Shares of Edesa Biotech Inc (NASDAQ:EDSA) surged after the biotech company was granted regulatory approval to initiate COVID-19 study. The company has been granted expedited approval by Health Canada to start a Phase 2/3 clinical study into EB05. Edesa’s investigational drug being developed to treat moderate to severe COVID-19 patients. The company announced that the EB05 drug product is now available and is seeking regulatory approval to speed up the initiation and rollout of the trial. Following the announcement, the company’s shares rose more than 115% Monday morning.
EB05’s Promising Potential
Edesa says the drug is a monoclonal antibody and is very promising in reducing the release of proinflammatory cytokines that are common in severe COVID-19 patients. In particular, the drug suppresses the toll-like receptor 4 (TLR4) signaling and could be an important part of the innate immune system. The drug is also promising in reducing inflammation that causes acute lung injury and is said to be activated by SARS and Influenza infection.
The company is optimistic that this drug will reduce the number of ICU patients and intubation/ventilation procedures and save lives based on previous clinical data and the mechanism of action.
In a statement, Edesa CEO, Dr. Par Nijhawan, said the expedited review process plus the subsequent approval of the company’s Clinical Trial Application is a milestone in developing new drugs that can be used to treat underlying conditions induced by the SARS-CoV-2 infection. The Phase 2/3 study “will be an adaptive, multicenter, randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of EB05 in adult hospitalized patients with moderate to severe COVID-19.” In this study, Edesa intends to admit up to 355 candidates in the first phase of the trial.
If the drug produces positive results in Phase 2, it will proceed to a pivotal Phase 3 study. According to Dr. Nijhawan, COVID-19 patients often have inflammation and injury to the lungs caused by an overactive immune response. Moderate to severe patients are at risk of acute respiratory distress syndrome, life-threatening form of respiratory failure. It is a major cause of death among COVID-19 patients.