UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12,
2020
Edesa Biotech, Inc.
(Exact Name of Registrant as Specified in its Charter)
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British Columbia, Canada
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001-37619
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N/A
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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100 Spy Court
Markham, Ontario, Canada L3R 5H6
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(Address
of Principal Executive Offices)
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(289) 800-9600
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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Common
Shares
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EDSA
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging
growth company ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☒
Item
2.02
Results of Operations and Financial Condition.
On
August 12, 2020, Edesa Biotech, Inc. (the “Company”)
issued a press release announcing its financial results for the
three and nine-month period ended June 30, 2020 (the
“Earnings Release”). The full text of the Earnings
Release is attached hereto as Exhibit 99.1. The information
furnished herein and therein shall not be deemed
“filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 (the “Exchange Act”) or otherwise
subject to the liabilities of that Section, or incorporated by
reference in any filing under the Exchange Act or the Securities
Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such a filing.
Item
9.01
Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Press
release issued by Edesa Biotech, Inc. dated August 12,
2020.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Edesa
Biotech, Inc.
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Date:
August 12, 2020
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By:
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/s/
Kathi Niffenegger
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Name:
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Kathi
Niffenegger
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Title:
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Chief
Financial Officer
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Exhibit 99.1
Edesa Biotech Reports Fiscal 3rd Quarter 2020 Results
TORONTO,
ON / ACCESSWIRE / August 12, 2020 / Edesa Biotech, Inc.
(Nasdaq: EDSA), a clinical-stage biopharmaceutical company, today
reported financial results for the three and nine months ended June
30, 2020 and provided an update on its business.
During
the quarter, Edesa received Canadian regulatory approval to begin a
Phase 2/Phase 3 clinical study of its biologic drug candidate,
EB05, as a potential treatment for hospitalized COVID-19 patients.
Based on previous clinical data and the drug’s mechanism of
action, the company believes that EB05 could regulate the
overactive immune response associated with Acute Respiratory
Distress Syndrome (ARDS) – the leading cause of death in
COVID-19 patients. In July, Edesa filed an investigational new drug
(IND) application with the Food and Drug Administration to expand
the company’s planned clinical study to U.S. hospitals. Edesa
also reported that protocol amendments to facilitate enrollment for
its ongoing Phase 2b clinical study in allergic contact dermatitis
have been implemented at the majority of the company’s
investigational centers.
“During
the quarter, we continued the dosing of subjects in our dermatitis
study, while simultaneously preparing for the launch of a Phase 2/3
study of our first biologic candidate – a novel monoclonal
antibody targeting TLR4,” said Dr. Par Nijhawan, Chief
Executive Officer of Edesa. “The lack of effective therapies
for ARDS has been made even more devastating by the COVID-19
pandemic, which can cause severe acute respiratory failure in up to
40% of hospitalized COVID-19 patients and up to 85% of patients
admitted to the ICU.” Dr. Nijhawan said that, subject to
funding and IND approval, the company is presently on track to be
ready to initiate patient enrollment ahead of the anticipated
resurgence of SARS-CoV-2 infections this fall/winter.
Edesa’s
Chief Financial Officer Kathi Niffenegger reported that
expenditures during the quarter reflected increased activities and
preparations related to the planned COVID-19 study as well as trial
expenses for the company’s ongoing dermatitis study. She also
noted that subsequent to the quarter end the company has received
cash proceeds of approximately $2.42 million as a result of
exercises of common share purchase warrants.
“We
have built flexibility into our business planning processes, and
have prioritized working capital for our clinical projects based on
their feasibility amid the pandemic, the nearness of their
inflection points and their ability to address significant unmet
medical needs,” said Ms. Niffenegger.
Financial Results for the Three Months Ended June 30,
2020*
Total revenues for the three months ended June 30, 2020 were $0.11
million, reflecting sale of product inventory obtained in the
reverse acquisition completed in June 2019. There were no
significant revenues for the three months ended June 30,
2019.
Total operating expenses increased by $0.56 million to $1.88
million for the three months ended June 30, 2020 compared to $1.32
million for the same period last year:
●
Cost
of sales and services was less than $0.01 million for the three
months ended June 30, 2020, reflecting the sales of product
inventory obtained in the reverse acquisition. There were no
product sales in the same period last year.
