What changed in this filing

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Item 1. Business

2023-12-15 compared with 2022-12-16 · 319 added, 194 removed, 280 unchanged (65% of the section changed)

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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.

Our most advanced drug candidate is EB05 (paridiprubart).

Paridiprubart represents a new class of emerging therapies called Host-Directed Therapeutics (HDTs) that are designed to modulate the body’s own immune response when confronted with infectious diseases or even chemical agents.

Importantly, these therapies are designed to work across multiple infectious diseases and threats, and could be stockpiled preemptively ahead of outbreaks.

Because they are threat agnostic, HDTs like paridiprubart have the potential to become standard of care in Intensive Care Units (ICUs) and critical countermeasures for both pandemic preparedness and biodefense.

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.

Recruitment in a Phase 3 study is ongoing.

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.

In November 2023, we reported final results from a Phase 2b clinical study evaluating multiple concentrations of our drug candidate, EB01 (daniluromer), as a monotherapy for moderate-to-severe chronic Allergic Contact Dermatitis (ACD), a common occupational skin condition.

Among the findings, 1.0% EB01 cream demonstrated statistically significant improvement over placebo for the primary endpoint and a key secondary endpoint.

For our EB06 monoclonal candidate, we have received regulatory approval by Health Canada to conduct a future Phase 2 study in patients with moderate to severe nonsegmental vitiligo, a common autoimmune disorder that causes skin to lose its color in patches.

We are also preparing an investigational new drug application (IND) in the United States (U.S.) for our EB07 product candidate to conduct a future Phase 2 study in patients with fibrotic diseases such as systemic sclerosis.

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 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.

We believe that the strength of our technologies has been validated by our favorable clinical data and progress to date, more than C$37 million in competitive government grant and funding awards, and our multiple arrangements with third parties to develop and commercialize their clinical-stage drug candidates.

Innovative pipeline addressing large underserved markets.

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

For example, ARDS is associated with approximately 10% of ICU admissions globally, impacts millions of people, and costs billions of dollars annually.

Intellectual property protection and market exclusivity.

We have opportunities to develop our competitive position through patents, trade secrets, technical know-how and continuing technological innovation.

We have exclusive license rights in our target indications to multiple patents and pending patent applications in the United States and in various foreign jurisdictions.

In addition to patent protection, we intend to utilize trade secrets and market exclusivity afforded to a New Chemical Entity, where applicable, to enhance or maintain our competitive position.

We have exclusive license rights in our target indications to multiple patents and pending patent applications in the U.S.

and in various foreign jurisdictions.

In addition to patent protection, we intend to utilize trade secrets and market exclusivity afforded to new chemical entities and biologics, where applicable, to enhance or maintain our competitive position.

Experienced leadership.

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 Exzell Pharma Inc., which was sold to BioLab Pharma in 2022, and Medical Futures, Inc., which was sold to Tribute Pharmaceuticals in 2015.

Our founder and 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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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.

Our goal is to obtain regulatory approval and commercialize multiple clinical assets in our pipeline.

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.

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

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

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

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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 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.

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.

ARDS has historically accounted for 10% of ICU admissions, representing more than 3 million patients globally each year.

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

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

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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).

EB05 (paridiprubart)

EB05 is an intravenous formulation of paridiprubart, 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, paridiprubart dampens TLR4 signaling by blocking receptor dimerization (and subsequent intracellular signaling cascades).

The drug has demonstrated the ability to block signaling irrespective of the presence or concentration of the various molecules that frequently bind with TLR4, known as ligands.

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.

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

Phase 2 Results of Phase 2/Phase 3 Study

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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.

The study included hospitalized Covid-19 patients, 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).

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.

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).

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

In the Phase 2 study, EB05 demonstrated a statistically significant and clinically meaningful trend for 28-day mortality 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.

The Survival Analysis using Cox’s Proportional Hazard Model also 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.

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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).

For severe Covid-19 patients at WCSS Level 5 and 6 (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).

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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.

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

Phase 3 of a Phase 2/Phase 3 Study

In December 2022, the U.S.

Food and Drug Administration (FDA) granted Fast Track designation to EB05 as a treatment for ARDS in critically ill Covid-19 patients.

The Fast Track program provides us with the opportunity for more frequent communication with the agency to discuss the development path for EB05 as a treatment for ARDS in critically ill Covid-19 patients.

Investigational drugs that receive Fast Track designation are also eligible for rolling review of their marketing application as well as potential pathways for accelerated regulatory approval.

To receive this designation, drug candidates must both treat a serious disease and have non-clinical or clinical data that demonstrate the potential to address an unmet medical need.

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 March 2023, we announced that the Company and the FDA agreed on the primary endpoint and population for a Phase 3 study evaluating EB05 as a therapy for hospitalized Covid-19 patients with ARDS.

Under the amended protocol design, we will evaluate a single cohort of severely ill patients on invasive mechanical ventilation, both with and without additional organ support such as ECMO.

The protocol calls for approximately 600 evaluable hospitalized subjects to be enrolled.

The primary endpoint will be the mortality rate at 28 days.

In October 2023, Canadian regulators approved an amendment that harmonized the previously approved Canadian protocol with the U.S.

Based on current hospitalization trends and our recruitment experience, we believe that Covid-19-related hospitalization patterns have become more predictable and seasonal in nature, similar to those of influenza, with increased hospitalizations and deaths anticipated in the fall/winter and among populations and geographies with low booster/vaccination rates.

As a result, we believe that the pace of future enrollment will be more closely linked to the number and location of investigational sites we activate rather than the unpredictable waves of the pandemic.

We plan to increase the number of investigational centers from 23 to up to 60 hospitals in the U.S.

