EVLO - Earnings call transcript Q4 2019

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Operator

Good morning, and welcome to Evelo's conference call to discuss the fourth quarter and full year 2019 financial results and business highlights. [Operator Instructions].

At this time, I'd like to turn the call over to Jessica Cotrone of Evelo. Please proceed.

Jessica Cotrone

Thank you, Sarah. a discuss that today. issued we the we to plan morning, press outlines release topics This This the Investors is tab. release available at www.evelobio.com under McHale, the Scientific and highlights. Officer; call, Executive Jonathan financial Poole, Bodmer, Today results Gill, Officer, and and of Chief will full Financial Duncan XXXX review President Chief our business Mark quarter Medical some and on R&D recent Chief Officer; fourth Simba Officer; Chief year

be this conference we including that the during any studies Before and and provided the timing microbials I should due XXXX. Act Reform the forward-looking statements to for relate those be subject of to safe to considered Securities materially of would forward-looking differ the statements milestones our the XXXX, clinical of factors. to objectives are facts, to and the indicated sufficiency statements that everyone remind Actual of Private the call and matters begin, like from by our anticipated meaning historical results many statements not clinical intended monoclonal any by operations the cash of the impact do made fund Reform of protection about of to Act. of results Litigation could Such impact statements forward-looking within harbor

Exchange set directed the and company's on factors are the Participants to quarterly September the the XX, XXXX, other and forth report quarter Securities Evelo's in Commission. risk Form with ended XX-Q for filings

company's made change. any if its statements even view today to forward-looking operations disclaims to the duty events forward-looking Any updates Evelo only to cause subsequent of provide Evelo's as speak to today. statements

to my pleasure to over Simba. now It pass the is call

Balkrishan Gill

and everyone, us. for joining you, Good Thank you Jessica. thank morning,

many axis, uncovered govern axis, on the diseases. SINTAX, with you major the small of biology the of focused of intestinal Evelo transform to small are biology As the harnessing is throughout ability a treatment body. we the newly intestinal the potential or area know, to

acts in to locally affordability. for in body. of safety, our superior and medicine efficacy, throughout developing of the believe new a which We alternatives effects intestine terms the be are We type convenience small will medicines

Slide X highlights accomplishments XXXX. our during

XXXX, cohorts data the clinical EDPXXXX, two with and reported we psoriasis. of in our quarter During important for individuals inflammation lead third for two candidate, These second data are reasons. of positive

validate they hypothesis target our the and safe intestinal of can effective a core to small unique Firstly, develop we that orally-delivered, medicines. immunomodulatory axis profile

diseases safe, proof with of address EDPXXXX a to millions are provide they convenient new EDPXXXX of well the of available. Secondly, medicine. psoriasis affordable mechanism people for has treatment readily and effective, the for needs which other inflammatory options as as as potential not

the we After discussions EDPXXXX formulation. Phase with global regulatory II into with improved advancing agencies, are

this We expect trial to initiate quarter second year. II in the the Phase of

to and clinical X. Slide anticipate In several inflammation programs. existing Moving oncology our readouts XXXX, from we

breast cancer evaluating our with PD-X/LX triple-negative after other data have data have patients further in relapsed stable additional Merck's which to EDPXXXX KEYTRUDA and in anti-PD-X expect expand with II I/II clinical We and in Phase data and diseases; colorectal would EDPXXXX Phase atopic individuals dermatitis, in who trial ongoing interim Ib for Phase our psoriasis; Phase treatment. in Ib inflammatory with microsatellite types for opportunity EDPXXXX tumor in clinical cancer, inhibitor combination potentially data prior

continuing are Alongside these potential clinical of full programs, into SINTAX. we our research the

to over Let call turn Duncan. the me now

Duncan McHale

of talk you, you we to EDPXXXX. opportunities to about as program for Simba. progress our pleased Thank to us Phase ahead today I'm the II be able

chronic a some face that X, before So inflammation wanted today. on focusing most of highlight moving driver I of to the central we to is burdensome Slide and psoriasis, diseases

in to X HPs forms and as as arthritis neurodegenerative Parkinson's and linked syndrome chronic and suffer including diseases, different a inflammation. of common know, metabolic Alzheimer's people disease Worldwide, diseases from are As you many chronic as inflammatory important X disease. well and the such chronic

