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Item 1. Business

2022-12-16 compared with 2021-12-28 · 145 added, 176 removed, 329 unchanged (49% of the section changed)

We are a biopharmaceutical company focused on acquiring, developing and commercializing clinical-stage drugs for inflammatory and immune-related diseases with clear unmet medical needs.

Our two lead product candidates, EB05 and EB01, are in later stage clinical studies.

EB05 is a monoclonal antibody therapy that we are developing as a treatment for Acute Respiratory Distress Syndrome (ARDS) in COVID-19 patients.

ARDS is a life-threatening form of respiratory failure, and the leading cause of death among COVID-19 patients.

ARDS can be also caused by bacterial pneumonia, sepsis, chest injury and other causes.

Specifically, EB05 inhibits toll-like receptor 4 (TLR4), a key immune signaling protein and an important mediator of inflammation that has been shown to be activated by SARS-COV2 as well as other respiratory infections such as influenza.

In multiple third-party studies, high serum levels of alarmins (damage signaling molecules) that bind to and activate TLR4 are associated with poor outcomes and disease progression in COVID-19 patients.

Since EB05 has demonstrated the ability to block signaling irrespective of the presence or concentration of the various molecules that frequently bind with TLR4, we believe that EB05 could ameliorate TLR4-mediated inflammation cascades in ARDS patients, thereby reducing lung injury, ventilation rates and mortality.

In September 2021, an independent data and safety monitoring board pre-emptively unblinded the Phase 2 part of a Phase 2/3 study of EB05 in hospitalized COVID-19 patients and identified "a clinically important" mortality benefit.

The monitoring board further recommended continuation of the study into a Phase 3 confirmatory trial.

The Phase 2 part of the study was funded primarily by a $11 million (C$14 million) reimbursement grant that was awarded by the Canadian government's Strategic Innovation Fund (SIF) following a multi-disciplinary technical review of our drug technology and plans.

In addition to EB05, we are developing an sPLA2 inhibitor, designated as EB01, as a topical treatment for chronic allergic contact dermatitis (ACD), a common, potentially debilitating condition and occupational illness.

EB01 employs a novel, non-steroidal mechanism of action and in two clinical studies has demonstrated statistically significant improvement of multiple symptoms in ACD patients.

EB01 is currently being evaluated in a Phase 2b clinical study.

In addition to our current clinical programs, we intend to expand the utility of our technologies and clinical-stage assets across other indications.

We are a biopharmaceutical company developing innovative ways to treat inflammatory and immune-related diseases.

Our approach is to acquire, develop and commercialize drug candidates based on mechanisms of action that have demonstrated proof-of-concept in human subjects.

We prioritize our efforts on disease indications where there is compelling scientific rationale, no approved therapies or where there are unmet medical needs, and where there are large addressable market opportunities, among other factors.

We have multiple late-stage product candidates in our development pipeline.

Our most advanced drug candidate is EB05, a monoclonal antibody developed for acute and chronic disease indications that involve dysregulated innate immunity responses.

EB05 inhibits toll-like receptor 4 (TLR4), a key immune signaling protein and an important mediator of inflammation.

We are currently evaluating EB05 as a potential treatment for Acute Respiratory Distress Syndrome (ARDS), a life-threatening form of respiratory failure.

In September 2022, we reported final results from the Phase 2 part of a Phase 2/Phase 3 study of EB05 in ARDS patients who were hospitalized for Covid-19-related respiratory disease.

Among the findings, EB05 demonstrated statistically significant mortality reductions in critically ill hospitalized patients treated with EB05 plus Standard of Care treatment (SOC).

We are currently enrolling patients in the Phase 3 part of the EB05 study.

In addition to EB05, we are developing product candidates for a number of chronic dermatological and inflammatory conditions.

We recently completed enrollment of a Phase 2b study of our EB01 drug candidate in moderate-to-severe chronic Allergic Contact Dermatitis (ACD), a common occupational and work-related skin condition.

We are also preparing an investigational new drug application (IND) in the United States for our EB07 product candidate to conduct a future Phase 2 study in systemic sclerosis (SSc), an autoimmune rheumatic disorder that causes fibrosis (scarring/hardening) of skin and internal organs.

In Canada, we are preparing a clinical trial application (CTA) for our EB06 monoclonal antibody candidate to conduct a future Phase 2 study in vitiligo, a common autoimmune disorder that causes the skin to lose its color in patches.

Competitive Strengths

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Validated technology and drug development capabilities .

We believe that the strength of our technologies has been validated by our $11 million competitive grant award;

favorable clinical data;

and our multiple arrangements with third parties to develop and commercialize their clinical- stage drug candidates.

Novel pipeline addressing large underserved markets.

We believe that the strength of our technologies has been validated by our favorable clinical data and progress, $11 million competitive grant award, and our multiple arrangements with third parties to develop and commercialize their clinical-stage drug candidates.

Innovative pipeline addressing large underserved markets.

Our product candidates include novel clinical-stage compounds and antibodies that have significant scientific rationale for effectiveness.

By initially targeting large markets that have significant unmet medical needs, we believe that we can drive adoption of new products and improve our competitive position.

For example, we believe that the novel, non-steroidal mode of action of our sPLA2 technology will be an appealing alternative for managing the symptoms of ACD and hemorrhoids disease (HD).

These diseases impact millions of people, and can have significant effects on patients’ quality of life and, in the case of many chronic ACD patients and their employers, significant workplace-related costs and limitations.

For example, ARDS is associated with approximately 10% of all Intensive Care Unit (ICU) admissions, impacts millions of people, and costs billions of dollars annually.

Intellectual property protection and market exclusivity .

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Our leadership team possesses core capabilities in dermatology, infectious diseases, gastrointestinal medicine, drug development and commercialization, chemistry, manufacturing and controls, and finance.

Our founder, Chief Executive Officer, Pardeep Nijhawan, MD, FRCPC, AGAF, is a board-certified gastroenterologist and hepatologist with a successful track record of building life science businesses, including Medical Futures, Inc., which was sold to Tribute Pharmaceuticals in 2015.

Our founder, Chief Executive Officer, Pardeep Nijhawan, MD, FRCPC, AGAF, is a board-certified gastroenterologist and hepatologist with a successful track record of building life science businesses, including Exzell Pharma Inc., which was sold to BioLab Pharma in 2022, and Medical Futures, Inc., which was sold to Tribute Pharmaceuticals in 2015.

In addition to our internal capabilities, we have also established a network of key opinion leaders, contract research organizations, contract manufacturing organizations and consultants.

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Key elements of our strategy include:

Rapidly develop EB05 as a novel therapy for ARDS .

We are applying our expertise in immune modulation and inflammation therapies, and clinical trial management, to rapidly develop EB05 as a potential treatment for ARDS.

In September 2021, an independent data and safety monitoring board pre-emptively unblinded the Phase 2 part of the Phase 2/3 study of EB05 and identified "a clinically important" mortality benefit for EB05 treated patients.

