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): September 28,
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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The
Nasdaq Stock Market LLC
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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 8.01. Other Events
Edesa Biotech, Inc. (the “Company”, “we”)
is filing this Current Report on Form 8-K to update our common
shares issued and outstanding and beneficial ownership and to
provide additional information pertaining to our expanded
intellectual property portfolio. We are also filing this Current
Report on Form 8-K to supplement the risk factors set forth under
"Item 1A. Risk Factors" in our Annual Report on Form 10-KT for the
nine-month period ended September 30, 2019 filed with the
Securities and Exchange Commission on December 12, 2019 (the
“Annual Report”), as supplemented by the additional
risk factor in Item 8.01 in our Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 27,
2020. The
risk factors set forth below relate to the expansion of our drug
development pipeline and the greater priority we have placed on our
EB05 development program. These supplemental risk factors should be
read in conjunction with the risk factors set forth in the Annual
Report and our Current Report on Form 8-K filed on March 27,
2020.
Shares Outstanding
As of September 24, 2020 we had 9,608,869 common shares issued and
outstanding, which reflects an aggregate of 194,591 common shares
issued upon exercise of warrants and options since the filing of
our interim financial results on Form 10-Q on August 12,
2020.
Security
Ownership of Certain Beneficial Owners and Management
The
following tables sets forth certain information as of September 24,
2020, with respect to the beneficial ownership of our common shares
by: (1) all of our directors; (2) our named executive officers; (3)
all of directors and executive officers as a group; and (4) each
person known by us to beneficially own more than 5% of our
outstanding common shares.
We have
determined beneficial ownership in accordance with the rules of the
SEC, based on a review of filings with the SEC and information
known to us.Except as indicated by the footnotes below, we believe,
based on theinformation furnished to us, that the persons and
entities named in the table below have sole voting and investment
power with respect to all common shares that they beneficially own,
subject to applicable community property laws.
Common
shares subject to options or warrants currently exercisable or
exercisable within 60 days of September 24, 2020 are deemed
outstanding for computing the share ownership and percentage of the
person holding such options and warrants, but are not deemed
outstanding for computing the percentage of any other person. The
percentage ownership of our common shares of each person or entity
named in thefollowing table is based on 9,608,869 common shares
outstanding as of September 24, 2020.
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Directors
and Officers
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Name and Address
of Beneficial Owner (1)
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Amount and
Nature of Beneficial Ownership
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Percent of
Shares Beneficially
Owned
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Lorin Johnson,
PhD
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24,845
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(2)
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*
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Sean
MacDonald
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20,035
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(3)
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*
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Pardeep Nijhawan,
MD
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3,317,207
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(4)
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34.3%
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Frank
Oakes
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15,524
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(5)
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*
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Paul
Pay
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43,546
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(6)
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*
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Carlo Sistilli,
CPA, CMA
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11,147
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(7)
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*
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Peter van der
Velden
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2,184,018
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(8)
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22.3
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Michael Brooks,
PhD
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202,639
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(9)
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2.1
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Kathi Niffenegger,
CPA
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48,846
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(10)
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*
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All
directors and executive officers as a group (9
persons)
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5,867,807
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(11)
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60.4%
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* Percentage of
shares beneficially owned does not exceed one percent.
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(1)
Unless otherwise
indicated, theaddress of each beneficial owner is c/o Edesa
Biotech, Inc., 100 Spy Court, Markham, ON Canada L3R
5H6.
(2)
Consists of (i)
8,524 Common Shares, (ii) 6,393 Common Shares issuable upon
exercise of Class A Warrants, (iii) 4,262 Common Shares issuable
upon exercise of Class B Warrants and (iv) 5,666 Common Shares
issuable upon exercise of options that are exercisable within sixty
days of September 24, 2020.
(3)
Consists of (i)
14,369 Common Shares and (ii) 5,666 Common Shares issuable upon
exercise of options exercisable within sixty days of September 24,
2020.
