Good afternoon, everyone. Thank you for joining the 25th Annual Needham Virtual Healthcare Conference. My name is Joseph Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Palisade Bio. Joining us today from the company is CEO JD Finley and President and Chief Medical Officer Mitch Jones. For those of you joining on the webcast, if you would like to ask a question, please do so at any time. You can submit a question using the chat box feature at the bottom of your screen. With that, we'll get started. I'll turn it over to Mitch and JD for the presentation. Thanks, Joseph Stringer, and thanks for having us here at the conference. We appreciate the opportunity to share our story with investors. This is exciting times for Palisade Bio. Our lead drug is a PDE4 inhibitor. The active ingredient was originally developed out of the Merck labs in Montreal. When they closed those labs down in about 2010, the medicinal chemists that were working on that molecule took that with them and built a prodrug, small molecule around that active ingredient, and that's what we are working on today. We acquired that through a license about 2.5 years ago. We've taken it through the remainder of the preclinical work, and now it's been through both a phase Ia with 84 healthy human volunteers and then another five UC patients, that we read that data out last August. We just recently, within the last few weeks, read out some data on a five-patient cohort in fibrostenotic Crohn's disease. What really makes this a unique asset is that the science behind PDE4 inhibitors and their effectiveness in the UC and IBD space has been fairly well documented with some predecessor PDE4 inhibitors. The problem with those is that they all come with serious adverse events. The prodrug formulation that these Merck scientists built around this asset that we own helps compensate for that and improves the therapeutic index. Mitch is going to go into some of the details of that here shortly. We are once-daily, we're oral, and we are about to kick off a definitive study in Ulcerative colitis that we'll read out by the second half of 2027, approximately 200 patients. Shortly after we kick off the Ulcerative colitis study, we plan to go into a Crohn's disease study studying luminal Crohn's. The study design for that hasn't been fully finalized yet, but we're thinking it's probably going to be a smaller study of maybe 50 patients-60 patients, open label, with the opportunity for some interim readout. With that, let me turn it over to Mitch, and he can take you through some of the details. Sure. Yeah. No, thank you, JD, and thank you to the conference organizers for inviting us. We have the milestone slide here, and I think this recaps what JD just pointed out. Our lead program is in Ulcerative colitis. We're expecting IND clearance coming up here in the first half of the year with a first subject dosed in a definitive phase II study of approximately 200 patients, and with a primary readout in the second half of 2027, and then the Crohn's study, as JD pointed out, with an IND clearance probably in Q3 for subject dosed, hopefully end of year, maybe early next, and then interim readouts in 2027. PDE4 inhibitors are pleiotropic drugs. I like to say there's no better example than PDE4s in terms of pleiotropic, anti-inflammatory, anti-fibrotic, clinically and commercially proven. PDE4s include Otezla, apremilast, which is approved in psoriasis, psoriatic arthritis, Behçet's. roflumilast, oral twice daily for COPD. This year, Verona was acquired by Merck for a PDE3/4 inhaled drug. There are good examples as well. Nerandomilast, a PDE4B specific drug, was approved this year, or last year, sorry, in IPF, and so truly an anti-fibrotic and anti-inflammatory drug. We've developed PALI-2108, which is an orally delivered, once-daily prodrug. The drug is formulated as a tablet, and it is coated with an enteric polymer coating and delivers to mid-small intestine or in the jejunum. When that is dispersed, 2108 is a prodrug that is a sugar moiety that's bound to a PDE4, and it's inactive. In prodrug form, it's inactive. It's much like the drug sulfasalazine, which is the drug 5-ASA, or sulfasalazine, which is bound to a sulfa-leaving group. Sulfasalazine was a prodrug that was relying on azoreductase, a microbiome-produced enzyme, to release a sulfa leaving group from the 5-ASA active group. Here, too, the developers of this drug, our technology used glucuronidation and bound a sugar moiety to a PDE4 inhibitor, relying on beta-glucuronidase, enzyme produced by the microbiome as opposed to an azoreductase. The 2108 molecules got restricted and inactive, and then as it progresses down the small intestine, the lumen of the gut, it starts to see more and more bacteria producing beta-glucuronidase enzyme. That enzyme cleaves the sugar