Based on these positive preliminary results, we are evaluating opportunities to apply, as applicable, for expedited regulatory review programs, which could potentially lead to accelerated clinical development and commercialization timelines.

Establish EB01 as the leading treatment for chronic ACD .

Our goal is to obtain regulatory approval for EB01 and commercialize EB01 for use in the treatment of ACD.

Based on previous early-stage clinical trial results in which patients treated with EB01 experienced statistically significant improvements of their symptoms with minimal side effects, we initiated a confirmatory Phase 2b clinical study evaluating EB01 in chronic ACD patients.

In June 2021, an independent data and safety monitoring board (DSMB) completed an interim review of blinded data from the first cohort of our study and determined that EB01 met key interim study parameters.

Enrollment in the final part of the study is ongoing.

Prioritize the development and commercialization of later-stage product candidates.

Our goal is to obtain regulatory approval and commercialize multiple clinical assets in our pipeline, beginning with our two most advanced product candidates, EB05 and EB01.

We seek to expedite development, in part, through the use of innovative trial designs, including adaptive design protocols, as well as by focusing on disease indications that we believe have clear regulatory pathways and interest from potential licensing or development partners.

We also plan to evaluate opportunities to apply, as applicable, for expedited regulatory review and orphan drug programs, which could potentially lead to accelerated clinical development and commercialization timelines for our product candidates.

Maximize our current portfolio opportunity by expanding use across multiple indications.

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Our assets are designed to modulate pathways that are implicated across a number of immune and inflammatory/allergic conditions.

For example, we are planning a proof-of-concept clinical study of our sPLA2 technology as a potential treatment for patients with HD.

We also believe that our monoclonal antibody candidates have potential utility in additional indications, including chronic conditions.

For example, we believe that our monoclonal antibody candidates have potential utility in additional indications, including chronic conditions like systemic sclerosis (SSc) and vitiligo.

Maximize the commercial potential of our product candidates via direct marketing or strategic arrangements .

If our product candidates are successfully developed and approved, we plan to either build commercial infrastructure capable of directly marketing the products, or alternatively, outsource the sales and marketing of our products.

We also plan to evaluate strategic licensing or partnering arrangements with pharmaceutical companies for the further development or commercialization of our drugs, where applicable, such as in areas or regions outside North America where a partner may contribute additional resources, infrastructure and expertise.

In-license promising product candidates .

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Our objective is to maintain a well-balanced portfolio with product candidates across various stages of development.

In general, we seek to identify product candidates and technology that represent a novel therapeutic approach, are supported by compelling science, target an unmet medical need, and provide a meaningful commercial opportunity.

We do not currently intend to invest significant capital in basic research, which can be expensive and time-consuming.

Maximize the commercial potential of our product candidates via direct marketing or strategic arrangements .

We also plan to evaluate strategic licensing or partnering arrangements with pharmaceutical companies for the further development or commercialization of our drugs, where applicable, such as in areas where a partner may contribute additional resources, infrastructure and expertise.

Acute Respiratory Distress Syndrome (ARDS)

Acute respiratory distress syndrome (ARDS) is a life-threatening form of respiratory failure, and the leading cause of death among COVID-19 patients.

In addition to virus-induced pneumonia, ARDS can be caused by bacterial pneumonia, sepsis, chest injury and other causes.

Specifically, ARDS involves an exaggerated immune response leading to inflammation and injury to the lungs that deprives the body of oxygen.

ARDS is classified as mild, moderate and severe by using an arterial partial pressure of oxygen (PaO2) to fraction of inspired oxygen (FIO2) threshold of 300, 200, and 100 mm Hg, respectively.

For moderate to severe cases, there are currently few meaningful treatments, other than supplemental oxygen and mechanical ventilation, and patients suffer high mortality rates.

Acute Respiratory Distress Syndrome

Acute respiratory distress syndrome (ARDS) is a life-threatening form of respiratory failure characterized by an exaggerated and dysfunctional immune response, rapid onset of widespread inflammation in the lungs, and hypoxia (an absence of enough oxygen in the tissues to sustain bodily functions).

ARDS can be precipitated by a number of conditions including viral and bacterial pneumonia, sepsis, chest injury and even mechanical ventilation, among other causes.

Prior to Covid-19, ARDS accounted for 10% of intensive care unit admissions, representing more than 3 million patients globally each year.

ARDS has historically affected approximately 200,000 patients each year in the United States, resulting in nearly 75,000 deaths annually, according to medical literature.

Countering the exaggerated innate immune response in ARDS has been a key area of interest among researchers.

Based on the prevalence data of ARDS, we estimate that there are as many as 600,000 ARDS-related admissions to Intensive Care Units (ICUs) each year in the seven major markets (US, UK, Germany, France, Spain, Italy, Japan) and Canada.

This estimate does not account for Covid-19-related hospitalizations, which we believe will continue to add to ARDS cases as the virus becomes endemic and more seasonal like influenza.

According to medical literature, ICU stays for ARDS patients in the U.S.

range from 7 to 21 days on average, at an average cost of more than $100,000 per patient.

For moderate to severe cases of ARDS, treatments remain limited and patients suffer high mortality rates.

Countering the exaggerated innate immune response in ARDS patients has been a key area of interest among researchers.

One of the most studied targets has been Toll-like receptor 4 (TLR4) - a key component of the innate immune system and an important mediator of inflammation.

Since TLR4 detects molecules found in pathogens and also binds to endogenous molecules produced as a result of injury, it is a key receptor on which both infectious and noninfectious stimuli converge to induce a proinflammatory response.

Specifically, TLR4 signaling activates leukocytes to secrete proinflammatory cytokines (i.e., CXCL10, IL-6, IFN-b, IL-1b, TNF-a), which under certain circumstances can result in a “cytokine storm” - a severe immune reaction in which the body releases too many cytokines into the blood too quickly.

Such upregulation of TLR4 and its associated cytokines has been observed in SARS-CoV-2 as well as other respiratory infections such as influenza.

In multiple third-party studies, high serum levels of alarmins, such as calprotectin (S100A8/A9) and HMGB1(high mobility group protein B1), that bind to and activate TLR4 are associated with poor outcomes and disease progression in COVID-19 patients.

Specifically, TLR4 signaling activates leukocytes to secrete proinflammatory cytokines (i.e., CXCL10, IL-6, IFN-b, IL-1b, TNF-α), which under certain circumstances can result in a “cytokine storm” - a severe immune reaction in which the body releases too many cytokines into the blood too quickly.

Such upregulation of TLR4 and its associated cytokines has been observed in respiratory infections such as influenza and SARS-CoV-2.

In addition, TLR4 inhibition (antagonism) prevents cytokine production at a very early stage and has been shown to have a protective effect.

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Antagonism of TLR4 has also been shown to modulate the secretion of proinflammatory cytokines (IL-6, CRP, IFNb, TNF-a, CXCL-10, IL8 and MIP-1b).

Based on this data as well as previous clinical results, we believe that the modulation of the TLR4 provides a compelling opportunity to treat ARDS.

Overview and Status

EB05 is a potentially first-in-class monoclonal antibody (mAb) that has been engineered to alter inflammatory signaling by binding to and blocking the activation of TLR4.