(4)
Consists of (A)(i)
537,312 Common Shares and (ii) 48,480 Common Shares issuable upon
exercise of options exercisable within sixty days of September 24,
2020 held by Pardeep Nijhawan; (B)(i) 2,124,024 Common Shares, (ii)
6,942 Common Shares issuable upon exercise of Class A Warrants and
(iii) 4,628 Common Shares issuable upon exercise of Class B
Warrants held by Pardeep Nijhawan Medicine Professional Corporation
for which Pardeep Nijhawan has sole voting and dispositive power
over all such shares; (C)(i) 224,094 Common Shares held by The
Digestive Health Clinic Inc. for which Pardeep Nijhawan has sole
voting and dispositive power over all such shares and (D)(i)
371,727 Common Shares held by 1968160 Ontario Inc. for which
Pardeep Nijhawan has sole voting and dispositive power over all
such shares.
(5)
Consists of (A)(i)
6,165 Common Shares and (ii) 6,618 Common Shares issuable upon
exercise of options that are exercisable within sixty days of
September 24, 2020 held by Frank Oakes and(B)(i) 1,218 Common
Shares, (ii) 914 Common Shares issuable upon exercise of Class A
Warrants and (iii) 609Common Shares issuable upon exercise of Class
B Warrants held by Frank and Dorothy Oakes Family Trust for which
each of Frank Oakes and Dorothy Oakes, as trustees, have voting and
dispositive power over all such shares.
(6)
Consists of (i)
2,436 Common Shares, (ii) 1,827 Common Shares issuable upon
exercise of Class A Warrants, (iii) 1,218 Common Shares issuable
upon exercise of Class B Warrants and (iv) 38,065 Common Shares
issuable upon exercise of options exercisable within sixty days of
September 24, 2020.
(7)
Consists of (A)
5,666 Common Shares issuable upon exercise of options exercisable
within sixty days of September 24, 2020 held by Carlo Sistilli and
(B)(i) 2,436 Common Shares, (ii) 1,827 Common Shares issuable upon
exercise of Class A Warrants and (iii) 1,218 Common Shares issuable
upon exercise of Class B Warrants held byYork-Cav Enterprises Inc
for which Carlo Sistilli, as President and Director, has sole
voting and dispositive power over all such shares.
(8)
Consists of (A)
5,666 Common Shares issuable upon exercise of options exercisable
within sixty days of September 24, 2020 held by Peter van der
Velden; (B)(i) 1,833,066 Common Shares, (ii) 96,542 Common Shares
issuable upon exercise of Class A Warrants and (iii) 64,362 Common
Shares issuable upon exercise of Class B Warrants held by Lumira
Capital II,L.P. and (C)(i) 169,502 Common Shares, (ii) 8,928 Common
Shares issuable upon exercise of Class A Warrants and (iii) 5,952
Common Shares issuable upon exercise of Class B Warrants held by
Lumira Capital II (International), L.P., an affiliate of Lumira
Capital II, L.P. Lumira Capital GP, L.P., the general partners of
which are Lumira GP Inc. and Lumira GP Holdings Co., is the general
partner of each of Lumira Capital II, L.P. and Lumira Capital II
(International), L.P. Each of Lumira Capital II, L.P. and Lumira
Capital II (International), L.P. is managed by Lumira Capital
Investment Management Inc. Each of Lumira Capital GP, L.P., Lumira
GP Inc., Lumira GP Holdings Co. and Lumira Capital Investment
Management Inc. may be deemed to beneficially own the shares held
by Lumira Capital II, L.P. and Lumira Capital II (International),
L.P. and such entities control voting and investment power over
such shares through an investment committee of the Lumira group.
Peter van der Velden is an executive officer of Lumira GP Inc.,
Lumira GP Holdings Co. and Lumira Capital Investment Management
Inc.
