Executive Summary

Pre-revenue biotech quarter with disciplined OpEx and pipeline milestones; net loss was $30.6M (EPS $(0.40)), modestly improved vs prior year on a per-share basis due to higher share count after the May financing .
Cash rose to $92.0M at 6/30 from $39.6M at 3/31 on proceeds from a $79.2M registered direct offering in May; management reiterated cost control focus to extend runway .
Guidance sharpened: EDP1815 psoriasis regulatory feedback by year-end 2022; atopic dermatitis Phase 2 readouts in Q1 and Q2 2023; EDP2939 Phase 1/2 start in Q3 2022 with dosing in Q4 and psoriasis data in 2H 2023 .
Potential stock catalysts: CEO succession announcement, EDP1815 AD data cadence, psoriasis registrational design feedback, and initiation/dosing for EDP2939 (first EV candidate) .

What Went Well and What Went Wrong

What Went Well
- Strengthened balance sheet: cash increased to $92.0M at quarter-end after a $79.2M financing; added an experienced CFO effective Sept 1, 2022 .
- Clinical execution on track: AD Phase 2 recruitment “on-schedule”; two AD readouts guided for Q1 and Q2 2023; psoriasis feedback from regulators expected by year-end 2022 .
- Strategic clarity on formulation: management highlighted potential of faster-release capsule to enhance efficacy and will use Cohort 4 AD readout to inform psoriasis Phase 3 formulation choice .
What Went Wrong
- Continued losses with no revenue; Q2 net loss of $30.6M and total OpEx of $29.6M underscore ongoing cash burn typical for clinical-stage biotech .
- Rising G&A year over year (Q2: $8.4M vs $7.0M), reflecting growth needs ahead of late-stage development; R&D also edged up (Q2: $21.2M vs $20.7M) .
- Estimates context unavailable: S&P Global consensus for EVLO could not be retrieved; thus we cannot quantify beats/misses this quarter (pre-revenue stage) (S&P Global consensus data unavailable for this ticker at time of retrieval).

Financial Results

Metric	Q4 2021	Q1 2022	Q2 2022
Revenue ($USD Millions)	$0.0 (no revenue line)	$0.0 (no revenue line)	$0.0 (no revenue line)
Research & Development Expense ($M)	$18.9	$19.3	$21.2
General & Administrative Expense ($M)	$8.7	$9.4	$8.4
Total Operating Expenses ($M)	$27.559	$28.738	$29.587
Net Loss ($M)	$28.652	$29.861	$30.561
Diluted EPS ($)	$(0.54)	$(0.56)	$(0.40)
Weighted Avg Shares (basic & diluted)	53,515,636	53,619,635	75,719,092

Notes: EVLO reported no revenue line in its statements of operations for these periods; treated as $0 revenue .

Cash and Debt

Metric	Q4 2021	Q1 2022	Q2 2022
Cash & Cash Equivalents ($M)	$68.441	$39.631	$92.007
Debt – Current Portion ($M)	$0.000	$1.844	$5.928
Debt – Noncurrent ($M)	$46.557	$44.772	$40.746

Estimates vs. Actuals

Metric	Actual (Q2 2022)	Consensus (S&P Global)	Delta
Revenue ($M)	$0.0	N/A (unavailable)	N/A
Diluted EPS ($)	$(0.40)	N/A (unavailable)	N/A

S&P Global consensus estimates were unavailable for EVLO at the time of retrieval; therefore beats/misses cannot be assessed.

