Palisade Bio Draws Bullish Call, Lead IBD Drug Advances Toward Phase 2

Vandana Singh

July 27, 2026 5 min read

PALI
OPY

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Oppenheimer on Thursday initiated coverage of Palisade Bio Inc., saying the stock offers investors an attractive way to gain exposure to the fast-growing inflammatory bowel disease market.

The company's lead candidate, PALI-2108, is a once-daily oral PDE4 inhibitor prodrug designed to activate in the ileum and colon, targeting inflammation at disease sites while allowing systemic distribution of the active drug.

PALI-2108 has reported positive results across Phase 1a and Phase 1b trials, including studies in ulcerative colitis and fibrostenotic Crohn's disease.

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In June, the FDA cleared the company's Investigational New Drug (IND) application for PALI-2108, paving the way for the global Phase 2 ASCENTRA-UC trial in patients with moderately to severely active ulcerative colitis. Palisade Bio expects to begin enrollment in the second half of 2026, with topline efficacy data anticipated in the second half of 2027.

The company is also advancing PALI-2108 for Crohn's disease and expects to submit an IND application for the Phase 2 ASCENTRA-CD trial in the second half of 2026.

Market Positioning and Sales Estimates

Analyst Leland Gershellinitiated with a Buy rating and a price forecast of 8.

Gershell further commented, "We believe PALI-2108's appeal lies in its potential for biologic-like early symptom improvement paired with a once-daily oral profile better suited for long-term maintenance—a profile that could fill a critical gap in the evolving IBD drug landscape."

Gershell sees PALI-2108 as set to occupy a middle ground UC still lacks: Johnson & Johnson'sTremfya (guselkumab)-like early relief paired with Abivax SA'sobefazimod-like oral maintenance practicality, combining fast enough onset to

matter with a once-daily profile better suited for chronic use if randomized Phase 2 data confirm the early clinical and pharmacologic signals.

Oppenheimer estimates U.S. peak sales of $2.6 billion in UC in 2040 and $2.8 billion in fibrostenotic CD in 2041.

Next-Generation Approach to PDE4 Inhibitors

Oppenheimer said approved PDE4 inhibitors for non-gastrointestinal conditions, including Amgen Inc.'sOtezla, Merck & Co Inc.'sOhtuvayre, have broad anti-inflammatory and anti-fibrotic effects but are limited by safety and tolerability concerns.

The firm said PALI-2108's intestine-selective activation could offer a next-generation PDE4 approach that preserves those benefits while reducing clinical drawbacks.

Photo via Shutterstock

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