We have the flexibility to adjust the timing of these and other clinical trial expenditures to manage our working capital.

In addition to Covid-19 induced ARDS, we are also exploring various approaches to evaluate our EB05 drug candidate in a general, all-cause ARDS population.

Given the broader pool of patients, we believe a general, all-cause ARDS study could increase efficiency and expedite development timelines as well as validate the broader potential utility of EB05.

Any changes we make to our clinical study protocol may impact how previously enrolled subjects are categorized and/or included in the study’s results.

As of the date of this filing, recruitment is ongoing in the U.S.

Previous Phase 1 and Phase 2 Clinical Studies

Paridiprubart has demonstrated the potential 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, paridiprubart has demonstrated favorable safety and tolerability profiles.

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

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

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

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

Paridiprubart demonstrated a favorable safety profile in the Phase 1 study in healthy volunteers as well as in 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

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.

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

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

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

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

Federal Funding from the Government of Canada

In October 2023, our wholly owned subsidiary Edesa Biotech Research, Inc.

(Edesa Biotech Research) entered into a multi-year contribution agreement (the 2023 SIF Agreement) with the Canadian government’s Strategic Innovation Fund, or SIF.

Under the 2023 SIF Agreement, the Government of Canada committed up to C$23 million in partially repayable funding toward (i) conducting and completing a Phase 3 clinical study of our investigational therapy EB05 in critical-care patients with ARDS caused by Covid-19 or other infectious agents, and (ii) submitting EB05 for governmental approvals and manufacturing scale-up, following, and subject to, completing the Phase 3 study and (iii) conducting two non-clinical safety studies to assess the potential long-term impact of EB05 exposure.

Of the C$23 million committed by SIF, up to C$5.75 million is not repayable.

The remaining C$17.25 million is conditionally repayable starting in 2029 only if and when we earn gross revenue.

Edesa Biotech Research has agreed to complete the project by December 31, 2025.

In the event that we or Edesa Biotech Research breach our obligations under the 2023 SIF Agreement, subject to applicable cure, the SIF may exercise a number of remedies, including suspending or terminating funding under the 2023 SIF Agreement, demanding repayment of funding previously received and/or terminating the 2023 SIF Agreement.

The performance obligations of Edesa Biotech Research under the 2023 SIF Agreement are guaranteed by us.

Our previously completed Phase 2 study of EB05 was also funded, in part, by SIF.

Under a February 2021 agreement (the 2021 SIF Agreement), the Government of Canada committed C$14.1 million in nonrepayable funding for an international Phase 2 study and certain pre-clinical experiments.

In the event that we or Edesa Biotech Research breach our obligations under the 2021 SIF Agreement, subject to applicable cure, the SIF may exercise a number of remedies, including 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 us.

All potential funding available under the 2021 SIF Agreement has been received.

As of the date of this filing, we have met all of our performance and reporting requirements under the 2021 SIF Agreement.

Vitiligo is a chronic autoimmune disease that causes the loss of skin pigmentation in patches.

It occurs when melanocytes, the pigment-producing skin cells, die or stop producing melanin.

The extent of color loss from vitiligo is unpredictable and can affect the skin on any part of the body.

It is estimated that vitiligo prevalence is between 0.5 to 2% of the global population.

Vitiligo patients are not born with lesioned skin.

Rather, unpigmented spots appear over time, with about 50% of patients having symptom onset before 20 years of age.

There are two main forms of vitiligo:

segmental, where depigmentation is limited to one area and side of the body, and nonsegmental (generalized), where patches of pale skin occur on both sides of the body, often symmetrically.

Nonsegmental vitiligo is the most common type of vitiligo.

At present, there is only one FDA-approved therapeutic indicated for repigmentation in vitiligo, a Janus Kinase (JAK) inhibitor cream (ruxolitinib);

however, there is an increased risk of serious infections and malignancies associated with ruxolitinib.

Similarly, off-label non-surgical therapies tend to be time-consuming, expensive, or prone to causing side effects.

Common treatments include topical drugs, phototherapies and surgical interventions.

Based on the availability and limitations of current treatments, we believe there is a significant need for well targeted and systemic immunotherapies.

Overview and Status

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.

CXCL10 is highly expressed in vitiligo patients, and has been shown to play both a key role in the trafficking of anti-melanocytic T-cells to the epidermis as well as in inducing apoptosis (death) of melanocytes.

Furthermore, neutralization of CXCL10 has been demonstrated to both prevent and reverse depigmentation in animal models.

EB06 is currently formulated for intravenous administration, with future plans for a potential subcutaneous formulation.

We have approval from Health Canada to conduct a Phase 2 study of EB06 in moderate to severe nonsegmental vitiligo patients, and we are currently evaluating potential funding options to initiate this project, which may include both drug manufacturing and clinical activities.

Previous Clinical Experience

EB06 has demonstrated a favorable safety and tolerability profile in three previous clinical studies of 65 subjects in total.

The first Phase 1 study was a double-blind, placebo-controlled, ascending, single-dose study in 20 healthy subjects.

Participants received single intravenous doses of EB06, ranging from 0.1 to 20 mg/kg.

No deaths or serious adverse events (AEs) were reported.

EB06 was generally safe and well tolerated at doses up to 20 mg/kg.

A second Phase 1 study evaluated the effect of single doses of EB06 to generate proof-of-principle data on the neutralization of CXCL10 in an inflammatory setting in humans using an experimentally nickel-induced allergic contact dermatitis model.

For this double-blind, placebo-controlled study, 16 subjects were exposed to single intravenous doses of 180 and 720 mg of EB06.

No deaths or serious AEs were reported, and EB06 was generally safe and well tolerated.