targeting SINTAX of therapies many people. develop to to By oral biologic potential Evelo's we treat the these novel have platform, with

moving So X. Slide to

relevance to the readouts, treatment for EDPXXXX as It chose broad trial we also there mild inflammation. start of for So in options. limited psoriasis of in potential moderate and treatment informative rapid it approval rapid provides psoriasis, which for have are which currently enables the to clinical

individual safe Now you And terms can in area, psoriatic has mild as severe can and be some pictures, would be psoriasis. see surface characterized to this slide from examples body as moderate termed need what And features, of us of medicines these although in mild the lesions also profile. Evelo's affordable skin serious associated this There an allows with oral addition effective, and therapy, there are and develop unparalleled distressing. for a to comorbidities platform psoriasis. is the with to

activity XX-day both dosed safe, EDPXXXX. clinical activity pharmacodynamic the showing dose to dosing a response. hoped and to a period, XX, improvement high-dose of number to in cohort, the is reported snapshot develop us separate an year exploratory we We day provides lesion cohorts well Phase including scores either saw of placebo safety endpoints lesion provide clear rationale X no medicine cohorts from The tolerated II. beyond and a primary with and from we responses, in data this convenient psoriasis last trial and we the of look also high- pharmacodynamic potential and The reductions The for cohorts low-dose secondary was looked suggesting and tolerability, effective, endpoint advance reported in severity study receiving scores. into in score difference And we'd evaluate severity to Slide for and saw continued for clinical with EDPXXXX data at PASI EDPXXXX. PASI the as and the the a sustained affordable was in and cohort. EDPXXXX overall X psoriasis.

which original have in discuss later. but individuals. the main XXX more PASI the score of the the The shows be trial specifically to as study API FDA design of evaluate has EDPXXXX Mark X the an Slide and trial same target will new profile release Phase detail X this endpoint with a of the in is II will and will The formulation at XX. formulation we study, new of our in design week improved placebo dose-ranging agreed The on doses versus MHRA. primary reduction SINTAX, more approximately

to the in advance the of by the XXXX discussions Clinical with from Phase trial III to data second studies into enable agencies. expect XXXX, interim end Phase of this quarter XXXX. initiate regulatory to of data and announce in end We could us II registration subject to study

I can pipeline moments II areas. clinical In trial about you need. few the to talking a spend dermatitis, Now about Phase we moving have unmet already treat multiple opportunity And EDPXXXX in EDPXXXX we've the condition to XX, to and therapeutic across talked in Slide a see broad preclinical for another inflammation, atopic want psoriasis. with

by disease skin pain, and dermatitis red a an Atopic inflammatory life. patches swelling of unrelenting itch that is of skin, quality chronic oozing affect can characterized severely

quarter XX to in U.S., initial Phase affects development psoriasis, the and EDPXXXX for of people, XX to patients. mild is atopic this approximately XX% data prevalent therapies year. expect dermatitis, cohort available mild Ib of dermatitis currently there few atopic dermatitis these are systemic a are million atopic of In in or million XX moderate. to and from Whilst second a subjects moderate than we more the subjects is

in Based and such inflammatory and we ThX and other preclinical ThXX-driven pathway in on diseases potential EDPXXXX's supports as data preclinical for rheumatoid spondyloarthritis. the activity and in effects EDPXXXX psoriatic ThX-driven the visit ThXX, psoriasis data ThX clear demonstrates of our such axial this on exploring EDPXXXX arthritis. potential diseases, as diseases, and atopic data its other on has man, arthritis IL-XX also Preclinical modulation and biology. diseases in also EDPXXXX and IL-X based the

our This year, we're microbial nonreplicating since clinic. first into advancing monoclonal XXXX, the

of and preclinical second will in to we We a in initiate year build pipeline to in are asthma the Ib inflammation. planning trial our Phase continue the half

due of atopic was to We of The Ib placebo. development moderate evaluated to systemic have marked both to dermatitis to EDPXXXX the Ib Phase on and EDPXXXX. cohort no from effect and difference final following reported mild immunology moderate with EDPXXXX its overall in than decided less well-tolerated psoriasis completion Phase trial mild the discontinue trial of

