Eupraxia Pharmaceuticals Inc.

The thesis

Metrics profile

This profile describes the company's characteristics. It contains no assessment of whether the share is over- or undervalued.

Fundamentals

Business model

One compound, two applications, no revenue. EP-104 is fluticasone propionate in a formulation that releases the drug over weeks rather than at once. The accumulated deficit stands at USD 196,720,360.

**EP-104GI in eosinophilic oesophagitis** is the active programme. The RESOLVE trial (NCT05608681) is registered as **phase 1b/2**, randomised, quadruple-masked, crossover, with an estimated 117 participants and sites in Australia, Canada, the Netherlands, New Zealand, Switzerland and the United Kingdom. It began on 31 March 2023, with estimated primary completion in December 2026. The company describes the second, placebo-controlled part as phase 2b, at doses of 120 mg and 160 mg.

⚠️ **The distinction between open-label and controlled evidence is not a formality here.** Every figure communicated so far comes from the open 1b/2a part: cohort 9 with **three** patients, cohorts 5 to 7 with **nine**, the remission rates from 19, 14 and six evaluable. Without a control group it is not possible to establish what share of the improvement is attributable to treatment.

**EP-104IAR in knee osteoarthritis** is paused. That is notable, because the programme has a positive phase 2b trial published in a peer-reviewed journal, FDA fast track designation of 13 June 2023 and an end-of-phase-2 meeting with the FDA in January 2024. That it nevertheless sits idle is a signal about funding and partnering, not about the data.

The Auritec licence additionally carries milestone payments of up to **USD 25 million** on approval and commercialisation.

Balance sheet

As at 30 June 2026, in US dollars: cash of USD 52,426,167 and short-term investments of USD 81,234,688, **USD 133,660,855** in total. Total assets USD 139,907,536. **No borrowings.** Accumulated deficit USD 196,720,360.

Quarterly loss USD 14,493,433; half-year loss USD 27,148,279. Research and development for the half USD 23,978,961; general and administrative USD 10,081,257. Cash used in operating activities for the half was **USD 23,239,896**, around USD 11.6 million a quarter.

**There are two figures for runway, and they do not say the same thing.** The company states the funds will last *"into the second half of 2028"*. Extrapolating the half-year burn linearly gives around 34 months, to mid-2029. The company's own figure is therefore the more conservative — rightly so, because spending is rising: research and development climbed from USD 11.2 million in the first quarter to USD 12.8 million in the second, and a phase 3 would raise it materially. We use the company's figure.

**There is no going-concern statement.** The usual risk language appears, that future financing may not be available.

Dilution

As at 30 June 2026: 65,906,632 common shares, 8,295,638 preferred shares, 1,428,571 pre-funded warrants, 7,860,017 options and 523,421 warrants — a simple sum of around **84,014,279**, about 27% above the common share count.

⚠️ **Two sources of the same date give two different share counts.** The press release of 11 August 2026 gives 65,474,223 common shares at 30 June 2026; the management discussion of the same date gives 65,906,632. One is probably as at the balance sheet date and the other as at the reporting date, but we have not been able to confirm that. Anyone carrying the figure forward should check it in the statement of changes in equity.

Two financings shaped the treasury. On 24 September 2025, 14,636,363 common shares were placed at **USD 5.50**, around USD 80.5 million gross including full exercise of the over-allotment. In February 2026 came 7,607,145 common shares and 1,428,571 pre-funded warrants at **USD 7.00**, around USD 63.2 million gross and USD 58,634,895 net. **Both without attached warrants** — for a company of this size, a sign that it could place the paper without a sweetener.

A USD 300 million base shelf prospectus is also registered, permitting further issuance at any time.

Valuation

We currently publish no fair value and no recommendation. The framework that applies to this sector is set out here: Methodology.

Key metrics

Peer group

SWOT

Chart

Catalysts

• Q4 2026 Interim readout of the placebo-controlled part of RESOLVE

  The first controlled readout of the only active programme. It was previously announced for the third quarter of 2026; the trial doubled in size within the same year.

• December 2026 Estimated primary completion of NCT05608681

  The trial registry's figure, last updated 19 March 2026. An estimate, not a commitment.

• open Start of phase 3 for EP-104GI

  Announced as "at least one study will be required". USD 8 million of the February 2026 raise is earmarked for it. No date given.

• open Second gastrointestinal indication

  Announced on 29 September 2025 for the first half of 2026. ⚠️ We have not been able to confirm that this trial has started.

• open Resumption or partnering of EP-104IAR

  The interim report makes the decision contingent on risk, funding or a partner. No date given.

Risks

• The entire valuation of the active programme rests on uncontrolled data. Everything published on EP-104GI comes from the open-label part of the RESOLVE trial, in cohorts of three to nineteen evaluable patients and with no published p-values. Without a control group it is not possible to establish what share of the observed improvement is attributable to treatment. The first placebo-controlled readout is due in the fourth quarter of 2026.
• The company effectively has a single active compound. EP-104IAR is paused — with a positive phase 2b trial in 319 randomised patients published in The Lancet Rheumatology, FDA fast track designation of 13 June 2023 and an end-of-phase-2 meeting in January 2024. The interim report makes resumption contingent on risk, funding or a partner. That a programme with those credentials sits idle is a statement about resources, not about the data.
• The timetable has already slipped. On 8 January 2026 top-line data was guided for the third quarter of 2026; by the interim report of 11 August 2026 that had become an interim readout in the fourth quarter. Over the same period the trial doubled in size, which the company cites as the reason for the increase in research spending.
• Two treatments are already approved in the indication. Dupixent was approved by the FDA for eosinophilic oesophagitis in May 2022 and later extended to children; Eohilia followed in February 2024. EP-104GI would therefore not be measured against placebo alone but in a setting with existing therapies. ⚠️ We have no verified information on the approval position in the European Union.
• Burn is rising, and a phase 3 would raise it materially. Research and development climbed from USD 11.2 million in the first quarter to USD 12.8 million in the second quarter of 2026. The USD 133.7 million of liquidity lasts into the second half of 2028 on the company's own account — a figure that already allows for the planned increase and is therefore more conservative than a linear extrapolation.
• Dilution is substantial and may continue at any time. On a simple sum, the 65,906,632 common shares become around 84,014,279 once preferred shares, pre-funded warrants, options and warrants are added — about 27% more. A USD 300 million base shelf prospectus is registered in addition.
• The Auritec licence carries milestone payments of up to USD 25 million on approval and commercialisation. Those amounts fall due before the product generates a result.
• ⚠️ Several points we could not verify and therefore do not state as fact: we found no orphan drug or fast track designation specifically for **EP-104GI in eosinophilic oesophagitis**; nor any interactions with the European Medicines Agency; and the fall in warrants from 3,799,824 at 31 March 2026 to 523,421 at 30 June 2026 is of unknown cause to us. We found nothing on litigation, which is not the same as there being none.

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