Eupraxia Pharmaceuticals Provides Update for Phase 2 Study in Knee Osteoarthritis for Lead Drug Candidate EP-104IAR

-- Clean Safety Review from Data Safety Monitoring Board Supports Addition of Diabetes Patients into the Trial --

Eupraxia Pharmaceuticals Inc. ("Eupraxia" or the "Company") (TSX: EPRX), a Phase 2 clinical-stage biotechnology company with an innovative drug delivery technology platform, today announced updates to its Phase 2 trial which is evaluating EP-104IAR's efficacy and safety for the treatment of osteoarthritis ("OA") of the knee.

"A clean safety review from our Data Safety Monitoring Board has increased our confidence in EP-104IAR's potential as a treatment for OA of the knee and has allowed us to expand the scope of our Phase 2 trial," said Dr. James Helliwell , CEO of Eupraxia. "The updates we are announcing today have the potential to generate more robust data that could support a stronger Phase 3 trial for EP-104IAR, and further differentiate the product candidate's commercial profile in the longer-term. In addition, we believe that these updates increase EP-104IAR's opportunity to become an effective chronic treatment for a chronic disease. More than ever, we are excited about EP-104IAR's potential to treat OA, a disease with limited safe and effective treatment options that affects more than 30 million people in the U.S. alone."

Updates to the Company's Phase 2 trial include:

Eupraxia announced today that its ongoing Phase 2 study has successfully completed all DSMB reviews, with no drug-related Serious Adverse Events noted, and a clean safety profile.

The Company also announced today that based on the clean safety profile observed during the Data Safety Monitoring Board Review, it is now including patients with a diabetes diagnosis in its Phase 2 trial. Diabetics represent a meaningful percentage of patients diagnosed with OA, and inclusion of this important subgroup will provide valuable additional data to guide further drug development.

Magnetic Resonance Imaging ("MRI") has been added to the trial's protocol to further characterize the safety profile of EP-104IAR and could strengthen EP-104IAR's differentiation as a treatment for OA. This elective imaging component is expected to help identify EP-104IAR-induced reductions in inflammation and assess ongoing cartilage health in patients. Scans will follow patients at zero, three, six and 12 months, with a potential to include up to 50 patients. This change was implemented after the DSMB meeting and in conjunction with strong supportive pre-clinical evidence of cartilage health and joint health. The Company believes this MRI subgroup may further strengthen the pre-clinical data seen to date.

The Company also anticipates that this data will better inform its evaluation for inclusion of imaging in its planned Phase 3 program with the drug.

Dr. Helliwell commented, "We believe that a detailed visual representation of EP-104IAR's effect on knee osteoarthritis inflammation and joint morphology could be valuable in informing our Phase 3 trial design, and, on a longer-term basis, could better support physician decisions to prescribe the drug should it reach the commercial stage."

As a cumulative result of the updates to its Phase 2 trial, the Company anticipates that top-line data from the study will now be available in the second quarter of 2023. Eupraxia previously anticipated that the top-line data would read out in the first quarter of 2023.

Eupraxia's lead product candidate, EP-104IAR, is designed to meet the significant unmet medical need and market demand for long-lasting disease relief in multiple indications benefitting from highly localized and longer delivery of corticosteroids. The lead indication is for pain relief in knee OA. The U.S. Centers for Disease Control and Prevention estimates that knee OA affects more than 30 million people in the U.S. alone. This includes 14 million that suffer with knee pain or some form of disability. Knee OA is also associated with depression and loss of sleep, which can greatly affect quality of life.

With EP-104IAR, Eupraxia hopes to change the way knee OA pain is treated. Current therapies are challenged by poor safety, inadequate efficacy and/or limited duration of activity. Corticosteroids are one of only two drug classes strongly recommended by the American College of Rheumatology and the Arthritis Foundation for the treatment of knee OA pain. Currently approved corticosteroids are very effective at reducing pain for a short duration late in the disease but can expose the body to unwanted local and systemic side effects.

EP-104IAR endeavours to provide long-term pain relief with fewer unwanted side effects. It encapsulates a highly potent corticosteroid (fluticasone propionate) within a microns-thin polymer membrane, part of Eupraxia's patented technology platform.

