{"id":353631,"date":"2023-11-22T12:00:00","date_gmt":"2023-11-22T17:00:00","guid":{"rendered":"https:\/\/platohealth.ai\/flagship-backed-microbiome-biotech-evelo-to-shut-down\/"},"modified":"2023-11-23T03:30:13","modified_gmt":"2023-11-23T08:30:13","slug":"flagship-backed-microbiome-biotech-evelo-to-shut-down","status":"publish","type":"post","link":"https:\/\/platohealth.ai\/flagship-backed-microbiome-biotech-evelo-to-shut-down\/","title":{"rendered":"Flagship-backed microbiome biotech Evelo to shut down","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
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Evelo Biosciences, a biotechnology company launched by Flagship Pioneering to develop microbiome drugs, is shutting down, according to a regulatory filing<\/a>.<\/p>\n

The move follows setbacks for the company, which was testing its lead drug candidate for inflammatory skin conditions. That drug failed the main goal<\/a> of a Phase 2 trial, data announced Feb. 1 showed. As a result, Evelo laid off 48 people<\/a> in January, and let go of another unspecified number of employees in the second quarter.<\/p>\n

\u201cAfter seeking potential funding sources and other ways to continue to operate Evelo\u2019s business, Evelo has not found a viable alternative to the dissolution,\u201d the company wrote in a Monday filing notifying investors of its plans to shut down. Evelo\u2019s website now redirects to its SEC filings.<\/p>\n

Evelo had approximately $17.3 million in cash and cash equivalents<\/a> on hand as of Sept. 30. It raised $25.5 million via a private stock placement in July.<\/p>\n

The company\u2019s shares, which trade on Nasdaq under the ticker symbol \u201cEVLO<\/a>,\u201d have lost almost all of their value since Evelo\u2019s Wall Street debut in 2018.<\/p>\n

Evelo studied its lead drug candidate, EDP1815, in Phase 2 trials for atopic dermatitis and psoriasis. In April, the company halted work on EDP1815 in atopic dermatitis and turned its focus to a second experimental drug, EDP2939, which was also in testing for psoriasis. EDP2939 missed its goal in a trial readout in October and Evelo stopped development.<\/p>\n

Evelo also previously researched medicines for COVID-19 and cancer.<\/p>\n

Founded in 2015, Evelo licensed a cancer therapy<\/a> from the University of Chicago and brokered a deal with the Mayo Clinic to develop anti-inflammatory drugs<\/a>.<\/p>\n

Many other biotech companies have announced layoffs or business restructurings in what continues to be a difficult funding market for drugmakers. More than 130 biotechs, including Evelo, have let go of employees this year, according to data compiled by BioPharma Dive.<\/p>\n

Other notable companies that have shuttered since the beginning of the year include another former Flagship startup, Rubius Therapeutics<\/a>, and gene therapy developer LocanaBio<\/a>.<\/p>\n

Despite the market turbulence, the biopharma sector still appears to be growing. An August analysis from the investment firm Stifel<\/a> found that employment at mid-sized and large pharmaceutical and biotech companies is still increasing, though employment numbers are down among small drugmakers.<\/p>\n