Evelo Biosciences, Inc.
Q2 2019 Earnings Call Transcript

Published: 12 Aug 2019

[Operator:]

Good morning and welcome to Evelo’s Conference Call for initial data results for clinical trials EDP1815 and EDP1066. [Operator Instructions] At this time, I would like to turn the call over to Stefan Riley of Evelo. Please proceed.

[Stefan Riley:]

Thank you, operator. This morning, we issued a press release that outlines the topics that we plan to discuss today. This release is available at www.evelobio.com under the Investors tab. Today in our call, Simba Gill, Evelo’s CEO, together with Duncan McHale, our Chief Medical Officer, will review the positive data from EDP1815 and EDP1066 and their significance on the company’s strategy and future clinical plans.Before we begin, I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact, including statements about our objectives and anticipated clinical milestones for 2019 and 2020, the potential of any of our monoclonal microbials and clinical data, the timing and plans for clinical studies of EDP1815 and the timing and results of any clinical studies should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be subject to the safe harbor protection provided by the reform act. Actual results could differ materially from those indicated by the forward-looking statements due to the impact of many factors. Participants are directed to the Risk Factors set forward in Evelo’s quarterly report on Form 10-Q for the quarter ended March 31, 2019, and the company’s other filings with the Securities and Exchange Commission. Any forward-looking statements made today speak only to Evelo’s operations as of today. Evelo disclaims any duty to provide updates to its forward-looking statements even if subsequent events cause the company’s views to change. I would like to draw your attention to the accompanying data presentation.It is now my pleasure to pass the call over to Simba.

[Simba Gill:]

Thank you, Stefan. Good morning, everyone and thank you for joining us. Today is an important day. We started Evelo with the bold vision to transform medicine by harnessing newly uncovered biology in which we understand for the first time that cells in the small intestine play a central role in governing our biology. Our objective is to develop a new class of all biologics based on this central biology. As you know, our preclinical data are phasing across multiple models of biology and disease, and question you and we have been asking is quite simply, will it work in humans? I’m delighted to report today the first clinical evidence for that translation, both in terms of clinical responses in patients as well as biomarkers.Slide 3 summarizes key highlights from these data. Notably, we are advancing EDP1815 into Phase II in psoriasis. I am now going to hand over to Duncan, who will go into the details of the clinical data.

[Duncan McHale:]

Thank you, Simba. So I’m pleased to be able to share with you today our interim clinical data from the EDP1815 and EDP1066 Phase Ib trials. Moving to Slide 5, just as a reminder, we selected psoriasis as one of the first inflammatory diseases to study given the unmet patient need, particularly in the mild-to-moderate patient segment, as well as the ability to learn about the pharmacology of our clinical candidates. We have the opportunity to address any stage of disease due to the potentially differentiated profile of Evelo’s oral biologics. Our goal is to be a first-line treatment across all stages of disease. Our initial focus is on the mild-to-moderate populations. This population numbers over 3.5 million patients across the U.S. and EU5, and these patients are underserved by current therapies.Moving to Slide 6, the low-dose cohort in this Phase Ib trial enrolled 12 patients with mild-to-moderate psoriasis. The patients were randomized in a 2

[Simba Gill:]

Thank you, Duncan. So if we turn to Slide 21, we summarize our revised clinical data guidance. We have a number of data readouts over the next 18 months, and importantly, we’ve added to our guidance the Phase IIa 12-week interim data for EDP1815 in psoriasis expected in late 2020.Moving to Slide 22, today, we presented the first evidence from human clinical studies that support our platform opportunity and vision. Based on these data, we are advancing EDP1815 into Phase II in psoriasis. We expect to expand into other inflammatory indications after the interim 12-week data of that trial.I would like to conclude by thanking our remarkable team at Evelo for their passion and dedication to our science and our vision. We would now be happy to take any questions you may have.

[Operator:]

Thank you. [Operator Instructions] I saw our first question comes from Matthew Harrison from Morgan Stanley. Please go ahead.

