Evelo Biosciences has filed for a $100 million initial public offering. The pitch to public investors comes as the Flagship Ventures’ startup prepares to test its lead inflammatory disease and anticancer microbial strains in humans.
Cambridge, Massachusetts-based Evelo is developing oral formulations of specific microbial strains. Evelo selects the strains on the strength of their potential to interact with host immune cells in the gut, thereby up or down-regulating immune responses via multiple pathways. The involvement of multiple pathways is tipped to deliver better results than single-target drugs. Evelo is also hoping the use of microbes found naturally in people will result in good tolerability, enabling their use early in disease pathways.
None of that is proven in the clinic, though. Evelo has pulled in well over $100 million from Flagship, GV, Celgene, Alexandria Venture Investments and Mayo Clinic over the past few years. Now, it wants another $100 million from public financiers to support its evolution into a clinical-phase biotech.
Evelo has a CTA approved for lead candidate EDP1066, setting it up to start a clinical trial in healthy volunteers and patients with mild-to-moderate psoriasis or atopic dermatitis this quarter. Data are due in the first half of next year. Evelo has similar plans for its second inflammatory disease candidate EDP1815, which is also aimed at psoriasis and atopic dermatitis. If those studies go well, Evelo may also look at the assets in rheumatoid arthritis and inflammatory bowel disease.
That is one side of Evelo’s pipeline. The other is aimed at oncology indications, including colorectal cancer, renal cell carcinoma, melanoma and PD-1 relapsed patients. Evelo expects to take its lead cancer drug, EDP1503, into the clinic later this year. That trial will assess EDP1503 in PD-1-naïve and PD-1-relapsed melanoma patients in combination with a PD-1 checkpoint inhibitor.
Evelo is embarking on the oncology clinical development program on the back of preclinical data showing EDP1503 upregulates the immune response against tumors. When paired to a checkpoint inhibitor—which prevent downregulation of immune responses—in mouse models the effect was greater than either drug achieved as a monotherapy.
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The appetite for drugs that enhance and extend the efficacy of checkpoint inhibitors means Evelo will have a hot asset on its hands if it validates the idea in the clinic. However, it is going into the IPO with some fundamental questions unanswered.
Evelo’s clinical trials will use a capsule that it has been unable to test in mice. The capsule is designed to deliver its payload into the gut, where Evelo hopes the microbial strain will pass through gut tissue and into the lumen. However, Evelo is unsure if it will be possible to achieve sufficient exposure using a convenient dosing regimen. And, even if it does, it is unclear whether the drug will trigger enough immune activity at the site of the disease to improve outcomes.
Comparable uncertainties face all biotechs as they translate their science into humans. What sets Evelo and other members of the IPO class of 2018 apart from many of their predecessors is they are seeking cash from public investors before clearing up any doubts in the clinic.