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EDSA US Equity

Edesa Biotech, Inc.Health Care · Pharmaceutical Preparations · CIK 1540159 · FY ends Sep 30
$5.75
+0.04 (+0.70%)
USD · as of 2026-08-19 · marketstack

EDSA · 10-K · period ended 2020-09-30

← all EDSA documents
filed 2020-12-07 · EDGAR original ↗

Our rendering of the filing — original pagination and typography are not reproduced, and tables are reduced to their short label cells (the figures live on FA). Nothing is summarized: every line below is the filing's own text.

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10-K

1

edsa_10k.htm

ANNUAL REPORT

edsa_10k

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark

One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO

SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period

from to

Commission file number: 001-37619

EDESA BIOTECH, INC.

(Exact name of registrant as specified in its charter)

British Columbia, Canada N/A

100 Spy Court Markham, ON, Canada L3R 5H6

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (289)

800-9600

Securities registered pursuant to Section 12(b) of the

Act:

Name of each exchange on which

Title of each class Trading Symbol registered

Common Shares, without par value EDSA The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the

Act:

None

Indicate by check mark if the registrant is

a well-known seasoned issuer, as defined in Rule 405 of the

Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is

not required to file reports pursuant to Section 13 or Section

15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the

registrant (1) has filed all reports required to be filed by

Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the

registrant was required to file such reports), and (2) has

been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the

registrant has submitted electronically every Interactive Data File

required to be submitted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or

for such shorter period that the registrant was required to submit

such files). Yes☒ No☐

Indicate by check mark whether the registrant is a large

accelerated filer, an accelerated filer, a non-accelerated filer, a

smaller reporting company, or an emerging growth company. See the

definitions of “large accelerated filer,”

“accelerated filer,” “smaller reporting

company,” and “emerging growth company” in Rule

12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

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.☒

Indicate by check mark whether the

registrant is a shell company (as defined in Rule 12b-2 of the

Act). Yes ☐ No ☒

As of March 31, 2020, the last business day of the

registrant’s most recently completed second fiscal quarter,

the aggregate market value of the registrant’s outstanding

common shares held by non-affiliates was approximately $8,422,972,

which was calculated based on 8,859,159 common shares outstanding

as of that date, of which 3,935,968 common shares were held by

non-affiliates at the closing price of the registrant’s

common shares on The Nasdaq Capital Market on such

date.

As of

December 2, 2020, the registrant had 10,523,087 common shares

issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

EDESA BIOTECH, INC.

ANNUAL REPORT ON FORM 10-K

Year Ended September 30,

2020

Table of Contents

Item Page

PART I

1. Business 4

1A. Risk Factors 15

1B. Unresolved Staff Comments 28

2. Properties 28

3. Legal Proceedings 28

4. Mine Safety Disclosures 28

PART II

6. Selected Financial Data 30

7A. Quantitative and Qualitative Disclosures About Market Risk 34

8. Financial Statements and Supplementary Data 34

9A. Controls and Procedures 34

9B. Other Information 35

PART III

10. Directors, Executive Officers and Corporate Governance 36

11. Executive Compensation 39

13. Certain Relationships and Related Transactions, and Director Independence 47

14. Principal Accounting Fees and Services 48

PART IV

15. Exhibits and Financial Statement Schedules 49

SIGNATURES 52

2

FORWARD-LOOKING STATEMENTS AND OTHER MATTERS

This Annual Report on Form 10-K contains certain forward-looking

statements within the meaning of Section 27A of the Securities Act

of 1933, as amended (the Securities Act) and Section 21E of the

Securities Exchange Act of 1934, as amended (the Exchange Act) and,

as such, may involve known and unknown risks, uncertainties and

assumptions. Forward-looking statements are based upon our current

expectations, speak only as of the date hereof, are subject to

change and include statements about, among other things: the

status, progress and results of our clinical programs; our ability

to obtain regulatory approvals for or successfully commercialize

any of our product candidates; our business plans, strategies and

objectives, including plans to pursue collaboration, licensing or

other similar arrangements or transactions; our expectations

regarding our liquidity and performance, including our expense

levels, sources of capital and ability to maintain our operations;

the competitive landscape of our industry; and general market,

economic and political conditions.

