Embattled Evelo hangs on to CEO while letting go of 48 employees after eczema trial misses goals

Evelo Biosciences’ lead asset has flunked a phase 2 trial in eczema after an unusually high placebo response rate was reported in the first three of four cohorts. The data drop comes as the biotech manages to hang on to CEO Simba Gill, Ph.D., but lays off 48 staff members.

The Massachusetts-based biotech shared data from three cohorts in a multicenter, placebo-controlled phase 2 assessing lead candidate EDP1815. The orally delivered med is designed to treat atopic dermatitis, also known as eczema, after 16 weeks of dosing. The trial enrolled 405 patients with mild, moderate or severe eczema and separated them into four groups. Three cohorts enrolled 100 patients each, with 75 patients receiving EDP1815 and 25 on the placebo. Each group received different concentrations, dosing regimens or manufacturing processes of Evelo’s investigational med. Patients in the fourth cohort are receiving a faster-release capsule that aims to boost efficacy, with data expected in the second quarter of this year.   

The phase 2 study’s primary endpoint is decreasing the ailment by at least 50% at week 16, as measured on the Eczema Area and Severity Index (EASI). EASI-50 responses or greater were achieved in 41%, 38% and 32% of patients with mild to moderate disease in cohorts 1, 2 and 3, respectively. What threw the trial off track was that patients on placebo had an overall EASI-50 response of 56%.   

“We are working through the data to understand the very high placebo rates observed in the trial, which occurred with greater prevalence in certain geographic regions,” Gill said in a Feb. 1 release, adding that the results from the fourth cohort “will inform our path forward in atopic dermatitis.”

Despite previous plans to leave, the CEO, who is also an advising partner at Flagship, will continue to lead the organization at the board’s request, the company added in the same release. Evelo has put its search for a successor on pause but is instead implementing cost-reducing initiatives that include layoffs.

“Given the challenging financial macro-environment, we have implemented cost-saving initiatives in order to extend our cash runway,” said Gil. “As part of this initiative, we have reduced our workforce and are prioritizing investment in our core clinical programs.”

The company is laying off 48 employees, or 48% of its workforce, an Evelo spokesperson told Fierce Biotech. The workforce cull was the only cost-saving initiative shared in the release, though the spokesperson said other operating and infrastructure cuts will also be made. 

The cost-saving measures are expected to extend Evelo’s cash runway into the third quarter of this year. As of Sept. 30, 2022, the company had $69.1 million in cash and equivalents on hand. One of the many biotechs leaning on venture debt amid the prolonged bear market, Evelo went on to receive a $45 million loan from Horizon Technology Finance Corporation at the end of the year.

Last April, the embattled company hit the brakes on a separate atopic dermatitis treatment after a phase 1 trial failed to demonstrate clinical benefit. With no clear evidence of benefit after eight weeks across the subset of 15 patients who received the lower dose of the drug, dubbed EDP1867, the biotech said the program would be put on hold.  

However, the company is still pushing ahead with EDP1815 in psoriasis after it was found to be well-tolerated and showed positive efficacy results in a phase 2 study. Evelo has also started dosing in a phase 1 trial of a microbial extracellular vesicle (EV) asset dubbed EDP2939.

The company is on the hunt for partnership opportunities for EDP1815, EDP2939 and its EV platform.