Based on these data as well as previous clinical results, we believe that the modulation of TLR4 provides a compelling opportunity to treat ARDS.

EB05 is a first-in-class monoclonal antibody (mAb) that has been engineered to alter inflammatory signaling by binding to and blocking the activation of TLR4.

Specifically, EB05 dampens TLR4 signaling by blocking receptor dimerization (and subsequent intracellular signaling cascades).

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Based on this broad mechanism of action, we believe that EB05 could ameliorate TLR4-mediated inflammation cascades in ARDS patients, thereby reducing lung injury, ventilation rates and mortality.

EB05 has demonstrated the ability to resolve fever and stabilize heart and breathing rates in human subjects that were injected with lipopolysaccharide (LPS) - a potent inducer of acute systemic inflammation.

In previous Phase 1 and Phase 2 clinical studies, EB05 has demonstrated favorable safety and tolerability profiles.

In November 2020, we initiated patient enrollment for an international Phase 2/3 clinical study evaluating the safety and efficacy of EB05 as a therapy for adult hospitalized COVID-19 patients.

Phase 2 Results of Phase 2/Phase 3 Study

In September 2022, we reported final results for the Phase 2 part of an international Phase 2/3 clinical study evaluating the safety and efficacy of EB05 as a therapy for adult hospitalized Covid-19 patients.

The Phase 2 part of the Phase 2/3 study was primarily exploratory and designed to refine patient stratification and statistical powering for the Phase 3 study.

All levels of hospitalized Covid-19 patients were enrolled, ranging from Level 3 (hospitalized, not requiring supplemental oxygen) on the nine-point WHO Covid-19 Severity Scale (WCSS) to WCSS Level 7 (hospitalized, requiring intubation plus additional organ support such as ECMO).

Enrollment in the study as well as the analysis was stratified according to baseline WCSS level into patients with mild Covid-19, defined as WCSS level ≤4, or severe Covid-19, defined as WCSS level ≥5.

Following a single intravenous infusion of EB05 or placebo, patients were evaluated for disease progression, mortality, side effects and other critical care measurements.

Standard-of-care Covid-19 treatment is given to all patients.

Phase 2 enrollment and treatment were completed in September 2021.

Approximately 360 subjects were included in the Phase 2 dataset, and more than 600 subjects have been enrolled as of December 27, 2021.

In September 2021, an independent Data and Safety Monitoring Board (DSMB) identified an important signal between the treatment arms for 28-day mortality and requested that the study be pre-emptively unblinded.

While the Phase 2 portion was primarily designed to refine patient stratification and statistical powering for the Phase 3 study, the DSMB concluded that "a clinically important efficacy signal" was detected and that the study has "met its objective." The DSMB recommended continuation of the study into a Phase 3 confirmatory trial.

Among the findings, the DSMB reported a 28-day death rate of 14.3% (2/14) in the EB05 arm versus 36.8% (7/19) in the placebo arm in critically ill patients receiving extracorporeal membrane oxygenation (ECMO) therapy and/or invasive mechanical ventilation plus organ support.

Survival Analysis using Cox's Proportional Hazard Model showed that the patients treated with EB05 plus standard of care had a 68.5% reduction in the risk of dying when compared to placebo plus standard of care at 28 days (HR:

3.17 placebo vs.

EB05; 95% CI:

0.66- 15.35; p=0.15).

In this cohort, approximately 90% of patients received dexamethasone (or other steroids), and more than 45% received both an IL-6 inhibitor drug and a steroid.

The DSMB noted another 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 versus 12.0% (9/75) in the placebo + SOC arm;

1.52 placebo vs.

EB05, n=136).

Within this group, an important signal was seen in patients with severe ARDS at baseline.

The DSMB reported a 28-day mortality rate of 16.7% (2/12) in the EB05 + SOC arm versus 42.9% (6/14) in the placebo + SOC arm.

Survival Analysis using Cox's Proportional Hazard Model in this group showed that the subjects treated with EB05 + SOC had a 66.0% reduction in the risk of dying when compared to placebo + SOC at 28 days (HR:

2.94 placebo vs.

There were confirmatory efficacy signals detected in other patient groups as well.

In addition, the safety data demonstrated that there were no meaningful differences observed between the two treatment groups with respect to the incidence of treatment emergent serious and non-serious adverse events.

Based on the Phase 2 interim results and the monitoring board’s recommendations, we plan to focus the Phase 3 portion of the EB05 study on critically ill hospitalized patients receiving extracorporeal membrane oxygenation (ECMO) therapy and/or invasive mechanical ventilation plus organ support.

We may also evaluate other subgroups of hospitalized patients, subject to funding and the timely availability of sufficient number of subjects who meet enrollment criteria.

In the Phase 2 study, EB05 demonstrated a statistically significant and clinically meaningful trend for mortality and survival time for all randomized subjects in the critically ill cohort (the intent to treat, or ITT, population).

The 28-day death rate in the EB05 plus standard of care (SOC) arm was 7.7% versus 40% in the placebo + SOC arm in critically severe patients on ECMO therapy (extracorporeal membrane oxygenation) or Invasive Mechanical Ventilation (IMV) plus organ support with ARDS at baseline (p=0.04).

The Survival Analysis using Cox’s Proportional Hazard Model demonstrated that patients treated with EB05 + SOC had an 84% reduction in the risk of dying when compared to placebo + SOC at 28 days.

To our knowledge, no other study has demonstrated a result of this magnitude in this population.

The 60-day mortality rate was 23.1% (3/13) in the EB05 + SOC arm versus 45% (9/20) in the placebo + SOC arm for this same population (p=0.20).

The Survival Analysis using Cox’s Proportional Hazard Model showed that the patients treated with EB05 + SOC had a 61% reduction in the risk of dying when compared to placebo + SOC at 60 days.

In addition to the critically ill population, the analysis of the full Phase 2 dataset revealed other efficacy signals.

For severe Covid-19 patients at WCSS Level ≥5 (99% of patients had ARDS at baseline), there were clinically meaningful differences with respect to the proportion of patients who were alive without any need for oxygen support at Day 28 (the Phase 2 study’s primary endpoint).

From the ITT analysis of this population, 45.8% in the EB05 + SOC arm versus 36.1% in the placebo + SOC arm achieved the primary endpoint (p=0.16).

Similarly positive efficacy signals were also demonstrated in this same population for the proportion of patients who achieved at least a 2-point improvement on the WCSS.

From the ITT analysis of this population, 46.7% in the EB05 + SOC arm versus 36.1% in the placebo + SOC arm achieved at least a 2-point improvement in on the WCSS (p=0.12).

For mild Covid-19 patients at WCSS Level ≤4, the study did not detect meaningful clinical differences between the arms for these endpoints, which is likely the result of the baseline severity score being too close to the endpoint (WCSS of 3 or less) on these scoring scales.

The Phase 2 study demonstrated that EB05 was well-tolerated and consistent with the observed safety profile to date.