(9)
Consists of (i)
4,327 Common Shares, (ii) 1,371 Common Shares issuable upon
exercise of Class A Warrants, (iii) 914 Common Shares issuable upon
exercise of Class B Warrants and(iv) 196,027 Common Shares issuable
upon exercise of options exercisable within sixty days of September
24, 2020.
(10)
Consists of (A)
46,105 Common Shares issuable upon exercise of options that
areexercisable within sixty days of September 24, 2020 held by
Kathi Niffenegger and (B) (i) 1,218 Common Shares, (ii) 914 Common
Shares issuable upon exercise of Class A Warrants and (iii) 609
Common Shares issuable upon exercise of Class B Warrants held by
the Kathi Niffenegger Trust for which Kathi Niffenegger, as
trustee, has sole voting anddispositive power over all such
shares.
(11)
Consists of (i)
5,300,418 Common Shares, (ii) 125,658 Common Shares issuable upon
exercise of Class A Warrants, (iii) 83,772 Common Shares issuable
upon exercise of Class B Warrants and (i) 357,959 Common Shares
issuable upon exercise of options that are exercisable within sixty
days of September 24, 2020.
Shareholders
Known by Us to Own 5% or More of Our Common Shares
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Name and Address
of Beneficial Owner
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Amount
and
Nature
of
Beneficial
Ownership
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Percent of
Shares
Beneficially
Owned
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Inveready
(1)
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531,986
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5.5%
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Lumira Capital II,
L.P. (2)
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2,178,352
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22.3%
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(1)
Consists of 531,986
Common Shares. Voting and investment power over the shares held by
Inveready Innvierte Biotech II, S.C.R. S.A is exercised by its
board of directors. The address of the shareholder is c/o Inveready
Technology Investment Group, C/dels Cavaliers, 50, Barcelona,
08034, Spain.
(2)
Consists of (A)(i)
1,833,066 Common Shares, (ii) 96,542 Common Shares issuable upon
exercise of Class A Warrants and (iii) 64,362 Common Shares
issuable upon exercise of Class B Warrants heldby Lumira Capital
II, L.P. and (B)(i) 169,502 Common Shares, (ii) 8,928 Common Shares
issuable upon exercise of Class A Warrants and (iii) 5,952 Common
Shares issuable upon exercise of Class B Warrants held by Lumira
Capital II (International), L.P., an affiliate of Lumira Capital
II, L.P. Lumira Capital GP, L.P., the general partners of which are
Lumira GP Inc. and Lumira GP Holdings Co., is the general partner
of each of Lumira Capital II, L.P. and Lumira Capital II
(International), L.P. Each of Lumira Capital II, L.P. and Lumira
Capital II (International), L.P. is managed by Lumira Capital
Investment Management Inc. Each of Lumira Capital GP, L.P., Lumira
GP Inc., Lumira GP Holdings Co. and Lumira Capital Investment
Management Inc. may be deemed to beneficially own the shares held
by Lumira Capital II, L.P. and Lumira Capital II (International),
L.P and such entities control voting and investment power over such
shares through an investment committee of the Lumira group. The
address of each entity listed in this note is 141 Adelaide Street
West, Suite 770, Toronto, Ontario, Canada M5H 3L5.
Intellectual Property
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. 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. 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 EB05 and EB06 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 have also filed additional method of use patent
applications which we believe, if issued, could potentially prevent
biosimilar substitution until as late as 2041.
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 or EB06
after approval in the United States, and eight years of exclusivity
after approval in Canada and ten years of exclusivity after
approval in the European Union in any case.
We
expect patents and other proprietary intellectual property rights
to be an essential element of our business. We intend to protect
our proprietary positions by, among other methods, filing U.S. and
foreign patent applications related to our proprietary technology,
inventions, and improvements. We also rely on trade secrets,
know-how, continuing technological innovation and other
in-licensing opportunities to develop and maintain our proprietary
position. Our success will depend, in part, on our ability to
obtain and maintain proprietary protection for our product
candidates, technology, and know-how, to operate without infringing
on the proprietary rights of others, and to prevent others from
infringing our proprietary rights.
