Evelo Biosciences, a biotechnology company launched by Flagship Pioneering to develop microbiome drugs, is shutting down, according to a regulatory filing.
The move follows setbacks for the company, which was testing its lead drug candidate for inflammatory skin conditions. That drug failed the main goal of a Phase 2 trial, data announced Feb. 1 showed. As a result, Evelo laid off 48 people in January, and let go of another unspecified number of employees in the second quarter.
“After seeking potential funding sources and other ways to continue to operate Evelo’s business, Evelo has not found a viable alternative to the dissolution,” the company wrote in a Monday filing notifying investors of its plans to shut down. Evelo’s website now redirects to its SEC filings.
Evelo had approximately $17.3 million in cash and cash equivalents on hand as of Sept. 30. It raised $25.5 million via a private stock placement in July.
The company’s shares, which trade on Nasdaq under the ticker symbol “EVLO,” have lost almost all of their value since Evelo’s Wall Street debut in 2018.
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.
Evelo also previously researched medicines for COVID-19 and cancer.
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.
Despite the market turbulence, the biopharma sector still appears to be growing. An August analysis from the investment firm Stifel found that employment at mid-sized and large pharmaceutical and biotech companies is still increasing, though employment numbers are down among small drugmakers.