moiety from the PDE4 active. That PDE4 active can be absorbed through the diseased tissue in the ileum and then in the colon, and then it's free to act intracellularly. As it gets absorbed, it circulates systemically with a free fraction of about 20%-25%. In that way, you've got this prodrug orally delivered, locally bioactivated, locally acting, and then absorbed systemically, distributing systemically with a lower free fraction, but still achieving IC90, as you'll see later in the presentation. The original PDE4 inhibitors, as we were discussing a couple of slides back, include generation one, like roflumilast, the second line here, AstraZeneca's oral twice daily for COPD, apremilast, a second generation of PDE4s. That's another pan inhibitor for Behcet's, psoriasis, psoriatic arthritis. Verona this year acquired by Merck with a PDE3/4, that's a pan inhibitor. Arcutis with roflumilast, another pan inhibitor, gen one, that was formulated as a cream. Notably, Jiangsu Hengrui Pharmaceuticals from China presented a 90-patient double-blinded RCT data last year at UEG Week, which demonstrated a 57% clinical remission in moderate to severely active UC patients and 44% placebo-adjusted, which is roughly twice as good as sort of anything on the market of a 12-week clinical remission endpoint. Selective PDE4 inhibitors have been developed. Boehringer Ingelheim developed nerandomilast, a PDE4B specific. The B isoform is more closely associated with anti-inflammatory effects. Despite the highly selective nature of the PDE4B inhibitor in their phase III program, I think both an IPF study and an ILD study with an IPF approval, the drug still suffers from about a third or 30% of patients with diarrhea. PDE4 inhibitors have tolerability issues. As JD pointed out, those can be broadly categorized as GI or CNS, and then GI direct exposure of PDE4 and absorption through the upper gut can cause a CFTR secretory diarrhea. The CNS adverse effects are thought to be associated with peak levels or Cmax levels and are headache and nausea. PALI-2108 is a next gen PDE4 inhibitor. We're using pharmacologic properties of drug development and drug design to address these tolerability issues and to push dose so that the drug is no longer dose-limited by tolerability. In Ulcerative colitis and Crohn's as opposed to psoriasis, there's a much larger inflammatory burden. You've got to push the dose. Even though apremilast is approved at 30 mg in psoriasis, just like mafimilast was approved at 30 mg in psoriasis, mafimilast saw better efficacy at 45 mg and then 60 mg. With PALI-2108, the nice thing is the half-life is long. You can dose this drug, our drug, orally once daily. It's locally bioactivated, so you avoid the diarrheal tolerability issues, and it's slowly released over time, improving the therapeutic index around headache and nausea. In terms of differentiation, we're oral once daily. This is a novel target. There's no PDE4s approved in IBD. It's gut activated, which improves tolerability because it's locally activated. I think later in the presentation, I'll show you some tissue to plasma ratio data that demonstrates a six-fold increase in tissue to plasma drug concentrations. Of course, there's the potential for oral combination therapies. We've conducted a phase I study, a phase I SAD, MAD and Food Effects study. We went up in a single ascending dose as high as 450 mg. We conducted a multiple ascending dose and went as high as 50 mg or 100 mg daily, and then settled on a 30 mg titrated dose that was considered a max tolerable dose in UC and took that into a UC study. I'll just show you sort of quickly the design elements here of the phase I. Here's the phase I SAD, single ascending dose on the left, the multiple dosing here on the right, where we used at this point, we didn't know whether the pharmacology of the drug would hold given in UC patients, you have increased bowel frequency. We were evaluating twice-daily dosing despite a long half-life of 12 hours. The study showed us that there weren't pharmacologic differences in the Cmax or the AUC between normal healthies and UC patients with oral dosing. Despite that, we took the 30 mg twice daily titrated into a UC study. We didn't see any adverse effects at 15 mg twice daily or at 30 mg twice daily, and then took that into a UC patient population. The other interesting thing is. The 15 mg twice daily is 30 mg daily. We didn't see any adverse effects and no PDE4-related adverse effects or tolerability issues. Same thing for 30 mg, so 60 mg daily, when we used titration. In fact, we looked at tissue levels 36 hours after dosing on the elimination profile of the drug after the study was over, and we're able to get patients into a flex sig. We took tissue samples and found that we're approaching IC90 even 36 hours after the completion of dosing. We conducted a phase Ib study in UC patients. We just treated five patients. Just thinking back to the UC experience with PDE4 inhibitors, apremilast was used in by Celgene in a phase II study and demonstrated a 31.6% remission at 12 weeks, approximately 20% placebo-corrected. As I pointed out, 30 mg twice daily is the approved dose of apremilast. 