EDSA: Nearing Enrollment Completion for Phase 2 Portion of EB05 Trial in COVID-19…

By David Bautz, PhD

NASDAQ:EDSA

READ THE FULL EDSA RESEARCH REPORT

Business Update

Enrolled 285 Patients Thus Far in Phase 2/3 Trial of EB05 in COVID-19

Edesa Biotech, Inc. EDSA is currently conducting a Phase 2/3 clinical trial of EB05 in patients hospitalized with COVID-19 with or at risk of developing acute lung injury (ALI) and acute respiratory distress syndrome (ARDS). The trial is a randomized, multicenter, double blind, placebo-controlled study that is expected to enroll approximately 316 patients across 40 hospitals (NCT04401475). As of May 12, 2021, the trial has enrolled more than 285 patients, with the potential to enroll up to 398 to allow for 316 evaluable in a blinded interim analysis. Patients will receive a single dose of either EB05 (15 mg/kg) + standard of care (SOC) or SOC only. If the results of the interim analysis look promising, the protocol allows for continuation of enrollment as a pivotal Phase 3 trial.

In February 2020, Edesa announced that that the Government of Canada has committed up to CAD$14 million (US$11 million) in non-repayable funding to complete the Phase 2 portion of the ongoing Phase 2/3 clinical trial of EB05 in COVID-19. The CAD$14 million will be utilized to not only fund the remainder of the Phase 2 portion of the study but also to perform preclinical research on whether EB05 is effective in other areas, including as a treatment for other respiratory pathogens.

Background on TLR4 and ARDS

EB05 is a monoclonal antibody that targets toll-like receptor 4 (TLR4). Toll-like receptors (TLRs) belong to the pattern recognition receptor family of proteins and are an important part of the innate immune system. They are responsible for detecting invading pathogens and initiating an immediate immune response. TLR4 recognizes a number of different pathogens, including bacterial lipopolysaccharide (LPS) (Miller et al., 2005), mannuronic acid polymers from Gram-negative bacteria (Flo et al., 2002), and viral components (Haynes et al., 2001). Its activation leads to production of pro-inflammatory cytokines and chemokines (Janssens et al., 2003).

In addition to being involved in the innate immune response to pathogens, TLRs are known to be involved in exaggerated immune responses, with TLR4 shown to induce inflammatory responses that can lead to ALI (Jiang et al., 2005). Additional examples for TLR4's role in ALI and ARDS include:

• Imai et al., 2008: This study looked at the role of TLR4 in ALI. Mice deficient in TLR4 (Tlr4^-/-) were resistant to acid-induced ALI and while H5N1 influenza rapidly induced ALI in wild-type mice, TLR4 deficient mice were resistant to H5N1-induced ALI, suggesting a causative role for TLR4 in ALI.

• Shirey et al., 2016: This research group had previously reported that Tlr4^-/- mice are resistant to influenza-induced lethality and a novel small molecule TLR4 inhibitor (eritoran) reduced influenza-induced lethality. In this study, an anti-TLR4 antibody protected mice from lethal influenza infection.

• Perrin-Cocon et al., 2017: A novel small molecule TLR4 antagonist (FP7) was tested in an in vivo mouse model of influenza. FP7 blocked TLR4 stimulation and protected mice from influenza-induced lethality and reduced inflammatory cytokine expression and ALI.

• Zhou et al., 2018: An anti-TLR4 monoclonal antibody was studied in a rat model of ARDS. The rats treated with the anti-TLR4 antibody showed lower respiratory frequency, lung permeability, lung edema, inflammatory infiltration, and tumor necrosis factor (TNF)-α and interleukin (IL)-1β expression levels in lungs along with lower TLR4, TLR9, MyD88, and nuclear factor (NF)-κB expression in macrophages.

• Domitrovic 2018: TLR4 monoclonal antibodies were evaluated both in vitro and in a rat model of ARDS. Stimulating macrophages with TNF-α along with anti-TLR4 antibody eliminated the upregulation and secretion of cytokines. Pre-treating rats with anti-TLR4 antibody prior to ventilation decreased lung injury, inflammatory infiltration, lung edema, and TLR4, TLR9, MyD88, and NF-κB expression.

• Zhang et al., 2019: This study examined the role of TLR4 and NF-κB in ALI and found inhibition of the TLR4/NF-κB signaling pathway decreased oxidative stress and improved ALI.