Supplemental Risk Factors
Risks Related to Our Business
We depend heavily on the success of our lead product candidates,
EB01 and EB05, which we are developing for the treatment of chronic
ACD and ARDS, respectively. If we are unable to obtain regulatory
approval or commercialize EB01 or EB05, or experience significant
delays in doing so, our business will be materially
harmed.
Our ability to generate product revenues, which may not occur for
multiple years, if at all, will depend heavily on the successful
development and commercialization of EB01 as a treatment for
chronic ACD or EB05 as a treatment for ARDS. The success of our
product candidates, including EB01 and EB05, will depend on a
number of factors, including the following:
●
our
ability to obtain additional capital from potential future
licensing, collaboration or similar arrangements or from any future
offering of our debt or equity securities;
●
our
ability to identify and enter into potential future licenses or
other collaboration arrangements with third parties and the terms
of the arrangements;
●
our
timing to obtain applicable regulatory approvals;
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successful
completion of clinical development;
●
the
ability to provide acceptable evidence demonstrating a product
candidates’ safety and efficacy;
●
receipt
of marketing approvals from applicable regulatory authorities and
similar foreign regulatory authorities;
●
the
availability of raw materials to produce our product
candidates;
●
obtaining
and maintaining commercial manufacturing arrangements with
third-party manufacturers or establishing commercial-scale
manufacturing capabilities;
●
obtaining
and maintaining patent and trade secret protection and regulatory
exclusivity;
●
establishing
sales, marketing and distribution capabilities;
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generating
commercial sales of the product candidate, if and when approved,
whether alone or in collaboration with others;
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acceptance
of the product candidate, if and when approved, by patients, the
medical community and third-party payors;
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effectively
competing with other therapies; and
●
maintaining
an acceptable safety profile of the product candidate following
approval.
If we do not achieve one or more of these factors in a timely
manner or at all, we could experience significant delays or an
inability to successfully commercialize EB01, EB05 or any of our
other product candidates, which would materially harm our business.
Many of these factors are beyond our control. Accordingly, we may
never be able to generate revenues through the license or sale of
any of our product candidates.
Public health threats could have an adverse effect on our
operations and financial results.
Public health threats could adversely affect our ongoing or planned
research and development activities. In particular, a novel strain
of coronavirus, SARS-CoV-2 (which causes the disease now called
COVID-19), was reported to have surfaced in Wuhan, China in
December 2019, and has since spread globally, including to every
state in the United States. On January 31, 2020, the Secretary
of Health and Human Services (HHS) issued a Public Health
Emergency determination in response to the spread of
COVID-19. A Public Health Emergency determination remains in
effect for 90 days and can be renewed for additional 90 day
periods. The Secretary of HHS renewed his Public Health Emergency
determination on April 21, 2020, and again on July 23, 2020.
On March 11, 2020, the World Health
Organization declared COVID-19 a pandemic, and on March 13, 2020,
the United States declared a national emergency with respect to
COVID-19. The outbreak of COVID-19 has severely impacted global
economic activity and caused significant volatility and negative
pressure in financial markets. The global impact of the outbreak
has been rapidly evolving and many countries, including the United
States, have reacted by instituting quarantines, mandating business
and school closures and restricting travel. As a result, the
COVID-19 pandemic is negatively impacting almost every industry
directly or indirectly. We cannot presently predict the scope and
severity of any potential business shutdowns or disruptions, but if
we or any of the third parties with whom we engage, including the
suppliers, clinical trial sites, regulators and other third parties
with whom we conduct business, were to experience shutdowns or
other business disruptions, our ability to conduct our business in
the manner and on the timelines presently planned could be
materially and negatively impacted. Global epidemics, such as the
coronavirus, could also negatively affect site activation, as well
as recruitment and retention, at sites in a region or city whose
health care system becomes overwhelmed due to the illness, which
could have a material adverse effect on our business and our
results of operation and financial condition.
