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 13,
2021
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):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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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 2.02
Results of Operations and Financial Condition.
On
August 13, 2021, Edesa Biotech, Inc. (the “Company”)
issued a press release announcing its financial results for the
three-month and nine-month periods ended June 30, 2021 (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 13,
2021.
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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 13, 2021
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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 2021 Financial
Results
TORONTO,
ON / ACCESSWIRE / August 13, 2021 / Edesa Biotech, Inc.
(Nasdaq:EDSA), a clinical-stage biopharmaceutical company focused
on inflammatory and immune-related diseases, today reported
financial results for the three and nine months ended June 30, 2021
and provided an update on its business.
During
the quarter, the company achieved key interim milestones for both
of its lead product candidates, EB05 and EB01. Independent
monitoring boards assessed blinded interim treatment data and based
on their positive findings recommended that the two development
programs advance to the final stages of enrollment. Edesa expects
the end of Phase 2 (interim) analysis of a Phase 2/3 study of EB05
as a single-dose treatment for hospitalized COVID-19 patients will
be completed as early as the current quarter. The company plans to
provide more detailed clinical updates as they become available. In
parallel, the company has begun patient randomizations for the
final part of a Phase 2b clinical study evaluating EB01 as a
monotherapy for chronic Allergic Contact Dermatitis. Edesa recently
added new investigational sites and expanded recruitment beyond the
U.S. to Canada.
"We are
pleased to have these two key programs advancing side by side
toward data readouts and value inflection opportunities. EB05 and
EB01 each represent novel anti-inflammatory technologies with the
potential to provide transformational therapies for a broad range
of inflammatory and autoimmune conditions," said Par Nijhawan, MD,
Chief Executive Officer of Edesa Biotech. "We look forward to
maintaining the momentum we achieved year to date, and announcing
our end of Phase 2 results of our EB05 program as soon as
available."
Edesa's
Chief Financial Officer Kathi Niffenegger reported that
expenditures for the fiscal third quarter were in line with
management’s expectations and driven primarily by incremental
clinical study expenses related to patient enrollment, expanded
operations and drug product-related costs. "Our R&D
expenditures for the three-month and nine-month periods have
largely tracked the accelerated progress of our clinical studies as
well as preparations related to commercial-scale manufacturing of
our product candidates,” she said.
For the
nine-month period ended June 30, 2021, Ms. Niffenegger reported
that the company recorded reimbursements of approximately $8.5
million under a C$14 million reimbursement grant from the Canadian
Government, including $1.3 million for the fiscal third quarter. At
June 30, 2021, Edesa had working capital of $13.35 million,
including cash and cash equivalents of $8.05 million.
Financial Results for the Three Months Ended June 30,
2021
There were no revenues for the three months ended June 30, 2021
compared to $0.11 million for the three months ended June 30, 2020,
reflecting the winddown and discontinuation of sales of product
inventory from legacy operations.
Total operating expenses increased by $4.19 million to $6.07
million for the three months ended June 30, 2021 compared to $1.88
million for the same period last year:
●
Research
and development expenses increased by $3.32 million to $4.46
million for the three months ended June 30, 2021 compared to $1.14
million for the same period last year primarily due to increased
external research expenses related to recruitment and enrollment in
the company’s ongoing clinical studies, increased
investigational drug product expenses and an increase in
noncash share-based compensation. Higher salary and
related personnel expenses and patent fees also contributed to the
increase.
●
General
and administrative expenses increased by $0.88 million to $1.61
million for the three months ended June 30, 2021 compared to $0.73
million for the same period last year primarily as a result of
higher salary and related personnel expenses, noncash share
-based compensation and increased headcount. Higher legal and other
professional services also contributed to the
increase.
Total other income increased by $1.31 million to $1.31 million for
the three months ended June 30, 2021 compared to less than $0.01
million for the same period last year primarily due to increased
grant income under the company’s federal reimbursement grant
with the Canadian government’s Strategic Innovation
Fund.
For the three months ended June 30, 2021, Edesa reported a net loss
of $4.76 million, or $0.36 per common share, compared to a net loss
of $1.77 million, or $0.20 per common share, for the three months
ended June 30, 2020.
Financial Results for the Nine Months Ended June 30,
2021
There were no revenues for the nine months ended June 30, 2021
compared to $0.33 million for the nine months ended June 30, 2020,
reflecting the winddown and discontinuation of sales of product
inventory from legacy operations.
Total operating expenses increased by $13.48 million to $18.20
million for the nine months ended June 30, 2021 compared to $4.72
million for the same period last year:
●
Research
and development expenses increased by $11.65 million to $13.82
million for the nine months ended June 30, 2021 compared to $2.17
million for the same period last year primarily due to milestone
payments related to advancement of the company’s EB05
clinical program, increased external research expenses related to
accelerated activity in the company’s ongoing clinical
studies, increased investigational drug product expenses and an
increase in noncash share-based compensation. Higher
salary and related personnel expenses and patent fees also
contributed to the increase.
●
General
and administrative expenses increased by $1.85 million to $4.38
million for the nine months ended June 30, 2021 compared to $2.53
million for the same period last year primarily as a result of
higher salary and related personnel expenses, noncash
share-based compensation and increased headcount. Higher
legal and other professional services also contributed to the
increase.
