Why Is Psoriasis Company Evelo Biosciences Stock Plunging Today?

Evelo Biosciences Inc (NASDAQ:EVLO) released top-line results from its Phase 2 clinical study with EDP2939 in moderate psoriasis.

EDP2939 is a next-generation product candidate based on previously reported Phase 2 data in psoriasis with the company's first-generation product, EDP1815. 

The study's primary endpoint, the difference in the proportion of patients who achieved an outcome of a 50% improvement from baseline in Psoriasis Area and Severity Index (PASI) score (a PASI-50 response) between EDP2939 and placebo after 16 weeks of daily treatment, was not achieved. 

The company is continuing to gather and analyze the study data.

The company said it would cease the development of EDP2939 and is reviewing potential strategic alternatives, including seeking to partner EDP1815 and the SINTAX platform. 

A PASI-50 response was chosen as this is clinically meaningful for patients with moderate psoriasis and had been positive in the previous study with EDP1815. 

Although there was no statistically significant difference between the proportion of patients who achieved a PASI-50 response on EDP2939 compared to placebo, it was notable that such numeric proportion went from being inferior to placebo at week 16 (19.6% on EDP2939 vs 25% on placebo) to being superior at the week 20 follow-up visit (33.9% on EDP2939 vs 26.9% on placebo). 

Overall safety data was consistent with what was previously reported in the Phase 1 portion of this study: EDP2939 was well-tolerated with adverse events (AEs) comparable to placebo. 

Price Action: EVLO shares are down 48.3% at $1.51 on the last check Tuesday.