[Vikram Purohit:]

Hi, this is Vikram on for Matthew. Thanks for taking our question. So for the 1815 data, I guess, our first question is you provided some commentary on the LSS measure. We are wondering if there is any commentary you could provide on actual impact on PASI scores. And then also I believe there were some other secondary endpoints that you looked at in the study. We just wanted to see if there is any commentary you could provide about how those trended if they pointed in the same direction? Was there a correlation there? And then on 1066, our question is how does the data you generated so far now influence your expectations for the new formulation data coming later this year?

[Simba Gill:]

Hi, Vikram, this is Simba. Thanks for your questions. I am going to let Duncan answer both the questions on 1815 as well as 1066.

[Duncan McHale:]

Thanks for the questions. So as we said during the actual presentation that the reason we used the lesion severity score is that this is the more sensitive clinical measure. This study is a – it’s a signal-finding study. We were looking for a pharmacodynamic response. And we are very pleased to actually demonstrate over what is a short period of time throughout the 28 days at the lowest dose that pharmacodynamic response is demonstrated through the lesional scores and the other biomarkers that we reported today. Yes, we did measure the PASI score as we have said that’s a 22, but we are – in the actual report, you see the same trends. In the PASI score, there is a reduction there in our treated group compared with placebo, but it’s not a tool that’s really suited to this mild-to-moderate group over such a short period of time. And obviously, PASI will be something that as we move in Phase II we will be looking at. With regard the other pharmacodynamic endpoints we are still in the process of examining the other pharmacodynamic endpoints. The ones we’ve presented today are the ones we’ve got sort of robust analysis of and all are trending in the same way. So the others will be presented at a future scientific conference once we have finished the analysis of those. I forgot what the second part of the question was?

[Vikram Purohit:]

1066 formulation was the second part of the question.

[Duncan McHale:]

Yes. The data for 1066, actually mainly it’s very encouraging because also for 1066 what we have seen is a pharmacodynamic response. We’ve seen it in immune cell biomarker data but not translating into the clinical changes at the dose tested. The new formulation gives us a 30-fold increase in potency. And the portfolio strategy was always to test multiple microbes and multiple different indications as they may not respond the same to the different indications. So we feel actually testing the higher potency formulation in atopic dermatitis is still a very valuable piece of information to gain and potential benefit.

[Vikram Purohit:]

Okay, understood. Thank you.

[Duncan McHale:]

Thanks.

[Operator:]

Thank you, our next question comes from Chris Shibutani from Cowen. Please go ahead.

[Chris Shibutani:]

Great, thank you. Can you give us a sense for what the blend of mild versus moderate patients might be in the Phase II study? You also mentioned that you will be taking an interim look, I guess, at the 12-week point. Will you be sharing that information with us? Or will your decision about triggering additional autoimmune studies be further discussed at that point?

[Simba Gill:]

Hi, Chris. So let me take the second question. So yes, we will be sharing the interim 12-week data, and we’re actually giving formal guidance that we expect to release that late in 2020. And at that time, we will be giving guidance on potential expansion into additional indications. Importantly, as you understand, Chris, the potential for EDP1815 goes significantly beyond psoriasis. So subject to continued positive data, we would anticipate potentially expanding into a range of additional inflammatory indications. And again, we’ll give guidance on that in the second half late of 2020. On the first part of the question, I’ll let Duncan answer that.

[Duncan McHale:]

Thanks, Simba. And so to care for the subjects enrolled in this Phase Ib study, these were subjects with a body surface area of less than or equal to 5% in terms of psoriasis, so they are on sort of the mild end of that. It was a first-in-human study. For the Phase II study that we are moving into, we will have an advisory meeting with key opinion leaders in October to provide some more advice, but we will move into a more moderate population. There’s no evidence actually that EDP1815 should only work in mild to moderate and – or mild disease and may well look into the disease as well. So we’re going to take advice but we will broaden the population in Phase II so it’s clearly in that moderate underserved patient population.