A number of studies have been published this year showing how TLR4 signaling is involved in COVID-19, including data showing that the level of TLR4 ligands (specifically calprotectin) can differentiate patients with severe COVID-19 compared to mild cases. Calprotectin, otherwise known as S100A8/A9, is a TLR4 ligand that promotes NF-κB activation (Riva et al., 2012) and the secretion of multiple inflammatory proteins such as IL-6 (Wang et al., 2018). Taken together, these studies provide the rationale for testing TLR4 signaling inhibition as a treatment for COVID-19.

• Silvin et al., 2020: This study examined peripheral blood cells in patients suffering from COVID-19 and included 27 with mild disease, 16 with moderate disease, and 43 with severe disease. The results showed that high levels of calprotectin correlated with severe COVID-19. The authors propose that calprotectin may trigger the cytokine release syndrome seen in severe COVID-19.

• Shi et al., 2020: This retrospective study examined the level of calprotectin in 172 COVID-19 patients and showed that all of the patients had elevated levels of calprotectin compared to healthy controls. In addition, when examined on day 1 or 2 of hospitalization (n=94 patients), calprotectin levels were significantly higher in patients who would go on to require mechanical ventilation (n=32) compared to those who were not intubated (P<0.0001).

• Chen et al., 2020: This was a prospective study of 121 COVID-19 patients with 40 in the ICU and 81 in general wards at enrollment. Results showed that higher calprotectin resulted in significantly worse overall survival (P<0.0001). In addition, the level of calprotectin correlated with a range of inflammatory cytokines and chemokines, with three myeloid chemokines (IL-8, MCP-3, MCP-1) being the most significantly correlated and representing a distinct cytokine storm signature in COVID-19 patients.

Update on Phase 2b Trial of EB01

Edesa is currently conducting a Phase 2b clinical trial of EB01 2.0% cream in patients with allergic contact dermatitis (ACD). The randomized, double blind, placebo controlled, sample size adaptive design trial enrolled 46 patients in Part A randomized 1:1 between EB01 and placebo for 28 days of treatment. Now that all the patients from the first cohort have completed the 28-day treatment period, Edesa is currently conducting a blinded interim analysis that can have the following outcomes:

1) stop the study for futility;

2) continue to the dose ranging portion of the trial with 80 additional subjects; or

3) continue to the dose ranging portion of the trial with 120 additional subjects.

The primary endpoint of the trial will measure the mean percent change from baseline in Contact Dermatitis Severity Index (CDSI) at Day 29, with secondary endpoints examining symptom reduction, dose-response relationships, and safety. An outline of the trial is shown below.

In March 2021, Edesa announced that a definitive license agreement in which the company acquired additional global rights to a non-steroidal anti-inflammatory technology that forms the basis for EB01 and EB02. This expands the company's intellectual property portfolio for a technology that could be applicable to multiple indications.

Financial Update

On May 14, 2021, Edesa announced financial results for the second quarter of fiscal year 2021 that ended March 31, 2021. The company did not report any revenues during the second quarter of fiscal year 2021, compared to $0.11 million for the three months ending March 31, 2020, which reflects the winddown and discontinuation of sales of product inventory from legacy operations. R&D expenses for the second quarter of fiscal year 2021 were $7.98 million, compared to $0.50 million for the second quarter of fiscal year 2020. The increase was primarily due to milestone payments related to advancement of the EB05 program, increased clinical costs, increased drug product expenses, and increased non-cash share-based compensation. G&A expenses for the three months ending March 31, 2021 were $1.54 million, compared to $1.11 million for the three months ending March 31, 2020. The increase was primarily due to higher salary and personnel expenses along with higher legal fees and professional service costs. Total other income was $7.25 million for the second quarter of fiscal year 2021, compared to $0.03 million for the second quarter of fiscal year 2020. The increase was due to grant income related to the federal grant with the Canadian government's Strategic Innovation Fund.

As of March 31, 2021, Edesa had approximately $11.0 million in cash and cash equivalents due in part to a bought deal offering of common shares, in which the company sold 1.5626 million shares at a price of $6.40 per share for net proceeds of $8.85 million. As of May 13, 2021, Edesa had approximately 13.2 million shares outstanding and, when factoring in stock options and warrants, a fully diluted share count of approximately 15.1 million.

Conclusion

Edesa is getting close to having the 316 evaluable patients for the Phase 2 portion of the EB05 COVID-19 study in order to perform a blinded interim analysis. We look forward to the outcome of that analysis as the company prepares to be able to move into the Phase 3 portion of the trial shortly after the interim analysis is complete. In addition, we look forward to the outcome of the interim analysis for the Phase 2b trial of EB01. With no changes to our model our valuation remains at $16 per share.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $40,000 annually for these services. Full Disclaimer HERE.