A third, open-label, single-arm Phase 2 study investigating multiple administrations of EB06 in patients with primary biliary cirrhosis with an incomplete response to ursodeoxycholic acid (UDCA) was also completed.

A total of 29 patients were treated with 10 mg/kg intravenous doses of EB06 every two weeks, for a total of 6 doses.

No serious treatment-related AEs were reported.

In addition, in a variety of pre-clinical in vitro and in vivo experiments, EB06 demonstrated the ability to neutralize the biological activity of CXCL10.

In animal toxicology studies, EB06 was well-tolerated.

Allergic Contact Dermatitis

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The disease can be either irritant contact dermatitis or ACD.

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 market research, we believe that together these conditions cost up to $2 billion annually in the U.S.

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.

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

Common allergens associated with ACD include plants, metals, plastics and resins, rubber additives, dyes, biocides, and various cosmetics.

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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.

EB01 (daniluromer)

Overview and Status

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.

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

These enzymes are secreted by immune cells upon their activation and produce arachidonic acid via phospholipid hydrolysis, which, in turn, initiates a broad inflammatory cascade.

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 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.

Phase 2b Clinical Results of EB01

In November 2023, we reported final results from a Phase 2b clinical study evaluating multiple concentrations of our drug candidate, EB01, as a monotherapy for chronic moderate-to-severe ACD.

The double-blind, placebo-controlled trial evaluated the safety and efficacy of EB01 in approximately 200 subjects, who were treated for 28 days with either EB01 cream (2.0%, 1.0% or 0.2%) or a placebo/vehicle cream.

The primary efficacy outcome measurement was the mean percent improvement in symptoms from baseline at day 29 on the Contact Dermatitis Severity Index (CDSI).

A key secondary efficacy measurement was the success rate of subjects achieving a score of "clear" or "almost clear" with at least a 2-point improvement from baseline after treatment at day 29 on the Investigator's Static Global Assessment (ISGA) scale.

The 1.0% EB01 cream demonstrated statistically significant improvement over placebo.

For the primary endpoint, patients with 1.0% EB01-treated lesions demonstrated a 60% average improvement in symptoms from baseline at day 29 on the CDSI versus 40% for placebo/vehicle (p=0.027).

For the ISGA secondary efficacy endpoint, 53% of patients with 1.0% EB01-treated lesions achieved a score of "clear" or "almost clear" with at least a 2-point improvement from baseline after treatment at day 29 (p=0.048).

Only 29% of patients in the placebo group reached the same endpoint.

No serious treatment-related adverse events were reported across all concentrations.

The 2.0% and 0.2% formulations did not show significant differences compared to placebo.

We are currently evaluating potential partnerships and funding opportunities for the continued development of this drug candidate.

Previous Clinical Results of EB01

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

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/vehicle-controlled clinical study to assess the safety and efficacy of topical 1% EB01 cream for the treatment of ACD.

The first Phase 2 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.

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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).

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.

A second Phase 2 study was a 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.

To be included in the study, patients had to have bilateral ACD with a CDSI score of at least 10 on each side, with no more than a 1-point difference between lesions.

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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.

Total clinical experience with daniluromer, 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.

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 TNF-α at the protein and mRNA expression levels.

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).

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

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

Additionally, in several Good Laboratory Practice animal toxicology studies, daniluromer 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

Hemorrhoids Disease (HD) is a common disorder, characterized by itching, inflammation, pain, tenderness, bleeding and difficulty defecating.

According to National Institutes of Health reports, HD affects approximately 5% of the U.S.

adult population, or approximately 12.5 million adults in the U.S.

Almost half of individuals 50 years and older have experienced symptomatic hemorrhoids.

Despite the high prevalence of hemorrhoids, we are not aware of any prescription drugs with an approved New Drug Application for the treatment of hemorrhoids.

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 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.

Confusion often arises because the term hemorrhoid has been used to refer to both normal anatomic structures and pathologic structures.

Hemorrhoids are cushions of fibromuscular tissue that line the anal canal.

With HD, the muscle fibers that anchor the cushions become attenuated, the hemorrhoids slide, become congested, bleed, and eventually prolapse or protrude into the anal canal.

The two types of hemorrhoids, external and internal, refer to their location.

Internal hemorrhoids are typically classified as first degree (grade I) - hemorrhoids bleed but do not protrude;

second degree (grade II) - hemorrhoids protrude but reduce on their own;

third degree (grade III) - hemorrhoids protrude and require manual re-insertion;

and fourth degree (grade IV) - hemorrhoids are permanently prolapsed and cannot be re-inserted.

The treatment of HD typically begins with conservative therapy consisting of diet and lifestyle modification, fiber supplements, sitz baths and stool softeners.

In addition to this conservative therapy, physicians may prescribe topical steroids and analgesics.

Because of the lack of effective prescription products, most hemorrhoid patients will use over-the-counter preparations or the prescription drugs available, which are similar to the over-the-counter treatment, but formulated with a higher dose.

Based on public filings and reports, we estimate that as many as 4 million prescriptions are written and more than 20 million over-the-counter units are sold each year in the U.S.

for the treatment of HD.

Alternatives are invasive procedures, including rubber band ligation, the injection of a sclerosing agent, electrocoagulation, light therapy and hemorrhoidectomy.

Overview and Status

Our EB02 drug candidate represents a potential extension of our sPLA2 anti-inflammatory technology.

Based on our analysis of clinical data in dermatitis, we believe that EB02, which is currently formulated as a cream, may be effective in treating the erythema, swelling and exudation associated with HD.

Specifically, sPLA2 has been demonstrated to be a mediator of processes that characterize hemorrhoidal pathophysiology, including inflammation and micro-vascularization.

