EVLO - Evelo drops 23% as atopic dermatitis trial fails; announces layoffs

Clinical-stage biotech Evelo Biosciences ( NASDAQ: EVLO ) lost ~23% pre-market Wednesday after announcing that its atopic dermatitis candidate EDP1815 failed to meet the main goal in a Phase 2 trial. The company also announced that it implemented cost-saving initiatives, including workforce reductions that will extend its cash runway into Q3 2023.

Citing data from the first three cohorts, Evelo ( EVLO ) said that the trial indicated an unusually high placebo response rate that led to the miss in the primary endpoint. The fourth cohort, designed to test a faster release formulation, is fully enrolled, with data expected in Q2 2023.

Evelo ( EVLO ) said that the company’s clinical priorities remain unchanged, and it is in talks to ink partnerships for EDP1815, psoriasis candidate EDP2939, and the EV platform.

“Given the challenging financial macro-environment, we have implemented cost-saving initiatives in order to extend our cash runway,” Chief Executive of Evelo ( EVLO ) Simba Gill remarked.

Meanwhile, the company has halted the search for a CEO candidate as the director board has asked Dr. Gill to continue in his role “at this time.”

In August, Evelo ( EVLO ) announced a leadership transition as Dr. Gill sought to rejoin venture capital firm Flagship Pioneering.

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