Hello everyone. My name is Mitchell Kapoor. I am a Senior Biotechnology Analyst at H.C. Wainwright. Today, I have the pleasure of having Palisade Bio with us for a fireside chat, and from the company, I have JD Finley and Mitch Jones. Gentlemen, thank you for joining us today.
Thanks for having us.
Maybe to kick off the conversation, for those who are not familiar with the company or are not up to speed with the current developments, you can just give an overview of Palisade and the current initiatives for the company.
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 seven 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 two phase I-B studies, one in ulcerative colitis, where we treated five patients for a week. Then earlier this year, we completed a five-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.
Great, and maybe also to start off, what makes this different than Otezla?
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 JD 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 mg and 45 mg BID dosing.
Between the phase II data for Otezla at 20% remission above placebo and the mufemilast data at 45 mg 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 JD 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, PDE4B, PDE4C, and PDE4D. About 30, 40% of patients express and overexpress other isoforms, not just PDE4B. You cannot go in with just a PDE4B-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.
Excellent. Wonderful overview. Okay. From the data that we have seen so far, the healthy volunteer data and then the FSCD data, what did we learn? What is the path forward for folks who are not familiar that there was a little bit of a pivot there? From an inter-patient variability standpoint, what do we know from all of the data put together at this point?
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?
Yeah, I mean, I would just say that we did not really spare any expense or even we spent a fair bit of time on the development of this drug. We did a phase I SAD/MAD food effect study. We did a I-B in ulcerative colitis over just a week, but looking at a lot of different biomarkers. We saw a 30% improvement in cyclic AMP, which is kind of a difficult to measure tissue assay, PDE biomarker, 30% reduction in lymphocytes, a 70% improvement in PDE4B, a 70% improvement in fecal calprotectin, in plasma CRP in just one week. In the modified Mayo Score, which is a combo of rectal bleeding, stool frequency, as well as endoscopy score, we saw 100% response and 40% improvement, again, with a max tolerated dose.
There's other good examples of S1Ps and PDE4s that have done similar things on biomarkers. Certainly this was done in a Phase I clinic and setting, so those symptomatic portions of the Mayo Score were monitored carefully. In the FSCD study, we did that over two weeks. Again, after doing some extensive, sophisticated PopPK modeling, we did a once daily dosing starting at 20 and then 25 and then 30, and we saw a 40% response, 40% remission in the SES-CD score and biomarkers effectively very similar to what we saw in the ulcerative colitis study, but over two weeks.
Excellent. Maybe we can move to the Acentra study and just the design of that and what we can expect to see in the second half of next year.
Sure. Yeah. For anyone that's not up to speed on the studies, in Q2, we announced that we had IND clearance in the ulcerative colitis indication. Effectively, it's a registration-like study, what we call a definitive study, 2B study. It's a three-arm study. It's our target dose, which is 15, then high dose, which is 30 versus placebo. It's powered to see a 17.5% difference between active and placebo groups at an 80% confidence, 90% confidence to see a 20% difference. We have 204 patients randomized one to one to one through 12 weeks of induction. Treat straight through design out to 48 weeks in maintenance, as well a blinded maintenance phase. Yeah. That's the UC study. We have started to activate sites, so we'll have some updates on the UC program shortly.
Great. With obefazimod's maintenance data, it's changed the field a bit. Wondering about how you think, does that weigh into the bar at all of how you interpret the data next year, and where is the optimal position for your drug, a gut-activated PDE4?
Yeah. obefazimod, the phase III data, roughly, I think on average, around 16%+ remission at eight weeks, and then the long-term maintenance data was a number a couple of percent better than anything in the field, best in indication. No surprise, in speaking with some of our expert Clinical Advisory board members who are also part in the Clinical Advisory board for Abivax. It's clear that they believe that the drug, over time, results in improved mucosal healing, potentially, and durable remission through reprogramming the immune system. Some other mechanisms that are out there that could act to help balance and cause mucosal healing would be something like AHR, although there's some drawbacks to that as well. But in terms of obefazimod, it seems to be moderately better long-term in terms of clinical remission in maintenance.
We'll see if that's true also in Crohn's disease, and I'm not sure that it's changed our goals necessarily. Because we have early symptomatic improvement.
Right.
Because we're potent anti-inflammatory, a little bit different mechanism, we're looking for pretty good data, something similar to mufemilast . That would be incredible, but in the induction phase.
Great. Okay. Earlier we walked through together the importance of maintaining an adequate Ctrough, and should we focus on average exposure? What do you think about how does that look from the data we've seen, and what that could predict of how this drug will work whenever we see the data?
We looked at apremilast, which had a 20% remission over placebo. We looked at mufemilast , which, at the high end, had a 44 over placebo, even at the 24-week point, and even in the crossover placebo to active therapy patients. We normalized all those data, the PK data, based on IC50, IC90. Then we looked at Ctrough, we looked at exposure, so AUC, and we looked at C avg, which is kind of a proxy for AUC. Consistently, our drug PALI-2108 had either lower variability in the Ctrough levels or superior exposure over a 24-hour period, or time spent above IC90 than the others.
