Evelo Biosciences(US:EVLO)2020-02-14 18:00Financial Data and Key Metrics Changes - The company ended 2019 with cash and cash equivalents of $77.8 million, down from $147.9 million at the end of 2018, primarily due to operating expenses [29] - R&D expenses for Q4 were $16.4 million and $63.1 million for the full year, compared to $11.3 million and $39 million in the previous year, indicating a significant increase in clinical program costs [30] - General and administrative expenses were $6.3 million for Q4 and $23.2 million for the full year, up from $4.7 million and $18.2 million in 2018, reflecting increased personnel and consulting fees [31] - The net loss was $22.6 million for Q4 and $85.5 million for the full year, compared to a net loss of $15.4 million and $60.9 million in 2018, showing a worsening financial position [32] Business Line Data and Key Metrics Changes - The company reported positive clinical data for EDP1815, its lead inflammation candidate, in two cohorts of individuals with psoriasis, validating its hypothesis regarding the small intestinal axis [7][8] - EDP1815 is advancing into Phase II trials with an improved formulation, expected to initiate in Q2 2020 [8][15] - The company is also exploring EDP1815 for atopic dermatitis, with initial data expected from a Phase Ib trial in Q2 2020 [19] Market Data and Key Metrics Changes - Chronic inflammation affects 1 in 7 people globally, indicating a significant market opportunity for the company's therapies targeting inflammatory diseases [11] - Atopic dermatitis affects 18 million to 25 million people in the U.S., with a high percentage being mild to moderate cases, highlighting the unmet need in this market [19] Company Strategy and Development Direction - The company is focused on the small intestinal axis (SINTAX) to develop new oral biologic therapies for various diseases, aiming for superior efficacy, safety, convenience, and affordability [6] - The strategy includes advancing clinical programs in inflammation and oncology, with a broad pipeline across multiple therapeutic areas [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a "cash-rich" 2020, anticipating significant updates as clinical programs progress [33] - The company emphasized the importance of safety and tolerability in its therapies, noting that current treatment options for mild to moderate psoriasis are limited [38] Other Important Information - The company has decided to discontinue development of EDP1066 due to its less marked effect on systemic immunology compared to EDP1815 [21] - The new formulation of EDP1815 is designed to maximize drug release in the upper small intestine, which is associated with better anti-inflammatory effects [25][51] Q&A Session Summary Question: What data should be expected regarding the interim for EDP1815 by the end of the year? - Management indicated that the trial is designed flexibly, allowing for interim analysis once 50% of subjects have reached 12 weeks of treatment, with various endpoints to be evaluated [34][35] Question: What effect would be needed to move a dose level forward in Phase II for EDP1815? - Management noted that the bar for response is low due to the limited therapies available for mild to moderate patients, emphasizing safety and tolerability as critical factors [37][38] Question: What formulation will be used in Phase II for EDP1815? - The new formulation with improved release characteristics will be used in the Phase II dose-ranging study, which has received positive feedback from regulators [50]