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8-K - CURRENT REPORT - Edesa Biotech, Inc. | edsa_8k.htm |
Exhibit 99.1
Edesa Biotech Reports Fiscal 1st Quarter 2020 Results
TORONTO,
ON / ACCESSWIRE / February 13, 2020 / Edesa Biotech, Inc.
(Nasdaq: EDSA), a clinical-stage biopharmaceutical company, today
reported financial results for the three months ended December 31,
2019 and provided an update on its business.
During the quarter, Edesa expanded an ongoing Phase 2b study of its
lead product candidate, EB01, following positive safety data in
healthy volunteers. The company is developing EB01 as a monotherapy
for patients with chronic allergic contact dermatitis (ACD), a
debilitating disease that is frequently caused by allergens present
in the workplace. Edesa plans to expand the utility of its
anti-inflammatory technology, which forms the basis of EB01, into
additional indications, including hemorrhoids disease (HD). The
company expects to initiate a proof of concept study in HD later
this year. Following the quarter end, in January, the company
completed a $4.36 million equity financing, which included
significant participation from Edesa’s current institutional
investors and insiders.
Dr. Par Nijhawan, Chief Executive Officer of Edesa, said that the
company intends to move rapidly to initiate the proof of concept
study in HD. “This indication represents a significant
expansion and market opportunity for our anti-inflammatory
technology platform. We also plan to identify new clinical assets
and technologies that fit our strategy of developing new treatments
that address unmet medical needs, have large addressable markets
and are complementary to the portfolios of larger biopharmaceutical
companies.”
Edesa’s Chief Financial Officer, Kathi Niffenegger, reported
that expenditures during the quarter reflected increased activity
levels in the company’s clinical programs as well public
company expenses that Edesa did not incur as a privately held
company. “The change in our operational expenses over the
comparable period reflect the ongoing transformation of the company
and the priority we have placed on advancing our EB01 program,
building on our technology platform and delivering on clinical and
corporate milestones.”
Financial Results for the Three Months Ended December 31,
2019*
Total revenues for the three months ended December 31, 2019 were
$0.11 million, reflecting sale of product inventory obtained in the
reverse acquisition completed in June 2019. There were no revenues
for the three months ended December 31, 2018.
Total operating expenses increased by $0.80 million to $1.21
million for the three months ended December 31, 2019 compared to
$0.41 million for the same period last year:
●
Cost
of sales and services was less than $0.01 million for the three
months ended December 31, 2019, reflecting the sales of product
inventory obtained in the reverse acquisition. There were no
product sales in the same period last year.
●
Research
and development expenses increased by $0.27 million to $0.53
million for the three months ended December 31, 2019 compared to
$0.26 million for the same period last year. The increase was
primarily due to increased external research expenses related to
the initiation of clinical studies for the company’s EB01
drug product candidate as well as higher personnel
expenses.
●
General
and administrative expenses increased by $0.53 million to $0.68
million for the three months ended December 31, 2019 compared to
$0.15 million for the same period last year. The increase was
primarily due to increased salaries and related personnel expenses,
increased legal and professional fees, and public company
expenses.
For the three months ended December 31, 2019, Edesa reported a net
loss of $1.09 million, or $0.15 per basic share, compared to a net
loss of $0.36 million, or $0.11 per basic share, for the three
months ended December 31, 2018.
* Financial results for any periods ended prior to June 7, 2019
reflect the financials of the company’s subsidiary Edesa
Biotech Research, Inc. on a standalone basis.
Working Capital
At December 31, 2019, the company had working capital of $4.12
million. Cash and cash equivalents totaled $4.33
million.
On January 8, 2020, the company closed a registered direct offering
of common shares and concurrent private placement of purchase
warrants. The company received aggregate gross proceeds in the
offering of $4.36 million, before deducting fees to the placement
agent and other estimated offering expenses payable by the company.
The company intends to use the net proceeds from the financing for
general corporate purposes, which may include working capital,
capital expenditures, and research and development
expenses.
1
Calendar
Edesa management will be attending the American Contact Dermatitis
Society Annual Meeting and Dermatology Innovation Forum, both on
March 19, 2020 in Denver, Colorado; and the Bio-Europe Spring 2020
Conference being held March 23-25, 2020 in Paris. Members of the
investment or biopharma communities interested in meetings with
management can schedule one-on-ones through the conference online
systems 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
efficiently developing innovative treatments that address
significant unmet medical needs. Edesa’s lead product
candidate, EB01, is a novel non-steroidal anti-inflammatory
molecule (sPLA2 inhibitor) for the treatment of chronic allergic
contact dermatitis which has demonstrated statistically significant
improvements in multiple clinical studies. A Phase 2b clinical
study of EB01 was initiated in October 2019. Edesa also intends to
expand the utility of its sPLA2 inhibitor technology, which forms
the basis for EB01, across multiple indications and expand its
portfolio with assets that can drive long-term growth
opportunities. The company is based in Markham, Ontario, Canada,
with U.S. offices in Southern California.
