PART I [Business](index=6&type=section&id=Item%201.%20Business) Evelo Biosciences develops oral biologics targeting the small intestinal axis (SINTAX™) for inflammatory diseases and cancer, advancing a pipeline of novel therapeutic candidates - Evelo is developing a new class of oral medicines targeting the small intestinal axis (SINTAX™) to produce therapeutic effects throughout the body for immune, metabolic, and neurologic diseases[24](index=24&type=chunk) - The company's lead product candidates are EDP1815 (for inflammatory diseases and COVID-19), EDP1867 and EDP2939 (for inflammatory diseases), and EDP1908 (for cancer)[25](index=25&type=chunk) - Evelo's strategy is to explore the full potential of SINTAX, develop best-in-class oral therapies, scale its platform, protect its intellectual property, and collaborate with partners to expand its reach[31](index=31&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) Product Pipeline Status | Product Candidate | Indication(s) | Development Stage | | :--- | :--- | :--- | | EDP1815 | Psoriasis, Atopic Dermatitis, COVID-19 | Phase 2 / Phase 2/3 | | EDP1867 | Atopic Dermatitis | Phase 1b | | EDP2939 | Inflammatory Diseases | Preclinical (Clinical development anticipated 2022) | | EDP1908 | Oncology | Preclinical (Clinical development anticipated 2022) | Research and Development Expenses | Year | R&D Expense (in millions) | | :--- | :--- | | 2020 | $69.6 | | 2019 | $63.1 | - As of March 5, 2021, the company had 90 full-time employees, with 67 engaged in research and development[228](index=228&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks as a development-stage entity, including substantial losses, capital needs, unproven therapeutic approach, reliance on third parties, and COVID-19 impacts - The company is a development-stage entity with a history of significant losses and expects to incur losses for the foreseeable future[231](index=231&type=chunk) Financial Losses | Period | Net Loss (in millions) | Accumulated Deficit (in millions) | | :--- | :--- | :--- | | Year ended Dec 31, 2020 | $93.7 | $292.5 | | Year ended Dec 31, 2019 | $85.5 | - | - Existing cash, combined with proceeds from a Q1 2021 stock issuance, is expected to fund operations into the third quarter of 2022, after which additional funding will be required[238](index=238&type=chunk)[240](index=240&type=chunk) - The company's therapeutic approach targeting the small intestinal axis (SINTAX™) is unproven, and there is no guarantee it will lead to approvable or marketable products[256](index=256&type=chunk) - The COVID-19 pandemic has adversely impacted and may continue to disrupt clinical trial enrollment, operations, and supply chains[288](index=288&type=chunk)[289](index=289&type=chunk) - The company relies on third-party Contract Manufacturing Organizations (CMOs) for the production of its product candidates, which poses risks to supply, quality, and cost[326](index=326&type=chunk) [Unresolved Staff Comments](index=88&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[535](index=535&type=chunk) [Properties](index=88&type=section&id=Item%202.%20Properties) The company's corporate headquarters, including office and laboratory space, is located in Cambridge, Massachusetts, leased under a sublease agreement expiring in September 2025 - The company leases 40,765 square feet of office and laboratory space in Cambridge, Massachusetts[536](index=536&type=chunk) - The current sublease agreement for its headquarters expires in September 2025[536](index=536&type=chunk) [Legal Proceedings](index=88&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings, though a European patent unrelated to current products faces opposition - The company is not a party to any material legal proceedings[537](index=537&type=chunk) - In February 2021, a notice of opposition was filed against European patent EP 3223834, which the company states does not relate to any current product candidates and is not expected to affect development plans[538](index=538&type=chunk) [Mine Safety Disclosures](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[539](index=539&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=89&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "EVLO", with approximately 31 record holders as of March 5, 2021, and no anticipated cash dividends - The company's common stock trades on the Nasdaq Global Select Market under the symbol "EVLO"[542](index=542&type=chunk) - As of March 5, 2021, there were approximately 31 holders of record of the common stock[542](index=542&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[543](index=543&type=chunk) [Selected Financial Data](index=90&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Evelo Biosciences is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information[545](index=545&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=91&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Evelo reported increased net losses in 2020 driven by higher R&D expenses, with existing capital expected to fund operations into Q3 2022 following a Q1 2021 financing Results of Operations (in thousands) | Line Item | 2020 | 2019 | | :--- | :--- | :--- | | Research and development | $69,616 | $63,128 | | General and administrative | $22,270 | $23,229 | | **Total operating expenses** | **$91,886** | **$86,357** | | Loss from operations | ($91,886) | ($86,357) | | **Net loss** | **($93,666)** | **($85,472)** | - The increase in R&D expenses was primarily driven by the progression of EDP1815 to Phase 2, the addition of COVID-19 studies, and manufacturing costs for EDP1867's Phase 1 trial[596](index=596&type=chunk) Cash Flow Summary (in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Cash used in operating activities | ($73,063) | ($71,980) | | Cash (used in)/provided by investing activities | ($1,315) | $51,970 | | Cash provided by financing activities | $65,465 | $4,992 | - As of December 31, 2020, the company had **$68.9 million** in cash and cash equivalents, with an additional **$82.2 million** raised in Q1 2021, expected to fund operations into Q3 2022[602](index=602&type=chunk)[613](index=613&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=106&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Evelo Biosciences is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information[625](index=625&type=chunk) [Financial Statements and Supplementary Data](index=106&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's consolidated financial statements