Forward-looking statements are those that

predict or describe future events or trends and that do not relate

solely to historical matters. You can generally identify

forward-looking statements as those statements containing the

words “anticipate,”

“believe,” “plan,” “estimate,”

“expect,” “intend,” “may,”

“will,” “would,” “could,”

“should,” “might,” “potential,”

“continue” or other similar expressions. You

should not rely on our forward-looking statements as they are not a

guarantee of future performance. There can be no assurance that

forward-looking statements will prove to be accurate because the

matters they describe are subject to assumptions, known and unknown

risks, uncertainties and other unpredictable factors, many of which

are beyond our control.

Our actual results could differ materially and adversely from those

expressed in any forward-looking statements as a result of various

factors, some of which are discussed in this report in the Part I,

Item 1A. Risk Factors and elsewhere in this report. Risks and

uncertainties include, among others,

our ability to obtain funding for our operations;

our estimates regarding our expenses, revenues, anticipated capital

requirements and our needs for additional financing;

the timing of the commencement, progress and receipt of data from

any of our preclinical and clinical trials;

the expected results of any preclinical or clinical trial and the

impact on the likelihood or timing of any regulatory

approval;

the therapeutic benefits, effectiveness and safety of our product

candidates;

the timing or likelihood of regulatory filings and

approvals;

changes in our strategy or development plans;

the volatility of our common share price;

the rate and degree of market acceptance and clinical utility of

any future products;

the effect of competition;

our ability to protect our intellectual property as well as comply

with the terms of license agreements with third

parties;

our ability to identify, develop and commercialize additional

products or product candidates;

reliance on key personnel; and

general changes in economic or business conditions.

Except as required by law, we undertake no obligation to update

forward-looking statements.

As used in this Annual Report on Form 10-K, “Edesa,”

“the Company,” “we,” “us,” and

“our” refer to Edesa Biotech, Inc. and our consolidated

subsidiaries, except where the context otherwise

requires.

Our logo and other trademarks or service marks of Edesa Biotech,

Inc. appearing in this Annual Report on Form 10-K are the property

of Edesa Biotech, Inc. This Annual Report on Form 10-K contains

additional trade names, trademarks and service marks of other

companies. We do not intend our use or display of other

companies’ trade names, trademarks or service marks to imply

relationships with, or endorsement or sponsorship of us by, these

other companies.

All historical references to common shares, warrants and share

options outstanding prior to June 7, 2019 and the related exercise

prices in this Form 10-K have been adjusted to reflect the effect

of the one for six reverse split, effected at the close of market

on June 7, 2019.

3

PART I

Item 1.BUSINESS.

Overview

We are a biopharmaceutical company focused on acquiring, developing

and commercializing clinical-stage drugs for inflammatory and

immune-related diseases with clear unmet medical needs. Our two

lead product candidates, EB05 and EB01, are in later stage clinical

studies.

EB05

is a monoclonal antibody therapy that we are developing as a

treatment for Acute Respiratory Distress Syndrome (ARDS) in

COVID-19 patients. ARDS is a life-threatening form of respiratory

failure, and the leading cause of death among COVID-19 patients.

ARDS can be also caused by bacterial pneumonia, sepsis, chest

injury and other causes. Specifically, EB05 inhibits toll-like

receptor 4 (TLR4), a key immune signaling protein and an important

mediator of inflammation that has been shown to be activated by

SARS-COV2 as well as other respiratory infections such as

influenza. In multiple third-party studies, high serum levels of

alarmins (damage signaling molecules) that bind to and activate

TLR4 are associated with poor outcomes and disease progression in

COVID-19 patients. Since EB05 has demonstrated the ability to block

signaling irrespective of the presence or concentration of the

various molecules that frequently bind with TLR4, we believe that

EB05 could ameliorate TLR4-mediated inflammation cascades in ARDS

patients, thereby reducing lung injury, ventilation rates and

mortality. In November 2020, we initiated a Phase 2/Phase 3

clinical study of EB05 and are currently enrolling

subjects.

In addition to EB05, we are 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. We initiated a Phase 2B clinical study

evaluating EB01 for chronic ACD in the fourth calendar quarter of

2019 and are currently enrolling subjects.