Edesa Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to: the company’s
plans to initiate a proof of concept study in HD later this year
and its plans to expand its pipeline with new clinical assets and
technologies. 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 and the
timing and success of submission, acceptance and approval of
regulatory filings. Many of these factors that will determine
actual results are beyond the company's ability to control or
predict. For a discussion of further risks and uncertainties
related to Edesa's business, please refer to Edesa’s public
company reports filed with the U.S. Securities and Exchange
Commission and the British Columbia Securities Commission. All
forward-looking statements are made as of the date hereof and are
subject to change. Except as required by law, Edesa assumes no
obligation to update such statements.
Contacts
Gary Koppenjan
Edesa Biotech, Inc.
(805) 488-2800 ext. 150
investors@edesabiotech.com
2
Condensed Interim Consolidated Balance Sheets
(Unaudited)
|
December 31,
|
September
30,
|
|
2019
|
2019
|
|
|
|
Assets:
|
|
|
Cash,
cash equivalents and short-term investments
|
$4,326,840
|
$5,030,583
|
Other
current assets
|
500,365
|
614,123
|
Operating
lease right-of-use assets
|
213,848
|
-
|
Property
and equipment, net
|
48,309
|
73,058
|
|
|
|
Total Assets
|
$5,089,362
|
$5,717,764
|
|
|
|
Liabilities and Shareholders' Equity:
|
|
|
Current
liabilities
|
$704,162
|
$461,634
|
Noncurrent
liabilities
|
151,514
|
$-
|
Shareholders'
equity
|
4,233,686
|
5,256,130
|
|
|
|
Total Liabilities and Shareholders' Equity
|
$5,089,362
|
$5,717,764
|
3
Condensed Interim Consolidated Statements of
Operations
(Unaudited)
|
Three Months Ended
|
|
|
December 31,
2019
|
December 31,
2018
|
|
|
|
Total Revenues
|
$107,800
|
$-
|
|
|
|
Expenses:
|
|
|
Cost
of sales and services
|
3,778
|
-
|
Research
and development
|
527,998
|
257,391
|
General
and administrative
|
681,706
|
148,350
|
|
1,213,482
|
405,741
|
|
|
|
Loss from operations
|
(1,105,682)
|
(405,741)
|
|
|
|
Other income (loss)
|
12,149
|
40,892
|
Income tax expense
|
800
|
-
|
|
|
|
Net loss
|
(1,094,333)
|
(364,849)
|
|
|
|
Exchange
differences on translation
|
18,114
|
17,760
|
|
|
|
Net loss and comprehensive loss
|
$(1,076,219)
|
$(347,089)
|
|
|
|
Weighted
average number of common shares outstanding
|
7,504,468
|
3,239,902
|
|
|
|
Loss per share - basic and diluted
|
$(0.15)
|
$(0.11)
|
4
Condensed Interim Consolidated Statements of Cash
Flows
(Unaudited)
|
Three Months Ended
|
|
|
December 31,
2019
|
December 31,
2018
|
|
|
|
Cash flows from operating activities:
|
|
|
Net
loss
|
$(1,094,333)
|
$(364,849)
|
Adjustments
for:
|
|
|
Depreciation
and amortization
|
2,403
|
412
|
Straight-line
operating lease expense
|
19,439
|
-
|
Cash
payments on operating lease
|
(19,440)
|
-
|
Share-based
compensation
|
8,775
|
11,434
|
Change
in working capital items
|
293,444
|
(29,343)
|
|
|
|
Net cash used in operating activities
|
(789,712)
|
(382,346)
|
|
|
|
Net cash used in investing activities
|
(477,293)
|
-
|
|
|
|
Net cash provided by financing activities
|
45,000
|
-
|
|
|
|
Effect
of exchange rate changes on cash and cash equivalents
|
18,472
|
19,214
|
|
|
|
Decrease
in cash and cash equivalents during the period
|
(1,203,533)
|
(363,132)
|
Cash
and cash equivalents, beginning of period
|
5,030,583
|
3,730,230
|
Cash and cash equivalents, end of period
|
$3,827,050
|
$3,367,098
|
5