Injected into the knee, EP-104IAR is intended to diffuse drug slowly into the knee joint providing therapeutic concentrations for up to six months. This has the potential dual advantage of providing long-duration pain relief with fewer systemic side effects. An enhanced safety profile would also benefit the estimated 70% of knee OA patients that experience pain in both knees by allowing simultaneous treatment of both affected joints.

In contrast to immediate release steroids, a non-clinical study of EP-104IAR suggests a cartilage sparing effect, which could provide a safer treatment alternative for those afflicted with chronic OA pain. The product has also been designed with physician convenience in mind – targeting a long shelf life, no refrigeration and easy integration into existing delivery techniques.

Eupraxia is a clinical-stage biotechnology company focused on the development of locally delivered, extended-release alternatives to currently approved drugs. Each of Eupraxia's product candidates has the potential to address therapeutic areas with high unmet medical need and strives to provide improved patient benefit by delivering targeted, long-lasting activity with fewer side effects.

Eupraxia's lead product candidate, EP-104IAR, is currently in Phase 2 development for the treatment of pain due to OA of the knee. In addition to EP-104IAR, Eupraxia is developing a pipeline of earlier-stage long-acting formulations. Potential pipeline candidates include a range of drugs for indications such as postsurgical pain (EP-105), and post-surgical site infections (EP-201), each designed to improve on the activity and tolerability of approved drugs. For further details about Eupraxia, please visit the Company's website at: www.eupraxiapharma.com .

This news release includes forward-looking statements and forward–looking information within the meaning of Canadian securities laws. Often, but not always, forward–looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward looking statements in this press release include statements regarding the Company's business strategies and objectives, including current and future plans and opportunities, expectations and intentions; statements regarding the Company's Phase 2 clinical trial; the expected timing and potential of data to support and inform a planned Phase 3 trial; the ability of the Company to execute on its business strategy; the expected benefits of using MRI; the expansion of patient enrollment in the Company's Phase 2 clinical trial; the inclusion of diabetics in the Company's Phase 2 trial; the potential of Eupraxia's product candidates, including EP-104IAR's potential to treat OA; the Company's expectations regarding its product designs, including with respect to targeted shelf life, storage, ease of integration, duration and effectiveness; the results gathered from studies of Eupraxia's product candidates; the potential for the Company's technology to impact the drug delivery process; the competitive advantages of the Company's technology; the benefits to patients from the Company's drug platforms; the translation of the Company's technologies and expansion of its offerings into clinical applications; the Company's estimation of potential product markets; and the demand and market acceptance for products developed by the Company. Such statements and information are based on the current expectations of Eupraxia's management, and are based on assumptions, including but not limited to: future research and development plans for the Company proceeding substantially as currently envisioned; industry growth trends, including with respect to projected and actual industry sales; the Company's ability to obtain positive results from the Company's research and development activities, including clinical trials; and the Company's ability to protect patents and proprietary rights. Although Eupraxia's management believes that the assumptions underlying these statements and information are reasonable, they may prove to be incorrect. The forward–looking events and circumstances discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Eupraxia, including, but not limited to: the Company's limited operating history; the Company's novel technology with uncertain market acceptance; if the Company breaches any of the agreements under which it licenses rights to its product candidates or technology from third parties, the Company could lose license rights that are important to its business; the Company's current license agreement may not provide an adequate remedy for its breach by the licensor; the Company's technology may not be successful for its intended use; the Company's future technology will require regulatory approval, which is costly and the Company may not be able to obtain it; the Company may fail to obtain regulatory approvals or only obtain approvals for limited uses or indications; the Company completely relies on third parties to provide supplies and inputs required for its products and services; the Company relies on external contract research organizations to provide clinical and non-clinical research services; the Company may not be able to successfully execute its business strategy; the Company will require additional financing, which may not be available; any therapeutics the Company develops will be subject to extensive, lengthy and uncertain regulatory requirements, which could adversely affect the Company's ability to obtain regulatory approval in a timely manner, or at all; the impact of the COVID-19 pandemic on the Company's operations; and other risks and uncertainties described in more detail in Eupraxia's public filings on SEDAR ( www.sedar.com ). Although Eupraxia has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward–looking statements and information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward–looking statement or information can be guaranteed. Except as required by applicable securities laws, forward–looking statements and information speak only as of the date on which they are made and Eupraxia undertakes no obligation to publicly update or revise any forward–looking statement or information, whether as a result of new information, future events or otherwise.

SOURCE Eupraxia Pharmaceuticals Inc.

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