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Business Update
Phase 3 Trial of EB05 Hits 25% Enrollment
On February 17, 2022, Edesa Biotech, Inc. (NASDAQ:EDSA) announced that more than 25% of the subjects have been randomized under the Phase 3 protocol approved by Health Canada for the ongoing clinical trial of EB05 for the treatment of acute respiratory distress syndrome (ARDS) in critically ill COVID-19 patients (NCT04401475).
The Phase 3 trial is designed to test the efficacy of a single dose of EB05 in critically ill COVID-19 patients that are receiving extracorporeal membrane oxygenation (ECMO) and/or invasive mechanical ventilation plus organ support, defined as Level 7 on the World Health Organization's COVID-19 Severity Scale. The primary endpoint will be 28-day mortality. Secondary endpoints will assess ventilator-free days and 60-day mortality. The protocol approved by Health Canada calls for approximately 315 evaluable subjects being enrolled. A similar protocol has been filed with the U.S. FDA and the company is currently in discussions with the agency on the design of the final Phase 3 protocol.
In September 2021, Edesa announced positive results from the Phase 2 portion of the trial that included approximately 360 patients, age 24-93, from clinical trial sites in the U.S., Canada, and Columbia. The independent Data and Safety Monitoring Board (DSMB) identified an important treatment effect regarding 28-day mortality in which treatment with EB05 in addition to standard of care (SOC) resulted in a 68.5% reduction in the risk of dying when compared to placebo and requested that the study be preemptively unblinded. The Phase 2 portion of the study was originally designed to guide the patient stratification and statistical powering for the Phase 3 trial, however the DSMB noted that "a clinically important efficacy signal" was detected along with the fact that the study "met its objective". In addition, the DSMB recommended that the study continue into a Phase 3 confirmatory trial.
In October 2021, Edesa announced additional results from the Phase 2 portion of the ongoing Phase 2/3 clinical trial of EB05:
• The DSMB noted a mortality benefit in 136 hospitalized COVID-19 patients receiving supplemental oxygen (28-day mortality rate of 8.2% [5/61] in the EB05 + SOC arm vs. 12.0% [9/75] in the placebo + SOC arm; HR=1.52). Among this group there was a strong signal for patients with severe acute respiratory distress syndrome (ARDS) at baseline (defined as PaO2/FiO2 < 100 mm Hg). The DSMB concluded that patients with severe ARDS receiving supplemental oxygen at baseline had "a clinically important efficacy signal" with a 28-day mortality rate of 16.7% (2/12) in the EB05 + SOC arm vs. 42.9% (6/14) in the placebo + SOC arm. This corresponds to a 66.0% reduction in the risk of death at Day 28 for subjects treated with EB05 + SOC compared to placebo + SOC (HR=2.94, 95% CI: 0.59 – 14.60; P=0.19) when using the Cox Proportional Hazard Model.
• Efficacy signals were also noted in the 190 patients with mild to moderate ARDS at baseline (28-day mortality rate of 7.8% [7/90] in the EB05 + SOC arm vs. 11.0% [11/100] in the placebo + SOC arm; HR=1.46). Among this group, patients with mild to moderate ARDS receiving oxygen beyond supplemental oxygen had a 28-day mortality rate of 10.8% (4/37) in the EB05 + SOC arm vs. 20.5% (8/39) in the placebo + SOC arm. This corresponded to a 50.7% reduction in the risk of dying when comparing the EB05 + SOC arm to placebo + SOC (HR=2.03, 95% CI: 0.61-6.74, P=0.25). In this cohort there was also an increase of 6.1 days alive and free of invasive mechanical ventilation at 28 days when comparing the EB05 + SOC arm to placebo + SOC.
EB01
In June 2021, Edesa announced positive interim results for EB01 in the Phase 2b clinical trial in patients with allergic contact dermatitis (ACD) (NCT03680131). The initial study cohort consisted of 46 subjects randomized 1:1 to receive treatment with either EB01 2.0% cream or placebo and 36 (n=18 EB01; n=18 placebo) completed the study follow-up and were used in the interim analysis.
The study's Data Safety Monitoring Board (DSMB) performed a blinded analysis of the data and reported an approximately 1.7-fold difference between treatment groups for the primary efficacy endpoint, the mean percent change from baseline on the Contact Dermatitis Severity Index (CDSI). CDSI uses physician's visual assessment of dryness, scaling, redness, pruritis, and fissures, with each scored from 0 (none) to 3 (severe).
In addition, the DSMB reported an approximately 1.8-fold difference between the treatment groups in the Investigator's Static Global Assessment (ISGA), a key secondary efficacy endpoint. The ISGA uses a five-point rating scale: 0 – clear, 1 – almost clear, 2 – mild, 3 – moderate, 4 – severe disease. Success on the ISGA is defined as a two-point reduction from baseline and a final ISGA score of 0 or 1. The ISGA is commonly used for FDA-regulated registration trials in dermatitis.
For both the CDSI and ISGA, double-digit absolute differences were seen between the treatment groups and no serious treatment-related adverse events were reported for either treatment group.
The company recently announced more than 75% of the patients planned for the primary cohort of the trial have been enrolled. In addition, enrollment has returned to a pre-pandemic pace in the past couple of months. Edesa may be in a position to announce topline results in 2022.
Financial Update
On February 14, 2022, Edesa announced financial results for the first quarter of fiscal year 2022 that ended December 31, 2021. There were no revenues reported for the first quarter of fiscal year 2022. R&D expenses in the first quarter of fiscal year 2022 were $4.0 million, compared to $1.4 million for the first quarter of fiscal year 2021. The increase was primarily due to increased expenses associated with the clinical trials of EB01 and EB05, drug product expenses, and higher salaries partially offset by a decrease in noncash share-based compensation. G&A expenses totaled $1.2 million for the first quarters of both fiscal year 2022 and 2021.
As of December 31, 2021, Edesa had approximately $5.9 million in cash and cash equivalents. Subsequent to the end of the first quarter of fiscal year 2022, Edesa raised approximately $1.1 million from the issuance of shares under the at-the-market (ATM) program. We estimate that the company has sufficient capital to fund operations through mid-2022, and the company is continuing to evaluate various strategic funding options, including non-dilutive sources for the development of COVID-19 therapeutics. As of February 11, 2022, Edesa had approximately 13.8 million shares outstanding and when factoring in stock options and warrants a fully diluted share count of approximately 16.0 million.
Conclusion
We are glad to see that Edesa is continuing to enroll patients under the Phase 3 protocol that was approved by Health Canada, and we are hopeful that an agreement can be reached with the FDA soon. We look forward to additional updates from Edesa regarding the advancement of EB05 and EB01, particularly the anticipated timelines for each of the trials and when topline data is anticipated. With no changes to our model our valuation remains at $20 per share.
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