[Chris Shibutani:]

Got it. And then there is work that you are obviously doing in a very rigorous fashion, looking at dosing as well as potency. And I’m hoping you can provide a little clarity in terms of what the distinctions may be there, for instance, in the 1815 work that you are talking about increasing to 2.76 grams, 5x the dose, whereas in 1066 you’re talking about a novel formulation that has 30x the potency. Can you just help us understand the differences in terms of what is actually going on with how it is that you’re able to enable that potency difference, which I would think would be the ultimate kind of metric with this formulation? And is that a formulation modality that you’re going to apply to 1815? And if not, is it just merely just increasing the heft of therapeutic that you are administering? Just a little clarity there would be helpful.

[Simba Gill:]

Yes. Chris, I will let Mark, our Chief Scientific Officer, answer that question.

[Mark Bodmer:]

Chris, the thrust of the formulation studies we’ve been doing is to maximize the ability of the micro to engage with the target cells in the gut. So we had a specification for this to protect against conditions in the stomach, of course, and then to release as quickly as possible as the drug passes into the small intestine, and that’s what the new formulation does. So the drug substance is exactly the same. What it’s doing is it’s changing the rate of exposure and that’s what’s leading to this difference in potency that we measure in the preclinical models and we’re taking forward. We’re seeing exactly the same effect for EDP1066 and for EDP1815, which we think is related to the biology of the interaction of the microbes with the gut and the distribution of the appropriate target cells, particularly in the upper part of the small intestine. So there’s 1 part here. It’s the same formulation change for both and it’s based on this notion of getting maximal target cell engagement within the lumen of the small intestine to appropriate stage and timing of release of the microbe.

[Simba Gill:]

And Chris, very importantly, just to repeat something we said on the call, we are taking EDP1815 forward in the Phase II with both the original as well as the new formulation. And obviously, one of the things that’s very encouraging is that with the data reported today that’s the lowest dose we’ve looked at, it’s with the original formulation. So on both the questions you asked in terms of potency and dosing, we’re going to be investigating in the Phase II something that is a 5 at 5 dose and looking at the new formulation, which is up to 30-fold more potent. So the other components on this are also the extended duration of therapy. Again, Duncan mentioned it on the call, but it’s an important point to emphasize. 28 days is a very short duration to drive changes in systemic immunology and to drive changes in clinical response. So again very encouraging that we’ve seen in a short period with the low dose the effects that we summarized. The Phase II in addition to looking at higher doses and the new formulation will also be an extended duration of therapy.

[Chris Shibutani:]

Got it. Thank you very much for the additional comments.

[Simba Gill:]

Thank you, Chris.

[Operator:]

Thank you. Our next question comes from Matthew Luchini from BMO Capital. Please go ahead.

[Matthew Luchini:]

Hi, thanks. Good morning and congrats on the progress. So, a couple for me. First, I guess, given that the LSS measures a single lesion. Maybe you could talk a little bit about how the specific lesion on each patient was selected? And then secondarily, maybe you could talk a little bit if you look back at Slide 10 and the patient data, we have a range of responses. And I was just wondering if you might be able to provide any color based on perhaps patient baseline characteristics or something else, what do you think drove the substantial response seen in some patients and the more muted response in some of the other patients? And then finally, just as a point of clarification in case I missed it, could you tell us the breakdown of mild versus moderate patients in today’s results?

[Simba Gill:]

Thanks. And thanks for the congratulation. So I think, again our brilliant Chief Medical Officer is the right person to answer all those questions.

[Duncan McHale:]

Sure. Thanks, Simba. In terms of the choice of the lesion, so this is something that is obviously done by the investigator at the site. What we did for EDP1815, we have the same investigator trained appropriately who actually did all of the scoring. And so they chose the lesion. They chose sort of a large lesion, which generally has the highest sort of score that we can for the lesional score so, most of the lesion scores are around 8 to 10 points. So there is no hard and fast rules, but the investigator chose that lesion and he chose the lesion or she chose the lesion with a high score so that we can see a reduction in the score. So that’s the lesional score, the choice of lesion. If you look at the rate of responses, so in terms of baseline, there’s no evidence that the original baseline score altered the response. It’s certainly not that we had the more mild patients on the lesional score responding all the more severe. We took the responses across the range as we might expect. The variability in responses is really a function of the fact that actually what you are doing with psoriasis is you’re treating the inflammation and you’re allowing the skin to heal. And there’s quite a bit of variability in that healing response. And that’s why if you look at anti-inflammatory agents as a sort of the category or class treating psoriasis, you need to treat out to sort of 12 to 16 weeks to really understand the full depth of response entirely and the range of responses in the population. And that’s why the Phase II study will have a longer duration period to actually be able to really measure clinical benefit across the population. So I think what you’re just seeing there is probably just variability in skin healing times that we know do vary quite markedly. The final question here is that although the individual lesion scores here were often scores of 8, 9, out of 12. The disease was mild and these patients were all mild and maybe just into the moderate range. That’s because this was the first-in-human study, so we had to take sort of the slightly mild population. So overall, the disease will be classed as mild, but actually the lesion scores were in the sort of 8 to 10-type range.

