Edesa Biotech (NASDAQ: EDSA) reported a quarterly net loss of $5.4 million for the third quarter ended June 30, 2026, marking a significant deterioration in profitability compared to the prior year. The company’s loss per share widened to $(0.60), missing the analyst consensus estimate of $(0.58) by 3.45%. This represents a 140% year-over-year expansion from the $(0.25) per share loss recorded in Q3FY25.

The widening loss was primarily driven by a sharp increase in operating expenses, which rose $3.6 million to $5.5 million from $1.9 million in the same period last year. Research and development (R&D) expenses accounted for the bulk of this increase, surging 344% to $4.0 million from $0.9 million. The company attributed this spike to increased manufacturing-related activities and other preparations for its planned Phase 2 clinical study of EB06 in vitiligo patients. General and administrative (G&A) expenses also increased by $0.6 million to $1.6 million, driven by higher noncash share-based compensation and professional fees.

| Metric: | Q3FY26 | Estimate | Q3FY25 | Change | | ---: | :--- | :--- | :--- | :--- | | EPS ($): | (0.60) | (0.58) | (0.25) | -140% | | Net Loss ($M): | 5.4 | - | 1.7 | +218% | | Operating Expenses ($M): | 5.5 | - | 1.9 | +189% | | R&D Expenses ($M): | 4.0 | - | 0.9 | +344% |

Operational Progress

Despite the financial headwinds, Edesa highlighted operational milestones during the quarter. The company completed preparations for its Phase 2 clinical study of EB06, an anti-CXCL10 monoclonal antibody for moderate-to-severe nonsegmental vitiligo. Subsequent to quarter-end, Edesa began activating its first investigational sites, with patient recruitment expected to commence in Canada in the coming weeks.

In its respiratory program, the company conducted exploratory analyses evaluating paridiprubart’s effect in ARDS patients with concurrent acute kidney injury (AKI). In this population, paridiprubart plus standard of care was associated with significant mortality reductions and improvements in the kidney-specific MAKE30 composite endpoint. Edesa continues to evaluate potential regulatory pathways and advance strategic discussions for the program.

Nine-Month Performance and Balance Sheet

For the nine months ended June 30, 2026, Edesa reported a net loss of $11.9 million, or $(1.40) per share, compared to a net loss of $5.0 million, or $(0.95) per share, in the same period last year. Total operating expenses for the nine-month period increased by $6.8 million to $12.2 million.

At June 30, 2026, Edesa held cash and cash equivalents of $10.3 million, down slightly from $10.8 million at September 30, 2025. Working capital stood at $6.9 million. The decrease in cash was partly offset by financing activities, which provided $6.8 million in net cash during the nine-month period.

What the Numbers Show

The divergence between the actual EPS miss and the prior year’s performance highlights the intensifying cost structure associated with clinical-stage development. While the $(0.60) EPS miss against the $(0.58) estimate is narrow in absolute terms, the underlying driver—a 344% surge in R&D expenses—signals a material shift in capital deployment. With total other income declining to $112,000 from $154,000 due to reduced government reimbursement funding, the company’s operational burn rate is increasingly reliant on its core cash reserves and potential future financing or partnership deals for paridiprubart.

Edesa Biotech, Inc. has entered into a securities purchase agreement for a private investment in public equity (PIPE) financing expected to yield gross proceeds of approximately $3.5 million, before deducting offering expenses payable by the company. The financing, led by Edesa's Chief Executive Officer and healthcare-focused investors, aims to support the continued advancement of the company's vitiligo program and its drug candidate, paridiprubart, as well as provide working capital and general corporate purposes. The PIPE is expected to close on or about June 15, 2026, subject to customary closing conditions.

The company is selling an aggregate of 729,241 common shares without an agent, underwriter, broker, or dealer. The purchase price is set at $4.69 per common share for investors and $5.21 per common share for Edesa's Chief Executive Officer. The securities were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder, and have not been registered under the Act.

Key Transaction Details

Edesa has agreed to file a registration statement with the U.S. Securities and Exchange Commission (SEC) registering the resale of the common shares within 45 days of the closing. The company plans to file a Current Report on Form 8-K with the SEC with additional details of the PIPE. In Canada, a material change report is expected to be filed less than 21 days before the expected closing date.

The securities may be offered to "accredited investors" within the meaning of the Canadian National Instrument 45-106 - Prospectus Exemptions. Securities issued in Canada may be subject to applicable Canadian hold periods imposed under applicable securities legislation. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein.