Edesa Biotech raises capital to advance CXCL10 antibody program

Edesa Biotech, Inc. has successfully raised $15 million through a private placement offering, a critical move that will help advance its CXCL10 antibody program and other investigational therapies targeting inflammatory and immune-related diseases. The financing, conducted at-the-market under Nasdaq rules, was led by Velan Capital and included participation from both new and existing healthcare-focused institutional investors.

With the latest capital infusion, Edesa Biotech funding is expected to support the development of EB06, an experimental monoclonal antibody therapy being investigated as a treatment for nonsegmental vitiligo, a chronic autoimmune disorder that causes skin discoloration. The funding will also be used for working capital and general corporate purposes, ensuring the company maintains a steady trajectory toward clinical advancement.

Who Invested in Edesa Biotech’s Private Placement Offering?

The private placement offering saw strong institutional backing, demonstrating investor confidence in Edesa’s biopharmaceutical pipeline. Velan Capital led the financing, joined by Nantahala Capital, Rubric Capital Management LP, Stonepine Capital Management, and Broadfin Holdings LLC.

In addition to institutional investors, Edesa Biotech’s directors and officers personally contributed approximately $1.1 million, reinforcing insider confidence in the company’s potential. Unlike traditional equity financing, this transaction was conducted without the involvement of placement agents, underwriters, brokers, or dealers, ensuring that all proceeds directly support Edesa’s research and development efforts.

Under the terms of the private placement, Edesa Biotech issued 834 newly designated Series B-1 convertible preferred shares, each priced at $10,000, alongside 3,468,746 common shares priced at $1.92 per share. The offering closed on February 12, 2025, marking a crucial step in securing long-term funding for the company’s pipeline.

What Is Edesa Biotech’s CXCL10 Antibody Program and Why Is It Important?

At the core of this financing round is Edesa Biotech’s CXCL10 antibody program, which aims to develop targeted therapies for inflammatory diseases. The company’s lead candidate, EB06, is a monoclonal antibody designed to inhibit CXCL10, a pro-inflammatory chemokine linked to autoimmune conditions such as nonsegmental vitiligo.

Vitiligo, a disorder that leads to the loss of skin pigmentation, affects millions globally, with nonsegmental vitiligo being the most common and widespread form. There is currently no cure, and available treatments are often limited in effectiveness. Edesa Biotech’s funding will enable the company to advance EB06 into a Phase 2 clinical trial, a critical milestone that could position the drug as a potential breakthrough therapy.

How Does This Funding Strengthen Edesa Biotech’s Broader Drug Pipeline?

Beyond its CXCL10 antibody program, Edesa Biotech is also actively developing treatments for serious respiratory and dermatological conditions. The company’s most advanced respiratory drug candidate, EB05 (paridiprubart), is being evaluated as a potential treatment for Acute Respiratory Distress Syndrome (ARDS), a life-threatening respiratory failure condition.

EB05 has already received two funding awards from the Government of Canada, highlighting its potential in treating ARDS, particularly in cases linked to severe viral infections. Additionally, Edesa is preparing to file an Investigational New Drug (IND) application for EB07 (paridiprubart) in the United States, paving the way for a Phase 2 clinical trial in pulmonary fibrosis patients.

In the dermatology sector, Edesa Biotech’s portfolio includes EB01 (1.0% daniluromer cream), a Phase 3-ready topical therapy for allergic contact dermatitis (ACD). ACD is a common occupational skin condition, and EB01 has shown promising results in addressing moderate-to-severe cases.

What Are the Terms and Limitations of Edesa Biotech’s Convertible Preferred Shares?

As part of the private placement structure, the Series B-1 Preferred Shares were issued with a stated value of $10,000 per share. These shares can be converted into common shares at a price of $1.92 per share, subject to certain restrictions designed to prevent excessive ownership concentration.

To manage dilution and ensure fair market participation, individual investors are restricted to a maximum beneficial ownership of 4.99%, although they have the option to increase this cap to 9.99%. These limitations are intended to balance investor participation while maintaining Edesa Biotech’s stock stability.

What Leadership Changes Have Been Announced Following the Private Placement?

Alongside the private placement offering, Edesa Biotech has also announced a significant board appointment. David Liu, a Senior Analyst at Velan Capital, has officially joined Edesa’s Board of Directors, effective immediately upon the offering’s closure.

Liu’s appointment is part of an Investor Rights Agreement, which allows institutional investors a direct role in shaping Edesa’s strategic direction. His background in healthcare investments and capital markets is expected to bring valuable financial and industry insights as the company continues its drug development efforts.

What’s Next for Edesa Biotech Following This Funding Round?

With $15 million in fresh capital, Edesa Biotech is now positioned to accelerate its CXCL10 antibody program and further its Phase 2 clinical trials for EB06. The company’s broader pipeline, including treatments for ARDS, pulmonary fibrosis, and allergic contact dermatitis, will also benefit from the strengthened financial foundation.

Edesa’s commitment to developing host-directed therapies for immuno-inflammatory diseases aligns with the growing industry demand for targeted biologics and precision medicine. As clinical trials progress, investor confidence in Edesa Biotech funding strategies remains strong, reinforcing the company’s potential in the competitive biopharmaceutical market.

Edesa Biotech’s private placement offering marks a significant milestone in its research and development journey. By securing funding from institutional investors and company insiders, Edesa ensures that its CXCL10 antibody program and other therapeutic candidates continue progressing toward potential commercialization.

As the company advances through key clinical milestones, its growing pipeline of immune-targeted therapies positions it as a promising player in the biotechnology sector. With investor support and a strong scientific foundation, Edesa Biotech is well-prepared to deliver innovative solutions for patients suffering from inflammatory and immune-related diseases.