Evelo Biosciences(US:EVLO)2022-05-12 12:23Financial Performance - As of March 31, 2022, the company reported total assets of $58.8 million, a decrease from $87.9 million as of December 31, 2021, representing a decline of approximately 33%[15]. - The company incurred a net loss of $29.9 million for the three months ended March 31, 2022, compared to a net loss of $28.2 million for the same period in 2021, reflecting an increase in losses of about 6%[17]. - The company has an accumulated deficit of $444.6 million as of March 31, 2022, up from $414.7 million at the end of 2021, marking an increase of approximately 7%[29]. - The net loss for the three months ended March 31, 2022, was $29.861 million, compared to a net loss of $28.196 million for the same period in 2021[106]. - The company anticipates continuing to incur losses for at least the next several years, raising substantial doubt about its ability to continue as a going concern[202]. Cash and Cash Equivalents - Cash and cash equivalents at the end of Q1 2022 were $40.8 million, down from $126.2 million at the end of Q1 2021, indicating a decrease of about 68%[24]. - As of March 31, 2022, total cash and cash equivalents were $39.631 million, down from $68.441 million as of December 31, 2021, representing a decrease of approximately 42.2%[42]. - Total cash, cash equivalents, and restricted cash decreased by $29.0 million during the three months ended March 31, 2022[204]. - Net cash used in operating activities was $28.9 million for the three months ended March 31, 2022, compared to $26.3 million for the same period in 2021[205][206]. - Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2022, a significant decrease from $82.3 million in the same period in 2021[209]. Operating Expenses - Total operating expenses for Q1 2022 were $28.7 million, slightly higher than $27.5 million in Q1 2021, representing an increase of about 5%[17]. - General and administrative expenses increased to $9.4 million for the three months ended March 31, 2022, up from $6.0 million in the same period in 2021, representing a $3.5 million increase[195]. - The company expects significant increases in expenses related to ongoing and new clinical trials, manufacturing capabilities, and regulatory approvals[161]. - Total other expense, net for the three months ended March 31, 2022, was $1.0 million, an increase of $0.4 million from $0.6 million in the same period in 2021[196]. Research and Development - Research and development expenses decreased to $19.3 million in Q1 2022 from $21.5 million in Q1 2021, a reduction of approximately 10%[17]. - The company is developing EDP1815, an investigational oral biologic for treating inflammatory diseases, with positive Phase 2 trial results in psoriasis showing a 29% PASI-50 response rate compared to 12% for placebo[119][122]. - The company anticipates that research and development expenses will continue to increase as it advances clinical trials for product candidates including EDP1815 and EDP2939[180]. - Research and development expenses for the three months ended March 31, 2022, were $19.3 million, a decrease of $2.2 million from $21.5 million in the same period in 2021, primarily due to the completion of the first EDP1815 Phase 2 clinical trial[192]. Strategic Plans and Partnerships - The company plans to pursue strategic partnerships and collaborations to secure additional funding, as current cash reserves are insufficient to support operations for the next twelve months[30]. - A strategic collaboration with ALJ for EDP1815 development in the Middle East, Turkey, and Africa includes a 50:50 profit share arrangement[157]. - The company plans to seek additional capital through future equity financings, debt financings, or partnerships to fund operations beyond the current cash reserves[202]. Clinical Trials and Product Development - EDP1815 demonstrated a statistically significant reduction in pro-inflammatory cytokines IL-6 (p=0.0003), IL-8 (p=0.0007), and TNF (p=0.0037) compared to placebo, indicating its potential efficacy[135]. - The European Medicines Agency approved a Pediatric Investigation Plan for EDP1815, allowing inclusion of patients aged 12-17 in Phase 3 trials and requiring a clinical trial for younger age groups post-Marketing Authorization Application[140]. - The Phase 2 trial of EDP1815 began in February 2022, enrolling up to 400 patients with a primary endpoint of achieving an EASI-50 response at week 16[146]. - EDP1867 was well-tolerated in a Phase 1b trial but showed no clear clinical benefit, leading the company to place the program on hold[151]. - EDP2939 is being developed for inflammatory diseases, with clinical development anticipated to start in Q3 2022 and data expected in H2 2023[153]. Debt and Financing - The total debt under the Amended Credit Facility as of March 31, 2022, is $46.616 million, after accounting for interest and discount[76]. - Interest expense for the three months ended March 31, 2022, was approximately $1.0 million, compared to $0.8 million for the same period in 2021, indicating a year-over-year increase of 25%[76]. - The company has drawn down the full $45.0 million available under its amended loan and security agreement[165]. - The company has financed operations primarily through public and private offerings, with gross proceeds of $434.9 million from equity and debt transactions since inception[197]. Impact of COVID-19 - The COVID-19 pandemic has negatively impacted the company's operations, particularly in patient enrollment and retention in clinical trials[172].