●
Research
and development expenses increased by $0.64 million to $1.14
million for the three months ended June 30, 2020 compared to $0.50
million for the same period last year. The increase was primarily
due to increased external research expenses related to the clinical
study of the company’s EB01 drug candidate, and increased
activities and preparations related to the planned Phase 2/Phase 3
clinical study of EB05 as a potential treatment for hospitalized
COVID-19 patients.
●
General
and administrative expenses decreased by $0.09 million to $0.73
million for the three months ended June 30, 2020 compared to $0.82
million for the same period last year primarily due to a decrease
in legal fees, which was partially offset by increased salary and
related personnel expenses and higher public company
expenses.
For the three months ended June 30, 2020, Edesa reported a net loss
of $1.77 million, or $0.20 per basic share, compared to a net loss
of $1.29 million, or $0.30 per basic share, for the three months
ended June 30, 2019.
Financial Results for the Nine Months Ended June 30,
2020*
Total revenues for the nine months ended June 30, 2020 were $0.33
million, reflecting sale of product inventory obtained in the
reverse acquisition completed in June 2019. There were no
significant revenues for the nine months ended June 30,
2019.
Total operating expenses increased by $2.45 million to $4.72
million for the nine months ended June 30, 2020 compared to $2.27
million for the same period last year:
●
Cost
of sales and services was $0.02 million for the nine months ended
June 30, 2020, reflecting the sales of product inventory obtained
in the reverse acquisition. There were no product sales in the same
period last year.
●
Research
and development expenses increased by $1.30 million to $2.17
million for the nine months ended June 30, 2020 compared to $0.87
million for the same period last year. The increase was primarily
due to increased external research expenses related to the clinical
study of the company’s EB01 drug candidate, and increased
activities and preparations related to the planned Phase 2/Phase 3
clinical study of EB05 as a potential treatment for hospitalized
COVID-19 patients, as well as increased salary and related
personnel expenses.
●
General
and administrative expenses increased by $1.13 million to $2.53
million for the nine months ended June 30, 2020 compared to $1.40
million for the same period last year. The increase was primarily
due to increased salary and related personnel expenses, increased
legal and professional fees, and higher public company
expenses.
For the nine months ended June 30, 2020, Edesa reported a net loss
of $4.35 million, or $0.52 per basic share, compared to a net loss
of $2.19 million, or $0.61 per basic share, for the nine months
ended June 30, 2019.
* Financial results for any periods ended prior to June 7, 2019
reflect the financials of the company’s subsidiary Edesa
Biotech Research, Inc. on a standalone basis.
Working Capital
At June 30, 2020, Edesa had working capital of $5.24 million. Cash
and cash equivalents totaled $5.64 million. From July 8 to August
10, 2020, the exercise of common share purchase warrants resulted
in net cash proceeds to the company of approximately $2.42
million.
Calendar
Edesa management will be remotely joining the H.C. Wainwright
Global Investment Conference on September 14-16, 2020 and the LD
Micro 500 conference being held September 1-4, 2020. Attendees
interested in meetings with management can schedule video
one-on-one meetings through the conferences or by contacting Edesa
at investors@edesabiotech.com.
About Edesa Biotech, Inc.
Edesa Biotech, Inc. (Nasdaq:
EDSA) is a clinical-stage biopharmaceutical company focused on
developing innovative treatments for inflammatory and
immune-related diseases with clear unmet medical needs.
Edesa’s lead product candidate, EB01, is a novel
non-steroidal anti-inflammatory molecule (sPLA2 inhibitor) for the
treatment of chronic allergic contact dermatitis which has
demonstrated statistically significant improvements in multiple
clinical studies. The company is developing late-stage monoclonal
antibodies that block certain immune signaling proteins, known as
TLR4 and CXCL10. These molecules are associated with a broad range
of diseases, including the inflammation associated infectious
diseases. Due to the global health emergency, Edesa has prioritized
the development of EB05 as a potential treatment for hospitalized
COVID-19 patients. The company is based in Markham, Ontario,
Canada, with a U.S. subsidiary located in Southern California. Sign
up for news
alerts.
