Edesa Biotech (NASDAQ:EDSA) is prioritizing its anti-TLR4 drug candidate, EB05 (paridiprubart), for a U.S. government-funded study targeting Acute Respiratory Distress Syndrome (ARDS). This strategic pivot was highlighted in the company's fiscal year 2024 results, which also showed a significant reduction in operating expenses.
Financial Overview
For the fiscal year ended September 30, 2024, Edesa Biotech reported a net loss of $6.2 million, or $1.93 per common share, compared to a net loss of $8.4 million, or $2.93 per common share, for the year ended September 30, 2023. Total operating expenses decreased by $2.2 million to $7.0 million, reflecting a more than 20% reduction from the previous year's $9.2 million. Research and development expenses specifically fell by $1.9 million to $2.9 million, attributed to decreased external research expenses related to a completed dermatitis study and reduced labor costs.
"This year, Edesa maintained its momentum despite the headwinds in the drug development sector, and we once again validated our TLR4 technology with a third competitive government award," said Par Nijhawan, MD, Chief Executive Officer of Edesa Biotech.
Strategic Shift and Government Funding
The company's strategic pivot involves focusing on a U.S. government-funded study investigating novel threat-agnostic host-directed therapeutics for ARDS. Edesa is also amending a development and drug manufacturing project supported by the Government of Canada to maximize synergies between the two government-funded initiatives. This dual-government backing underscores the potential of Edesa's TLR4 technology platform.
EB06 Anti-CXCL10 Program
Edesa intends to manufacture EB06, an anti-CXCL10 monoclonal antibody, and submit related data to the U.S. Food and Drug Administration (FDA) as part of an investigational new drug (IND) application. The manufacturing of clinical-grade drug batches and initiation of patient enrollment are subject to funding. Topline results for this Phase 2 study could be available within 12 to 18 months following regulatory clearance in the U.S. The study is currently approved in Canada.
Liquidity and Financial Management
As of September 30, 2024, Edesa had cash and cash equivalents of $1.0 million and negative working capital of $0.2 million. Subsequent to the fiscal year end, the company received $1.5 million in gross proceeds under a securities purchase agreement with an entity affiliated with Edesa’s Chief Executive Officer and Founder, and $0.6 million in net proceeds from common shares sold under an at-the-market offering program.
"Following the end of the fiscal year, we strengthened our balance sheet, and with two governments now funding the advancement of our anti-TLR4 technology, we have improved our position for future financing, potential strategic arrangements as well as other opportunities to advance our pipeline," said Stephen Lemieux, Edesa's Chief Financial Officer.
Future Outlook
Edesa management plans to participate in one-on-one meetings during JP Morgan week, which begins on January 13, 2025, in San Francisco, California. This event will provide an opportunity for the company to engage with potential investors and partners.