In September 2019, we received approval from Health Canada to begin a clinical study of EB02 as a potential treatment for patients with grade I-III internal hemorrhoids.

Our exploratory Phase 2a study is designed to assess the safety and efficacy of EB02 among hemorrhoid patients at investigational centers in Canada.

The study plan includes up to 48 subjects in a randomized, double- blind, vehicle-controlled design.

Should the initial results be encouraging, we plan to transition from a proof-of-concept study to a Phase 2 study of up to 80 to 400 subjects.

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 Future Product Candidates

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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.

Among our activities, we are preparing IND in the U.S.

for our EB07 (paridiprubart) product candidate to conduct a future study in patients with fibrotic diseases such as systemic sclerosis.

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

In addition, our EB02 (daniluromer) drug candidate represents a potential extension of our sPLA2 anti-inflammatory technology.

We have received approval from Health Canada for an exploratory Phase 2a clinical study of EB02 as a potential treatment for patients with grade I-III internal hemorrhoids.

In light of our focus on the development of other product candidates, we are currently evaluating the timing for the initiation of this planned study of EB02.

Initiating recruitment in the EB07 and EB02 studies is subject to, among other limitations, funding, regulatory approvals, drug manufacturing and activation of clinical investigational sites.

Intellectual Property and Key Licenses

We have an exclusive license from Yissum Research Development Company, the technology transfer company of Hebrew University of Jerusalem Ltd.

(Yissum), for patents and patent applications that cover our product candidates EB01 and EB02 in the United States, Canada, Australia and various countries in Europe.

(Yissum), for patents and patent applications that cover our product candidates EB01 and EB02 in the U.S., Canada, Australia and various countries in Europe.

Method of use patents, for which we hold an inbound license from Yissum and an affiliate of Yissum, have been issued for use in dermatologic and gastrointestinal conditions and infections that will expire in 2024.

We expect to seek patent term extension in the United States related to time under IND, which could add up to three to five years of additional protection.

We expect to seek patent term extension in the U.S.

related to time under IND, which could add up to three to five years of additional protection.

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 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.

We expect to seek patent term extension in the United States related to time under IND, which could extend protection.

We expect to seek patent term extension in the U.S.

related to time under IND, which could extend protection.

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.

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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 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 would be eligible for up to five years of exclusivity for EB01 and EB02 and up to 12 years of exclusivity for EB05 and EB06 after approval in the U.S., 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 (EU).

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

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).

Edesa will use the exclusive rights to develop products containing these Constructs (the Licensed Products) for therapeutic, prophylactic and diagnostic applications in humans and animals.

Unless earlier terminated, the term of the license agreement will remain in effect for twenty-five years from the date of first commercial sale of Licensed Products.

Subsequently, the license agreement will automatically renew for five-year periods unless either party terminates the agreement in accordance with its terms.

Under the license agreement, we are exclusively responsible, at our expense, for the research, development manufacture, marketing, distribution and commercialization of the Constructs and Licensed Products and to obtain all necessary licenses and rights.

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 (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.

We also have a commitment to pay NovImmune a royalty based on net sales of Licensed Products in countries where Edesa directly commercializes Licensed Products and a percentage of sublicensing revenue received by Edesa in the countries where Edesa does not directly commercialize Licensed Products.

The license agreement provides that Light Chain will remain the exclusive owner of existing intellectual property in the Constructs and that Edesa will be the exclusive owner of all intellectual property resulting from the exploitation of the Constructs pursuant to the license.

Subject to certain limitations, Edesa is responsible for prosecuting, maintaining and enforcing all intellectual property relating to the Constructs.

During the term of the agreement, Edesa also has the option to purchase the licensed patents and know-how at a price to be negotiated by the parties.

If Edesa defaults or fails to perform any of the terms, covenants, provisions or its obligations under the license agreement, Light Chain has the option to terminate the license agreement, subject to providing Edesa an opportunity to cure such default.

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 in April 2020, we acquired from NovImmune its inventory of the TLR4 antibody for an aggregate purchase price of $5.0 million.

In April 2020, through Edesa Biotech Research, we entered into an exclusive license agreement (the NovImmune License Agreement) with NovImmune SA (NovImmune), 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).

We will use the exclusive rights to develop products containing these Constructs (the Licensed Products) for therapeutic, prophylactic and diagnostic applications in humans and animals.

Unless earlier terminated, the term of the NovImmune License Agreement will remain in effect for 25 years from the date of first commercial sale of Licensed Products.

Subsequently, the NovImmune License Agreement will automatically renew for 5-year periods unless either party terminates the agreement in accordance with its terms.

Under the NovImmune License Agreement, we are exclusively responsible, at our expense, for the research, development manufacture, marketing, distribution and commercialization of the Constructs and Licensed Products and to obtain all necessary licenses and rights.

We are 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 addition, we are committed to payments of various amounts to NovImmune upon meeting certain development, approval and commercialization milestones as outlined in the NovImmune License Agreement up to an aggregate amount of $356 million.

We also have a commitment to pay NovImmune a royalty based on net sales of Licensed Products in countries where we directly commercialize Licensed Products and a percentage of sublicensing revenue received by us in the countries where we do not directly commercialize Licensed Products.

The NovImmune License Agreement provides that NovImmune will remain the exclusive owner of existing intellectual property in the Constructs and that we will be the exclusive owner of all intellectual property resulting from the exploitation of the Constructs pursuant to the license.

Subject to certain limitations, we are responsible for prosecuting, maintaining and enforcing all intellectual property relating to the Constructs.

During the term of the agreement, we also have the option to purchase the licensed patents and know-how at a price to be negotiated by the parties.

