EDSA - Edesa stock slumps 30% amid skin rash drug's mixed phase 2b trial results

Edesa Biotech ( NASDAQ: EDSA ) stock fell ~33% on Tuesday after the company reported data from a phase 2b trial of skin disorder therapy EB01

The company is exploring EB01 as a monotherapy for moderate-to-severe chronic Allergic Contact Dermatitis (ACD) — an itchy rash caused by direct contact with a substance or an allergic reaction to it.

The trial evaluated EB01 in ~200 people, who were treated for 28 days with either EB01 cream (2.0%, 1.0% or 0.2%) or a placebo/vehicle cream.

Edesa said that 1.0% EB01 cream showed a statistically significant improvement over placebo. For the main goal, patients with 1.0% EB01-treated lesions showed a ~60% average improvement in symptoms from baseline at day 29 on the Contact Dermatitis Severity Index (CDSI) versus ~39% for placebo.

The effect was also seen at 15 days (44% for 1.0% EB01 versus 29% for placebo) and continued at follow-up (64% for 1.0% EB01 verus 44% for placebo), the company added.

For the secondary efficacy goal, 53% of patients with 1.0% EB01-treated lesions achieved a score of 'clear' or 'almost clear' with at least a 2-point improvement from baseline after treatment at day 29, compared to 29% of patients in the placebo group, according to the company.

Edesa noted that the 2.0% and 0.2% formulations did not show significant differences compared to placebo.

For patients on 2.0% EB01, (n=81), treated lesions showed a 38.81% average improvement in symptoms from baseline at day 29 on CDSI versus 39.25% for placebo (n= 84).

For 2.0% EB01, 24.7% of patients (out of total 81), achieved a score of 'clear' or 'almost clear' with at least a 2-point improvement from baseline, compared to 28.6% (out of total 84) of patients in the placebo group.

"We are pleased that the study findings demonstrated that the 1.0% EB01 cream helped patients with moderate-to-severe disease significantly reduce their symptoms and achieve clear or almost clear skin in more than half the cases," said Edesa CEO Par Nijhawan.

Edesa noted that it is preparing for an end of phase 2 meeting with FDA following full analysis which it expects to complete by midyear.

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