Risks Related to Clinical Development, Regulatory Approval and
Commercialization
The clinical trial designs, endpoints and outcomes that will be
required to obtain marketing approval of a drug to treat chronic
ACD, ARDS or any other indication are uncertain. We may never
receive marketing approval for our drug candidates, including EB01
as a treatment for chronic ACD and EB05 as a treatment for
ARDS.
To our knowledge, there are currently no FDA-approved treatment
options specifically indicated for chronic ACD. Accordingly, there
is not a well-established development path that, with positive
outcomes in clinical trials, would be reasonably assured of
receiving marketing approval for chronic ACD. In particular, if our
Phase 2B clinical trial of EB01 in individuals with chronic ACD is
successful and, similarly, if our Phase 2/Phase 3 clinical trial of
EB05 in Canada, once initiated, and if our IND for EB05 is approved
by the FDA, we plan, in each case, to use the applicable trial to
support pivotal clinical trials designed to establish the efficacy
of EB01 or EB05, as applicable, to support, together with
additional long-term safety data, an application for regulatory
approval as a treatment for chronic ACD or ARDS, as applicable. As
of September 28, 2020, our IND for EB05 is under review by the FDA.
Unless we receive comments from the FDA, we expect to be in a
position to commence the U.S. portion of our EB05 study by the end
of October, 2020. At this time, we are uncertain as to whether we
will receive comments or whether any such comments would delay the
commencement of the U.S. portion of our clinical study. The FDA,
Health Canada or any other regulatory authority outside of the
United States may determine that the designs or endpoints of any
potentially pivotal trial that we conduct, or that the outcome
shown on any particular endpoint in any potentially pivotal trial
that we conduct, are not sufficient to establish a clinically
meaningful benefit for EB01 in the treatment of chronic ACD, EB05
in the treatment of ARDS, or otherwise, to support approval, even
if the primary endpoint or endpoints of the trial is or are met
with statistical significance. If this occurs, our business could
be materially harmed. Moreover, if the FDA requires us to conduct
additional clinical trials beyond the ones that we currently
contemplate in order to support regulatory approval in the United
States of EB01 for the treatment of chronic ACD or EB05 for the
treatment of ARDS, or if Health Canada requires us to conduct
additional clinical studies beyond the ones that we currently
contemplate in order to support regulatory approval in Canada of
EB05 for the treatment of ARDS, our finances and results from
operations will be adversely impacted.
Likewise, if we conduct any future clinical trials designed to
support marketing approval of EB02 as a treatment for HD or
clinical trials designed to support marketing approval of any other
of our product candidates, such as EB06, the FDA, Health Canada or
any other regulatory authority outside of the United States may
determine that the designs or endpoints of the trial, or that the
outcomes shown on any particular endpoint in the trial, are not
sufficient to establish a clinically meaningful benefit or
otherwise to support approval, even if the primary endpoint of the
trial is met with statistical significance.
Even if our Phase 2/3 study of EB05 in hospitalized COVID-19
patients demonstrates efficacy, it is not certain that additional
studies may not be required or the data will be sufficient to
enable EB05 to gain regulatory approval as a treatment for
ARDS.
If our Phase 2/3 clinical trial of EB05 in hospitalized COVID-19
patients demonstrates efficacy, we plan to seek marketing approval
with the FDA and regulatory authorities outside the United States.
We cannot predict whether each of these regulatory agencies will
agree that the data and information from our Phase 2/3 study will
be sufficient to meet the requirements for filing a marketing
application or the standards for approval. If the regulatory
agencies determine that more data and information are needed, it
could delay and/or negatively impact our ability to obtain
regulatory approval to market and sell a particular product
candidate. The likelihood that the FDA or any regulatory authority
outside the United States will concur with our plan is uncertain.
