rubin, sort of at the top of some of the KOLs executing clinical research. Vip, CMO at Alimentiv, Flo at the Cleveland Clinic, kind of the fibrosis KOL that's highest profile in the U.S. LPB, Laurent, on a number of different clin-ad boards and high profile as well. Bram out of University of Leuven, sort of taking over for Séverine, who's now the provost or something at Leuven.
Yeah, you probably saw Dr. Rubin presented the Abivax data on Monday, and Dr. Peyrin-Biroulet, he presented the AgomAb data at DDW.
That's it.
That's it. We'll open it up for questions.
Oh, sorry. Thanks so much. That was great. Can you just talk about interpreting the kind of emerging mefemapras data? If you can talk about kind of structure comparisons, just how to make sense of that, given that's not a prodrug and yours is a prodrug.
Sure. There's a paper published by Li et al. that demonstrates where they take biopsy samples of colon tissue and do western blot analysis of the various isoforms. You can see fairly clearly that healthy, there's not overexpression of PDE4. In disease patients, you've got groups of, let's say, 30% of patients overexpressing A, C, and D, and then fairly broad expression of B, as one might assume, given that others are targeting PDE4B for inflammation. I still think it's important to recognize that PAN inhibition is required. The pathway is redundant in that cyclic AMP will be degraded by overexpressors of A. Even if you have a few patients that are overexpressing A, you still want to address those patients. Apremilast, they've suggested that they're a PAN inhibitor at times.
At times when it was kind of in fashion, it was a PDE4 inhibitor, a specific inhibitor. Now I think it's, they mentioned, I think Laurent spoke about it sort of sparing isoform D. It's hard to really know. Our drug is, we've measured activity on A, B, and D, so it's sort of more a PAN inhibitor. It's also more a next-gen inhibitor in design. When you look at off-target and all that stuff, more like apremilast. When it comes to the prodrug design, the design is much like sulfasalazine, which worked well for delivering 5-ASA locally to tissues and was approved in Crohn's and colitis. Really, it's the sulfa-leaving group causing nausea that was the issue with that drug.
This being a sugar-leaving group instead seems like maybe an old technology that is robust and was proven out, applying it to new targets. Maybe even a target that has evidence that it worked in the hands of Celgene and now at higher doses than apremilast drug. We did look at the steady-state drug concentrations in ileum, ascending, descending colon. There is seven times drug levels in colon tissue at steady state. We think there's the ability to dose within a therapeutic range that will allow for tolerability as well as efficacy. Whereas at the top range, I think you're seeing apremilast run into issues with tolerability. There's a couple of serious adverse events, for instance.
Thank you.