In addition to our current clinical programs, we intend to expand

the utility of our technologies and clinical-stage assets across

other indications.

Competitive Strengths

We believe that we possess a number of competitive strengths that

position us to become a leading biopharmaceutical company focused

on inflammatory and immune-related diseases,

including:

Validated technology and

drug development capabilities.We believe that the strength of our

technologies has been validated byfavorable clinical data from Phase 1 and

Phase 2 studies; and, our multiple arrangements with third parties

to develop and commercialize their clinical-stage drug

candidates.

Novel pipeline

addressing large underserved markets.Our product candidates include novel

clinical-stage compounds and antibodies that have significant

scientific rationale for effectiveness. By initially targeting

large markets that have significant unmet medical needs, we believe

that we can drive adoption of new products and improve our

competitive position. For example, we believe that the novel,

non-steroidal mode of action of our sPLA2 technology will be

appealing alternatives for managing the symptoms of ACD and

hemorrnoids disease (HD). These diseases impact millions of people

in the United States and Canada, and can have significant effects

on patients’ quality of life and, in the case of many chronic

ACD patients and their employers, significant workplace-related

costs and limitations.

Intellectual property

protection and market exclusivity.We have opportunities to develop our

competitive position through patents, trade secrets, technical

know-how and continuing technological innovation. We have exclusive

license rights in our target indications to multiple patents and

pending patent applications in the United States and in various

foreign jurisdictions. In addition to patent protection, we intend

to utilize trade secrets and market exclusivity afforded to a New

Chemical Entity, where applicable, to enhance or maintain our

competitive position.

Experienced

leadership.Our

leadership team possesses core capabilities in dermatology,

infectious diseases, gastrointestinal medicine, drug development

and commercialization, chemistry, manufacturing and controls, and

finance. Our founder, Chief Executive Officer, Pardeep Nijhawan,

MD, FRCPC, AGAF, is a board-certified gastroenterologist and

hepatologist with a successful track record of building life

science businesses, including Medical Futures, Inc., which was sold

to Tribute Pharmaceuticals in 2015. In addition to our internal

capabilities, we have also established a network of key opinion

leaders, contract research organizations, contract manufacturing

organizations and consultants. As a result, we believe we are well

positioned to efficiently develop novel treatments for inflammatory

and immune-related diseases.

4

Our Business Strategy

We plan to develop and commercialize innovative drug products that

address unmet medical needs for large, underserved markets where

there is limited competition. Key elements of our strategy

include:

Rapidly develop EB05 as

a novel therapy for hospitalized COVID-19 patients.We intend to apply

our expertise in immune modulation and inflammation therapies and

clinical trial management to rapidly develop EB05 as a potential

treatment for ARDS. With potential investigational sites in

multiple jurisdictions, we believe there will be sufficient

patients available and that we can complete the study amid the

global health crisis. Should the antibody treatment demonstrate

promising results at the Phase 2 readout, we plan to continue with

a pivotal Phase 3 study, subject to funding and additional

regulatory approvals in certain

jurisdictions.

Establish EB01 as the

leading treatment for chronic ACD.Our goal is to obtain regulatory approval

for EB01 and commercialize EB01 for use in the treatment of ACD.

Based on promising clinical trial results in which patients treated

with EB01 experienced statistically significant improvements of

their symptoms with minimal side effects, we initiated a Phase 2B

clinical study evaluating EB01. The protocol includes a blinded

interim readout following the completion of the first part of the

Phase 2B study. In November 2020, we completed enrollment of more

than 50% of the patients planned for this part of a

study.

Selectively targeting

additional indications.In addition to our ARDS and ACD programs, we

plan to efficiently generate proof-of-concept data for other

programs where modulation of immune pathways or the inhibition of

sPLA2 activity may have therapeutic benefits. For example, we are

planning a proof-of-concept clinical study of our sPLA2 technology

as a potential treatment for patients with HD, subject to funding

and the resumption of normal, pre-pandemic operations at targeted

clinical sites.