Phase 3 of a Phase 2/Phase 3 Study

The Phase 3 part of our Phase 2/3 study is designed to assess the efficacy and safety of EB05 among hospitalized patients with severe and critical disease, for whom there continues to be limited treatment options and high mortality rates.

The Phase 3 double-blind, placebo-controlled study design has been approved in Canada, Colombia, Poland, where recruitment is ongoing.

In the U.S., the Food and Drug Administration (FDA) is currently reviewing our Phase 3 study design.

We intend to harmonize the study protocol, where appropriate, across jurisdictions once we reach agreement with the FDA on the study design.

Previous Phase 1 and Phase 2 Clinical Studies of EB05

EB05 has demonstrated the ability to regulate inflammation and resolve fever and stabilize heart and breathing rates in human subjects that were injected with lipopolysaccharide (LPS) - a potent inducer of acute systemic inflammation.

In previous Phase 1 and Phase 2 clinical studies, EB05 has demonstrated favorable safety and tolerability profiles.

In a previous Phase 1 study, EB05 was administered in healthy volunteers (HV) as a single intravenous infusion using a single ascending pharmacokinetic/pharmacodynamic dose design.

EB05 was administered at different dose levels and was followed by in vivo LPS challenges.

The study demonstrated that EB05 inhibited the release of various pro-inflammatory cytokines ( IL-6, TNF-α and CXCL10) as well as stabilized certain other vital signs for up to 22 days after the infusion of EB05.

The study further demonstrated that cytokine response and baseline vital signs were restored at 40 days after EB05 infusion.

EB05 demonstrated a favorable safety profile in the Phase 1 study in healthy volunteers as well as a multiple-infusion Phase 2 study in subjects with rheumatoid arthritis (RA).

In the Phase 1 study, doses ranged from 0.001 mg/kg up to 15mg/kg.

The Phase 2 RA study was a multiple dose study where patients received one dose of EB05 5 mg/kg every two weeks for 12 weeks.

In the Phase 1 study, a total of 60 subjects received EB05, and in the Phase 2 RA study, 61 patients were randomized to the EB05 group.

There were no meaningful differences observed between the placebo and EB05 treatment groups with respect to the incidence of treatment emergent serious and non-serious adverse events in either of these studies.

Federal Reimbursement Grant from the Canadian Government

On February 2, 2021, our wholly owned subsidiary Edesa Biotech Research, Inc.

In February 2021, our wholly owned subsidiary Edesa Biotech Research, Inc.

entered into a multi-year contribution agreement with the Canadian government’s Strategic Innovation Fund, or SIF.

Under this agreement, the Government of Canada committed up to C$14.05 million ($11 million) in nonrepayable funding toward (i) the Phase 2 portion of our ongoing Phase 2/3 study of our investigation therapy EB05 in hospitalized Covid-19 patients, and (ii) certain pre-clinical research intended to potentially broaden the application of our experimental therapy.

On a quarterly basis, we may submit claims to the SIF for 75% of eligible reimbursable expenses.

Under the agreement, Edesa has agreed to certain obligations in relation to the completion of the clinical and pre-clinical project.

In the event that we breach our obligations under the agreement, subject to applicable cure, the SIF may exercise a number of remedies, including suspending or terminating funding under the Agreement, demanding repayment of funding previously received and/or terminating the Agreement.

The performance obligations of Edesa Biotech Research under the contribution agreement are guaranteed by the Company.

As of December 27, 2021, we have met all of our performance and reporting requirements under the grant agreement.

Previous Phase 1 and Phase 2 Clinical Studies of EB05

In a previous Phase 1 study, EB01 demonstrated the ability to regulate inflammation in humans.

EB05 was administered in healthy volunteers (HV) as a single intravenous infusion using a single ascending (from 0.001 mg/kg to 15 mg/kg) pharmacokinetic/pharmacodynamic dose design in Part 1 of the study.

In Part 2 of the study, EB05 was administered at different dose levels and was followed by an in vivo LPS challenge where HVs were administered LPS on Day 1, Day 22 or Day 40 after EB05 administration (0.01mg/kg or 0.25 mg/kg).

In subjects receiving an EB05 dose of 0.01 or 0.25 mg/kg and exposed to the LPS challenge immediately after the infusion, IL-6, TNFα and CXCL10 release was inhibited.

In subjects administered EB05 0.25 mg/kg and exposed to the LPS challenge 22 days after the infusion, the release of IL6, TNFα and CXCL10 was also inhibited.

In subjects who received the LPS challenge 40 days after EB05 infusion, the cytokine response to LPS was restored.

In all subjects receiving placebo, the cytokine response to LPS was observed.

Vital signs (temperature and heart rate) were also measured during the in vivo LPS challenge in HV following EB05 or placebo administration.

Similar to the trend in the cytokine levels, in subjects receiving an EB05 dose of 0.01 or 0.25 mg/kg and exposed to the LPS challenge immediately after the infusion, rise in baseline temperature and change in heart rate was inhibited.

In subjects administered EB05 0.25 mg/kg and exposed to the LPS challenge 22 days after the infusion rise in baseline temperature and change in heart rate was also inhibited.

In subjects who received the LPS challenge 40 days after EB05 infusion, the rise in baseline temperature and change in heart rate to LPS was restored.

EB05 has demonstrated a favorable safety profile in the Phase 1 study in health volunteers as well as a multiple-infusion Phase 2 study in subjects with rheumatoid arthritis (RA).

In the Phase 1 study, doses ranged from 0.001 mg/kg up to 15mg/kg.

The Phase 2 RA study was a multiple dose study where patients received one dose of EB05 5 mg/kg every two weeks for 12 weeks.

In the Phase 1 study, a total of 60 subjects received EB05, and in the Phase 2 RA study, 61 patients were randomized to the EB05 group.

As of the date of this filing, we have met all of our performance and reporting requirements under the grant agreement.

Allergic Contact Dermatitis

Contact dermatitis is one of the most common occupational and work-related skin conditions in the United States.

Contact dermatitis is a common occupational and work-related skin condition.

The disease can be either irritant contact dermatitis or ACD.

Together, these conditions have been estimated to cost up to $2 billion annually as a result of lost work, reduced productivity, medical care and disability payments.

Based on published reports and U.S.

insurance claims data, we estimate that there are more than 2.5 million people in the United States with ACD, including more than 1 million people who have chronic ACD.

Since primary care physicians do not always distinguish between irritant and allergic contact dermatitis, a potentially larger undiagnosed patient population may also be present.

Based on market research, we believe that together these conditions cost up to $2 billion annually in the United States as a result of lost work, reduced productivity, medical care and disability payments.

Based on the prevalence data of contact allergy in the general population, which we sourced from scientific literature and market reports, we estimate that there are as many as 30 million people in the seven major markets (US, UK, Germany, France, Spain, Italy, Japan) and Canada with ACD, and of these, we estimate that 40% have chronic exposure or frequent recurring exposure to a causative allergen.

Based on the mechanism of action and topical delivery, we believe that the total addressable patient population for EB01 is as high as five million people in the seven major markets and Canada.