[Matthew Luchin:]

Great. Thank you for the additional color.

[Operator:]

Thank you. Our next question comes from Chris Howerton from Jefferies. Please go ahead.

[Chris Howerton:]

Great. Congrats on the data. Thanks for taking my question I think quite a few of them were asked already but in terms of the safety profiles what we’ve seen so far, I think, the comments were that they were the same as the placebo group. But I’m wondering if you could provide a little more information in terms of what were the most frequent adverse events that were seen within this data set.

[Simba Gill:]

Chris, sure. Duncan?

[Duncan McHale:]

Sure, Chris. Happy to. This – the adverse events profiles that we’ve seen has been incredibly well tolerated, no serious adverse events, no adverse events of severe intensity. The few events we’ve had, the majority were mild with a couple of moderate events. The only event we’ve really seen in the EDP1815 was 2 or 3 headaches that were treated with standard acetaminophen-type analgesia and a little bit of bloating abdominal pain. And again, nothing that stopped anybody taking the medicines. And something that we always see in these sorts of studies. So it was really – those were the only 2 AEs in the EDP1815 cohort that were reported.

[Chris Howerton:]

Got it. Okay. And then I think there was great information on the formulation work that you’ve doing and moving forward. And I guess, my understanding is that the formulation for 1815 was shown to be 30x more potent. But I’m not sure that, that same information has been disclosed for new formulation for 1066. So I was just trying to confirm maybe what the status of a new formulation would be of that asset. And if not, what operational steps would be required to kind of move that forward?

[Simba Gill:]

Mark, do you want to take that?

[Mark Bodmer:]

Yes. So the new formulations – the original work actually was done with EDP1066. The data that we’ve put in the public domain happens to be for EDP1815. But the effect were the same, a range of 10- to 30-fold improvement for EDP1066 and 30 or even possibly greater for EDP1815. Status of EDP1066 is that we actually have the manufactured GMP formulated material ready for the study, which Duncan mentioned in atopic dermatitis, and we’re pursuing the same for EDP1815.

[Chris Howerton:]

Got it. Okay, great. And then maybe just in terms of the number of pills and dosing frequency and the potential for food effect, is there any kind of additional information you can provide to us in terms of what we’ve seen so far in the data? And maybe what your expectations might be moving forward with respect to those features?

[Simba Gill:]

Yes. Chris, I think the one thing we can say is between the new formulation, the data we’ve already presented today, those two things give us confidence that as we move forward we will be able to end up with an attractive commercial formulation, which obviously ideally is, e.g., one pill per day or equivalent. So that’s as much as we’re discussing at this stage.

[Chris Howerton:]

Okay. That’s great. And then maybe if I could ask just one more question in terms of the features of the formulation, one of the words that I found interesting was that you called the current formulation enteric and then a new formulation a novel formulation. So I was just curious in terms of that word choice and specifically, what it’s meant in terms of the differentiation between the two.

[Simba Gill:]

Mark, go ahead.

[Mark Bodmer:]

Yes. So we haven’t disclosed specifically what the new formulation is. They are actually both enteric in the sense that they protect from the effect of stomach acid, which is deleterious on the pharmacology of these microbes. The original enteric formulation is a capsule with a standard enteric coat into which the lyophilized material at the weights Duncan referred to is put. The new formulation is an alternative presentation. I think we commented when we first talked about this, but it’s a commercializable accessible technology, which increases the rate of exposure. We’ll discuss what this is at some point but we haven’t revealed it. They are both enterically coated, but there are some additional facets of the new formulation which speed the exposure and release.

