Evelo: Flagship-founded Evelo Biosciences will dissolve after finding no 'viable alternative'

Evelo Biosciences, a Flagship Pioneering biotech that set out to create new oral medicines dubbed monoclonal microbials, has decided to dissolve after multiple clinical failures and layoffs doomed its fate earlier this year. The board determined on Monday that a dissolution would be "in the best interests of Evelo and its stockholders," per a late Tuesday SEC filing outlining the plan, which includes hiring a new executive from an accounting firm focused on distressed businesses and experienced in winding down companies. Marella Thorell "After seeking potential funding sources and other ways to continue to operate Evelo's business, Evelo has not found a viable alternative to the Dissolution," the company wrote in its SEC paperwork. CEO and president Simba Gill and CFO Marella Thorell departed, as did the entire board. If approved, the dissolution would mark an ending that wasn't entirely unforeseen for the biotech after its cash reserves petered out in recent quarters. Last month, Evelo said it would seek alternative paths after scrapping one of its last clinical drugs following a mid-stage psoriasis failure. The eight-year-old biotech had shuttered work on an atopic dermatitis study earlier in the spring and laid off 45% of its employees at that time. Evelo had reeled in more than $150 million in private funding from Flagship, Alphabet's venture arm GV, Alexandria Venture Investments, Celgene, Mayo Clinic and others before jumping onto the Nasdaq in May 2018 with an $85 million IPO as $EVLO. Over the years, Evelo had recruited prominent industry names to its board, including longtime Biogen chair Stelios Papadopoulos and former Novartis Pharmaceuticals CEO David Epstein, who now runs Seagen. The company had burnt through a lot of cash over the years trying to create new treatments in what is now a booming inflammation and immunology field, marked by multiple recent high-profile acquisitions and an IPO reminiscent of yesteryear. Evelo had accumulated $588 million in deficit as of Sept. 30 and had only $17.3 million in cash and equivalents at that point, per an SEC filing. It marks another big bet out of Flagship to have faltered in recent years as a few other offshoots have also shuttered since the pandemic heyday, including one-time cell therapy high-flyer Rubius, microbiome company Kaleidoscope and fertility biotech Ohana Biosciences. After hitting a home run with its creation of Moderna, the Boston-area venture firm has recently set its sights on Asia-Pacific and the UK, where it launched Quotient Therapeutics on Tuesday. Evelo joins a list of at least a dozen other biotechs to have closed their doors this year, including neuro-focused genetic medicines upstart Locanabio, non-viral gene therapy maker Intergalactic Therapeutics, Singapore cell therapy biotech Tessa Therapeutics and others.