Total other income increased by $8.50 million to $8.54 million for
the nine months ended June 30, 2021 compared to $0.04 million for
the same period last year primarily due to increased grant income
under the company’s federal reimbursement grant with the
Canadian government’s Strategic Innovation Fund.
For the nine months ended June 30, 2021, Edesa reported a net loss
of $9.66 million, or $0.83 per common share, compared to a net loss
of $4.35 million, or $0.52 per common share, for the nine months
ended June 30, 2020.
Event Calendar
Edesa management is scheduled to present at the H.C. Wainwright Global
Investment Conference being
held September 13-15, 2021 in New York City. Attendees interested
in meeting with management can schedule one-on-one meetings through
the conference 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. The
company’s two lead product candidates, EB05 and EB01, are in
later stage clinical studies. EB05 is a monoclonal antibody therapy
that the company is developing as a treatment for Acute Respiratory
Distress Syndrome (ARDS). ARDS is a life-threatening form of
respiratory failure, and the leading cause of death among COVID-19
patients. Edesa is also developing an sPLA2 inhibitor, designated
as EB01, as a topical treatment for chronic allergic contact
dermatitis (ACD), a common, potentially debilitating condition and
occupational illness. EB01 employs a novel, non-steroidal mechanism
of action and in two clinical studies has demonstrated
statistically significant improvement of multiple symptoms in ACD
patients. The company is based in Markham, Ontario, Canada, with a
U.S. subsidiary located in Southern California. Sign up for
news
alerts. Connect with Edesa
on Twitter
and LinkedIn.
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: upcoming milestones
in the company's clinical studies, including the timing of
enrollment milestones and data readouts for its COVID-19 and
dermatitis studies; the company’s belief that its product
candidates may provide transformational therapies for a broad range
of inflammatory and autoimmune conditions; and the company’s
intention to maintain the momentum it has achieved during 2021 and
move another step closer to providing new, effective treatment
options for patients . 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.
Contact
Gary Koppenjan
Edesa Biotech, Inc.
(805) 488-2800 ext. 150
investors@edesabiotech.com
Condensed Interim Consolidated Statements of
Operations
(Unaudited)
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Three Months Ended
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Nine Months Ended
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June 30, 2021
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June 30, 2020
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June 30, 2021
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June 30, 2020
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Total Revenues
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$-
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$109,985
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$-
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$328,301
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Expenses:
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Cost
of sales
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-
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1,472
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-
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15,287
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Research
and development
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4,464,347
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1,143,868
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13,819,305
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2,174,680
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General
and administrative
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1,608,232
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733,079
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4,377,507
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2,528,702
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6,072,579
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1,878,419
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18,196,812
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4,718,669
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Loss from Operations
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(6,072,579)
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(1,768,434)
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(18,196,812)
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(4,390,368)
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Other Income (Loss):
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Reimbursement
grant income
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1,306,796
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-
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8,477,261
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-
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Other
income (loss)
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6,273
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2,671
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63,242
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41,436
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Loss before income taxes
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(4,759,510)
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(1,765,763)
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(9,656,309)
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(4,348,932)
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Income tax expense
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-
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-
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800
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800
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Net Loss
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(4,759,510)
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(1,765,763)
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(9,657,109)
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(4,349,732)
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Exchange
differences on translation
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174,128
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68,972
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267,075
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47,178
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Net Comprehensive Loss
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$(4,585,382)
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$(1,696,791)
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$(9,390,034)
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$(4,302,554)
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Weighted
average number of common shares
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13,251,999
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8,859,520
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11,680,294
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8,364,866
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Loss per common share - basic and diluted
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$(0.36)
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$(0.20)
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$(0.83)
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$(0.52)
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Condensed Interim Consolidated Balance Sheets
(Unaudited)
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June 30,
2021
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September 30,
2020
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Assets:
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Cash
and cash equivalents
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$8,052,574
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$7,213,695
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Other
current assets
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6,281,733
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890,323
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Non-current
assets
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2,543,036
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2,658,357
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Total Assets
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$16,877,343
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$10,762,375
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Liabilities, shareholders' equity and temporary
equity:
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Current
liabilities
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$983,467
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$1,529,857
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Noncurrent
liabilities
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90,121
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124,388
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Temporary
equity
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-
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2,476,955
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Shareholders'
equity
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15,803,755
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6,631,175
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Total liabilities, shareholders' equity and temporary
equity
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$16,877,343
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$10,762,375
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Condensed Interim Consolidated Statements of Cash
Flows
(Unaudited)
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Nine Months Ended
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June 30, 2021
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June 30, 2020
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Cash flows from operating activities:
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Net
loss
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$(9,657,109)
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$(4,349,732)
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Adjustments
for noncash items
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2,380,648
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540,945
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Change
in working capital items
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(6,033,149)
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495,384
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Net cash used in operating activities
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(13,309,610)
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(3,313,403)
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Net cash provided by (used in) investing activities
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(7,610)
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15,532
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Net cash provided by financing activities
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13,953,703
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3,864,307
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Effect
of exchange rate changes on cash and cash equivalents
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202,396
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43,676
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Increase
in cash and cash equivalents during the period
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838,879
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610,112
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Cash
and cash equivalents, beginning of period
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7,213,695
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5,030,583
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Cash and cash equivalents, end of period
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$8,052,574
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$5,640,695
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