Edesa Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to: the company’s
belief that EB05 could regulate the overactive immune response
associated with ARDS and the company’s plans regarding its
Phase 2/3 study, including its belief that, subject to funding and
IND approval, the company could be ready to initiate patient
enrollment ahead of the anticipated resurgence of SARS-CoV-2
infections this fall/winter. Readers should not unduly rely on
these forward-looking statements, which are not a guarantee of
future performance. There can be no assurance that forward-looking
statements will prove to be accurate, as all such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results or future events to differ
materially from the forward-looking statements. Such risks include:
the ability of Edesa to obtain regulatory approval for or
successfully commercialize any of its product candidates, the risk
that access to sufficient capital to fund Edesa’s operations
may not be available or may be available on terms that are not
commercially favorable to Edesa, the risk that Edesa’s
product candidates may not be effective against the diseases tested
in its clinical trials, the risk that Edesa fails to comply with
the terms of license agreements with third parties and as a result
loses the right to use key intellectual property in its business,
Edesa’s ability to protect its intellectual property, the
timing and success of submission, acceptance and approval of
regulatory filings, and the impacts of public health crises, such
as COVID-19. Many of these factors that will determine actual
results are beyond the company's ability to control or predict. For
a discussion of further risks and uncertainties related to Edesa's
business, please refer to Edesa’s public company reports
filed with the U.S. Securities and Exchange Commission and the
British Columbia Securities Commission. All forward-looking
statements are made as of the date hereof and are subject to
change. Except as required by law, Edesa assumes no obligation to
update such statements.
Contacts
Gary Koppenjan
Edesa Biotech, Inc.
(805) 488-2800 ext. 150
investors@edesabiotech.com
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Condensed Interim Consolidated Statements of
Operations
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(Unaudited)
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Three Months
Ended
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Nine Months
Ended
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June 30,
2020
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June 30,
2019
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June 30,
2020
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June 30,
2019
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Total Revenues
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$109,985
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$500
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$328,301
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$500
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Expenses:
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Cost
of sales and services
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1,472
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-
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15,287
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-
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Research
and development
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1,143,868
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502,927
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2,174,680
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872,020
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General
and administrative
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733,079
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817,927
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2,528,702
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1,395,353
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1,878,419
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1,320,854
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4,718,669
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2,267,373
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Loss from Operations
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(1,768,434)
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(1,320,354)
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(4,390,368)
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(2,266,873)
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Other Income
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2,671
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26,347
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41,436
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79,187
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Income Tax Expense
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-
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-
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800
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-
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Net Loss
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(1,765,763)
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(1,294,007)
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(4,349,732)
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(2,187,686)
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Exchange
differences on translation
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68,972
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27,443
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47,178
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118,456
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Net Loss and Comprehensive Loss
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$(1,696,791)
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$(1,266,564)
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$(4,302,554)
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$(2,069,230)
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Weighted
average number of common shares outstanding
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8,859,520
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4,317,759
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8,364,866
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3,599,188
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Loss per share - basic and diluted
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$(0.20)
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$(0.30)
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$(0.52)
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$(0.61)
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Condensed Interim Consolidated Balance Sheets
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||||
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(Unaudited)
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June
30,
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September
30,
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2020
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2019
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Assets:
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Cash and cash
equivalents
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$5,640,695
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$5,030,583
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Other current
assets
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580,112
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614,123
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Intangible
asset
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2,508,829
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-
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Operating lease
right-of-use assets
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172,776
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-
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Property and
equipment, net
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20,342
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73,058
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Total
Assets
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$8,922,754
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$5,717,764
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Liabilities,
shareholders' equity and temporary equity:
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Current
liabilities
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$983,078
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$461,634
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Noncurrent
liabilities
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139,487
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-
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Temporary
equity
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2,458,051
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-
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Shareholders'
equity
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5,342,138
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5,256,130
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Total
liabilities, shareholders' equity and temporary equity
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$8,922,754
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$5,717,764
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Condensed Interim Consolidated Statements of Cash
Flows
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||||
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(Unaudited)
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Nine Months
Ended
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June 30,
2020
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June 30,
2019
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Cash Flows from Operating Activities:
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Net
loss
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$(4,349,732)
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$(2,187,686)
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Adjustments
for non-cash items
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540,945
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36,639
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Change
in working capital items
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495,384
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(1,749,912)
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Net cash used in operating activities
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(3,313,403)
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(3,900,959)
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Net cash provided by investing activities
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15,532
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6,405,207
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Net cash provided by financing activities
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3,864,307
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-
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Effect
of exchange rate changes on cash and cash equivalents
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43,676
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128,618
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Net
change in cash and cash equivalents
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610,112
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2,632,866
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Cash
and cash equivalents, beginning of period
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5,030,583
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3,730,230
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Cash and cash equivalents, end of period
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$5,640,695
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$6,363,096
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