30 mg is also approved twice daily for psoriasis in China for the drug mafimilast. The developers have used that at 45 mg and then 60 mg and saw a dose response. They also saw 57% remission at the high dose, 44% placebo-corrected. Here we've done our study with 2108, which is in this study given at 30 mg twice daily. We treated five patients with moderate to severe Ulcerative colitis. One not on background, two on 5-ASA, one on Entyvio and one on Remicade. No patients entered the study on steroids. There were no steroid taper over the course of the study, and this is just a one-week study. We saw over the course of one week with a five-day titration, we saw a 27% increase in tissue cyclic AMP, which is downstream. The way the drug works is intracellularly, we're inhibiting the PDE4 enzyme, and there's a number of different isoforms and types of PDE4 enzymes. If you look at a western blot, for instance, of patients with Ulcerative colitis versus healthies, you can find actually that there are a number of patients with Ulcerative colitis with elevated protein levels of PDE4A, B, C, and D. You can't take a specific PDE4B, for instance, inhibitor and treat all patients because the enzyme will degrade cyclic AMP. You need a sort of more a pan inhibitor, which is part of the thesis of using an oral once daily drug that's a prodrug and can be released locally and absorbed topically. We increased cyclic AMP, the PDE biomarker, by almost 30%. Tissue lymphocytes, we measured that with immunohistochemistry, were down, I think 30% here. I think if you do the individual mean approach, it's 40%, I think, in all patients. 70% decrease in tissue PDE4B, 70% reduction in fecal calprotectin, and a 15% reduction in plasma CRP. We saw a 30%-60% improvement in Geboes, RHI, and Nancy scores, and we saw a 63% decrease in the modified Mayo score. That, of course, that's made up of the endoscopy score, the rectal bleeding, and stool frequency scores. We saw at least a one-point improvement in each of those in all five patients. We had five out of five, 100% achieved response, the FDA definition of response, and then 40%, two out of five, achieved clinical remission. Again, this is just in one week with a max tolerable dose of our drug. Just a footnote, our drug is about 20 x more potent than apremilast. Also 20 x more potent than nerandomilast. We plan to move forward this year, as we pointed out, midyear with dosing a UC study, a definitive study of approximately 200 patients. A high dose, a low dose, or a target dose and high dose, depending on how you think about it, as well as a placebo group. We're going to treat patients through an induction, and we're going to go out at 12 weeks with a primary endpoint of clinical remission at 12 weeks. We'll extend those patients in a blinded maintenance extension with a treat straight through design with an FDA sort of negotiated definition of the escape criteria from the treat straight through design. Responders will be treated straight through and then non-responders put into a double-blind induction on high dose, probably 2108 through the maintenance period. We've also done a phase Ib study in fibrostenotic Crohn's disease. Just like in the UC study, we treated a smaller number of patients, and we did a heavily translational study. I don't think we need to sort of convince others on the efficacy, inflammatory or antifibrotic efficacy of PDE4 inhibitors. The biology sort of speaks for itself with a large number of approvals in the previous studies in the UC and FSD. What we wanted to do, and sorry, in the previous studies in Ulcerative colitis. What we wanted to do here in FSD was for the first time to treat patients with advanced Crohn's disease. I think these patients had 15 years-16 years diagnosed, 80% on concomitant biologics in the background. We treated five patients over a two-week period of time, using our phase I data. We had populated a PopPK model and simulated our once daily dosing paradigm and found that a 30 mg dose could be used to achieve systemic IC90. We used that information and decided to start dosing at 20 mg. We treated two patients at 20 mg and then another two patients at 25 mg, and then finally ended up at 30 mg. We treated patients for two weeks. Here's roughly the study design. We evaluated safety and tolerability over the two weeks with a 10-day titration, pharmacokinetics, pharmacodynamics. We also did an endoscopy and looked at the SES-CD score. In terms