This we a portfolio, and with of an of biomarker consistent ongoing the the a our further clinical have cohort with In study this data a observed individuals dose relapsed than again I/II triple-negative Phase in our EDPXXXX positive cohort KEYTRUDA. tumor first who types in to in cancer expect evaluating year the Merck's to checkpoint we formulation. breast individuals microsatellite moderate were initial those colorectal oncology we inhibitor. original cancer, includes changes mild The treated response effect. antibody half anti-PD-X to from pharmacodynamic following the trial combination dermatitis the of other with with clinical stable atopic with inflammation of individuals of EDPXXXX, greater the with observed biomarkers In in new formulation high high of with changes dose

now like turn to I'd to Mark. the over that, call With

Mark Bodmer

Thank how you, make target a medicines, the small Duncan. We've intestinal axis. to about deal learned great which

One of than right more show for on down. upper effects Academic key of state in of inflammation of that Different is our in in responses importance the the release have are discoveries place. different the small drug body. the the further the intestine part anti-inflammatory formulation parts the of publications

drug anti-inflammatory the is released from effect. faster the the passing So better stomach, after the the

small SINTAX. is vitro the improved you've We're intestine. of shows an studies release left XX both our right. which from the of simulation we've the Duncan. advantage the our of targets X time on on clinical maximize of amount on this and drug full from existing drug, future anti-inflammatory and the and formulation of The inflammatory formulation response substance in conditions formulation is as Simba reduces Slide in release formulations, drug used XX will diseases, in capsule of This the the same preclinical minutes. from in previously in models. benefit heard shown taking the dose to enteric The rate new the This upper

of underpin last or have we've effects confirm gut. the microbiome using reported discoveries strains microbes, our We're striking distribution They is drug pharmacological The persist to they modify gut, the throughout data new Their clinical in platform. preclinical monoclonal the and single over don't limited yet that few microbials. the body. the hence the months

In of they work when what's cells lining the nonreplicating, example, for in fact, by. host the modifying passing intestine, they're small directly

partly to can of medicine how The a a the of completely has the of us notion This new actually work. led gut body. is outside inside

outside the from signaling are in. medicines Our

diseases inflammation as of It's the inflammatory the resolve in extraordinary gut. monoclonal in the that which, about by statement. microbial CNS As resolve animal for potential central inflammation nervous candidates, their in huge well can models, a microbial in we have intestine. in Think a moment. cancer, monoclonal with We a range action system an

metabolism, the back to a metabolism will couple finding have also via is discovery which in inflammation surely intestine. We program and microbes new small

the small regulating of discovery, as this work, and the body. is of a throughout picture of motherboard the intestine importance clinical the All building central physiology

hand I'll to Now Jonathan.

Jonathan Poole

in ended refinancing end and proceeds XXXX. million We with with XXXX. cash by equivalents cash XXXX of and to from at was for to cash, cash HealthVentures of and of debt Mark. spend The the decrease Thanks, our cash compared equivalents XXXX $XX.X in $XXX.X offset million due KX operating partially was net July investments

expect of XXXX. our capital operating us will equivalents and and our through cash We expenditure enable fund planned end expenses cash requirements that to the

our $XX.X the of primarily for programs fourth million The increases full the and to and year fourth was personnel. increase XXXX quarter for inflammation, were expenses for for quarter clinical in full to R&D costs million million and our million $XX.X XXXX. of in platform related compared due $XX.X the XXXX for the year R&D to $XX.X million $XX

was The million year of full expenses million million in XXXX. the compared for primarily of the infrastructure for and $X the for year of full to our XXXX to the our IPO and following G&A R&D $X.X professional $XX.X and to quarter fees of due for increase year costs personnel fourth public quarter $X.X for and consulting XXXX pipeline XXXX. million $XX.X costs, were fourth support the of increased million company full May

$XX.X loss I'll it million year $XX.X the compared million that, of million hand Net $XX.X year of quarter fourth the for over a to full the to for for And with net the XXXX loss as XXXX. full for fourth $XX.X million was Simba. and quarter and

Balkrishan Gill

Thanks is Thank you, team. you. to we've exceptional of Jonathan. because of only What of highlighted all the possible exceptional today work our

as we expect cashless the XXXX, rich progress further a forward during programs to year. you We and updating our look

like you to the that questions any call take now to We'd may have. open

Operator

Instructions]. [Operator

question first Harrison the comes from Morgan of Matthew line with Our Stanley.