The FDA or any other regulatory authority may instead determine
that additional clinical and/or non-clinical trials are required to
establish the efficacy of EB05 as a treatment for COVID-19-induced
ARDS, even if the outcome of our Phase 2/3 study in individuals is
favorable. If the FDA or a regulatory authority outside of the
United States makes the determination that additional clinical
and/or non-clinical trials are required, it would result in a more
expensive and potentially longer development program for EB05 than
we currently contemplate, which could delay our ability to generate
product revenues with EB05, interfere with our ability to enter
into any potential licensing or collaboration arrangements with
respect to this program, cause the value of the company to decline,
and limit our ability to obtain additional financing.
If we experience new or additional delays or difficulties in the
enrollment of patients in our clinical trial of EB01, or our
planned clinical trials of EB05, once initiated in Canada or
approved by the FDA, as applicable, or any other product candidate,
our application and or receipt of marketing approvals could be
delayed or prevented.
With respect to enrolling patients in our clinical trial of EB01,
recruiting patients with moderate to severe chronic ACD may be
challenging as there have not been recent clinical studies
conducted with this patient population. If we are unable to locate
and enroll a sufficient number of eligible patients to participate
in clinical trials of our product candidates including, in
particular, our ongoing trial of EB01 and our planned pivotal
trials of EB01 as a treatment for ACD or our planned trials of EB05
as treatment for ARDS, we may not be able to initiate or complete
the clinical trials.
Enrollment delays in our ongoing or planned clinical trials may
result in increased development costs for our product candidates,
which would cause the value of the company to decline and limit our
ability to obtain additional financing. Our inability to enroll a
sufficient number of patients in our ongoing or planned clinical
trials of EB01, EB05 or any other Edesa product candidate, would
result in significant delays or may require us to abandon one or
more clinical trials or planned clinical trials
altogether.
If the commercial opportunity in chronic ACD or COVID-19-induced
ARDS is smaller than we anticipate, our future revenue from EB01 or
EB05, as applicable, will be adversely affected and our business
will suffer.
It is critical to our ability to grow and become profitable that we
successfully identify patients with chronic ACD or COVID-19-induced
ARDS. Our projections of the number of people who have these
conditions as well as the subset who have the potential to benefit
from treatment with EB01 or EB05, are based on a variety of
sources, including third-party estimates and analyses in the
scientific literature, and may prove to be incorrect. Further, new
information may emerge that changes our estimate of the prevalence
of these diseases or the number of patient candidates for these
drug candidates. The effort to identify patients for our other
potential target indications is at an early stage, and we cannot
accurately predict the number of patients for whom treatment might
be possible. Additionally, the potentially addressable patient
population for our drug candidates may be limited or may not be
amenable to treatment with our drug candidates, and new patients
may become increasingly difficult to identify or access. If the
commercial opportunity for these conditions is smaller than we
anticipate, our future financial performance may be adversely
impacted.
We face substantial competition, which may result in others
discovering, developing or commercializing products to treat our
target indications or markets before or more successfully than we
do.
The development and commercialization of new drug products is
highly competitive. We face competition with respect to our current
product candidates and any products we may seek to develop or
commercialize in the future from major pharmaceutical companies,
specialty pharmaceutical companies and biotechnology companies
worldwide.
Competitors may also include academic institutions, government
agencies and other public and private research organizations that
conduct research, seek patent protection and establish
collaborative arrangements for research, development, manufacturing
and commercialization. Many of our competitors have significantly
greater financial resources and expertise in research and
development, manufacturing, preclinical testing, conducting
clinical trials, obtaining approvals from regulatory authorities
and marketing approved products than we do. Mergers and
acquisitions in the pharmaceutical and biotechnology industries may
result in even more resources being concentrated among a smaller
number of our competitors. Smaller and other early-stage companies
may also prove to be significant competitors, particularly through
collaborative arrangements with large and established companies.