of demo, patients were 15.4 years diagnosed. The SES-CD at baseline was 8. Just for context, agamab had a baseline of 7.4. I think a lot of Crohn's studies in moderate to severely active patients are 9-12. Concomitant biologics, patients were on concomitant biologics 80% of the time. The fecal calpro had a mean baseline of just under 300. That is in pretty good alignment actually with the FSCD population that Agomab evaluated. For those that wanted sort of a refresher on what an FSCD patient is. A fibrostenotic Crohn's patient is sort of an advanced Crohn's patient that's been selected for a stricture of the, specifically the ileum, because Crohn's becomes a stricturing disease. Patients end up having symptoms of stricture, symptoms of obstruction, and then end up having surgery or balloon dilatation to alleviate the stricture. 75% of patients with Crohn's over their lifetime end up having surgery due to stricturing disease, and it's a sort of a serious outcome of Crohn's. We're treating patients that are considered the most advanced and the most refractory. In terms of safety profile, I think we had two instances of adverse events overall in the whole study. We had one abdominal discomfort, and we had one episode of fatigue in two different patients. Importantly, we had no PDE4-related adverse events. We had no nausea, vomiting, we had no diarrhea, no abdominal discomfort. We were quite pleased with that outcome. In terms of pharmacokinetics, our modeling told us we could get to IC90 at 30 mg with once daily. This is the titration here that you're seeing the increase over time. That little dip at the end there, you can see where patients were treated with bowel prep prior to the ileocolonoscopy at the end of the study. Drugs steadily increased over time systemically. There at the end of the titration, you can see that all patients at 20 mg, 25 mg, and 30 mgs all achieved IC90. As well, at the bottom here, you can see some sort of mean scores, and on the right, you've got the sort of average. We took many, many biopsies in all of the various segments, ileum, A7, D7, and colon. In the UC study, we clearly showed that PK and PD effects were quite strong in the colon. Here, for the first time with a prodrug and locally bioactivated PDE4 inhibitor, we're showing appreciable drug levels in the ileum and the right side of the colon. The average across all segments was a tissue plasma ratio of sixfold. Sixfold more drug in tissue over plasma, that helps improve the therapeutic index of the drug. That's as measured at Cmax or as measured at steady state, divided by the plasma Cmax of the drug. In terms of the mechanism, we took samples of ileal tissue to understand if we're getting enough drug to the ileum and whether or not that's soliciting an adequate PD response. We found that we had a, as you saw the previous slide, a significant drug level in ileal tissue. We had a 32.9% increase in cyclic AMP in ileal tissue, and we had a 58.8% reduction of fecal calpro. The cyclic AMP change was highly correlated with the change in fecal calpro, meaning our PD response is translating to an anti-inflammatory effect in these Crohn's patients with a correlation of 0.93. We saw a 47.5% decrease in the endoscopic score, and there was a baseline of eight and a drop of 3.8 over the course of the study. We had 40% of patients achieving endoscopic response and 40% achieving endoscopic remission. Just to sort of compare that to moderate to severely active Crohn's studies, I think are roughly something under 30% for some of the best drugs like SKYRIZI or Rinvoq. The drug was well-tolerated and achieved PK, PD, and efficacy with doses as low as 20 mg. Clearly robust PK target engagement demonstrating the mechanism of action was associated with the improvements in inflammation. We demonstrated clinical efficacy or clinical effectiveness with the SES-CD score response in endoscopy. Our next steps in Crohn's is to, as JD pointed out, conduct a Crohn's study that we'll be initiating later this year. With that, I might hand it back to JD. Thanks, Mitch. The data we read out in August on the UC study, even though it was only five patients, it turned out to be a major catalyst in allowing us to raise almost $140 million that we closed on the very beginning of October last year. You can see we, as of December 31, have almost $135 million of cash on the balance sheet. That's projected to cover both the UC study and the Crohn's disease study, both phase IIs, and still give us roughly a year's worth of cash runway after that. Very well capitalized, at least in the near term. We are happy to have brought on some high-quality investors along the way, and even beyond those listed here, we've had a number buy in the open market since the closing. Very exciting times for us. We're very pleased with