Evelo Biosciences Secures $45 Million Debt Financing to Advance Oral Biologics Platform

On July 25, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that biotechnology company Evelo Biosciences announced the signing of a $45 million loan and security agreement with healthcare investment firm K2 HealthVentures (K2HV) to advance the development of its novel oral biologic platform. At closing, Evelo borrowed $20 million. These funds were used to repay Evelo’s previous $15 million loan and will support the company’s working capital and the further development of Evelo’s product candidates.

In 2014, Evelo Biosciences was formed through the merger of the biotechnology company Evelo and the biopharmaceutical company Epiva Biosciences. Each company brought distinct strengths: the former was dedicated to developing cancer therapies by investigating microbial effects on tumor immune responses, while the latter explored treatments for allergies, inflammation, and autoimmune diseases, with a focus on microbiome-based therapies and abnormal immune responses.

The merged company will continue to operate under the name Evelo, further focusing on research and development in the field of immuno-microbiomics, with Simba Gill, the former CEO of Evelo, continuing at the helm. Previously, Simba Gill co-founded and led a series of leading innovative companies involved in gene therapy, immunodiagnostics, antibodies, stem cells, and other fields, including Verdia, Avidia, Systemix (the world’s first stem cell company), and Valentis. Prior to joining Evelo, Gill served as CEO and President of the renowned pharmaceutical company Moksha8.

Evelo Biosciences has independently developed monoclonal microbial drugs that modulate systemic immunology and biology through direct interaction with cells in the small intestine, offering broad applicability in the fields of immune-mediated inflammation, metabolism, neurological disorders, and cancer. Cells in the small intestine play a crucial role in regulating immune, metabolic, and nervous system functions. Evelo currently has three candidate products: EDP1066 and EDP1815 for the treatment of inflammatory diseases, and EDP1503 for the treatment of cancer. Ten clinical trials are expected to be conducted during 2019 and 2020.

Evelo is also advancing its research into other oral biologics through preclinical development in additional disease areas. Evelo Biosciences holds multiple issued patents and has numerous patent applications pending covering its products and platform technologies, with the aim of developing safe, effective, and affordable medicines to improve the lives of patients with chronic diseases and cancer.

K2 HealthVentures, established in 2018 and headquartered in Massachusetts, USA, is an investment firm. The company is dedicated to providing flexible, long-term financing solutions to innovative private and public companies in the life sciences and healthcare sectors.

The investment team comprises seasoned professionals with diverse financial and operational backgrounds, possessing deep expertise across various healthcare sectors. Its unique and flexible permanent capital structure enables the firm to provide innovative, adaptive financing solutions that meet the evolving capital needs of its portfolio companies throughout their development.

“We are launching a clinical portfolio of oral biologics for inflammation and oncology, and this financing enhances our financial flexibility,” said Jonathan Poole, Chief Financial Officer of Evelo. “Through this partnership, the K2HV team has demonstrated a deep understanding of Evelo and our novel technology platform.”

“We are pleased to partner with Evelo to support the company’s vision of leveraging its novel oral biologic platform to develop safe and affordable therapies for a range of chronic diseases and cancers,” said Parag Shah, Founding Director and CEO of K2 HealthVentures. “This flexible and tailored financing structure aligns with our strategy of collaborating with innovative private and public companies in the life sciences and healthcare sectors.”

(Compiled by Cheng Tao)