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Evelo (EVLO) Drops 59% on Flunking Psoriasis Drug Study
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Shares of Evelo Biosciences (EVLO - Free Report) plummeted 58.8% on Tuesday after its management announced disappointing top-line results from a mid-stage study evaluating EDP2939 in moderate psoriasis.
The mid-stage study did not achieve its primary endpoint of difference in the proportion of patients who achieved at least 50% improvement from baseline in PASI score (a PASI-50 response) between EDP2939 and placebo following 16 weeks of daily treatment. Per management, 19.6% of patients receiving EDP2939 achieved a PASI-50 response after a 16-week treatment period, compared to 25% on placebo.
Evelo also reported 20-week treatment data wherein treatment with EDP2939 showed superiority over treatment with placebo. However, the company’s decision to scrap the candidate plummeted the stock. The top-line results have also forced Evelo to initiate a process to explore strategic alternatives, including seeking partnership opportunities for its proprietary SINTAX platform and other pipeline candidates.
In the year so far, shares of Evelo have plunged 96.3% compared to the industry’s 18.4% fall.
Image Source: Zacks Investment Research
This is the second major setback suffered by Evelo this year. Earlier this April, management discontinued developing its then-lead pipeline candidate EDP1815 in atopic dermatitis. This decision was taken by management based on data from a mid-stage study, wherein treatment with EDP1815 did not meet the primary endpoint.
Evelo was also developing EDP1815 for moderate psoriasis indication. At the time, it had skipped the candidate in favor of EDP2939, believing the latter to have a greater potential in the indication. Per an SEC filing in August, management had stated that pursuing EDP1815 in psoriasis indication was contingent upon the results of the EDP2939 study and the availability of funding and resources.
Unless management finds itself a suitable partner for EDP1815, it seems unlikely for EVLO to consider any clinical studies on its pipeline candidates. Currently, the company is facing severe liquidity constraints. As of June 2023-end, the company’s cash and cash equivalents balance stood at $7.6 million, while the debt balance stands at around $43.9 million.
In the past 60 days, the estimate for Allogene Therapeutics’ 2024 earnings per share narrowed from $2.22 to $2.21. Year to date, shares of Allogene have lost 49.3%.
ALLO’s earnings beat estimates in three of the trailing four quarters while meeting the mark on one occasion, witnessing an average earnings surprise of 3.93%. Allogene’s earnings beat estimates by 10.17% in the last reported quarter.
In the past 60 days, estimates for Deciphera Pharmaceuticals’ 2023 loss per share have narrowed from $2.38 to $2.36. Year to date, Deciphera’s stock has plunged 35.5%.
DCPH’s earnings surpassed estimates in two of the last four quarters, met the mark on one occasion and missed on another. The company witnessed an earnings surprise of 1.58% on average. In the last reported quarter, Deciphera’s earnings beat estimates by 8.06%.
In the past 60 days, estimates for Jazz Pharmaceuticals’ 2023 and 2024 earnings per share have increased from $18.49 to $18.64 and $20.31 to $20.59, respectively. Year to date, JAZZ’s stock has dipped 16.7%.
Jazz Pharmaceuticals’ earnings outpaced estimates in two of the trailing four quarters while missing the mark on the other two occasions, witnessing a negative surprise of 27.59%, on average. In the last reported quarter, Jazz Pharmaceuticals’ earnings beat estimates by 1.12%.
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Evelo (EVLO) Drops 59% on Flunking Psoriasis Drug Study
Shares of Evelo Biosciences (EVLO - Free Report) plummeted 58.8% on Tuesday after its management announced disappointing top-line results from a mid-stage study evaluating EDP2939 in moderate psoriasis.
The mid-stage study did not achieve its primary endpoint of difference in the proportion of patients who achieved at least 50% improvement from baseline in PASI score (a PASI-50 response) between EDP2939 and placebo following 16 weeks of daily treatment. Per management, 19.6% of patients receiving EDP2939 achieved a PASI-50 response after a 16-week treatment period, compared to 25% on placebo.
Evelo also reported 20-week treatment data wherein treatment with EDP2939 showed superiority over treatment with placebo. However, the company’s decision to scrap the candidate plummeted the stock. The top-line results have also forced Evelo to initiate a process to explore strategic alternatives, including seeking partnership opportunities for its proprietary SINTAX platform and other pipeline candidates.
In the year so far, shares of Evelo have plunged 96.3% compared to the industry’s 18.4% fall.
Image Source: Zacks Investment Research
This is the second major setback suffered by Evelo this year. Earlier this April, management discontinued developing its then-lead pipeline candidate EDP1815 in atopic dermatitis. This decision was taken by management based on data from a mid-stage study, wherein treatment with EDP1815 did not meet the primary endpoint.
Evelo was also developing EDP1815 for moderate psoriasis indication. At the time, it had skipped the candidate in favor of EDP2939, believing the latter to have a greater potential in the indication. Per an SEC filing in August, management had stated that pursuing EDP1815 in psoriasis indication was contingent upon the results of the EDP2939 study and the availability of funding and resources.
Unless management finds itself a suitable partner for EDP1815, it seems unlikely for EVLO to consider any clinical studies on its pipeline candidates. Currently, the company is facing severe liquidity constraints. As of June 2023-end, the company’s cash and cash equivalents balance stood at $7.6 million, while the debt balance stands at around $43.9 million.
Evelo Biosciences, Inc. Price
Evelo Biosciences, Inc. price | Evelo Biosciences, Inc. Quote
Zacks Rank & Stocks to Consider
Evelo currently carries a Zacks Rank #2 (Buy).Some better-ranked stocks are Allogene Therapeutics (ALLO - Free Report) , Deciphera Pharmaceuticals (DCPH - Free Report) and Jazz Pharmaceuticals (JAZZ - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the estimate for Allogene Therapeutics’ 2024 earnings per share narrowed from $2.22 to $2.21. Year to date, shares of Allogene have lost 49.3%.
ALLO’s earnings beat estimates in three of the trailing four quarters while meeting the mark on one occasion, witnessing an average earnings surprise of 3.93%. Allogene’s earnings beat estimates by 10.17% in the last reported quarter.
In the past 60 days, estimates for Deciphera Pharmaceuticals’ 2023 loss per share have narrowed from $2.38 to $2.36. Year to date, Deciphera’s stock has plunged 35.5%.
DCPH’s earnings surpassed estimates in two of the last four quarters, met the mark on one occasion and missed on another. The company witnessed an earnings surprise of 1.58% on average. In the last reported quarter, Deciphera’s earnings beat estimates by 8.06%.
In the past 60 days, estimates for Jazz Pharmaceuticals’ 2023 and 2024 earnings per share have increased from $18.49 to $18.64 and $20.31 to $20.59, respectively. Year to date, JAZZ’s stock has dipped 16.7%.
Jazz Pharmaceuticals’ earnings outpaced estimates in two of the trailing four quarters while missing the mark on the other two occasions, witnessing a negative surprise of 27.59%, on average. In the last reported quarter, Jazz Pharmaceuticals’ earnings beat estimates by 1.12%.