Connor Meehan

background were on just for you expect We of could And Matthew. how little This is a about data sort on patients what Connor the should many for what that of just us give we XXXX the regarding expect if to end the wondering and for of and there? year? interim sort

Balkrishan Gill

answer is Duncan Connor, that. let this Simba. I'll

Duncan McHale

for the question. Connor, Thanks, Great.

beyond trial at at as flexibly make of later have and look any treatment, designed actually can have on interim that in the a weeks perform reached the we'll XX% when we point subjects year. of so we XX the So decision we to interim which the

the at at, for of endpoints surface trial, the and IGA Ez Scorad, interim we the include the endpoints, terms In look which area. body

range at It your Untimely, pardon. So of the as easy. we're I going look beg well. a to wasn't endpoints

Operator

Our the from Shibutani next & comes of question Company. with line Chris Cowen

Christopher John Zopf

factor This dose is on dose for to the sort for you II be not looking forward? for severity Phase versus into will CJ in confident secondary the how in Xb endpoints a with level would for XXXX, Chris. to if patient And much difference response, Curious a population move of there's baseline be decision-making? what the effect

Balkrishan Gill

CJ. Thanks,

One is III. would level of two response move us So into I Phase give what to think questions. confidence

that question. was think your first I

is dose around second The response.

me take the put the patients. which available of and the treatment first context Let into regimens, for it are current

as available broadly the to moderate are is therapies need patients, few So related mild today. unmet you address to fact for know, there that that to the we're CJ, aiming very fundamental

situation very are with moderate to severe, There therapies different to in to levels effect. antibodies moderate. extensively used mild of few example, for available for where, the So very are different

typically use active some which patients lotions, or So component sort of have creams in and do them. have have not to pharmaceutical

is quite So the actually bar low.

it's But bar of given there tolerability. a important because emphasize very exactly currently available we've level such for. is guidance looking So poor low is to we're that not therapy. What's I'll formal safety as what and response

demonstrated to be perspective, we safe clearly have data forward from We we've that in a the well pushed far studies tolerated. something very so appears have and that,

actually, events, we We're placebo drug adverse What patients have the not are safety effects are of the parameters. on which Otezla, reported, between in what already, based data can compare, on as and seeing any with as we've at published. patients least investigated, as terms on are far as differences tolerability, look seen and good such try like-to-like we as we being oral they've agents, when at that,

said, but believe I have data it perspective. And So the as we we're compelling efficacy guidance, comments. giving leave from we already with I'll not very those specific

In terms let question, answer dose of Duncan dosing the the I'll question.

Duncan McHale

cover whole looked got and So dose dose make three could our doses in take look the there that Phase we in dose further will terms we've range range active the study, we that then of a and response, in of at Ib we development. across choice doses that

Operator

the Capital from comes of Matthew question with next Luchini Our line Markets. BMO

Matthew Luchini

Great.

on So XXXX. one two on from me XXXX and then

First, the to XXXX, that once at of patients have point at a second treatment. you're ago mentioned you I of conduct XX reached XX% any guess, interim able on weeks least

then you even other or we cross relatedly, having the of than quarter, ramping fact to full you've are data still their time impact. And as antibodies committed stop So therapeutic considerations fourth in threshold? Otezla to sort at the once when mark, there other are XX-week any that the that you might that study of sort the actually know

therapeutic we time XXXX So should XXXX of we would about what how And sort maximum think at then point? I'll -- level XX-week effect this. ask that think have have after in X of

Balkrishan Gill

me then let it's second the one. Duncan and because let take pretty so straightforward, Matt, the I'll one take first

the at It's considerations at correction. one and on just other stage. least weeks no patients at So mine that for interim actually XX% XX we're least specific for this commenting of there's

answer the I'll In and optimal that weeks let terms effect, to question. of Duncan XX time