ACD is caused by an allergen interacting with skin and usually occurs on areas of the body that have been directly exposed to the environment, with a high prevalence on the hands and face.

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More specifically, ACD involves an exogenous substance binding a cell surface protein to form a hapten that is recognized as a foreign antigen by the immune system.

Haptens are known to signal through toll-like receptors, a family of receptors involved in the innate immune system recognizing pathogens, leading to the induction of pro-inflammatory cytokines such as interleukin (IL)-1b.

EB01 has been shown in preclinical studies to inhibit the production of pro-inflammatory cytokines induced via toll-like receptor signaling (IL-1b, IL-6, IL-8, MIP-1a, and TNFa), suggesting that EB01 may address the underlying disease mechanism of ACD.

Haptens are known to signal through toll-like receptors, a family of receptors involved in the innate immune system, which leads to the induction of pro-inflammatory cytokines such as interleukin (IL)-1b.

EB01 has been shown in preclinical studies to inhibit the production of pro-inflammatory cytokines induced via toll-like receptor signaling (IL-1b, IL-6, IL-8, MIP-1a, and TNF-α), suggesting that EB01 may address the underlying disease mechanism of ACD.

Generally, dermatologists view chronic ACD from both a duration and recurrence perspective, considering how often and how long symptoms persist.

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Since inflammation in ACD is driven by external exposure to an allergen, the severity of ACD does not necessarily correlate with body surface area, as is often the case with other dermatological diseases.

Current treatment plans begin by attempting to identify and remove exposure to the allergen.

However, the offending allergen(s) is frequently not identified, and even when it is, avoiding exposure is often not possible (e.g., present in the workplace), according to our market research.

Current treatment plans begin by attempting to identify and remove exposure to the causative allergen.

However, the causative allergen(s) is frequently not identified, and even when it is, avoiding exposure is often not possible (e.g., it is present in the workplace), according to our market research.

To our knowledge, there are no drug treatment options specifically indicated for ACD.

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Topical corticosteroids are the most commonly used therapeutic intervention for ACD but cannot be used continuously since they have well-known side-effects including skin thinning, stretch marks, acne, stinging, burning and dryness.

Other topical treatments for ACD include immunomodulators such as topical calcineurin inhibitors.

Other topical treatments for ACD include topical immunomodulators such as topical calcineurin inhibitors.

However, these are less efficacious than topical corticosteroids and have an FDA “black box warning” for risk of malignancies.

Systemic corticosteroids can be used for acute control of severe cases of ACD but have safety concerns including hypothalamic-pituitary-adrenal axis suppression, growth suppression and loss of bone-density, thereby limiting the utility of steroids for treating chronic disease.

Finally, patients may be treated with systemic immunomodulators, which have a series of “black box warnings” and associated safety issues.

Finally, patients may be treated with systemic immunomodulators, which have “black box warnings” and associated safety issues.

Systemic therapies also need to be tapered off each time the physician wants to patch test allergens to identify the source of a patient’s ACD.

Overview and Status

EB01 is a topical vanishing cream containing a novel, non-steroidal anti-inflammatory compound.

EB01 is a potential first-in-class, topical vanishing cream containing a novel, non-steroidal anti-inflammatory compound.

EB01 exerts its anti-inflammatory activity through the inhibition of certain pro-inflammatory enzymes known as secretory phospholipase 2, or sPLA2.

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The sPLA2 enzyme family plays a key role in initiating inflammation associated with many diseases, and we believe that targeting the sPLA2 enzyme family with enzyme inhibitors will have a superior anti-inflammatory therapeutic effect because the inflammatory process will be inhibited at its inception rather than after inflammation has occurred.

In October 2019, we initiated patient enrollment for a multi-center Phase 2b clinical study evaluating EB01 as a monotherapy for patients with moderate to severe chronic ACD.

The double-blind, vehicle-controlled study will primarily evaluate the safety and efficacy of EB01 in ACD patients.

Investigators will also evaluate symptom reduction, quality of life and dose-relationships among various strengths of EB01 cream as secondary and exploratory measures.

In June 2021, an independent data and safety monitoring board (DSMB) completed an interim review of blinded data from the first cohort of our Phase 2b study of EB01 and determined that our drug candidate met key interim study parameters.

The DSMB assessed the blinded comparable data for safety as well as pre-assigned statistical thresholds used to determine the number of subjects for the final part of the Phase 2b study.

The initial cohort analyzed consisted of a population of 46 subjects, of whom 36 completed the study follow-up and were used in the interim analysis.

Based on the interim findings and the safety monitoring board's recommendations, we plan to enroll a total population of approximately 170 evaluable subjects in the primary cohort who will be provided with either 2% EB01 cream or placebo cream.

In addition to the primary cohort, the company plans to complete a dose-ranging cohort, which will evaluate lower-strength concentrations of EB01 in an additional 40 subjects.

Since March 2020, we have implemented a number of measures designed to respond to and mitigate disruptions to patient care and enrollment caused by the COVID-19 pandemic.

These measures include protocol amendments that reduce the number of in-person office visits and allow for remote telehealth appointments; the implementation of virtual investigational sites; patient recruitment campaigns; and new investigational sites.

Due to physician and patient interest, the company has also added a voluntary open-label extension for study patients once they complete their treatment in the main study.

This guarantees that participants in the placebo arm have access to treatment with the active ingredient.

The open label extension is also designed to provide longer term usage data, since ACD often reoccurs, or is chronic.

While these measures have been largely successful to date to increase the pace of enrollment, due to the changing nature of the pandemic and potential for new waves of infections to disrupt clinical sites, we are unable to predict with certainly the timing for the completion of the Phase 2b study.

Previous Results

EB01 has demonstrated anti-inflammatory activity in a variety of in vitro and in vivo preclinical pharmacology models.

In addition, EB01 has demonstrated efficacy for the treatment of ACD in two previous clinical trials.

A variety of in vitro and in vivo preclinical pharmacology models were used to assess the anti-inflammatory activity of EB01.

Using a model for hapten signaling indicative of ACD, lipopolysaccharide-stimulated peripheral blood mononuclear cells were treated with EB01 and shown to inhibit pro-inflammatory cytokines including IL-1b, IL-6, IL-8, MIP-1a, and TNFa at the protein and mRNA expression levels.

Additionally, the safety of EB01 has been established in several Good Laboratory Practice toxicology studies, including an eight-week study involving topical application of 2.0% EB01 cream to minipigs and a 6-week continuous infusion study in rats.

Overall, EB01 was well-tolerated and systemic exposure was negligible (below the limit of detection).

No genotoxicity has been demonstrated in bacterial reverse mutation and micronucleus testing.

Clinical experience with EB01 includes five clinical studies involving a total of 176 subjects.

No serious adverse reactions were encountered during these clinical studies.

Healthy volunteers were treated with EB01 under occlusion.

EB01 was classified as a weak sensitizer by maximization assay (Grade 1) and is, therefore, considered safe to use under any conditions.

