1Q26 Reports: Takeaways from Our Management Team Call

Research evidence excerpt

1Q26 Reports: Takeaways from Our Management Team Call

C O M PA N Y N O T E

M a y 1 3 , 2 0 2 6

...(inclusive of fibrosis markers) where dosing details should be provided at the time of IND

clearance. With this, mgmt expressed they do not have to do another pre-IND meeting for CD

which should help streamline initiation and data ~early 2028. Notably, since the Ph2 is open-

label we believe it provides PALI with optionality to include interim analyses, though mgmt

continues to guide data ~early 2028. For reference, PALI reported positive Ph1b (NCT07428096)

data in n=5 fibrostenotic CD patients which showed a 3.8-point improvement in mean SES-CD

(~47.5% reduction), where 40% achieved endoscopic response and 40% achieved endoscopic

remission after 14-days of treatment (notes here and here). Accordingly, PALI believes the Ph1b

data effectively de-risks PALI-2108 development in broader luminal CD where PALI-2108 has

the potential to transform current SoC given its convenient QD oral delivery with dual anti-

inflammatory and anti-fibrotic effects. Further, luminal CD made the most sense given it has a

clearly defined regulatory path vs FSCD.

All PK/PD modeling is complete where PALI-2108 has QD oral delivery and clear potential

for systemic treatment of other indications. Moreover, mgmt reminded us they completed

robust PK/PD modeling for PALI-2108 with comparative analyses vs other PDE4 inhibitors. With

this, PALI is convinced PALI-2108 has optimized QD dosing with potential systemic applications

across other indications such IPF, ILD, psoriasis, or COPD. Specifically, mgmt reminded us

PALI-2108's MoA poises it to drive both anti-inflammatory and anti-fibrotic benefits which allows

for broad applicability across multiple indications. Further, mgmt also discussed their ongoing