These third parties compete with us in recruiting and retaining
qualified scientific and management personnel, establishing
clinical trial sites and patient registration for clinical trials,
as well as in acquiring technologies that may be complementary to
or necessary for our programs. Our commercial opportunities could
be reduced or eliminated if our competitors develop and
commercialize products that are more effective, safer, have fewer
or less severe side effects, are approved for broader indications
or patient populations, or are more convenient or less expensive
than any products that we develop and commercializes. Our
competitors may also obtain marketing approval for their products
more rapidly than we may obtain approval for our products, which
could result in our competitors establishing a strong market
position before we are able to enter the market. If approved, our
product candidates will compete for a share of the existing market
with numerous other products being used to treat ACD, ARDS, or any
other indications for which we may receive government
approval.
Even if we are able to commercialize one of our product candidates,
the product may become subject to unfavorable pricing regulations,
third-party reimbursement practices or healthcare reform
initiatives, which would harm our business.
The regulations that govern marketing approvals, pricing, coverage
and reimbursement for new drug products vary widely from country to
country. Current and future legislation may significantly change
the approval requirements in ways that could involve additional
costs and cause delays in obtaining approvals. Some countries
require approval of the sale price of a drug before it can be
marketed. In many countries, the pricing review period begins after
marketing or product licensing approval is granted and, in some
markets, prescription pharmaceutical pricing remains subject to
continuing governmental control even after initial approval is
granted. As a result, we might obtain marketing approval for a
product in a particular country, but then be subject to price
regulations that delay our commercial launch of the product,
possibly for lengthy time periods, and negatively impact the
revenues we are able to generate from the sale of the product in
that country. Adverse pricing limitations may hinder our ability to
recoup our investment in one or more product candidates, even if
our product candidates obtain marketing approval.
Our ability to commercialize EB01, EB05 or any other product
candidate successfully also will depend in part on the extent to
which coverage and adequate reimbursement for these products and
related treatments will be available from government health
administration authorities, private health insurers and other
organizations. Government authorities and other third-party payors,
such as private health insurers and health maintenance
organizations, decide which medications they will pay for and
establish reimbursement levels. Our inability to promptly obtain
coverage and adequate reimbursement rates from both
government-funded and private payors for any approved products that
we develop could have a material adverse effect on our operating
results, our ability to raise capital needed to commercialize
products and our overall financial condition.
If we are not able to establish additional collaborations, we may
have to alter our development and commercialization
plans.
We may decide to collaborate with pharmaceutical and biotechnology
companies for the development and potential commercialization of
EB01, EB05 or other product candidates. Collaborations are complex
and time-consuming to negotiate and document and we face
significant competition in seeking appropriate collaborators. In
addition, there have been a significant number of business
combinations among large pharmaceutical companies that have
resulted in a reduced number of potential future collaborators. We
may not be able to negotiate collaborations on a timely basis, on
acceptable terms, or at all. If we are unable to do so, we may have
to curtail the development of a product candidate, reduce or delay
our development program or one or more of our other development
programs, delay our potential commercialization or reduce the scope
of any sales or marketing activities, or increase our expenditures
and undertake development or commercialization activities at our
own expense. If we elect to increase our expenditures to fund
development or commercialization activities on our own, we would
likely need to obtain additional capital, which may not be
available to us on acceptable terms, or at all. If we do not have
sufficient funds, we may not be able to further develop our product
candidates or bring them to market and generate product
revenue.
Even if we complete the necessary clinical trials, the marketing
approval process is expensive, time consuming and uncertain and may
prevent us from obtaining approvals for the commercialization of
some or all of our product candidates. If we are not able to
obtain, or if there are delays in obtaining, required marketing
approvals, we will not be able to commercialize our product
candidates, and our ability to generate revenue will be materially
impaired.
Our product candidates and the activities associated with their
development and commercialization, including their design, testing,
manufacture, safety, efficacy, recordkeeping, labeling, storage,
approval, advertising, promotion, sale and distribution, are
subject to comprehensive regulation by the FDA, Health Canada and
by comparable authorities in other countries. Failure to obtain
marketing approval for a product candidate will prevent us from
commercializing the product candidate. We have not received
approval to market EB01, EB05 or any other Edesa product candidate
from regulatory authorities in any jurisdiction.