In September 2022, we completed enrollment in a multi-center, double-blind, placebo-controlled confirmatory Phase 2b study evaluating the safety and efficacy of various concentrations of EB01 cream in approximately 210 subjects.

We anticipate that preliminary topline results will be available by mid-January 2023.

A voluntary 90-day open-label extension with EB01 cream is also available for study patients once they complete their treatment in the main study.

Previous Clinical Results of EB01

EB01 has demonstrated efficacy for the treatment of ACD in two separate clinical trials.

Both studies were double-blind, vehicle-controlled bilateral comparison studies to assess the safety, tolerability and efficacy of EB01 cream applied twice daily for the treatment of ACD of the hand and forearm as determined by the Contact Dermatitis Severity Index (CDSI), a physician’s visual assessment.

Both studies were double-blind, placebo/vehicle-controlled bilateral comparison studies to assess the safety, tolerability and efficacy of EB01 cream applied twice daily for the treatment of ACD of the hand and forearm as determined by the Contact Dermatitis Severity Index (CDSI), a physician’s visual assessment.

The CDSI is a composite endpoint, which grades each symptom of the disease (dryness, scaling, redness, pruritus, and fissures) scored from 0 (none) to 3 (severe), with a maximum total severity score of 15.

A diagnosis of ACD was confirmed by a positive patch test deemed to be clinically relevant by the investigator.

The first study (n=11) was a double-blind, placebo-controlled clinical study to assess the safety and efficacy of topical 1.0% EB01 cream for the treatment of ACD.

The first study (n=11) was a double-blind, placebo/vehicle-controlled clinical study to assess the safety and efficacy of topical 1% EB01 cream for the treatment of ACD.

Subjects selected for inclusion had bilateral ACD.

Prior to randomization, subjects were patch tested.

Patch tests were applied to the upper part of each subjects’ back for 2 days and were read on Days 2 and 4.

Only “++” reactions were considered clinically relevant and positive for the study.

The study was bilateral in design with one lesion treated with 1% EB01 cream twice daily, while a comparable lesion was treated with placebo cream.

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The mean change from baseline for 1% EB01 cream treated lesions was 69.9%, compared to 36.5% in the placebo cream lesions (p=0.0024).

No serious adverse events were reported.

A second, larger (n=30) bilateral study was conducted to assess 2% EB01 cream applied twice daily for 21 consecutive days in connection with the treatment of ACD.

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At Day 21, EB01-treated lesions had a mean improvement from baseline of 56%, compared to 24% for those treated with placebo cream (p<0.001).

Efficacy of the 2.0% EB01 cream was maintained through Day 42 (21-days after ending treatment) with a 49% decrease in total CDSI score for 2.0% EB01 cream-treated hands, compared to 15% in the vehicle-treated hands (p < 0.001).

Efficacy of the 2% EB01 cream was maintained through Day 42 (21-days after ending treatment) with a 49% decrease in total CDSI score for 2% EB01 cream-treated hands, compared to 15% in the placebo/vehicle-treated hands (p<0.001).

Within the total CDSI score, EB01 demonstrated statistically significant reductions for each of the individual CDSI components (dryness, scaling, redness, pruritus, and fissures).

Total clinical experience with EB01, including the current Phase 2b study, has involved approximately 270 subjects.

No serious adverse events have been encountered to date.

Pre-Clinical Results

EB01 has demonstrated anti-inflammatory activity in a variety of in vitro and in vivo preclinical pharmacology models.

Additionally, the safety of EB01 has been established in several Good Laboratory Practice toxicology studies.

Overall, EB01 was well-tolerated and systemic exposure was negligible (below the limit of detection).

No genotoxicity was demonstrated in bacterial reverse mutation and micronucleus testing.

Hemorrhoids Disease

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While there are commonly used prescription and over-the- counter products for HD, none has been approved by the FDA through the NDA process because they entered the market prior to 1962.

The mechanism of action of these treatments is either general, such as steroids, or unknown, in the case of herbal remedies, and we are not aware of any reports published in medical journals on the efficacy of safety of any product currently marketed in the U.S.

The mechanism of action of these treatments is either general, such as steroids, or unknown, in the case of herbal remedies, and we are not aware of any reports published in medical journals on the efficacy or safety of any product currently marketed in the U.S.

As a result of these factors, we believe that HD remains a significant unmet medical need and market opportunity.

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In light of our focus on the development of EB05 and EB01, we are currently evaluating the timing for the initiation of this planned study of EB02.

Other Product Candidates

We are also seeking to advance additional product candidates, including EB06, which is a monoclonal antibody candidate that binds specifically and selectively to chemokine ligand 10 (CXCL10) and inhibits the interaction of CXCL10 with its receptor(s).

Other Future Product Candidates

We are seeking to advance additional product candidates as well as add new disease indications for current product candidates, and from time to time we may request approval from regulators in various jurisdictions to initiate new clinical studies or amend the scope of current clinical studies.

In addition, we plan to continue to identify, evaluate and potentially obtain rights to and develop additional clinical assets across various stages of development, focusing primarily on inflammatory and immune-related diseases.

Among our activities, we are preparing an investigational new drug application (IND) in the United States for our EB07 product candidate to conduct a future study in systemic sclerosis (SSc), an autoimmune rheumatic disorder that causes fibrosis, (scarring/hardening) of skin and internal organs such as the lungs, heart and kidneys.

This project represents a potential additional use for our anti-TLR4 monoclonal antibody candidate in a chronic orphan disease with limited treatment options and high mortality and morbidity.

We are also preparing a clinical trial application (CTA) in Canada for our EB06 product candidate to conduct a future study in vitiligo, a common autoimmune disorder that causes the skin to lose its color in patches.

EB06 is a monoclonal antibody candidate that binds specifically and selectively to chemokine ligand 10 (CXCL10) and inhibits the interaction of CXCL10 with its receptor(s).

We believe that there is significant scientific rationale for the potential utility of this mechanism of action to reduce disease symptoms and progression in vitiligo patients.

Initiating recruitment in the EB07 or EB06 studies is subject to, among other limitations, regulatory approval of the respective applications.

Intellectual Property and Key Licenses

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Additional patents subject to the license agreement have been filed by Yissum which we believe, if issued, could potentially prevent generic substitution until after 2033.

We also hold an exclusive license from NovImmune SA, for patents and patent applications that cover our product candidates EB05 and EB06 in the United States, Canada and various other countries.

We also hold an exclusive license from NovImmune SA, for patents and patent applications that cover our product candidates that utilize our anti-TLR4 and anti-CXCL10 monoclonal antibody technology in the United States, Canada and various other countries.

Composition of matter patents, for which we hold an inbound license from NovImmune, have been issued that will expire as late as 2033 and 2028, respectively.

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We have also filed additional method of use patent applications which we believe, if issued, could potentially prevent biosimilar substitution until as late as 2041.

We have also filed provisional patent applications for use of these monoclonal antibody technologies in vitiligo (EB06) and systemic sclerosis (EB07).

In the event we are successful in commercializing a new drug candidate, we believe we would be eligible for data/market exclusivity, in addition to exclusivity rights granted through patent protection.

