EDSA: Phase 2b Data for EB01 Anticipated in January 2023…
NASDAQ:EDSA
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Business Update
Phase 2b Data for EB01 in January 2023
Edesa Biotech, Inc. (NASDAQ:EDSA) is currently conducting a double blind, placebo controlled trial to evaluate the safety and efficacy of 2.0% EB01 cream in approximately 170 evaluable subjects in total suffering from chronic allergic contact dermatitis (ACD) (NCT03680131). The company is also conducting an exploratory, dose-ranging component of the study, which will separately evaluate lower-strength concentrations of EB01 in 40 additional subjects.
In June 2021, Edesa announced positive interim results for EB01 in the Phase 2b trial. 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.
In September 2022 the company announced that enrollment in the trial was complete and we anticipate topline results in January 2023.
ACD Market Opportunity
ACD is a very common condition, with some studies suggesting a prevalence as high as 20% of the general population (Alinaghi et al., 2019). If one member of a family develops ACD then others in the same family have a higher prevalence of developing the condition, which would suggest a genetic predisposition, although environmental exposure most likely contributes as well. Women tend to develop ACD more than men, although this is likely due to a higher prevalence of wearing jewelry, which increases contact with nickel, a known trigger of ACD.
We estimate there are approximately 2.5 million individuals in the U.S. that suffer from ACD and that approximately 1.0 million suffer from the condition chronically. However, given how difficult it is to distinguish ACD from irritant contact dermatitis (ICD) we may be underestimating the potential number of patients. In addition, we are unaware of any FDA-approved therapies for ACD.
EB05 Granted Fast Track Designation
On December 20, 2022, Edesa announced that the U.S. Food and Drug Administration (FDA) has granted Fast Track designation to EB05, the company’s monoclonal antibody candidate that targets toll-like receptor 4 (TLR4). Fast Track designation allows Edesa the opportunity for more frequent communication with the FDA regarding the development path for EB05 as a treatment for acute respiratory distress syndrome (ARDS) in critically ill COVID-19 patients. In addition, the company may be able to receive a rolling review of a biologics license application (BLA) as well as the potential for accelerated regulatory approval.
Statistically Significant Mortality Reduction in Phase 2 ARDS Trial
In September 2022, Edesa announced final results from the Phase 2 portion of its ongoing Phase 2/3 clinical trial evaluating EB05 as a treatment for hospitalized patients with or at risk of developing COVID-19 induced ARDS. The company had previously reported initial topline data from the trial in September 2021, at which time the data safety monitoring board (DSMB) had requested to unblind certain data due to an efficacy signal seen with 28-day mortality. The data reported in September 2022 is from Edesa’s Clinical Study Report (CSR) on the full, validated Phase 2 dataset.
The following table shows the mortality rates from the Phase 2 trial for critically ill patients (defined as Level 7 on the World Health Organization’s COVID-19 Severity Scale [WCSS]). At the 28-day timepoint, patients treated with EB05 in addition to standard of care (SOC) had a mortality rate of 7.7% compared to 40% for patients treated with placebo and SOC (P=0.04). Using the Cox’s Proportional Hazard Model, this survival benefit translated to an 84.0% reduction in the risk of dying for patients treated with EB05 plus SOC compared to placebo plus SOC at 28 days.
In addition to the statistically significant mortality reduction in critically ill patients, additional efficacy signals were observed in the full Phase 2 dataset.
While not achieving statistical significance, clinically meaningful differences in the proportion of patients who were alive and without the need for oxygen support at Day 28 were observed in severe COVID-19 patients at WCSS level ≥5 (99% of patients had ARDS at baseline). The primary endpoint was achieved by 45.8% in the EB05 plus SOC arm compared to 36.1% in the placebo plus SOC arm (P=0.16). An additional positive efficacy signal was also seen in the proportion of patients who achieved at least a 2-point improvement on the WCSS, with 46.7% of patients in the EB05 plus SOC arm achieving that outcome compared to 36.1% in the placebo plus SOC arm (P=0.12). There were no clinically meaningful differences detected for COVID-19 patients at WCSS level ≤ 4, likely due to the baseline severity score being too close to the endpoint (WCSS ≤ 3).
Importantly, a single dose of EB05 was generally well-tolerated. Serious adverse events from 352 patients showed similar results between the two treatment groups and the incidence of treatment-emergent adverse events (TEAEs) and serious TEAEs were comparable between the treatment groups.
Edesa has submitted the Phase 2 CSR as was requested by the FDA as part of the review of the company’s Phase 3 clinical protocol design and statistical plan. Recruitment for the Phase 3 study is already underway in Canada, Colombia, and Poland. The first cohort of patients being enrolled in the Phase 3 study are critically ill COVID-19 patients that are receiving extracorporeal membrane oxygenation (ECMO) and/or invasive mechanical ventilation plus organ support (Level 7 on the WCSS). The second cohort will consist of hospitalized COVID-19 patients on invasive mechanical ventilation alone (Level 6 on the WCSS). The primary endpoint for the Level 7 cohort will be 28-day mortality. The primary endpoint for the Level 6 cohort will be the number of ventilator-free days at Day 28.
Financial Update
On December 16, 2021, Edesa announced financial results for fiscal year 2022 that ended September 30, 2022. As expected, there were no revenues reported for fiscal year 2022. R&D expenses in fiscal year 2022 were $13.3 million, compared to $18.0 million for fiscal year 2021. The decrease was primarily due to decreased milestone payments and external research expenses partially offset by increases personnel expenses. G&A expenses totaled $5.0 million for fiscal year 2022 compared to $5.7 million for fiscal year 2021. The decrease was primarily due to decreased noncash, share-based payments partially offset by increased public company expenses.
As of September 30, 2021, Edesa had approximately $7.1 million in cash and cash equivalents. Subsequent to the end of the fiscal year, Edesa raised gross proceeds of approximately $3.0 million from the issuance of approximately 2.7 million common shares, 12-month warrants to purchase up to an aggregate of approximately 1.3 million common shares and 3-year warrants to purchase up to an aggregate of approximately 1.3 million common shares. We estimate that the company has sufficient capital to fund operations for at least the next 12 months. As of December 14, 2022, Edesa had approximately 19.4 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 27.9 million.
Conclusion
We look forward to results from the Phase 2b trial of EB01, which we anticipate in January 2023. In addition, we are hopeful that the FDA will soon agree to the Phase 3 study design and statistical plan for the EB05 clinical trial such that Edesa can initiate patient enrollment in the U.S. After accounting for the recent financing and increasing the allotment for future dilution our valuation now stands at $10 per share.
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