We have only limited experience in filing and supporting the
applications necessary to obtain marketing approvals for product
candidates and expect to rely on third-party contract research
organizations to assist us in this process. Securing marketing
approval requires the submission of extensive preclinical and
clinical data and supporting information to regulatory authorities
for each therapeutic indication to establish the product
candidate’s safety and effectiveness. Securing marketing
approval also requires the submission of information about the
product manufacturing process to, and inspection of manufacturing
facilities by, the regulatory authorities. Regulatory authorities
may determine that EB01, EB05 or any of our other product
candidates is not effective, is only moderately effective or has
undesirable or unintended side effects, toxicities, safety profiles
or other characteristics that preclude us from obtaining marketing
approval or that prevent or limit commercial use.
The process of obtaining marketing approvals is expensive, may take
many years, if approval is obtained at all, and can vary
substantially based upon a variety of factors, including the type,
complexity and novelty of the product candidates involved. Changes
in marketing approval policies during the development period,
changes in or the enactment of additional statutes or regulations,
or changes in regulatory review for each submitted product
application, may cause delays in the approval or rejection of an
application. Regulatory authorities have substantial discretion in
the approval process and may refuse to accept any application or
may decide that our data are insufficient for approval and require
additional preclinical studies, clinical trials or other trials. In
addition, varying interpretations of the data obtained from
preclinical and clinical testing could delay, limit or prevent
marketing approval of a product candidate. Any marketing approval
we ultimately obtain may be limited or subject to restrictions or
post-approval commitments that render the approved product not
commercially viable. If we experience delays in obtaining approval
or if we fail to obtain approval of our product candidates, the
commercial prospects for our product candidates may be harmed and
our ability to generate revenues will be materially
impaired.
Risks Related to Our Intellectual Property
We are dependent on a license relationship with NovImmune SA for
our EB05 and EB06 programs
In April 2020, we entered into an exclusive license agreement with
NovImmune SA, which operates under the brand Light Chain
Bioscience, or Light Chain, to obtain exclusive rights throughout
the world to certain know-how, patents and data relating to
the monoclonal antibodies targeting TLR4 and CXCL10. Due to
the COVID-19 global health emergency, we have prioritized the
development of EB05, which has previously demonstrated efficacy in
blocking TLR4 signaling in two previous clinical studies, as a
potential treatment for ARDS resulting from COVID-19 and other
conditions. If we default or fail to perform any of the terms,
covenants, provisions or our obligations under the License
Agreement, Light Chain has the option to terminate the License
Agreement, subject to advance notice to cure such default. Any
termination of this license agreement would have a materially
adverse impact on our business and results from
operations.
Forward Looking Statements
This
Current Report on Form 8-K contains forward-looking statements.
When used in this report, the words “expects,”
“anticipates,” “suggests,”
“believes,” “intends,”
“estimates,” “plans,”
“projects,” “continue,”
“ongoing,” “potential,”
“expect,” “predict,” “believe,”
“intend,” “may,” “will,”
“should,” “could,” “would” and
similar expressions are intended to identify forward-looking
statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking statements
for many reasons, including the risks described in our Annual
Transition Report on Form 10-KT for the nine-month period ended
September 30, 2019 , filed with
the Securities and Exchange Commission on December 12, 2019, as
supplemented by the additional risk factor in Item 8.01 in our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on March 27, 2020, the risk factors contained in this
Current Report on Form 8-K and the risk factors
contained in other reports we file with the Securities and Exchange
Commission. Although we believe the expectations reflected in the
forward-looking statements are reasonable, they relate only to
events as of the date on which the statements are made. We do not
intend to update any of the forward-looking statements after the
date of this report to conform these statements to actual results
or to changes in our expectations, except as required by
law.
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:
September 28, 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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