and the report of its independent registered public accounting firm - The company's consolidated financial statements and the report of its independent registered public accounting firm are incorporated by reference and begin on page F-1 of the report[626](index=626&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=106&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[626](index=626&type=chunk) [Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020, with no attestation report required as an emerging growth company - Management concluded that disclosure controls and procedures were effective as of December 31, 2020[627](index=627&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2020[629](index=629&type=chunk) - The company is exempt from providing an attestation report from its registered public accounting firm on internal controls because it is an "emerging growth company"[630](index=630&type=chunk) [Other Information](index=107&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[631](index=631&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=108&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2021 proxy statement - Information is incorporated by reference from the 2021 proxy statement[634](index=634&type=chunk) [Executive Compensation](index=108&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's 2021 proxy statement - Information is incorporated by reference from the 2021 proxy statement[635](index=635&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=108&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details securities authorized for issuance under equity compensation plans as of December 31, 2020, with other ownership information incorporated by reference Equity Compensation Plan Information as of December 31, 2020 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining Available for Future Issuance (c) | | :--- | :--- | :--- | :--- | | **Approved by Stockholders** | | | | | 2015 Plan | 3,114,275 | $4.05 | — | | 2018 Plan | 3,780,387 | $8.77 | 951,621 | | ESPP | — | — | 307,753 | | **Total** | **6,894,662** | **$6.64** | **1,259,374** | [Certain Relationships and Related Transactions, and Director Independence](index=110&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related party transactions and director independence is incorporated by reference from the company's 2021 proxy statement - Information is incorporated by reference from the 2021 proxy statement[646](index=646&type=chunk) [Principal Accountant Fees and Services](index=110&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information concerning principal accountant fees and services is incorporated by reference from the company's 2021 proxy statement - Information is incorporated by reference from the 2021 proxy statement[647](index=647&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K, including corporate governance documents and material contracts - This item lists all exhibits filed with the Form 10-K, including the Restated Certificate of Incorporation, Bylaws, various incentive plans, material contracts like leases and license agreements, and required certifications[649](index=649&type=chunk)[650](index=650&type=chunk) [Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[658](index=658&type=chunk) Financial Statements and Notes [Report of Independent Registered Public Accounting Firm](index=115&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the company's 2020 and 2019 consolidated financial statements, noting the adoption of ASU No 2016-02 and no internal control audit - Ernst & Young LLP provided an unqualified audit opinion on the consolidated financial statements for the fiscal years 2020 and 2019[667](index=667&type=chunk) - The report highlights the company's adoption of the new lease accounting standard, ASU No 2016-02, in 2020[668](index=668&type=chunk) - The company was not required to have, nor did the auditors perform, an audit of its internal control over financial reporting[670](index=670&type=chunk) [Consolidated Financial Statements](index=116&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of **$90.6 million** and an accumulated deficit of **$292.5 million** as of December 31, 2020, with a net loss of **$93.7 million** for the year Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $68,857 | $77,833 | | Total assets | $90,639 | $90,920 | | Total liabilities | $60,154 | $30,723 | | Accumulated deficit | ($292,519) | ($198,853) | | Total stockholders' equity | $30,485 | $60,197 | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Research and development | $69,616 | $63,128 | | General and administrative | $22,270 | $23,229 | | **Loss from operations** | **($91,886)** | **($86,357)** | | **Net loss** | **($93,666)** | **($85,472)** | | Net loss per share | ($2.37) | ($2.67) | [Notes to Consolidated Financial Statements](index=120&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including the resolution of going concern issues via Q1 2021 financing, adoption of ASC 842, long-term debt, and in-license agreements with potential milestone payments - The company's ability to continue as a going concern was resolved by financing activities in Q1 2021, which are expected to fund operations for at least one year from the financial statement issuance date[692](index=692&type=chunk) - The company adopted the new lease accounting standard (ASC 842) on January 1, 2020, resulting in the recognition of a **$12.7 million** right-of-use asset and a **$13.9 million** lease liability[716](index=716&type=chunk) - As of December 31, 2020, the company had **$30.0 million** in long-term debt outstanding from its 2019 Credit Facility with K2 HealthVentures[733](index=733&type=chunk)[734](index=734&type=chunk) - The company has in-license agreements with the Mayo Clinic and the University of Chicago, with potential future milestone payments of up to **$56.0 million** and **$60.9 million**, respectively, plus royalties[737](index=737&type=chunk)[738](index=738&type=chunk)

Evelo Biosciences, Inc. (OTC:EVLO) Q4 2020 Results Earnings Conference Call March 9, 2021 8:30 AM ET Company Participants Jessica Cotrone - VP & Head, Communications Balkrishan Gill - President, CEO, Treasurer, Principal Financial Officer & Director Mark Bodmer - Chief Scientific Officer & President, Research & Development Jonathan Zung - Chief Development Officer Conference Call Participants Chris Howerton - Jefferies Matthew Luchini - BMO Capital Matthew Harrison - Morgan Stanley Peyton Bohnsack - Cowen G ...