Duncan McHale

agents. and this weeks in clinical an that although some XX majority other on out the from would there, current question. the weeks. placebo there need is approved is from of We benefit understanding beyond feedback you're to time because chose XX are is optimal the also continued KOLs therapies seen in weeks, placebo of without And that improvement subjects full based on benefit terms and presidents absolutely Yes, for XX clinical precedented thanks out period some from that right that receive

So EDPXXXX. a us of very the handle XX on benefits weeks give good will clinical

Matthew Luchini

And on XXXX. Okay. then

your of I brings the a sort profile that it's you couple it's of from you about if perspective, anything? specifically, monoclonal first nonreplicating microbial. fact that think times, nonreplicating Could what, mentioned guess, -- talk You've a it's

Balkrishan Gill

that I'll to let talk Mark point. Yes,

Mark Bodmer

That's why sure. the emphasize we Yes, nonreplicating.

a is of a are there and A much from stability view. easier advantages manage. number to So practical here. manufacturing just easier to stability point One manage, of microbe is nonreplicating is

in formal fairly the that's questions requirement possibility and although fact limited been the get a even with a that microbials So actually, infection the for the mechanism interaction intestine important, one. we've not big the of systemic axis. targeted relation in of very removes about with about order intestinal the terms of It lining which do the of modification been the are do And that's in one in I a theoretical to risk indication with principles spoke persistence with is probably small microbes of monoclonal earlier also therapeutic the colonization or microbe. has direct of this of And cells, the to any The of get viable to that's immunology. nonreplicating It we replicating -- small of can some effect. to modifying learned how one are risk. things

number you really program a deliberately pharmacologically active, it's in were fact, nonreplicating screened driving in We the all discovery things turns know a of state those it that some in are So already quite had are the of this because in large EDPXXXX. in of microbes that that pharmacologically XXXX, indication for nonreplicated our out, state. anti-inflammatories microbes And active, so discovery consideration. just we

I for a effort benefits nonreplicating product, have the reasons, outlined determined that a nonreplicating. to was it So deliberately the for

Operator

Instructions]. [Operator

line comes Howerton the question Jefferies. with from Chris of next Our

Christopher Howerton

formulation fast going go II? Ib from that on how to X, can expected a the different? cohort? Phase clarification. just in the lease? the that just the of the What formulation see And to one So we Is first same this guess, if the translate new between into described one XXXX, terms is just this they're Is I guess, Phase we're I the Mark

Balkrishan Gill

Thanks the is from the both history. we to positive it And just and MHRA. with those recap end formulation study. the So FDA moving last dose-ranging in Chris. forward of are some the with At question. the feedback the had for discussions year, discussions, new new formulation, of on based And a

positive dose-ranging the positions us, terms new to the data positive And expect which III, forward we So which given assuming of and we've move EDPXXXX that, a of Phase it's seen, just and and accelerated into tolerability study abbreviated discussion on with formulation and reminder, a with the safety database. safety regulators registration believe inherent a the we had II, data-driven an the go in Phase study. with on can we safety tolerability we full also

lines XXX a the So versus patients X,XXX. of something along more typical

So And Phase is the a few upcoming Phase II. Phase Ib also we're study. then formulation. the the there new data already points III The thinking obviously, with linked to the in about registration

So same formulation.

is the straightforward. obviously, there fairly translation So

Christopher Howerton

Got it.

That's about the I safety appreciate interesting abbreviated Okay. that. well. database as

Okay.

the And that bit quick-release, in maybe the post so rationale the stomach, for drive best terms you gastric a of little data a and Mark, on guess, could I anti-inflammatory effects. will elaborate the

color a little maybe in rationale more and data driving terms that decision? of the Just

Mark Bodmer

Sure, Chris.

once is parts upper be the within pro-inflammatory this. part independent us small lay in has to of anti-inflammatory, in to the associated That to that small We've earlier the down tend the I in with observations intestine. published X the with referred think your tend work become both what are it the There studies passes the in through first effects intestine further is be the quick and field, behind our shown EDPXXXX. that One is is clearly of release stomach, noise potency. question. this with response to academic that preclinical of that EDPXXXX higher preclinical with This microbe, I comments. tallies

also type. will of ahead with go way, formulation this the by a EDPXXXX, So

direct biomarker the Even important deem old using view. really the inflammatory we of is have of atopic the cohorts and earlier microbe comparative and didn't new And improved. EDPXXXX we in Duncan a from formulation with response formulation mentioned evidence with the that patients adequate are systemic comparative clinical what a dermatitis point

low it past. data important actually and three because clinical thought that's releasing than in the So just of those risk in and the the technical we from preclinical substance, quickly But a removes the components: speed evidence, of have then using the minds, drug very we risk a same . formulation translation. anyway our are that EDPXXXX. completely the with evidence the I about aspect was that clinical it we're switch. any more perspective, Actually, independent have post-release pretty