We would be eligible for up to five years of exclusivity for EB01 and EB02 and up to twelve years of exclusivity for EB05 or EB06 after approval in the United States, and eight years of exclusivity after approval in Canada and ten years of exclusivity after approval in the European Union in any case.

We would be eligible for up to five years of exclusivity for EB01 and EB02 and up to twelve years of exclusivity for EB05 and EB06 after approval in the United States, and, for any of these drug products, eight years of exclusivity after approval in Canada and ten years of exclusivity after approval in the European Union.

We expect patents and other proprietary intellectual property rights to be an essential element of our business.

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License Agreement with NovImmune SA

On April 17, 2020, our wholly owned subsidiary Edesa Biotech Research, Inc.

In April 2020, our wholly owned subsidiary Edesa Biotech Research, Inc.

entered into an exclusive license agreement with NovImmune SA, which operates under the brand Light Chain Bioscience, whereby we obtained exclusive rights throughout the world to certain know-how, patents and data relating to the monoclonal antibodies targeting TLR4 and CXCL10 (the Constructs).

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Edesa is required to use commercially reasonable efforts to develop and commercialize the Constructs in accordance with the terms of a development plan established by the parties.

In exchange for the exclusive rights to develop and commercialize the Constructs, we issued to NovImmune $2.5 million of newly designated Series A-1 Convertible Preferred Shares pursuant to the terms of a securities purchase agreement entered into between the parties concurrently with the license agreement.

In exchange for the exclusive rights to develop and commercialize the Constructs, we issued to NovImmune $2.5 million of newly designated Series A-1 Convertible Preferred Shares (all of which were subsequently converted into common shares) pursuant to the terms of a securities purchase agreement entered into between the parties concurrently with the license agreement.

In addition, Edesa is committed to payments of various amounts to NovImmune upon meeting certain development, approval and commercialization milestones as outlined in the license agreement up to an aggregate amount of $356 million.

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The license agreement is also terminable by Light Chain upon the occurrence of certain bankruptcy related events pertaining to Edesa.

In connection with the license agreement and pursuant to a purchase agreement entered into by the parties on April 17, 2020, we acquired from NovImmune its inventory of the TLR4 antibody for an aggregate purchase price of $5.0 million, payable in two installments - the first in 2021 and the second in 2022.

In connection with the license agreement and pursuant to a purchase agreement entered into by the parties in April 2020, we acquired from NovImmune its inventory of the TLR4 antibody for an aggregate purchase price of $5.0 million.

License and Development Agreement with Pendopharm

On August 27, 2017, our wholly owned subsidiary, Edesa Biotech Research, Inc.

In August 2017, our wholly owned subsidiary, Edesa Biotech Research, Inc.

entered into an exclusive license and development agreement with Pendopharm, a division of Pharmascience Inc.

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License Agreements with Yissum and Inventor

On June 29, 2016, our wholly owned subsidiary, Edesa Biotech Research, Inc., entered into an exclusive license agreement with Yissum, which agreement was subsequently amended on each of April 3, 2017 and May 7, 2017.

Pursuant to the license agreement as amended, we obtained exclusive rights throughout the world to certain know-how, patents and data relating to a pharmaceutical product for the following fields of use:

In June 2016, our wholly owned subsidiary, Edesa Biotech Research, Inc., entered into an exclusive license agreement with Yissum, which was subsequently amended in April 2017, May 2017 and October 2022.

Pursuant to the license agreement as amended, we obtained exclusive rights throughout the world to certain know-how, patents and data relating to

a pharmaceutical product for the following fields of use:

therapeutic, prophylactic and diagnostic uses in topical dermal applications and anorectal applications.

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Subject to certain conditions, we are permitted to engage third parties to perform our activities or obligations under the agreement.

In exchange for the exclusive rights to develop and commercialize the product for topical dermal applications and anorectal applications, we are committed to payments of various amounts to Yissum upon meeting certain milestones outlined in the license agreement up to an aggregate amount of $18.6 million.

In addition, in the event of a divestiture of substantially all of our assets, we are obligated to pay Yissum a percentage of the valuation of the licensed technology sold as determined by an external objective expert.

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Subject to certain exceptions, we have undertaken to indemnify Yissum against any liability, including product liability, damage, loss or expense derived from the use, development, manufacture, marketing, sale or sublicensing of the licensed product and technology.

On March 16, 2021, through Edesa Biotech Research, Inc., we entered into a license agreement with the inventor of the same pharmaceutical product to acquire global rights for all fields of use beyond those named under the 2016 license agreement with Yissum.

In March 2021, through Edesa Biotech Research, Inc., we entered into a license agreement with the inventor of the same pharmaceutical product to acquire global rights for all fields of use beyond those named under the 2016 license agreement with Yissum.

As a result of the license agreement entered into with inventor, Edesa now holds exclusive global rights to the pharmaceutical product that forms the basis of our EB01 and EB02 drug candidates for all fields of use in humans and animals.

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We are committed to remaining payments of up to an aggregate amount of $69.1 million, primarily relating to future potential commercial approval and sales milestones.

In addition, if we fail to file an investigational new drug application or foreign equivalent (IND) for the product within a certain period of time following the date of the agreement, we are required to remit to the inventor a fixed license fee annually as long as the requirement to file an IND remains unfulfilled.

In addition, if we fail to file an IND or foreign equivalent for the product within a certain period of time following the date of the agreement, we are required to remit to the inventor a fixed license fee annually as long as the requirement to file an IND remains unfulfilled.

Edesa also has a commitment to pay the inventor a royalty based on net sales of the product in countries where Edesa, or an affiliate, directly commercializes the product and a percentage of sublicensing revenue received by Edesa and its affiliates in the countries where the company does not directly commercialize the product.

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Our current arrangements with our manufacturers are subject to customary industry terms and conditions, and manufacturing is performed on an as-requested basis.

While we have not experienced significant shortages of raw materials to date, as a result of the pandemic and increased demand for production, CMOs have generally reported that supplies of raw materials and critical components necessary for our manufacturing processes have been more challenging and expensive to obtain, and longer lead times may be required for scheduling future production runs.

We believe that we have sufficient supplies on hand or in the process of being manufactured, filled and packaged to complete our clinical studies of EB05 and EB01.

While we have not experienced significant shortages of raw materials to date, as a result of increased industry demand, CMOs have generally reported that supplies of raw materials and critical components necessary for manufacturing processes have been more challenging and expensive to obtain, and longer lead times may be required for scheduling future production runs.

We believe that we have sufficient supplies on hand to complete our clinical studies of EB05 and EB01.

To supply future clinical studies and potential commercialization of our product candidates, we are engaged in discussions with various CMOs regarding long-term supply agreements.

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If we receive marketing approval or emergency use authorization in the United States, Canada or Europe for a product candidate, we plan to either build the capabilities to commercialize the product candidate in the applicable region with our own focused, specialized sales force, or alternatively, outsource the sales and marketing infrastructure necessary to market and sell our products.

