Evelo: Evelo dealt another blow with a PhII fail, plans for strategic alternatives

Evelo Biosciences is exploring strategic alternatives for its mid-stage psoriasis treatment after it reported that another psoriasis drug failed a Phase II clinical trial. Since the market opened, Evelo's stock $EVLO has plummeted by about 46% to $1.48 per share. The company said Tuesday that the Phase II trial of EDP2939, a microbial extracellular vesicle that is delivered orally to patients, did not achieve its primary endpoint after 16 weeks of daily treatment compared to a placebo. The trial investigated how many patients showed a 50% improvement in moderate psoriasis after treatment with EDP2939 using the Psoriasis Area and Severity Index score. Evelo stopped development of EDP2939. "We are conducting a review of potential strategic alternatives," Evelo CEO Simba Gill said in a press release. That includes seeking a partner for the company's small intestinal axis platform and EDP1815, which it's testing in psoriasis. This marks another hurdle in the inflammatory disease biotech's pipeline. In April, Evelo canceled all atopic dermatitis work on EDP1815, following the flop of a Phase II clinical trial. This was the fourth failed cohort investigating EDP1815 in reducing eczema severity. It laid off 45% of its workforce in February after EDP1815 failed to meet the primary endpoints in the first three cohorts. At the same time, Evelo's cash is dwindling. The company reported a 91% decline in cash to $7.6 million in the second quarter this year, compared to the $92 million in cash it had in the second quarter of 2022. Evelo, a spinout from Flagship Pioneering, went public in April 2018.