I think we were talking a little bit about how the terminal half-life versus the effective half-life of our drug, slightly different terminal half-life being 12 hours, effective half-life maybe being 27 for our drug, whereas immediate-release drugs like apremilast and mufemilast have much closer terminal and effective half-lives, and that's because our drug is a two-compartment system. You can kind of think of it simply as you're building up this reservoir of prodrug in the colon that's being released locally. It's being absorbed through the diseased tissue, and there's a two-compartment system, meaning active drug coming from colon, but also from plasma to diseased tissue, versus immediate-release drugs where it's circulating through plasma and into diseased tissue.
That sort of enables there to be pressure on the target, the PDE4 target, consistently because of the bioactivation locally as opposed to sort of this immediate-release sort of sawtooth pattern, and increased variability 24 hours later, just before your next dose.
Yeah, I think that consistency in delivery is what we believe eliminates a lot of the nausea and headaches.
that you typically see with a lot of spikes in the Cmax, with the other PDE4s that are systemically released.
Great. The gut activation, obviously, is the central component to your strategy. When you think about the different patients and the different disease severity and who might enroll versus who might be a classic patient that would be on therapy when it's commercialized, how do you think about those dynamics and how consistent the gut activation is from patient to patient, both in your study, but how you would expect that would translate to the real-world setting?
Yeah. The patients we're going to be treating are moderate to severe patients. That's classic for UC drug developers. We are going to treat 50% of patients failing advanced therapies, but less than 10 patients who have failed three or more advanced therapies.
Less than 10%.
That's right. We'll have 50% of patients that are bio-naive. So fairly consistent, very similar to an Abivax type population. I think the Prometheus population was sort of 65% advanced therapy exposed and failing advanced therapies versus 45%, or sorry, 35% bio-naives. So I think it will be representative of the general population. In terms of part of that question, these patients will be similar to other patients entering phase II or III clinical studies in UC, so they'll be selected for not having serious chronic diseases like cancer or being on medical therapies. So in that way, they'll be homogeneous.
Great. Okay. Fibrosis is a part of the disease, so just wondering how you could measure that in future studies and how you plan to track that.
Yeah, Mitch can get into the specifics of it, but you're hitting on one of the key areas where regulatory guidance is still pretty murky.
Okay.
We've got thoughts that come from our Clinical Advisory board and other experts in the field. Mitch, why don't you kind of-
Yeah. In Crohn's and colitis, there is fibrosis, which is the result of chronic inflammation in both. It's more apparent in Crohn's disease because it often involves a more sort of flexible, compliant tube at the end of the small intestine, which causes stricture and can cause acute abdomen and obstruction and acute abdomen, et cetera. But in ulcerative colitis, you also have fibrosis due to the ongoing inflammation. Our plans are to look at some of the pathways that represent anti-fibrotic pathways. Previously, we've looked at TGF-beta, for instance, and we've reported this in one of our posters, TGF-beta levels when looking at pathways before and after treatment with PALI-2108. Even in colon samples, we saw that that was kind of zeroed out or significantly reduced.
We will continue to look at some of those fibrotic pathways in colon tissue, in the ileum, in the case of in our Crohn's studies. Then we have got other soluble biomarkers that we are going to be reporting on at the ACG meeting and the UEG meeting, that we will probably include in future studies as well.
Great. Just to close things out, I like to take the opportunity to turn it over to you guys to mention anything critically important that we did not get to touch upon today, and also to give a preview of the next 12 months ahead and the key inflection points we will see.
Sure. Well, I will let you take the first half of that if you want.
The next 12 months?
No, what did we not talk about that?
Yeah, anything?
I do not know if you want to touch on combination therapy and the ideas, kind of the thoughts there.
We sort of see the field as separated into infused biologics where companies like Spyre and others are following those studies like DUET and VEGA, and the future might be combos. In the oral small molecule space, we see there being an opportunity for combos, so what is the best backbone there? It is something that is safe, and we think we have a very safe drug. The no EKG issues, no lab issues, no serious adverse events, so is it a safe drug? It is a safe drug. Is it a good backbone? It is anti-inflammatory, potent anti-inflammatory with early symptomatic improvement. You cannot think of a better backbone therapy than that. Now, the existing therapies like JAK inhibitors have black box warnings. S1Ps have monitoring requirements. They are not useful in Crohn's patients.
You've got upcoming obefazimod, the Abivax drug, the MIR-124, as well as icotrokinra, the J&J IL-23 that will hit the market sometime in the future. There's really only a handful of drugs that could be used in combination for oral small molecules, but fix those combos will come eventually. We're doing some work to understand that in very complex, I guess, large human AI-supported models.
Very quickly, next 12 months, we'll be very shortly announcing first patient dosed in the UC study. We'll be announcing approval of the study for Crohn's disease, and we'll also give all the details of that study. That'll be an open label study, so there may be opportunity to report data sometime during the year, next year, and then last patient dose probably in late Q3, early Q4 of next year for UC. That's kind of the next 12 months.
Wonderful. JD, Mitch, thank you both so much. Really appreciate your time today. Thanks to the Palisade team and all the investors that joined us today for the Fireside Chat.