In-license promising

product candidates.We

are applying our cost-effective development approach to advance and

expand our pipeline. Our current product candidates are in-licensed

from academic institutions or other biopharmaceutical companies,

and, from time to time, we plan to identify, evaluate and

potentially obtain rights to and develop additional assets. Our

objective is to maintain a well-balanced portfolio with product

candidates across various stages of development. In general, we

seek to identify product candidates and technology that represent a

novel therapeutic approach, are supported by compelling science,

target an unmet medical need, and provide a meaningful commercial

opportunity. We do not currently intend to invest significant

capital in basic research, which can be expensive and

time-consuming.

Capture the full

commercial potential of our product candidates.If our product candidates are successfully

developed and approved, we may build commercial infrastructure

capable of directly marketing the products in North America and

potentially other major geographies of strategic interest. We also

plan to evaluate strategic licensing arrangements with

pharmaceutical companies for the commercialization of our drugs,

where applicable, such as in territories where a partner may

contribute additional resources, infrastructure and

expertise.

Acute Respiratory Distress Syndrome (ARDS)

Acute

respiratory distress syndrome (ARDS) is a life-threatening form of

respiratory failure, and the leading cause of death among COVID-19

patients. In addition to virus-induced pneumonia, ARDS can be

caused by bacterial pneumonia, sepsis, chest injury and other

causes.

Specifically, ARDS

involves an exaggerated immune response leading to inflammation and

injury to the lungs that deprives the body of oxygen. ARDS is

classified as mild, moderate and severe by using an arterial

partial pressure of oxygen (PaO2) to fraction of inspired oxygen

(FIO2) threshold of 300, 200, and 100 mm Hg, respectively. For

moderate to severe cases, there are currently few meaningful

treatments, other than supplemental oxygen and mechanical

ventilation, and patients suffer high mortality rates. Prior to

COVID-19, ARDS accounted for 10% of intensive care unit admissions,

representing more than 3 million patients globally each year. ARDS

has historically affected approximately 200,000 patients each year

in the United States, resulting in nearly 75,000 deaths annually,

according to medical literature.

Countering the

exaggerated innate immune response in ARDS has been a key area of

interest among researchers. One of the most studied targets has

been Toll-like receptor 4 (TLR4) – a key component of the

innate immune system and an important mediator of inflammation.

Since TLR4 detects molecules found in pathogens and also binds to

endogenous molecules produced as a result of injury, it is a key

receptor on which both infectious and noninfectious stimuli

converge to induce a proinflammatory response. Specifically, TLR4

signaling activates leukocytes to secrete proinflammatory cytokines

(i.e., CXCL10, IL-6,

IFN-b, IL-1b, TNF-a), which under certain circumstances can result

in a “cytokine storm” – a severe immune reaction

in which the body releases too many cytokines into the blood too

quickly.

Such

upregulation of TLR4 and its associated cytokines has been observed

in SARS-CoV-2 as well as other respiratory infections such as

influenza. In multiple third-party studies, high serum levels of

alarmins, such as calprotectin and HMGB1(high mobility group

protein B1), that bind to and activate TLR4 are associated with

poor outcomes and disease progression in COVID-19 patients. In

addition, TLR4 inhibition (antagonism) prevents cytokine production

at a very early stage and has been shown to have a protective

effect. For example, in preclinical studies in mice, it was

demonstrated that administration of a TLR4 antagonist blocked

influenza-induced lethality and ameliorated virus-induced acute

lung injury. Antagonism of TLR4 has also been shown to modulate the

secretion of proinflammatory cytokines (IL-6, CRP, IFNb, TNF-a,

CXCL-10, IL8 and MIP-1b). Based on this data as well as previous

clinical results, we believe that the modulation of the TLR4

provides a compelling opportunity to treat ARDS.

5

EB05

Overview and Status

EB05 is a monoclonal antibody (mAb) that has been engineered to

alter inflammatory signaling by binding to and blocking the

activation of TLR4. Specifically, EB05 dampens TLR4 signaling by

blocking receptor dimerization (and subsequent intracellular

signaling cascades). The drug has demonstrated the ability to block

signaling irrespective of the presence or concentration of the

various molecules that frequently bind with TLR4, known as ligands.

Based on this broad mechanism of action, we believe that EB05 could

ameliorate TLR4-mediated inflammation cascades in ARDS patients,

thereby reducing lung injury, ventilation rates and mortality. EB05

has demonstrated the ability to resolve fever and stabilize heart

and breathing rates in human subjects that were injected with

lipopolysaccharide (LPS) – a potent inducer of the acute

systemic inflammation. In previous Phase 1 and Phase 2 clinical

studies, EB05 has demonstrated favorable safety and tolerability

profiles.