Segment breakdown and operating margins are not applicable given no revenue recognition.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EDP1815 – Psoriasis: Health authority feedback on registrational plans	2022	Meet with regulators “this year” and move towards registration trials	Feedback by year-end 2022	Refined timing (more specific)
EDP1815 – Atopic Dermatitis Phase 2 readouts (Cohorts 1–3)	1Q 2023	1H 2023	1Q 2023	Narrowed window
EDP1815 – Atopic Dermatitis Phase 2 readout (Cohort 4, faster-release)	2Q 2023	Not specified in Q4 2021; introduced in Q1 2022 as potential 2Q 2023	2Q 2023	Maintained
EDP2939 – Initiation	3Q 2022	Initiation in 3Q 2022	Initiation 3Q 2022; dosing expected 4Q 2022	Clarified dosing timing
EDP2939 – Psoriasis Phase 2 data	2H 2023	2H 2023	2H 2023	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2022)	Trend
Faster-release capsule/formulation	Faster-release capsule improved release to jejunum (88% vs 18%); expected to enhance efficacy; plan to integrate across programs	AD Cohort 4 uses faster-release; if efficacy improves, may adopt in psoriasis Phase 3 without timeline impact	Positive momentum; integrating formulation learnings
Regulatory path (psoriasis)	Intend to move towards registration trials after meetings with FDA/EMA in 2022	Awaiting health authority feedback by year-end for registrational plans	Advancing to concrete feedback window
AD Phase 2 execution	Recruitment “ahead of plan”; added Cohort 4	Recruitment on-schedule; two readouts guided (Q1 & Q2 2023)	Steady execution toward readouts
EV program (EDP2939)	Enter clinic in 3Q 2022; psoriasis data 2H 2023	Initiation 3Q 2022; dosing 4Q 2022; data 2H 2023; potential for higher efficacy vs microbes	Program initiation imminent; high-uptake potential
Capital allocation/runway	NA	Emphasized prior cost cuts and tight focus on core priorities amid market conditions	Tight expense control to reach catalysts
Market demand/pricing	NA	Clear demand for oral therapies (Otezla experience); plan for reasonable pricing to drive volume in mild/moderate populations	Reinforces commercial thesis

Management Commentary

“Enrollment is progressing well in the first three cohorts of the Phase 2 trial for EDP1815 in atopic dermatitis… [and] a fourth cohort… with a faster release profile… is expected to read out in the second quarter of 2023.”
“We… are waiting on guidance for advancing EDP1815 into registration trials [in psoriasis]… by year-end.”
On cost control: “We… looked at critical areas of investment… already taken a number of measures to bring cost under control in a very disciplined manner.”
On formulation strategy: “Base plan is to go forward with the original formulation… If we see a substantive improvement in… Cohort 4 in atopic dermatitis, then we will use that in the Phase 3 in psoriasis.”
On EVs: “Best case, we could get antibody-like efficacy with the microbial extracellular vesicles… the preclinical data supports that as a possibility.”

Q&A Highlights

Capital preservation/runway: Management reiterated prior cost cuts and focus on core programs to ensure cash lasts through key 2023 catalysts .
Psoriasis Phase 3 design: Planning to proceed with once-daily original formulation unless the faster-release Cohort 4 in AD shows clear improvement; regulators to confirm Phase 3 design and CMC readiness .
AD efficacy bar: EASI50 is key; “20% or greater separation… versus placebo would be a very strong win,” 15–20% a gray zone .
EV candidate segmentation: If EV efficacy is high, could segment severe patients vs keeping EDP1815 for mild-moderate; awaiting data to decide .
Commercial insights: Strong patient/clinician preference for oral therapy (Otezla as proof point) and intent for “very reasonable pricing” to drive volume .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2022 revenue and EPS was unavailable for this ticker at the time of retrieval; as a pre-revenue biotech, reported revenue was $0 and EPS $(0.40). This limits beat/miss assessment based on consensus .
Implications: Absent consensus anchors, investor focus remains on OpEx trends, cash runway, and 2023 clinical catalysts rather than near-term P&L beats/misses.

Key Takeaways for Investors

Cash runway extended by May financing; management is tightly prioritizing spend to reach multi-quarter 2023 catalysts (AD Phase 2 readouts, psoriasis registrational design, EV first-in-human) .
Formulation strategy offers upside optionality: faster-release capsule could boost efficacy, with a data-informed pivot available ahead of psoriasis Phase 3 without timeline slippage .
Multiple near-term catalysts: regulatory feedback by year-end 2022, AD readouts in Q1/Q2 2023, EDP2939 dosing in Q4 2022 and data in 2H 2023—each a potential stock mover .
Commercial thesis reinforced: strong preference for oral options and intent for reasonable pricing suggests large mild/moderate populations are addressable if efficacy clears the AD “20% separation” bar and psoriasis endpoints .
Leadership transition is underway (CEO succession; new CFO), but continuity is emphasized; watch for any strategic pivots as a new CEO is appointed .
With no revenue and ongoing losses, valuation will key off clinical probability of success, formulation-enhanced efficacy, and partnering optionality discussed by management in prior periods .

Citations:

Q2 2022 8-K press release and financials:
Q2 2022 earnings call transcript:
Q1 2022 8-K press release and financials:
Q4 2021 8-K press release and financials:

Evelo Biosciences, Inc. (EVLO)·Q2 2022 Earnings Summary