Edesa Biotech Inc., a Canadian startup developing dermatology and anorectal therapies, has raised a $7 million series A financing to fund a phase IIb trial of EB-01, a topical secretory phospholipase A2 (sPLA-2) inhibitor therapy it is developing for the treatment of allergic contact dermatitis.

Lumira Capital, one of Canada's largest health care funds, led the round, which also included participation from Pharmascience Inc., the largest pharmaceutical employer in Quebec, Barcelona-based Inveready Technology Investment Group and a number of Canadian family offices.

In addition to its investment, Pharmascience division Pendopharm in-licensed three assets targeting anal fissures and hemorrhoids, candidates it said would begin entering the clinic over the next six to 12 months.

Edesa CEO and founder Par Nijhawan told BioWorld that his team hopes to start the U.S.-Canadian trial within the next six to 12 months, following filings of an FDA investigational new drug application and a clinical trial application with Health Canada. The study will evaluate the right dose for the new chemical entity and seek to build on earlier studies that have shown "significant efficacy" for the drug, he said.

The molecule is conjugated to hyaluronic acid and acts on the arachidonic acid pathway, an approach that allows it to inhibit inflammation at the dermis level.

Nijhawan told BioWorld that his team's goal is to be the first company with an approved product for contact dermatitis, or localized skin inflammation elicited by an exogenous substance, a condition estimated to affect about 15 million to 16 million people in the U.S. Though calcineurin inhibitors and corticosteroids are often used to treat contact dermatitis, chronic usage, especially of corticosteroids, can come with its own side effects. There is no FDA-approved therapy for the condition and avoidance of its triggers can be difficult, especially when repeated exposures to irritants at home or work are involved.

In addition to EB-01, the Markham, Ontario-based company is working on EB-02, an alternate formulation of the active ingredient in EB-01, for the treatment of hemorrhoids. Nijhawan said that despite widespread use of hemorrhoid medications, most if not all of which were approved under the FDA's old drug efficacy study implementation program, "nobody has actually done a modern day clinical trial on these chemicals to prove that they do or don't work."

Both programs are in-licensed from Yissum Research Development Co., the technology transfer company of the Hebrew University of Jerusalem.

In addition to EB-01 and EB-02, Edesa is also working on the earlier-stage candidate EB-04 (formerly ASF-1096), a topical formulation of the anti-inflammatory and immunomodulatory R-salbutamol sulphate it in-licensed from Cipher Pharmaceuticals Inc., of Mississauga, Ontario, last year. As with EB-01 and EB-02, Edesa has global rights to the program. Nijhawan said he hopes the company will be able to develop new clinical data for EB-04 within the next 12 months to 36 months.

Prior to founding Edesa, Nijhawan was the CEO of the specialty pharma company Medical Futures Inc., which he sold to Tribute Pharmaceuticals for $25 million in cash and stock in mid-2015. Tribute was later acquired by Pozen Inc., which is now part of Aralez Pharmaceuticals Inc.

Founded in 2015, Edesa currently employs six people.