Palisade Bio has ended development of its lead and only drug in one of two potential indications after it failed to reduce adhesions in patients undergoing bowel resection surgery, sending the biotech’s stock into free fall.
The latest version of the phase 2 trial of the protease inhibitor, dubbed LB1148, evaluated 22 patients who had surgery since May, with half receiving the drug and the other half receiving placebo. A look at the top-line data proved to the company that LB1148 “did not achieve the primary endpoint of reducing adhesions.”
The safety data don’t make for easy reading, either. A total of 16 serious adverse events (SAEs) were reported in the LB1148 group, although the biotech pointed out that only three of these were related to the drug. The placebo group also saw a similar trend, with 14 SAEs.
“The company does not believe the safety data and efficacy results of the phase 2 PROFILE trial support further development of LB1148 for reduction in intra-abdominal adhesions,” Palisade concluded in the Wednesday morning release.
LB1148 is a broad-spectrum serine protease inhibitor that acts to neutralize digestive enzymes with the aim of reducing intestinal damage. The troubled PROFILE trial had already been through a couple of incarnations, initially enrolling 79 patients before it was paused in 2020 due to COVID-19.
It’s not yet the end of the road for LB1148, which is in a phase 3 trial by Palisade’s Chinese partner Newsoara to see whether the drug can accelerate the return of postoperative GI function. However, references to that trial were notable by their absence in this morning’s release.
Trying to move investors’ attention onto the future, CEO J.D. Finley promised that the biotech is “in the midst of encouraging discussions that we believe will lead to pipeline expansion opportunities in high value indications in the GI space.”
“Our focus is now on completing these discussions in order to unlock opportunities and provide value for our shareholders,” the CEO added.
The vague reference to a brighter future clearly wasn’t enough to appease those shareholders, who sent the biotech’s stock plummeting 66% to 65 cents when the markets opened Wednesday from a Tuesday closing price of $1.94.
You can hardly blame them. Only three months ago, Palisade was “looking forward” to the phase 2 readout, which it said would be “integral in determining the most expedient clinical pathway for LB1148.” Palisade had already gone all in on LB1148, laying off 20% of staff last fall to conserve enough money to push the drug through the clinic.
It meant the company ended March with $13.3 million in cash and equivalents which, supplemented by $6 million from selling off some shares, had been expected to be enough to fund operations through to 2024.