We also plan to utilize strategic licensing, collaboration, distribution or other marketing arrangements with third parties for the further development or commercialization of our products and product candidates, where applicable, such as in areas where a partner may contribute additional resources, infrastructure and expertise.

We also plan to utilize strategic licensing, collaboration, distribution or other marketing arrangements with third parties for the further development or commercialization of our products and product candidates, where applicable, such as in areas or regions outside North America where a partner may contribute additional resources, infrastructure and expertise.

The pharmaceutical and biotechnology industry is highly competitive, and the development and commercialization of new drugs is influenced by rapid technological developments and innovation.

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and Leo Pharma A/S.

For our EB05 product candidate, there are hundreds of competing therapies under evaluation, including prophylactic vaccines for the SARS-Cov2 virus, experimental stem cell therapies, novel therapeutics and repurposed commercial drugs.

For our EB05 product candidate, there are numerous competing therapies, including prophylactic vaccines for the SARS-Cov2 virus, experimental stem cell therapies, novel therapeutics and repurposed commercial drugs.

Our potential competitors include, among others:

Aqualung Therapeutics Corporation, Athersys, Inc., Enzychem Lifesciences Corp., Humanigen, Inc., Kiniksa Pharmaceuticals, Ltd., Merck & Co, Inc., Mesoblast Limited, Pfizer Inc., Regeneron Pharmaceuticals, Inc.

and Roche Holding AG.

Aqualung Therapeutics Corporation, Athersys, Inc., Eli Lilly and Company, Enzychem Lifesciences Corp., Kiniksa Pharmaceuticals, Ltd., Merck & Co, Inc., Mesoblast Limited, Pfizer Inc., Regeneron Pharmaceuticals, Inc., Roche Holding AG and Veru Inc.

For any future product for vitiligo or systemic sclerosis, potential competitors, include, among others:

Bausch Health, Galderma Laboratories, LP, Incyte Corporation, Boehringer Ingelheim AG, Chemomab Therapeutics Ltd., F.

Hoffmann-La Roche AG, GlaxoSmithKline plc., Merck & Co., Inc., Mitsubishi Tanabe Pharma Corporation, Sanofi S.A.

and Seagen, Inc.

Some of the competing product development programs may be based on scientific approaches that are similar to our approach, and others may be based on entirely different approaches.

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Government Regulation

We plan to conduct clinical studies and seek approvals for our product candidates in the United States, Canada and other jurisdictions.

We plan to conduct clinical studies and seek approvals for our product candidates in the United States, Canada, European Union and other jurisdictions.

Therefore, we currently are, and may in the future be, subject to a variety of national and regional regulations governing clinical trials as well as commercial sales and distribution of our products, if approved.

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Obtaining these marketing approvals and subsequently complying with ongoing statutory and regulatory requirements require substantial time, effort and financial resources.

United States

United States Regulations

In the United States, the FDA regulates drugs under the federal Food, Drug and Cosmetic Act as well as the Public Health Service (PHS) Act for biological drugs.

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Drug developers conduct adequate and well-controlled human clinical trials that establish the safety and efficacy of the product candidate for the intended use, typically in the following three stages, which are often sequential but may overlap:

The clinical trials are initially conducted in a limited population to test the product candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy humans or, on occasion, in patients, such as cancer patients.

The clinical trials are initially conducted in a limited population to test the product candidate for safety, dose tolerance, absorption, metabolism, distribution and excretion in healthy human volunteers or, on occasion, in patients, such as cancer patients.

Phase 1 clinical trials can be designed to evaluate the impact of the product candidate in combination with currently approved drugs.

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Once issued, the FDA may withdraw a drug approval if ongoing regulatory requirements are not met or if safety problems occur after the drug reaches the market.

In addition, the FDA may require further testing, including Phase 4 clinical trials (post-marketing), and surveillance programs to monitor the effect of approved drugs which have been commercialized.

In addition, the FDA may require further testing, including Phase 4 clinical trials (postmarketing), and surveillance programs to monitor the effect of approved drugs which have been commercialized.

The FDA has the power to prevent or limit further marketing of a drug based on the results of these post-marketing programs.

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State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Canada Regulations

Health Canada is the Canadian federal authority that regulates, evaluates and monitors the safety, effectiveness, and quality of drugs, medical devices, and other therapeutic products available to Canadians.

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Health Canada reviews the submitted information, sometimes using external consultants and advisory committees, to evaluate the potential benefits and risks of a drug.

If after of the review, the conclusion is that the patient benefits outweigh the risks associated with the drug, the drug is issued a Drug Identification Number (DIN), followed by a Notice of Compliance (NOC), which permits the market authorization holder (i.e., the NOC and DIN holder) to market the drug in Canada.

If after the review, the conclusion is that the patient benefits outweigh the risks associated with the drug, the drug is issued a Drug Identification Number (DIN), followed by a Notice of Compliance (NOC), which permits the market authorization holder (i.e., the NOC and DIN holder) to market the drug in Canada.

Drugs granted an NOC may be subject to additional postmarket surveillance and reporting requirements.

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The market authorization holder must also notify Health Canada of any new safety and efficacy issues that it becomes aware of after the launch of a product.

As of December 27, 2021, we have 16 full-time employees:

nine employees are primarily engaged in research and development, and seven employees are engaged in management, administration, business development and finance.

As of the date of this filing, we have 16 full-time employees:

ten employees are primarily engaged in research and development, and six employees are engaged in management, administration, business development and finance.

All employees are located in Canada or the U.S.

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As a growth-oriented company focused on innovation, we strive to foster diversity and inclusion.

As of December 27, 2021, women represented more than 50% of all employees, and individuals from underrepresented racial or ethnic groups, or who are foreign born, represented more than 50% of our employees.

As of the date of this filing, women represented more than 50% of all employees, and individuals from underrepresented racial or ethnic groups, or who are foreign born, represented more than 50% of our employees.

Legal Proceedings

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Corporate Information

We are incorporated under the laws of British Columbia, Canada, in 2007 and operate through our wholly owned subsidiaries, Edesa Biotech Research, Inc.

an Ontario, Canada corporation and Edesa Biotech USA, Inc., a California, USA corporation founded in 1999 (formerly known as Stellar Biotechnologies, Inc.

prior to November 2020).

In June 2019, we acquired the Ontario corporation through a reverse acquisition and changed our name from Stellar Biotechnologies, Inc.

to Edesa Biotech, Inc.

We subsequently changed the name of the Ontario subsidiary to Edesa Biotech Research, Inc.

(formerly Edesa Biotech Inc.).

The California subsidiary was acquired through a reverse merger in April 2010, when the company was organized as a Canadian capital pool company.

We are a British Columbia, Canada corporation founded in 2007 and operate through our wholly owned subsidiaries, Edesa Biotech Research, Inc., an Ontario, Canada corporation and Edesa Biotech USA, Inc., a California, USA corporation.

In June 2019, we acquired the Ontario corporation through a reverse acquisition and changed our name to Edesa Biotech, Inc.

Our executive offices are located at 100 Spy Court, Markham, Ontario, L3R 5H6, Canada.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business