PALISADE BIO, INC. Annual Report - How They Did This Year (Year Ending December 31, 2025)

Hey there! Thinking about PALISADE BIO, INC. as an investment? Let's break down what they did this past year. This report covers the year ending December 31, 2025. We'll explain it simply, without confusing financial talk. Think of this as a chat with a friend who's trying to figure out if this company is a good bet.

Here's what we'll look at:

1. What does this company do and how did they perform this year?

   • PALISADE BIO, INC. (PALI on Nasdaq) is a relatively small company. The SEC calls them a "Smaller reporting company" and a "Non-accelerated filer." This usually means their market value is under $700 million. Their market value was about $11.2 million on June 30, 2025. This is quite small for a public company.
   • The company has no physical headquarters. They use a mailing address in Denver, Colorado.
   • PALISADE BIO is a clinical-stage biopharmaceutical company. They focus on developing new treatments for inflammatory bowel disease (IBD) and other gut issues. Their main drug candidate, PALI-2101, is an oral treatment. It works locally to reduce gut inflammation. As of December 31, 2025, PALI-2101 was in Phase 2 clinical trials for ulcerative colitis. They expect early results by mid-2026. The company also has PALI-3001, an early-stage program for Crohn's disease. It is currently in lead optimization. They measured performance this year by clinical program progress. They also looked at their ability to get funding for these operations.

2. Financial performance - sales, profit, growth metrics

   • PALISADE BIO had no product sales for the year ending December 31, 2025. This is normal for a company in clinical trials. They earned $0.5 million from a research grant.
   • The company lost $28.7 million in 2025. This was more than the $25.1 million loss last year. Increased research and development caused this.
   • Research and development (R&D) costs drove their spending. These costs totaled $21.5 million for the year. This was up from $18.9 million in 2024. Advancing the PALI-2101 Phase 2 trial caused most of this increase.
   • General and administrative (G&A) costs were $7.2 million. This was similar to last year.
   • As a clinical-stage company, traditional sales or profit growth metrics don't apply. Instead, they measure success by clinical trial progress. Reaching regulatory milestones and raising money are also key.

3. Major wins and challenges this year

   • Major Wins:
     • Clinical Progress: They finished enrolling 150 patients in the PALI-2101 Phase 2 trial. This happened by September 2025, ahead of schedule.
     • Financing: PALISADE BIO raised $15.0 million in July 2025. They did this by selling new shares and warrants. This money was vital to fund their work and clinical development.
     • Intellectual Property: The U.S. Patent Office granted them a new patent in April 2025. This protects PALI-2101's makeup until 2042.
   • Challenges:
     • Cash Burn: Even with new funding, the company spent cash quickly. They used about $2.5 million per month. This means they constantly need to find more money.
     • Clinical Trial Risk: Clinical development always carries risks. Trial delays or bad data are major challenges.
     • Market Volatility: Biotech funding is tough right now. General market ups and downs affected their stock price. This made future fundraising harder.

4. Financial health - cash, debt, liquidity

   • On December 31, 2025, PALISADE BIO had $12.3 million in cash. This is down from $25.0 million at the end of 2024.
   • They spent about $2.5 million per month in 2025. With their year-end cash, they can fund operations only until Q2 2026.
   • PALISADE BIO has no major long-term debt. Their debts are mainly bills they owe and expenses built up.
   • To keep operating, the company needs to raise more money. They expect to need a lot more money. This will likely come from selling more shares or through partnerships. This funding is needed to finish PALI-2101's development. It will also advance their early programs beyond mid-2026.

5. Key risks that could hurt the stock price

   • Clinical Trial Failure: The main risk is that PALI-2101 or other drugs might fail. They could lack effectiveness or safety in trials. Regulators might also not approve them.
   • Need for More Money: The company has limited cash. They need a lot more funding to keep going. This money will also advance their drug pipeline. If they can't raise money easily, or at all, they might delay or stop drug programs.
   • Regulatory Approval Risk: Good trial results don't guarantee approval. The FDA or other agencies might still not approve their drugs.
   • Competition: The gut treatment market is very competitive. Big drug companies and other biotechs develop IBD treatments.
   • Intellectual Property: Their success relies on protecting their patents and ideas. They must also avoid infringing on others' rights.
   • Reliance on Others: PALISADE BIO heavily uses outside groups for trials and manufacturing. Their performance and compliance create risks.
   • Product Liability: Claims about their experimental drugs could arise. These could cause big financial problems.
   • Dilution: Future fundraising by selling shares will likely mean more shares issued, reducing your ownership percentage. This would impact the stock price.

6. Competitive positioning

   • PALISADE BIO works in the very competitive IBD market. This includes ulcerative colitis and Crohn's disease.
   • Current IBD treatments include biologics like Humira. They also use small molecule drugs like Xeljanz and steroids. Big drug companies like AbbVie and Pfizer sell these established treatments.
   • PALISADE BIO wants PALI-2101 to stand out. It's an oral, locally acting PDE4 inhibitor. This could offer a more targeted approach. It might also have fewer body-wide side effects than current drugs. This drug works differently than many current treatments.
   • Other companies also develop new oral IBD drugs. These include other PDE4 inhibitors and small molecules. This creates a crowded field. The company thinks its unique drug and local action are advantages. They believe it could improve safety and make patients more likely to take it.

7. Leadership or strategy changes

   • The executive leadership team saw no major changes in 2025. Dr. Mitchell Jones remained CEO. This kept leadership stable.
   • Their main strategy focused on PALI-2101 for ulcerative colitis. They put most resources into advancing its Phase 2 trial. They continued early work on PALI-3001. But their main focus was on PALI-2101's key milestones. This aimed to reduce risk and attract partners or investors.

8. Future outlook

   • For 2026, PALISADE BIO's main goal is to report early results from the PALI-2101 Phase 2 trial. They expect this in mid-2026. Good results would be a big boost for the company.
   • After Phase 2 results, they plan to talk with regulators like the FDA. They will discuss plans for a possible Phase 3 program.
   • They also want to find partnerships or licensing deals for PALI-2101. This would help fund later development and sales.
   • The company expects to keep losing money and spending cash. This will continue as they develop their drugs in trials. Finding more money will stay a top priority throughout 2026.

9. Market trends or regulatory changes affecting them

   • The wider drug market faces pressure on drug prices. This could affect PALI-2101's future sales if approved.
   • It's tough to raise money for small biotech companies. Less venture capital and careful investors directly affect PALISADE BIO's funding.
   • Regulators increasingly focus on real-world data and patient results. This could change how future trials are designed and approved.
   • New progress in precision medicine for IBD could change the market. It might favor drugs that target specific patient groups.