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Evelo is developing therapies that have the potential to be effective, safe, oral, affordable March 2021 Legal disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-lookin ...

Evelo Biosciences, Inc. (OTC:EVLO) Q3 2020 Earnings Conference Call October 29, 2020 8:30 AM ET Company Participants Jessica Cotrone - VP & Head, Communications Balkrishan Gill - President, CEO, Treasurer, Principal Financial Officer & Director Duncan McHale - Chief Medical Officer Mark Bodmer - Chief Scientific Officer & President, Research & Development Conference Call Participants Chris Howerton - Jefferies Joseph Thome - Cowen and Company Operator Good morning, and welcome to the Evelo Biosciences Third ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 | --- | --- | |--------------------------------------------------------------------------|-----------------------| | For the transition period from | to | | Commission F ...

Financial Data and Key Metrics Changes - The company completed a follow-on offering, raising $52 million to support clinical development programs in inflammation and oncology [7][13] - The company expects to generate six clinical readouts within the next 6 to 12 months, indicating a robust pipeline [8][39] Business Line Data and Key Metrics Changes - EDP1815 is being developed for psoriasis and COVID-19, with a Phase 2 dose-ranging study expected to initiate in Q3 2020 [24][36] - EDP1503 is in clinical trials for triple-negative breast cancer, showing promising early results with a 25% overall response rate in a small cohort [32][33] Market Data and Key Metrics Changes - The potential market for EDP1815 includes over 3.5 million people in the U.S. and EU5 with mild to moderate psoriasis, and an estimated 20 million globally [10][11] - The company is targeting a broad range of immune disorders, with over 600 million people affected worldwide [11] Company Strategy and Development Direction - The company aims to harness the small intestinal axis (SINTAX) to develop a new class of medicines that are effective, safe, convenient, and affordable [9][39] - The strategy includes expanding discovery into neuroinflammatory disorders, metabolic dysfunction, and viral-related inflammatory syndromes [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to recruit for clinical trials despite challenges posed by the COVID-19 pandemic, with a conservative guidance on timelines [52][53] - The company is prepared to provide product for 10 million to 15 million COVID-19 patients, with initial investments already made [72] Other Important Information - The company has received regulatory and ethics authorization for its Phase 2 trial in multiple regions, including the U.S., U.K., and EU [24] - EDP1867, a non-live product candidate, is expected to enter trials in early 2021, expanding the company's portfolio in inflammatory diseases [37][60] Q&A Session Summary Question: Initial efficacy for EDP1503 and commercial contribution for COVID program - Management indicated that the objective response rate for EDP1503 is being compared to historical data, with a current response rate of 25% suggesting added efficacy [44] - The company aims to provide affordable medicines globally, leveraging the unique properties of SINTAX [46][65] Question: Status of Phase 2 psoriasis study - Management confirmed that they are preparing to initiate the Phase 2 study shortly, with increased site numbers to mitigate recruitment risks [53][54] Question: Long-term commercial outlook for COVID treatment - The company plans to price its COVID treatment affordably, ensuring accessibility for large patient populations [66] Question: Clinical development path for oncology products - Management outlined plans for blinded studies to demonstrate antitumor activity before exploring combination therapies [80]

```markdown [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements that are subject to numerous risks and uncertainties, cautioning readers not to rely on them as predictions of future events - The company identifies several key risks that could cause actual results to differ from forward-looking statements, including[6](index=6&type=chunk) - - Status as a **development-stage company** with expected future losses[6](index=6&type=chunk) - - Ability to continue as a **going concern** and the need to raise additional funds[6](index=6&type=chunk) - - **Unproven therapeutic approach** and ability to successfully complete clinical trials[6](index=6&type=chunk) - - Impact of the **COVID-19 pandemic** on operations and clinical trials[6](index=6&type=chunk) - - Ability to establish manufacturing facilities and protect intellectual property[6](index=6&type=chunk) [PART I: FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%3A%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for June 30, 2020, show increased assets and liabilities due to a public offering and new lease standards, with the company continuing to incur net losses and facing a 