Palisade Bio is laying off 20 percent of its workforce, the company announced Thursday. The cost-saving measures are expected to amount to over $1.5 million per annum.
Palisade Bio is laying off 20 percent of its workforce, the company announced Thursday. The news comes a month after the company raised nearly $14 million in a public offering.
The San Diego-based company stated the layoffs and other cost-cutting measures are necessary to keep its Phase III clinical trial of its lead asset LB1148 on track. The trial recently began enrollment of about 600 patients and the process is expected to take as long as two years to complete. Palisade noted it needed to conserve cash and cut costs to continue funding the study.
The company also recently launched a Phase II trial to test LB1148 for prevention of post-surgical abdominal adhesions. Enrollment of about 220 patients is expected to be completed by the end of the year.
“In light of current financial market conditions and our need to advance our lead clinical program, LB1148, it was imperative that we conduct a strategic review to ensure we have sufficient capital to extend our runway as long as possible,” said CEO Tom Hallam in a statement.
Hallam added that the cost-saving measures announced Thursday amount to over $1.5 million per annum.
The company of about 15 employees did not say how many workers will be laid off.
Palisade is developing LB1148, a protease inhibitor to help return bowel function to adult patients undergoing gastrointestinal surgery and cardiovascular surgery. Previous studies have shown LB1148 to reduce this delay.
Patients generally don’t leave the hospital until they have a bowel movement. The company estimates close to 7 million patients annually experience prolonged hospital stays because of delayed bowel movements. This is caused by damage to the intestinal barrier which allows digestive enzymes to leak into the small intestine, triggering constipation.
LB1148 is a liquid taken by mouth and is designed to destroy the digestive enzymes. The medicine is administered before surgery. Palisade noted there are few options currently on the market to treat post-surgical delayed bowel movements.
Adolor Corp.’s Entereg, an anti-opioid medicine, is the only approved treatment available, the company noted. It estimates a $2 billion market exists in the United States alone.
Palisade Bio out-licensed rights to the drug to China to Shanghai-based Newsoara, which recently received authorization to start Phase III trials in China.
The company’s share price is trading at around 15 cents a share on the Nasdaq Stock Market.