the data so far, and it's basically tracking the way the drug was designed. That's the good news. We haven't seen any aberrations anywhere that have caused us concern about where this drug is headed. We hope to be best in class in treating both Crohn's disease and Ulcerative colitis with little to no side effects. I think with that, we'll open it up for any questions. Great. T hanks so much, JD and Mitch, for the great presentation. Start off with a couple questions from me, if you don't mind. First one is on the, I realize this got restricted. In terms of any systemic sort of leakage, for lack of a better term, have you done experiments in that sense to make sure that the drug is staying in the GI tract, and it's not showing up systemically? I think that this is actually kind of a common question, but also a bit of a common misconception on the drug, is that while the prodrug is gut restricted, the active moiety gets absorbed through the tissue and then distributes systemically. I think I've spent a lot of time in my career on orally delivered, locally acting, or locally bioactivating activated drugs, as well as some gut-restricted drugs. I think the example of Protagonist, with an oral cyclic peptide targeting IL-23, and sort of the original generation of that being completely gut restricted, and sort of failing in a later phase II study, and then being redesigned with J&J, multiple molecules, one that had better systemic distribution and then ultimately efficacy in psoriasis and now in UC and soon to be in a Crohn's study. Icotrokinra is a molecule that sort of demonstrates that it's likely that while the inflammatory burden is high and the target is the colon in Ulcerative colitis, there's also extraintestinal manifestations. With our drug, yes, it's gut restricted, locally bioactivated, but then absorbed and then distributed systemically as well. Yeah, Joseph Stringer, the reason that's important is that we believe you need to get systemic distribution of the drug to cover all of the symptoms that are associated with Ulcerative colitis. What's probably the most important part to understand is that the drug is not exposed to the upper gut, and that's usually the trigger for secretory diarrhea. We're getting it past that upper gut and avoiding the secretory diarrhea. Once it gets to the lower gut and is actually released into the tissue, it's a much slower release into the plasma. That's what also avoids some of the other adverse events you typically see, nausea, vomiting, that sort of thing. Interesting. Yeah. The other importance of having systemic distribution of the drug is that it provides us the opportunity to perhaps expand this drug into other disease areas of inflammation and fibrotic disease areas. Got it. Interesting. It kind of ties into my next question, more around the mechanism. Just given the prodrug mechanism, bacteria is kind of cleaving the prodrug portion as it moves down the intestinal tract. You mentioned it is getting in systemically, but does that type of mechanism have any implications for how the drug would work in UC versus Crohn's, just given the localization of the tissue? Do you think it would be more apt to perform better, say, in UC or Crohn's or vice versa? Yeah. We specifically conducted both the UC and Crohn's study with that great question in mind. Obviously, there's systemic distribution, and our goals are to dose this drug like a systemic drug, but that it's delivered locally. Our targets are IC90 or 20 x IC50 as an example, like nerandomilast was dosed. I guess the first answer to that question is that systemically we'll have IC90. The second piece to that is the drug is released in a similar way to other prodrugs that have been successful in IBD previously, sulfasalazine releasing mesalamine, and being marketed for 40 years in this space, and used in Crohn's and colitis. Really, these drugs that are prodrugs and rely on microbiome ubiquitously produce enzymes. They start to release active drug when they start to see higher CFU concentrations. The colonic bacteria, while at high concentrations in the colon, 10^11 concentrations in the colon. Also in the terminal part of the ileum, the last three feet or last meter of the small intestine, as an example. There's also colonic bacteria in that area of the small intestine, and so we have pretty significant release in that area. When we biopsy the tissue, we see, again, multiples of the plasma concentrations in tissue there. Again, I think we said all segments, there's a sixfold increased tissue to plasma ratio. That includes the ileum. Great. Maybe I missed this on the phase II trial design, but does that have a titration period? I know some of the phase I-A data you were showing had a titration portion in there. What are your thoughts on titration? Does this drug need to be