'Going Concern' uncertainty [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2020, total assets increased to **$113.9 million** and liabilities to **$44.7 million**, primarily due to higher cash and a public offering boosting stockholders' equity to **$69.2 million** Condensed Consolidated Balance Sheet Data (in thousands) | Balance Sheet Item | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $90,173 | $77,833 | | Total current assets | $92,717 | $81,009 | | Total assets | $113,905 | $90,920 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $13,608 | $9,743 | | Total liabilities | $44,699 | $30,723 | | Accumulated deficit | ($242,546) | ($198,853) | | Total stockholders' equity | $69,206 | $60,197 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the six months ended June 30, 2020, the company's net loss increased to **$43.7 million** from **$41.2 million** year-over-year, primarily due to higher research and development expenses Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $15,174 | $15,464 | $32,593 | $31,141 | | General and administrative | $5,071 | $5,923 | $10,913 | $11,050 | | Loss from operations | ($20,245) | ($21,387) | ($43,506) | ($42,191) | | Net loss | ($20,652) | ($20,941) | ($43,693) | ($41,240) | | Net loss per share | ($0.63) | ($0.65) | ($1.35) | ($1.29) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2020, net cash used in operations was **$35.9 million**, offset by **$48.9 million** from financing activities, resulting in a **$12.3 million** net cash increase and a **$91.7 million** cash balance Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($35,891) | ($33,349) | | Net cash (used in)/provided by investing activities | ($645) | $49,520 | | Net cash provided by financing activities | $48,876 | $203 | | Net increase in cash | $12,340 | $16,374 | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes to the financial statements detail a 'Going Concern' issue due to insufficient funding, alongside a **$48.4 million** public stock offering in June 2020, a **$20.0 million** loan facility drawdown in July 2019, and a further **$10.0 million** in July 2020, plus CARES Act payroll tax deferrals - Management has concluded that **substantial doubt** exists about the Company's ability to continue as a **going concern** within one year, as its cash and cash equivalents at June 30, 2020, are **not sufficient** to fund operations for the next twelve months[37](index=37&type=chunk) - In June 2020, the company sold 13.8 million shares of common stock in a public offering, generating estimated net proceeds of **$48.4 million**[35](index=35&type=chunk)[93](index=93&type=chunk) - The company has a loan facility with K2 HealthVentures (K2HV) for up to **$45.0 million** An initial **$20.0 million** was funded in July 2019, and a second tranche of **$10.0 million** was drawn on July 14, 2020[74](index=74&type=chunk) - Under the CARES Act, the company deferred **$0.2 million** in employer payroll taxes as of June 30, 2020[107](index=107&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's oral biologics development, including EDP1815 and EDP1503, noting COVID-19's impact on trials, continued significant losses of **$43.7 million**, a **$48.4 million** public offering, and substantial doubt about its ability to continue as a going concern without further financing [Recent Clinical Developments](index=27&type=section&id=Recent%20Clinical%20Developments) The company is advancing its clinical pipeline, with EDP1815 Phase 2 trials for COVID-19 and psoriasis, EDP1503 showing a **25%** overall response rate in TNBC, and EDP1867 Phase 1b planned for atopic dermatitis - **EDP1815 (Inflammatory Diseases):** - **COVID-19:** FDA cleared a Phase 2 trial; data from this and the UK-based TACTIC-E trial are expected in **Q4 2020**[129](index=129&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk) - **Psoriasis:** A Phase 2 dose-ranging trial is set to begin in **Q3 2020**, with interim data anticipated by **mid-2021**[129](index=129&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk) - **Atopic Dermatitis:** A new cohort is expected to start in **Q4 2020**, with initial data in **Q1 2021**[129](index=129&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk) - **EDP1503 (Oncology):** - Interim data showed a **25% Overall Response Rate (ORR)** in high-dose triple-negative breast cancer (TNBC) patients[141](index=141&type=chunk)[142](index=142&type=chunk) - The company will prioritize development for TNBC, with further data expected in **Q4 2020**[141](index=141&type=chunk)[142](index=142&type=chunk) - **EDP1867 (Inflammatory Diseases):** - A Phase 1b clinical trial in individuals with atopic dermatitis is planned to start in **Q1 2021**[139](index=139&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2020, R&D expenses increased by **$1.5 million** to **$32.6 million** due to personnel and platform costs, while G&A expenses remained stable at **$10.9 million** Comparison of Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $15,174 | $15,464 | $32,593 | $31,141 | | General & Administrative | $5,071 | $5,923 | $10,913 | $11,050 | | **Total Operating Expenses** | **$20,245** | **$21,387** | **$43,506** | **$42,191** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2020, the company held **$90.2 million** in cash, having raised **$48.4 million** from a June 2020 public offering and an additional **$10.0 million** debt drawdown in July 2020, but still faces substantial doubt about its ability to continue as a going concern beyond Q3 2021 without further capital - The company had cash and cash equivalents of **$90.2 million** as of June 30, 2020[183](index=183&type=chunk) - In June 2020, a public offering of common stock raised estimated net proceeds of **$48.4 million**[186](index=186&type=chunk) - Existing cash, including a **$10.0 million** debt drawdown in July 2020, is expected to fund operations into the beginning of the third quarter of 2021 This raises **substantial doubt** about the company's ability to continue as a **going concern**[190](index=190&type=chunk)[152](index=152&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company faces interest rate risk on its variable-rate debt, though a **10%** prime rate change would be immaterial, and while foreign currency risk is currently insignificant, it may increase, with inflation having no material operational effect - The company has **$20.0 million** outstanding under a variable-rate credit facility as of June 30, 2020, exposing it to interest rate risk However, due to the rate floor, a **10%** change in the prime rate would have no impact on interest payments[207](index=207&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2020, with no material changes to internal control over financial reporting identified - Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2020[212](index=212&type=chunk) [PART II: OTHER INFORMATION](index=42&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to material legal proceedings, though an ongoing patent matter involves the USPTO finding licensed patent claims unpatentable, prompting the University of Chicago to file a re-issue application for narrowed claims - In April 2020, the USPTO found all current claims **unpatentable** in a patent exclusively licensed by the company from the University of Chicago In June 2020, the University filed a re-issue application to seek narrowed claims[217](index=217&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces extensive risks, including a history of significant losses, the need for additional capital, substantial doubt about its going concern ability, unproven therapeutic approaches, clinical trial uncertainties exacerbated by COVID-19, and challenges in manufacturing, intellectual property, competition, and commercialization - The company is a **development-stage company** with a history of **significant losses** (**$242.5 million** accumulated deficit as of June 30, 2020) and expects to incur losses for the foreseeable future[219](index=219&type=chunk)[220](index=220&type=chunk) - There is **substantial doubt** about the company's ability to continue as a **going concern**, as existing cash is only expected to fund operations into the beginning of **Q3 2021**[238](index=238&type=chunk) - The company's product candidates are based on monoclonal microbials, an **unproven therapeutic approach**, and the biological mechanism of acting on the small intestine for systemic effects has **not been proven in humans**[246](index=246&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) - The **COVID-19 pandemic** has **adversely impacted** and may continue to impact clinical trial enrollment, regulatory timelines, and manufacturing supply chains[279](index=279&type=chunk)[280](index=280&type=chunk) [Other Information](index=98&type=section&id=Item%205.%20Other%20Information) The company reports that in July 2020, Chief Development Officer Neil Graham departed from his role - In July 2020, Chief Development Officer Neil Graham **left the company**[528](index=528&type=chunk) ```

| --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | Legal disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including statements relating to our development of EDP1815 for the treatment of patients with COVI ...

Evelo Biosciences Inc (OTC:EVLO) Q1 2020 Results Conference Call May 11, 2020 8:30 AM ET Company Participants Jessica Cotrone - VP & Head of Communications Simba Gill - President and CEO Duncan McHale - Chief Medical Officer Mark Bodmer - Chief Scientific Officer and President of Research & Development Conference Call Participants Connor Meehan - Morgan Stanley Chris Shibutani - Cowen Na Sun - BMO Capital Jiale Song - Jefferies Operator Good morning, and welcome to the Evelo Biosciences First Quarter 2020 F ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 | --- | --- | |--------------------------------------------------------------------------|-----------------------| | For the transition period from | to | | Commission File ...