Canadian biopharma Edesa Biotech Inc (NASDAQ:EDSA) is seeing its shares surge higher Monday after it announced regulatory approval to begin a late-stage study of its investigational asset for COVID-19.

What Happened: Edesa said it has received expedited approval from Health Canada to begin Phase 2/3 study of EB05, which it is evaluating as a potential treatment for moderate-to-severe COVID-19 patients.

EB05, according to Edesa, is a monoclonal antibody that has demonstrated the ability to suppress the release of pro-inflammatory cytokines that are often observed in severe COVID-19 patients.

"Health Canada's expedited review process and subsequent approval of our Clinical Trial Application represents a significant step in developing new drugs that can treat the underlying conditions induced by the SARS-CoV-2 infection," CEO Dr. Par Nijhawan said in a statement. 

Benzinga is covering every angle of how the coronavirus affects the financial world. For daily updates, sign up for our coronavirus newsletter.

Why It Matters: EB05 could help in reducing the number of ICU patients and intubation/ventilation procedures, ultimately saving lives, Edesa said.

The company also noted that the safety and tolerability of EB05 has been demonstrated previously in over 120 subjects.

Moderate-to-severe COVID patients often progress to acute respiratory distress syndrome, for which there is no meaningful treatment option other than supplemental oxygen and mechanical ventilation.

What's Next: Edesa plans to conduct the Phase 2/3 study as an adaptive, multicenter, randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of EB05 in adult hospitalized patients with moderate-to-severe COVID-19.

The study targets enrolling 355 patients in the first phase of the trial, with patients infused intravenously with EB05 or placebo.

If the treatment candidate shows promise at the Phase 2 stage, the study protocol allows enrolment to continue as a pivotal Phase 3 study.

At last check, Edesa shares were surging higher by 165.86% to $7.71.

Related Links:

The Week Ahead In Biotech: FDA Decisions In The Cards For Merck, Epizyme, Evoke And Ultragenyx

Sinovac Makes Headway In Coronavirus Vaccine Race With Positive Preliminary Phase 1/2 Results