titrated, or is that in the plan? All PDE4s that market a PDE4s use titration, apremilast or roflumilast or I think even nerandomilast. We spent a lot of time during our phase I program understanding fasted/fed schedule, understanding titration. We wanted to understand how to make the drug most as safe as possible. There's safe for the average patient, and then there's safe for three standard deviations of patients. We wanted to build a titration schedule for the phase II program so that we could make this drug as safe as possible for the largest number of patients, even those that are sensitive to PDE4s. We will use a titration schedule in this first study. You're right, though, it's possible that we don't need it, and I think we'll explore that in future studies. Yeah. It's interesting, Joseph Stringer. That has been an internal discussion that we've gone back and forth on that we know PDE4 inhibitors traditionally are tachyphylactic, and so that's where the titration is a big help in getting the body adjusted to the drug. Our mechanism of delivery may, in fact, kind of circumvent the need for titration. As Mitch says, maybe out of an abundance of caution, we're going to plan to titrate in the next phase II. Maybe the other last piece of that is that in the phase II, we're getting stability data on both foil blisters as well as bottles. In the phase II, we'll be using foil blisters, and so really the patient experience won't be any different on the titration. Got it. Makes sense. Thanks. Last one for me, kind of big picture question. PALI-2108 looks like your once daily oral, but it's designed to avoid some of the systemic and even the localized safety issues like GI tolerability seen with JAKs and S1Ps. Where would you see this drug fitting into the IBD treatment paradigm? I'll take a first shot at that, and then Mitch, you can fill in. We're obviously pursuing the development strategy under the assumption that this would be a monotherapy. That said, there's probably additional efficacy that you can pick up by combining it, and we'll know more about that when we do more PDE studies with these following phase II studies that we're going to be doing. The good news is our drug has been delivered with patients who are already on background therapies, and so we're demonstrating at first stage that there's no drug-to-drug interaction issues that we've come across so far. It becomes a really good candidate for combination therapy, we believe. Maybe to add to that, when thinking about a treatment algorithm, first-line therapy, obviously 5-ASA, flares, cort and steroids. There are the TNF inhibitors, sort of heavy lifters, and the 23s and the integrins, et cetera. I think the issue with many of these drugs is that, let's just take the 12-week remission rates for a lot of these drugs are below 20%, so like a one in five shot of getting into remission. Morphic or Prometheus, they were both acquired for mid-20s, 25% clinical remission. Here we're looking to break that ceiling, and I think the example with mafimilast achieving 57% remission in a China-only study, company in China, plus 44% placebo corrected. I think that's what we want to achieve with a prodrug that's locally acting and with a high tissue-to-plasma ratios. Couple other things. Like JAK inhibitors, this is intracellular acting. This is a fast-acting drug. We're seeing changes early on in patients' symptomatology, in patients complaining of rectal bleeding or improvements in rectal bleeding, improvements in bowel frequency. We talked to some of the sites and the teams that have conducted studies with PDE4s previously in these patients, and there are other reports that patients are getting symptomatic improvement really quickly with this drug. The last piece, and so you would think hopefully that patients that are symptomatic might be able to use this drug to get relief early on. The last piece is that we've developed a precision medicine test. We used 1,600 patient - 1,700 patient data to develop a biomarker test to predict potential responders. Hopefully, if you could use a potential test to select for a responder, one could imagine that might help clinicians pick patients that are responders, where at this time, we see such an excellent response in all patients that we're going to be evaluating the precision medicine test, post-hoc, and then we'll evaluate from there. It's one additional consideration when thinking on how to select patients that are likely to benefit from our drug. Well, fascinating program from you guys. Great progress, and thank you so much for the excellent presentation and the discussion. Thanks, Joseph Stringer. We appreciate you guys having us on. Yeah. Thank you, Joseph Stringer. Thanks, everyone, for joining us on the webcast. Have a good day and a good rest of the conference.