Edesa Biotech (EDSA) Stock Doubles On FDA News

Edesa Biotech EDSA Stock News

Edesa Biotech Inc (NASDAQ: EDSA) is up more than 100% in mid-day trading Thursday after the company announced that it has received a nod from the FDA. According to the announcement, the company received the go ahead to begin a Phase 2b clinical trial.

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EDSA Stock Rockets On FDA Nod

In a press release issued in the pre-market hours, Edesa Biotech said that the FDA has given it the green light to proceed with the clinical investigation of EB01. EB01 is a novel sPLA2 inhibitor.

At the moment, EDSA is working to develop EB01 as a potential treatment option for patients with chronic allergic contact dermatitis. With the FDA’s nod of approval, the company will move into a Phase 2b study of the drug, with the first patient expected to be enrolled in the coming quarter.

In a statement, Dr. Par Nijhawan, CEO at EDSA, had the following to offer:

There are limited options for ACD patients and we have been pleased with the level of interest from physicians in the U.S.

The company is committed to rapidly advancing our clinical plans and remains on track to initiate our clinical study for EB01.

This is an active and exciting time for Edesa and we look forward to providing clinical and business updates over the coming quarter.

This Is Huge News

The news that the Edesa Biotech is moving forward with the development of EB01, a treatment that could prove to be tremendously valuable. In fact, experts suggest that the dermatitis drug market could reach more than $6 billion annually by the year 2022.

Considering the fact that the market cap of EDSA sits at around $60 million at the moment, an entrance into this market and capture of even a small percentage of it could prove to be significant for the company. Not to mention that if all goes well, chances are that EB01 will take much more than a small percentage of the market.

At the moment, Alergic Contact Dermatitis is treated with steroids. Once a breakout occurs, atopic steroids are introduced, leading to a reduction in swelling and relief from symptoms. However, EB01 aims to attack the problem before it happens.

The treatment is not a steroid. In fact, it is designed to inhibit the inflammatory process at its inception, meaning that patients with chronic allergic contact dermatitis may soon have an option to avoid uncomfortable reactions associated with the ailment. As such, it could quickly become a leading option among chronic ACD patients.

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Final Thoughts

The truth of the matter is that a Phase 2b study is still early in the game. The company will need to do well in this trial and at least one more (pivotal Phase 3) in order to bring EB01 to market.

Nonetheless, with today’s news, it’s clear that Edesa Biotech is making important steps on the path to the potential approval of the drug. Should it become approved, it could become a goose that lays the golden eggs for the company and its investors.

What Do You Think?

Where do you think EDSA stock is headed moving forward? Join the discussion in the comments below!

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