Our

Phase 2/3 protocol has been approved in Canada. We have also

received approved for the Phase 2 portion of our study in the

United States. The company is currently enrolling patients at U.S.

and Canadian hospitals.

As

planned, our Phase 2/Phase 3 study is an adaptive, multicenter,

randomized, double-blind, placebo-controlled trial to evaluate the

efficacy and safety of EB05 in adult hospitalized COVID-19

patients. We expect to enroll approximately 316 patients. Patients

will be intravenously infused with EB05 or placebo.

Standard-of-care COVID-19 treatment will be given to all patients.

The total follow-up duration of each patient will be 28 days.

Should the drug treatment demonstrate promising results at the

Phase 2 readout, the protocol allows for enrollment to continue as

a pivotal Phase 3 study in Canada. In the U.S., we expect to have

an end of Phase 2 meeting with the U.S. Food and Drug

Administration (FDA) to finalize the Phase 3 protocol.

Previous Phase 1 and Phase 2 Clinical Studies of EB05

In a randomized, double blind, placebo-controlled, PK/PD guided

Phase 1 study, 60 healthy volunteers were given escalating, single

intravenous infusion of EB05 in the absence and presence of an in

vivo LPS challenge. Forty-eight (48) subjects were exposed to

escalating doses between 0.001 to 15 mg/kg in Part 1 of the study.

The highest dose of EB05 displayed a pharmacological effect

(defined by 80% inhibition of cytokine after ex vivo LPS challenge)

lasting up to 14 weeks. Twelve (12) subjects were exposed to an in

vivo LPS challenge (2 ng/kg) in Part 2 of the study. Of these, 3

received EB05 at a dose of 0.01 mg/kg and 9 at a dose of 0.25

mg/kg. No safety signals were identified after administration up to

a dose of 15 mg/kg.

In a previous Phase 2 clinical study, EB05 was administered to 57

rheumatoid arthritis patients and demonstrated a favorable safety

and tolerability profile. Patients received intravenous infusions

of EB05 at 5mg/kg every 2 weeks for a total of 6 doses. EB05

blocked cytokine release after ex vivo LPS challenge, with full

effect from a dose of 1 mg/kg onwards. The duration of inhibition

of cytokine release was dependent on the dose and lasted up to 14

weeks at a dose of 15 mg/kg. The pharmacological effects of EB05

after the ex vivo and in vivo LPS challenges were comparable. At a

dose of 0.25 mg/kg, EB05 prevented the laboratory and clinical

changes induced by an in vivo LPS administration, up to 22 days.

LPS effects were fully recovered between 22 and 40 days after EB05

administration.

Allergic Contact Dermatitis

Contact dermatitis is one of the most common occupational and

work-related skin conditions in the United States. The disease can

be either irritant contact dermatitis or ACD. Together, these

conditions have been estimated to cost up to $2 billion annually as

a result of lost work, reduced productivity, medical care and

disability payments. Based on published reports and U.S. insurance

claims data, we estimate that there are more than 2.5 million

people in the United States with ACD, including more than 1 million

people who have chronic ACD. Since primary care physicians do not

always distinguish between irritant and allergic contact

dermatitis, a potentially larger undiagnosed patient population may

also be present.

ACD is caused by an allergen interacting with skin and usually

occurs on areas of the body that have been directly exposed to the

environment, with a high prevalence on the hands and face. Common

allergens associated with ACD include plants, metals, plastics and

resins, rubber additives, dyes, biocides, and various cosmetics.

The disease is characterized by inflammation, erythema (redness),

pruritus (itchiness), and blistering of the skin. Inflammation can

vary from mild irritation and redness to open sores, depending on

the type of irritant, the body part affected and the degree of

sensitivity. ACD can become chronic if not treated or if the

causative allergen is not removed. In many chronic cases, the

causative allergen is unknown or difficult to avoid (as an example,

the allergen is present in the workplace).

