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EDSA: Additional Favorable Mortality Reductions Identified in COVID-19 Trial…

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By David Bautz, PhD

NASDAQ:EDSA

READ THE FULL EDSA RESEARCH REPORT

Business Update

Additional Mortality Benefits Identified in Phase 2 COVID-19 Trial

On October 19, 2021, Edesa Biotech, Inc. (NASDAQ:EDSA) announced additional results from the Phase 2 portion of the ongoing Phase 2/3 clinical trial of EB05 in critically ill COVID-19 patients. Last month, the independent Data and Safety Monitoring Board (DSMB) requested the study be preemptively unblinded after identifying an important treatment effect during the initial analysis of the Phase 2 portion of the study regarding 28-day mortality in which EB05 in addition to standard of care (SOC) resulted in a 68.5% reduction in the risk of dying when compared to placebo. Since then, additional analyses have been conducted that show additional mortality benefits among critically ill patients, including the following:

• 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.

The purpose of the Phase 2 portion of the trial was to identify the proper patient cohort to focus on in Phase 3, and by this metric the trial was a resounding success. Edesa will be focusing on critically ill ARDS patients based on the lack of treatments available (essentially none) and the clinically meaningful impact seen with EB05 treatment.

Next steps for Edesa are to file amendments with the regulatory authorities in the U.S. and Canada and to receive feedback from them regarding the final population size for the Phase 3 portion of the study. The company also intends to receive feedback about the potential for expedited regulatory review. In the meantime, the trial is continuing to enroll patients, with an emphasis on the most critically ill.

Conclusion

The new analyses disclosed by Edesa are nicely supportive of the original analysis that caused the DSMB to unblind the study and further support getting the Phase 3 trial enrolled as quickly as possible as there continues to be little that can be offered to critically ill COVID-19 patients. The company should be receiving feedback from regulatory agencies in the near term regarding the targeted enrollment size for the Phase 3 study, and following that we anticipate an update from the company with anticipated timelines for the trial. With no changes to our model our valuation remains at $20 per share.

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