If we default or fail to perform any of the terms, covenants, provisions or its obligations under the NovImmune License Agreement, NovImmune has the option to terminate the NovImmune License Agreement, subject to providing us with an opportunity to cure such default.

The NovImmune License Agreement is also terminable by NovImmune upon the occurrence of certain bankruptcy related events pertaining to us.

In connection with the NovImmune 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

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.

Pursuant to the license and development agreement, we granted to Pendopharm an exclusive license throughout Canada to certain know-how, patents and data for the sole purpose of obtaining regulatory approval for certain pharmaceutical products to allow Pendopharm to distribute, market and sell the licensed products for human therapeutic use in certain gastrointestinal conditions.

In August 2017, Edesa Biotech Research entered into an exclusive license and development agreement with Pendopharm, a division of Pharmascience Inc.

(the Pendopharm License Agreement).

Pursuant to the Pendopharm License Agreement, we granted to Pendopharm an exclusive license throughout Canada to certain know-how, patents and data for the sole purpose of obtaining regulatory approval for certain pharmaceutical products to allow Pendopharm to distribute, market and sell the licensed products for human therapeutic use in certain gastrointestinal conditions.

If Pendopharm elects not to seek regulatory approval of the applicable product, the applicable product will be removed from the license rights granted to Pendopharm and will revert to us.

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In exchange for the exclusive rights to market, import, distribute, and sell the pharmaceutical products, Pendopharm is required to pay us a royalty in respect of aggregate annual net sales for each pharmaceutical product sold in Canada.

Unless earlier terminated, the term of the license and development agreement will expire, on a licensed product by licensed product basis, on the later to occur of (i) the date that is 13 years after the first commercial sale of the licensed product in Canada;

Unless earlier terminated, the term of the Pendopharm License Agreement will expire, on a licensed product by licensed product basis, on the later to occur of (i) the date that is 13 years after the first commercial sale of the licensed product in Canada;

(ii) the date of expiry of the last valid licensed patent in Canada relating to the licensed product;

or (iii) the date of expiry of any period of exclusivity granted to the licensed product by a regulatory authority in Canada.

The license and development agreement shall also terminate upon the termination of certain license agreements that Edesa has with third parties.

Pendopharm also has the right to terminate the license and development agreement for any reason upon 120 days notice to us.

The Pendopharm License Agreement shall also terminate upon the termination of certain other license agreements that we have with third parties.

Pendopharm also has the right to terminate the Pendopharm License Agreement for convenience upon 120 days’ notice to us.

License Agreements with Yissum and Inventor

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:

In June 2016, Edesa Biotech Research, entered into an exclusive license agreement with Yissum, which was subsequently amended in April 2017, May 2017 and October 2022 (collectively, the Yissum License Agreement).

Pursuant to the Yissum 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.

Unless earlier terminated, the term of the license agreement will expire on a country by country basis on the later of (i) the date of expiry of the last valid licensed patent in such country;

Unless earlier terminated, the term of the Yissum License Agreement will expire on a country by country basis on the later of (i) the date of expiry of the last valid licensed patent in such country;

(ii) the date of expiry of any period of exclusivity granted to a product by a regulatory authority in such country or (iii) the date that is 15 years after the first commercial sale of a product in such country.

Under the license agreement, we are exclusively responsible, at our expense, for the development of the product, including conducting clinical trials and seeking regulatory approval for the product, and once regulatory approval has been obtained, for the commercialization of the product.

Under the Yissum License Agreement, we are exclusively responsible, at our expense, for the development of the product, including conducting clinical trials and seeking regulatory approval for the product, and once regulatory approval has been obtained, for the commercialization of the product.

We are required to use our commercially reasonable efforts to develop and commercialize the product in accordance with the terms of a development plan established by the parties.

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 $18.4 million after deducting $0.2 million that is included in the commitments for the year ending September 30, 2023.

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 Yissum License Agreement up to an aggregate amount of $18.4 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.

We also have a commitment to pay Yissum a royalty based on net sales of the product in countries where we, or an affiliate of ours, directly commercializes the product and a percentage of sublicensing revenue received by us and our affiliates in the countries where we do not directly commercialize the product.

The license agreement provides that Yissum shall remain the exclusive owner of the licensed technology and that we are responsible for preparing, filing, prosecuting and maintaining the patents on the licensed technology in Yissum’s name.

The Yissum License Agreement provides that Yissum shall remain the exclusive owner of the licensed technology and that we are responsible for preparing, filing, prosecuting and maintaining the patents on the licensed technology in Yissum’s name.

Notwithstanding the foregoing, we will be the exclusive owner of all patents and other intellectual property that is made by, or on our behalf, after the date of the agreement, including all improvements to the licensed technology.

If we default or fail to perform any of the terms, covenants, provisions or our obligations under the license agreement, Yissum has the option to terminate the license agreement, subject to providing us with an opportunity to cure such default.

We have the right to terminate the agreement if we determine that the development and commercialization of the product is no longer commercially viable.

If we default or fail to perform any of the terms, covenants, provisions or our obligations under the Yissum License Agreement, Yissum has the option to terminate the Yissum License Agreement, subject to providing us with an opportunity to cure such default.

We have the right to terminate the Yissum License Agreement if we determine that the development and commercialization of the product is no longer commercially viable.

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.

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.

In March 2021, through Edesa Biotech Research, we entered into a license agreement with the inventor of the same pharmaceutical product, which was subsequently amended in September 2023 (together, the Inventor License Agreement), to acquire global rights for all fields of use beyond those named under the Yissum License Agreement.

As a result of the Inventor License Agreement, we now hold 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.