Christopher Howerton

Got it.

that the And formulation It be Okay. Obviously, sense. learnings questions that any to that the there one has maybe Makes in you to going translate you had other the the formulation further work any in to translation was took but that enhancing terms XXXX I beneficial of of have terms of actually, was that or from is preclinical you programs. positive. of effects clinical program from can of your learnings pipeline? away outside learnings adjudication

Balkrishan Gill

Mark?

Mark Bodmer

Yes.

take me that as well. Let

because EDPXXXX a and which this new when pick our the is to of ideal are of number actually, different what are Actually, probably effects microbes program field. years back We EDPXXXX going pharmaceutical in a putting strategy, a properties had X.X original to this So together, respects. variety going microbes know be. is was were didn't clinical we this very

So production. EDPXXXX type anaerobe, is almost in probiotic-type the organism. facultative a actually It's gram-positive, food that's used

prevalent. So types of all very are orgasms these

finding translate. we're decent out that in so interested And one seemed whether and would to have activity the find preclinical that

different very probably food trials, actually and long use aware effect. in organisms probiotic a there's history trying have which pretty that of and clinical a EDPXXXX origins properties. and You're EDPXXXX has modest had to

both they lower is duodenum from surfaces the that and anaerobes. And these small down. are from One's isolated in EDPXXXX obligate from mucosal intestine. is EDPXXXX the the are are organisms So --

best preclinical seeing host from of actually, cells. microbes proximity the of are of immunological that studies have type ones And that the these So the in origin were close around it's in series that is of this of and immune of cytokines on with of microbes human phenotype cells, with We according we've the secretion are like. out, type quite the view that with phenotypes complex individual an can work And strains cells. or to we the microbes discriminatory change generate And that actually extensive clinic, done patterns in data the human those co-culturing this anti-inflammatory of that macrophages, their and those an naturally primary effects. of turned plus organisms, then do live point assays. we

And of along and cluster with very discovery different and completely EDPXXXX, EDPXXXX. interestingly, to EDPXXXX a some in our anti-inflammatories, other place

So facultative as which work out, organisms, that XXXX than partial the clusters we got studies, which one comment models absent component, as well pro-inflammatory actually component were probiotic-type the gram-positive then the from in formulation that that organisms better. EDPXXXX. anaerobe is is more turned EDPXXXX into was animal just have final a actually deep anti-inflammatory And as potent

studies as think that's the clinical So out well. in panning I

between selected and actually a question long understanding it's a the has answer, lot and into spent EDPXXXX because but we of difference how -- critical developed it's microbes. XXXX So it's the platform a

Christopher Howerton

Right.

anti-inflammatory the to in to that the ecological their best effects. the more with been effect pharmacological observed a essentially, that are those you've organism closely that of human those niche So seems have tissue have effect have on source associated profound

Mark Bodmer

Correct.

Christopher Howerton

it. Got

tranche missed have remaining KX? mentioned, inclusive the Okay. that is the And But a questions. that of asked -- quick I've you might runway for this, from is cash the maybe just just I but Jonathan. a housekeeping then debt from facility few one if

Jonathan Poole

any That's Chris, that is the assumption cash no. cash more made from our drawn and we've equivalents. just The existing in of not KX we tranches facilities. have guidance the

Operator

back now closing would to session. to question-and-answer today's concludes remarks. the for This call like Simba I turn

Balkrishan Gill

everyone, Thank us joining for today. you,

I and appreciate very Evelo much. So in and the support continued your interest questions. Thanks

Operator

call. and today's you Ladies participating. conference gentlemen, concludes for Thank this

now may disconnect. You

Evelo Biosciences (EVLO) 14 Feb 202019 Q4 Earnings call transcript