6

The immune mechanisms involved in ACD are well documented. During

the initial contact with the offending allergen, the immune system

is sensitized. Upon subsequent contact, a delayed-type

hypersensitivity reaction (Type IV) occurs at the point of contact

between the skin and the allergen. As a cell-mediated response, the

immune reaction primarily involves the interaction of T cells with

antigens rather than an antibody response. More specifically, ACD

involves an exogenous substance binding a cell surface protein to

form a hapten that is recognized as a foreign antigen by the immune

system. Haptens are known to signal through toll-like receptors, a

family of receptors involved in the innate immune system

recognizing pathogens, leading to the induction of pro-inflammatory

cytokines such as interleukin (IL)-1b. EB01 has been shown in

preclinical studies to inhibit the production of pro-inflammatory

cytokines induced via toll-like receptor signaling (IL-1b, IL-6,

IL-8, MIP-1a, and TNFa), suggesting that EB01 may address the

underlying disease mechanism of ACD.

Current Treatments

Generally, dermatologists view chronic ACD from both a duration and

recurrence perspective, considering how often and how long symptoms

persist. Chronic disease affects patients over a prolonged period,

typically greater than six months or even years. These chronic

patients have either frequent intermittent exposure or continuous

exposure. Since inflammation in ACD is driven by external exposure

to an allergen, the severity of ACD does not necessarily correlate

with body surface area, as is often the case with other

dermatological diseases.

Current treatment plans begin by attempting to identify and remove

exposure to the allergen. However, the offending allergen(s) is

frequently not identified, and even when it is, avoiding exposure

is often not possible (e.g., present in the workplace), according

to our market research. To our knowledge, there are no drug

treatment options specifically indicated for ACD. As such,

physicians must utilize agents approved for other dermatological

conditions. Topical corticosteroids are the most commonly used

therapeutic intervention for ACD but cannot be used continuously

since they have well-known side-effects including skin thinning,

stretch marks, acne, testicular atrophy, nosebleeds, stinging,

burning and dryness. Other topical treatments for ACD include

immunomodulators such as topical calcineurin inhibitors. However,

these are less efficacious than topical corticosteroids and have an

FDA “black box warning” for risk of malignancies.

Systemic corticosteroids can be used for acute control of severe

cases of ACD but have safety concerns including

hypothalamic-pituitary-adrenal axis suppression, growth suppression

and loss of bone-density, thereby limiting the utility of steroids

for treating chronic disease. Finally, patients may be treated with

systemic immunomodulators, which have a series of “black box

warnings” and associated safety issues. Systemic therapies

also need to be tapered off each time the physician wants to patch

test allergens to identify the source of a patient’s

ACD.

EB01

Overview and Status

EB01 is a topical vanishing cream containing

a novel, non-steroidal anti-inflammatory compound. EB01 exerts its

anti-inflammatory activity through the inhibition of certain

pro-inflammatory enzymes known as secretory phospholipase 2, or

sPLA2. These enzymes are secreted by immune cells

upon their activation and produce arachidonic acid via phospholipid

hydrolysis, which, in turn, initiates a broad inflammatory cascade.

The sPLA2 enzyme family plays a key role in

initiating inflammation associated with many diseases, and we

believe that targeting the sPLA2 enzyme family with enzyme inhibitors will

have a superior anti-inflammatory therapeutic effect because the

inflammatory process will be inhibited at its inception rather than

after inflammation has occurred.

In October 2019, we initiated patient enrollment for a multi-center

Phase 2B clinical study evaluating EB01 as a monotherapy for

patients with moderate to severe chronic ACD. The double-blind,

vehicle-controlled study will primarily evaluate the safety and

efficacy of EB01 in ACD patients. Investigators will also evaluate

symptom reduction, quality of life and dose-relationships among

various strengths of EB01 cream as secondary and exploratory

measures. We plan to perform a blinded interim analysis following

the completion of the first cohort to determine the total number of

patients for the second part of the study. The sample-size adaptive

protocol contemplates up to 166 total subjects.

In April 2020, we filed a protocol amendment with the FDA. The

amendment provides for, among other changes, a reduction in the

number of in-person office visits, allowances for remote telehealth

appointments and other procedural updates to simplify enrollment

Source: SEC EDGAR (public domain) · 10-K for the period ended 2020-09-30, filed 2020-12-07 · accession 0001654954-20-013236

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