We are required to use commercially reasonable efforts to develop and commercialize the product in accordance with the terms of a development plan established by the parties.

Edesa is exclusively responsible, at its expense, for the development of the product.

We are exclusively responsible, at our expense, for the development of the product.

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 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.

Subject to certain exceptions, we have undertaken to indemnify Licensor 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.

In addition, if we fail to file an IND application 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 on a quarterly basis as long as the requirement to file an IND remains unfulfilled.

We also have a commitment to pay the inventor a royalty based on net sales of the product in countries where we, or an affiliate, directly commercialize the product and a percentage of sublicensing revenue received by us and our affiliates in the countries where we do not directly commercialize the product.

Unless earlier terminated, the term of the Inventor License Agreement will expire on a country by country basis on the later of (i) the date of expiry of the last valid licensed patent in such country or (ii) the date that is 15 years after the first commercial sale of a product in such country.

If we default or fail to perform any of the terms, covenants, provisions or our obligations under the Inventor License Agreement, the inventor has the option to terminate the Inventor License Agreement, subject to providing us with an opportunity to cure such default.

We have the right to terminate the Inventor License Agreement if we determine that the development and commercialization of the product is no longer commercially viable.

Subject to certain exceptions, we have undertaken to indemnify the inventor 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.

Manufacturing and Marketing

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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.

We believe that we have sufficient supplies on hand to complete the Phase 3 clinical study for EB05.

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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Because we are focused on the discovery and development of drugs, we do not have any marketing or distribution capabilities, nor are we at a stage where we would have any customers for our investigational medicines.

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.

If we receive marketing approval or emergency use authorization in the U.S., 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 or regions outside North America where a partner may contribute additional resources, infrastructure and expertise.

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We face competition from companies developing and commercializing products that will be competitive with our drug candidates, including large pharmaceutical and smaller biotechnology companies, many of which have greater financial and commercial resources than we do.

For our EB01 and EB02 product candidates, our potential competitors include, among others, Aclaris Therapeutics, Inc., Brickell Biotech, Inc., Citius Pharmaceuticals Inc., Dermavant Sciences, Inc.

and Leo Pharma A/S.

For our EB01 and EB02 product candidates, our potential competitors include, among others, Aclaris Therapeutics, Inc., Citius Pharmaceuticals Inc., Dermavant Sciences, Inc., Fresh Tracks Therapeutics, Inc.

(formerly Brickell), Incyte Corporation, Leo Pharma A/S, Pfizer Inc., Sanofi S.A., and Sun Pharmaceutical Industries Ltd.

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., 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.

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

For any future product for vitiligo or fibrotic diseases, potential competitors, include, among others:

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

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

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, European Union and other jurisdictions.

We plan to conduct clinical studies and seek approvals for our product candidates in the U.S., Canada, EU 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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Although we have entered into agreements with these third parties, we continue to be responsible for confirming that each of our clinical trials is conducted in accordance with our investigational plan or research protocol, as well as International Conference on Harmonization Good Clinical Practices, or GCP, which include guidelines for conducting, recording and reporting the results of clinical trials.

The FDA in the United States, Health Canada in Canada, the European Medicines Agency (EMA) in the European Union and comparable regulatory agencies in foreign countries impose substantial requirements on the clinical development, manufacture and marketing of pharmaceutical products and product candidates.

The FDA in the U.S., Health Canada in Canada, the European Medicines Agency (EMA) in the European Union and comparable regulatory agencies in foreign countries impose substantial requirements on the clinical development, manufacture and marketing of pharmaceutical products and product candidates.

These agencies and other federal, state, provincial and local entities regulate research and development activities and the testing, manufacture, packaging, importing, distribution, quality control, safety, effectiveness, labeling, storage, record-keeping, approval and promotion of our products and product candidates.

All of our product candidates will require regulatory approval before commercialization.

In particular, therapeutic product candidates for human use are subject to rigorous preclinical and clinical testing and other statutory and regulatory requirements of the United States, Canada, the EU and foreign countries.

In particular, therapeutic product candidates for human use are subject to rigorous preclinical and clinical testing and other statutory and regulatory requirements of the U.S., Canada, the EU and foreign countries.

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

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.

The process required by the FDA before our product candidates may be marketed in the United States generally involves the following:

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

The process required by the FDA before our product candidates may be marketed in the U.S.

generally involves the following:

Pre-clinical testing.

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These studies typically assess efficacy, toxicology and pharmacokinetics.

Submission to the FDA of an Investigational New Drug application (IND), which must become effective before human clinical trials may begin.

Submission to the FDA of an IND, which must become effective before human clinical trials may begin.

As part of an IND application to the FDA, trial sponsors submit the results of pre- clinical tests, together with manufacturing information and analytical data.

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If the Phase 2 clinical trials demonstrate that a dose range of the product candidate is effective and has an acceptable safety profile, Phase 3 clinical trials are then undertaken in large patient populations to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.

Manufacturing Facilities.

Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with Current Good Manufacturing Practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity.

New Drug Application (NDA) or Biologics License Application (BLA).

The results of the nonclinical studies and clinical trials, together with other detailed information, including extensive manufacturing information and information on the composition of the drug and proposed labeling, are submitted to the FDA in the form of an NDA or BLA requesting approval to market the drug for one or more specified indications.

The FDA reviews an application to determine, among other things, whether a drug is safe and effective for its intended use and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity.

FDA approval of an NDA or BLA must be obtained before a drug may be offered for sale in the United States.

The FDA may deny approval of an NDA or BLA if the applicable regulatory criteria are not satisfied, or it may require additional clinical data.

Even if such data are submitted, the FDA may ultimately decide that the application does not satisfy the criteria for approval.