[Chris Howerton:]

Got it, okay. Alright well thank you very much and congratulations again on the positive data.

[Simba Gill:]

Thanks, Chris.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Taylor Feeley from Chardan. Please go ahead.

[Taylor Feeley:]

Hi, thanks for taking my question this morning. Many of them have been answered. But I guess, I’ll start with one about the lesion severity score. For this 2-point reduction, can you help benchmark it against other therapeutics that are currently used in psoriasis and maybe help us understand on a similar timescale and in this patient population the data that may exist on what those lesion severity score look like? And then if you could just maybe clarify the cytokine assay? You mentioned that it’s a ratio of the cytokines that went up versus the cytokines that went down. But is the ratio fold change or just the number of cytokines? I just want to make sure I fully understand that metric. Thank you so much.

[Simba Gill:]

Good morning. Taylor, so let me take the first question. We can’t benchmark because what we’re addressing with EDP1815 is the patient segment for which there is unmet need into which existing therapies are non-applicable. So other therapies do not actually go after the mild-to-moderate populations until there isn’t good historical benchmarking. We’ve used LSS, as Duncan said, because it is the most sensitive measure of clinical response in patients with mild-to-moderate disease. So that’s the answer to that question. Duncan, do you want to handle the cytokine question?

[Duncan McHale:]

Yes. I mean the short answer to the cytokine question is it was the number of cytokines that were up-regulated or down-regulated following the stimulation of the immune cells by LPS non-immune stimulant. And as you sort of see what we saw in the treated group after 28 days of treatment was that we saw more down-regulated cytokines following that stimulation compared with the actual baseline numbers. But it wasn’t fold changed. It was the number of cytokines.

[Taylor Feeley:]

Okay, great. Any color on magnitude of change or is it too early to be able to discuss that?

[Duncan McHale:]

I mean it’s probably too early to do that and what you find in these sorts of assays is there’s a lot of intra-individual variability, as I’m sure you’re well aware of, and small number.

[Operator:]

Our last question comes from Chris Shibutani from Cowen. Please go ahead.

[Chris Shibutani:]

Great, thank you very much for taking the follow-ups. Then if we’re looking for benchmarks, so how we should compare and frame the results that you’ll provide on the Phase II program at 12 and 24 weeks? I believe, PASI is the endpoint there. As you’ve described for mild-to-moderate patients, a lot of the therapeutics that we’re very familiar with have not necessarily been tested. But can you refer us to appropriate references or benchmarks there, so that we’ll have some context for interpreting the results that you present from the Phase II? And then I have one last quickie.

[Simba Gill:]

So, couple of points. So yes, Chris, PASI will be the key readout in the full Phase II. And I think, as we go forward, we’ll give you more guidance on appropriate comparators probably too early for us to get into too much detail on that right now.

[Chris Shibutani:]

Okay, great. We’ll be keen for that. And then lastly, just on 1503, I noticed in the communication that you say that you will no longer be providing guidance on the timing related to this IST. Has anything changed in terms of your involvement, in terms of control of that study as well as how the results will be communicated?

[Simba Gill:]

No. Nothing’s changed there, Chris. We just decided that – we have never had operational control. So we made a decision to stop giving formal guidance on that because we can’t impact the speed at which it’s occurring, but nothing’s changed.

[Operator:]

This concludes our Q&A session. At this time, I’d like to turn the call back to Simba Gill for closing remarks.

[Simba Gill:]

So thank you very much everybody. Appreciate the continued interest in Evelo. It’s, obviously, as I said, an important day for us. We’re delighted to report that, for the first time, we have data showing positive clinical signals and supporting biomarker data in human patients. We really appreciate the support and the questions. And look forward to continuing to build Evelo together with you. Thank you.

[Operator:]

Thank you, ladies and gentlemen, for attending today’s conference. This concludes the program. You may all disconnect. Good day.