Even after raising nearly $14 million in a recent public offering, Palisade Bio is cutting 20% of its staff as it looks to keep its finances hanging on by a thread.
The latest decision by the company’s leadership is part of an effort to keep Palisade afloat, although, when push comes to shove, its future rests on its one and only asset: LB1148. The med is a gastrointestinal treatment designed to improve function after surgery. The company announced Thursday that the decision to shave off staff was done solely to save as much money as possible to afford the med’s development plan.
“As a result of this process, we identified efficiencies and took cost-saving measures of over $1.5 million per annum to streamline our business, including a 20% reduction in our workforce,” said CEO Tom Hallam, Ph.D. “Through these necessary actions, I believe our company is now in a much stronger position financially.”
A month ago, the company closed a $13.8 million public offering, a financial life preserve after the company reported just $5 million in cash on hand in its second-quarter earnings report. A cash runway was not attached to the remaining funds, but, in the same report, Palisade reported losing $2.3 million in the second quarter, painting a dire future.
All eyes now turn to LB1148, the company’s sole asset, which is being developed as a therapeutic to assist with postoperative GI function and prevention of post-surgical abdominal adhesions. The former is the indication currently furthest along, with the company dosing its first patient in a phase 3 trial in the middle of August. But the company noted that same month that it expects to take at least a year and a half to complete enrollment. In May, the company’s partner in the China market, Newsoara Biopharma, received a green light from regulators there to continue with phase 3 plans.
The use as a treatment for abdominal adhesions is in phase 2 development, and the company expects to complete enrollment in the fourth quarter of this year. The trial is expected to complete in the first half of 2023.
The reality is that there was not much room for the company’s shares to fall in light of the news. Palisade’s stock has been trading at less than $1.00 per share since April 7 and has been at less than $0.50 for roughly six weeks. The company now sits at about $0.15 apiece.