Data from clinical trials are not always conclusive and the FDA may interpret data differently than we or our collaborators do.

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 (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.

Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved label.

Further, if there are any modifications to a drug, including changes in indications, labeling or manufacturing processes or facilities, we may be required to submit and obtain FDA approval of a new NDA or BLA or a supplement, which may require us to develop additional data or conduct additional pre-clinical studies and clinical trials.

In addition, under the Pediatric Research Equity Act, or PREA, an NDA or supplement to an NDA must contain data to assess the safety and efficacy of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may grant deferrals for submission of pediatric data or full or partial waivers.

Product Candidate Chemistry, Controls and Manufacturing.

Concurrent with clinical trials, companies typically complete additional animal and laboratory studies, develop additional information about the chemistry and physical characteristics of the drug, and finalize a process for manufacturing the product in commercial quantities in accordance with FDA’s current Good Manufacturing Practices (cGMP) requirements.

The manufacturing process must consistently produce quality batches of the drug, and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.

In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate the effectiveness of the packaging and that the compound does not undergo unacceptable deterioration over its shelf life.

Review and Approval Processes

After the completion of clinical trials of an investigational drug or biologic product, an NDA or BLA is prepared and submitted to the FDA.

FDA approval must be obtained before commercial marketing and distribution of the product may begin in the U.S.

The NDA or BLA must include results of product development, laboratory, and animal studies, human trials, information on the manufacture and composition of the product, proposed labeling and other relevant information.

The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will file the NDA or BLA and, even if filed, that any approval will be granted on a timely basis, if at all.

Under the Prescription Drug User Fee Act, as amended (PDUFA), each NDA or BLA must be accompanied by a significant user fee.

The FDA adjusts the PDUFA user fees on an annual basis.

PDUFA also imposes annual program fees on prescription drugs, including biologics.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

No user fees are assessed on NDAs or BLAs for products designated as orphan drugs, unless the application also includes a non-orphan indication.

Within 60 days following submission, the FDA reviews the NDA or BLA to determine if it is substantially complete before the agency files it.

The FDA may request additional information or may refuse to file any NDA or BLA that it deems incomplete or not properly reviewable at the time of submission.

In this event, the NDA or BLA must be resubmitted with the additional information.

The resubmitted application also is subject to an initial filing review before the FDA files it.

Once the submission is filed, the FDA begins an in-depth substantive review of the NDA or BLA.

Under PDUFA, FDA has agreed to performance goals to review 90% of original standard NDAs or BLAs within 10 months of the 60-day filing date and 90% of original priority NDAs or BLAs within 6 months of the 60-day filing date, whereupon a review decision is to be made.

The FDA does not always meet its PDUFA goal dates for standard and priority NDAs and BLAs.

The review process and the PDUFA goal date may be extended by three months if the FDA requests or the NDA/BLA sponsor otherwise provides additional information or clarification regarding information already provided in the NDA or BLA submission.

The FDA reviews the NDA or BLA to determine, among other things, whether the proposed product is safe and potent, or effective, for its intended use, and has an acceptable purity profile, and whether the product is being manufactured in accordance with GMP to assure and preserve the product’s identity, safety, strength, quality, potency and purity.

The FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations when making decisions.

During the product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy (REMS) is necessary to assure that the benefits of the biologic outweigh the potential risks of the product to patients.

A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product’s safe use (ETASU).

An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries.

If the FDA concludes that a REMS is needed, the sponsor of the BLA must submit a proposed REMS;

the FDA will not approve the BLA without a REMS, if required.

Before approving an NDA or BLA, the FDA will typically inspect the facilities at which the product is manufactured.

The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in substantial compliance with GMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites, to assure that the clinical trials were conducted in compliance with GCP requirements.

To assure GMP, GLP and GCP compliance, an applicant must incur significant expenditure of time, money, and effort in the areas of training, record keeping, production, and quality control.

Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the NDA or BLA does not satisfy its regulatory criteria for approval and deny approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently from how we interpret the same data.

If the agency decides not to approve the NDA or BLA in its present form, the FDA will issue a complete response letter that usually describes all of the specific deficiencies identified by the FDA.

The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials.

Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval.

If a complete response letter is issued, the applicant may resubmit, addressing all of the deficiencies identified in the letter, withdraw the application, or request a hearing.

If a product candidate receives regulatory approval, the FDA will issue an approval letter.

The approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling.

The FDA may impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a risk management plan, or otherwise limit the scope of any approval.

In addition, the FDA may require post marketing clinical trials, sometimes referred to as Phase 4 clinical trials, designed to assess further a biological product’s safety and effectiveness, and testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Satisfaction of FDA regulations and requirements or similar requirements of state, local and foreign regulatory agencies typically take several years, and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.

Typically, if a product candidate is intended to treat a chronic disease, as is the case with some of our product candidates, safety and efficacy data must be gathered over an extended period.

Orphan Designation and Exclusivity

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the U.S., or a patient population greater than 200,000 individuals in the U.S.

and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S.

will be recovered from sales in the U.S.

for that drug or biologic.

Orphan drug designation must be requested before submitting a BLA or NDA.

After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product marketing exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same use or indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.

Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition.

Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA or NDA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

In addition, orphan drug exclusive marketing rights in the U.S.

may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Expedited Development and Review Programs

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EUAs may also be revised or revoked by FDA at any time.

Patent Term Restoration

Depending upon the timing, duration, and specifics of the FDA approval of the use of our current and potential product candidates, some of our U.S.

patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments).

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.

However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.

The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and the approval of that application.

Only one patent applicable to an approved biological product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent.

Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

Biosimilars and Exclusivity

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created an abbreviated approval pathway for biological products shown to be highly similar to, or interchangeable with, an FDA-licensed reference biological product.

The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies.

Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

The BPCIA includes, among other provisions:

A 12-year exclusivity period from the date of first licensure, or BLA approval, of the reference product, during which approval of a 351(k) application referencing that product may not be made effective;

A 4-year exclusivity period from the date of first licensure of the reference product, during which a 351(k) application referencing that product may not be submitted;

An exclusivity period for certain biological products that have been approved through the 351(k) pathway as interchangeable biosimilars.

The BPCIA also establishes procedures for identifying and resolving patent disputes involving applications submitted under section 351(k) of the PHSA.

The BPCIA is complex and its interpretation and implementation by the FDA remains unpredictable.

In addition, government proposals have sought to reduce the 12-year reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.

As a result, the ultimate effect, implementation, and meaning of the BPCIA is subject to uncertainty.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA-regulated products, including biological products, are required to register and disclose certain clinical trial information on the website www.clinicaltrials.gov.

Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of a clinical trial are then made public as part of the registration.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

Disclosure of the results of clinical trials can be delayed in certain circumstances for up to two years after the date of completion of the trial.

Competitors may use this publicly available information to gain knowledge regarding the progress of clinical development programs as well as clinical trial design.

Pediatric Information

Under the Pediatric Research Equity Act (PREA), BLAs or supplements to BLAs must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the biological product is safe and effective.

The FDA may grant full or partial waivers, or deferrals, for submission of data.

Unless otherwise required by regulation, PREA does not apply to any biological product with orphan product designation except a product with a new active ingredient that is a molecularly targeted cancer product intended for the treatment of an adult cancer and directed at a molecular target determined by FDA to be substantially relevant to the growth or progression of a pediatric cancer that is subject to a BLA submitted on or after August 18, 2020.

The Best Pharmaceuticals for Children Act (BPCA) provides a six-month extension of any non-patent exclusivity for a biologic if certain conditions are met.

Conditions for exclusivity include the FDA’s determination that information relating to the use of a new drug or biologic in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe.

Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.

FDA Post-Approval Requirements

Once an NDA or BLA is approved, maintaining post-approval compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources.

Manufacturers and other entities involved in the manufacture and distribution of approved products are required to register the establishments where the approved products are made with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMP and other laws.

Rigorous and extensive FDA regulation of products continues after approval, particularly with respect to GMP.

We rely, and expect to continue to rely, on third parties for the production and distribution of clinical and commercial quantities of any products that we may commercialize.

Manufacturers of our products are required to comply with applicable requirements in the GMP regulations, including quality control and quality assurance and maintenance of records and documentation.

Other post-approval requirements include reporting of GMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse effects, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.

After a BLA is approved, the product also may be subject to official lot release.

As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution.

If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot.

The FDA also may perform certain confirmatory tests on lots of some products before releasing the lots for distribution by the manufacturer.

Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain GMP compliance.

Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including withdrawal of the product from the market.

In addition, changes to the manufacturing process or facility generally require prior FDA approval before being implemented.

Other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

We also must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, and promotional activities involving the internet.

Discovery of previously unknown problems or the failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market as well as possible civil or criminal sanctions.

Failure to comply with the applicable U.S.

requirements after approval may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity.

FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical hold, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.

Other Regulatory Requirements

Any products manufactured or distributed by us or our collaborators (pursuant to FDA approval) are subject to continuing regulation by the FDA, including recordkeeping requirements and reporting of adverse experiences associated with the drug.

Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, seizure of product, injunctive action or possible civil penalties.

The FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.

A company can make only those claims relating to safety and efficacy that are approved by the FDA.

Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Physicians may prescribe legally available drugs for uses that are not described in the drug’s labeling and that differ from those tested by us and approved by the FDA.

Such off-label uses are common across medical specialties.

Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.

The FDA does not regulate the behavior of physicians in their choice of treatments.

The FDA does, however, impose stringent restrictions on manufacturers’ communications regarding off-label use.

The federal anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.

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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

We are not currently subject to any material legal proceedings.

Corporate Information

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Our website address is www.edesabiotech.com.

The contents of our website or social media postings are not part of our SEC reports for any purpose or otherwise incorporated by reference.

The contents of our website or social media postings are not part of our Securities and Exchange Commission (SEC) reports for any purpose or otherwise incorporated by reference.

Any references to website addresses contained in this report are intended to be inactive textual references only.

Available Information

We file or furnish periodic reports and amendments thereto, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and current reports on Form 8-K, proxy statements and other information with the U.S.

Securities and Exchange Commission (SEC).

Such reports and other information filed or furnished by us with the SEC are available free of charge on our website at www.edesabiotech.com/investors/sec-filings as soon as reasonably practicable after such reports are available on the SEC’s website at www.sec.gov.

Our filings are also available at the Canadian Securities Administrators’ SEDAR website at www.sedar.com.

Investors and other interested parties should note that we may also use our website and our social media channels to publish information about Edesa that may be deemed material to investors.

Investors and other interested parties should note that we may also use our website and our social media channels to publish information about us that may be deemed material to investors.

We encourage investors and other interested parties to review the information we may publish through our website and social media channels.

Smaller Reporting Company

We are currently a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (Exchange Act), and are thus allowed to provide simplified executive compensation disclosures in our filings, are exempt from the provisions of Section 404(b) of the Sarbanes- Oxley Act requiring that an independent registered public accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and have certain other reduced disclosure obligations with respect to our SEC filings.

We are currently a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and are thus allowed to provide simplified executive compensation disclosures in our filings, are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that an independent registered public accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and have certain other reduced disclosure obligations with respect to our SEC filings.

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