Evelo Biosciences Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

Evelo Biosciences (Nasdaq: EVLO) announced plans for a public offering of $40 million in common stock, with an option for underwriters to purchase an additional $6 million. The funds are intended to support the advancement of EDP1815 into multiple Phase 2 clinical trials for inflammatory diseases and hyperinflammation, as well as to continue developing EDP1503 for oncology and other research activities. The offering is subject to market conditions, and there is no guarantee on completion or terms. Morgan Stanley, Cowen, and BMO Capital Markets are managing the offering.

Positive

• Intended use of proceeds includes advancing EDP1815 through two Phase 2 trials and a Phase 2/3 trial.
• Funding will also support the clinical development of EDP1503 for oncology.
• Additional funds will aid R&D for other product candidates and oral biologics.

Negative

• Offering could lead to stock dilution for existing shareholders.
• Completion of the offering is uncertain and dependent on market conditions.

CAMBRIDGE, Mass., June 24, 2020 (GLOBE NEWSWIRE) -- Evelo Biosciences, Inc. (Nasdaq: EVLO) (“Evelo”), a clinical stage biotechnology company developing a new modality of orally delivered, systemically acting biologic therapies, today announced that it intends to offer and sell, subject to market and other conditions, $40 million of its common stock in an underwritten public offering. Evelo expects to grant the underwriters a 30-day option, solely to cover over-allotments, if any, to purchase up to an additional $6 million of its common stock. There can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. All of the shares in the proposed offering are to be sold by Evelo.

Morgan Stanley, Cowen and BMO Capital Markets are acting as joint book-running managers for the offering.

Evelo intends to use the net proceeds from the offering, in addition to its existing cash resources, for the following purposes: (i) advance  EDP1815  into  two  Phase  2  clinical trials and a Phase 2/3 clinical trial for the treatment of inflammatory diseases and hyperinflammation caused by viral infections including SARs-CoV-2; (ii) advance EDP1815 in a Phase 1b trial in atopic dermatitis  with  an  enteric  capsule  formulation; (iii) continue the clinical development of EDP1503, a  monoclonal  microbial  candidate  for  oncology; (iv) other research and development activities for additional product candidates, including EDP1867 and EDP2939, for the treatment of inflammatory diseases, and advancing additional oral biologics through preclinical development in other disease areas; and (v) the remainder, if any, for working capital and other general corporate purposes.

A registration statement relating to the securities being sold in the offering has been declared effective by the Securities and Exchange Commission. The securities will be offered only by means of a prospectus supplement and accompanying prospectus forming a part of the effective registration statement. A preliminary prospectus supplement related to the offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the securities being offered may also be obtained, when available, from: Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attn: Prospectus Department or by email at prospectus@morganstanley.com; or Cowen and Company, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at (631) 274-2806.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the completion and anticipated use of proceeds of the proposed offering. All such forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties related to fluctuations in Evelo’s stock price, changes in market conditions and satisfaction of customary closing conditions related to the public offering, as well as the other factors discussed in the “Risk Factors” section in the registration statement referenced above and in Evelo’s most recently filed Quarterly Report on Form 10-Q, as well as other risks detailed in Evelo’s filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. There can be no assurance that Evelo will be able to complete the proposed public offering on the anticipated terms. All information in this press release is as of the date of the release, and Evelo undertakes no duty to update this information, even if subsequent events cause its views to change, unless required by law.

Contact:
Evelo Biosciences

Jessica Cotrone
978-760-5622
jcotrone@evelobio.com

FAQ

What is Evelo Biosciences planning with the $40 million public offering?

Evelo intends to use the proceeds to support clinical trials for EDP1815 and EDP1503, as well as for other research and development activities.

When was the Evelo Biosciences press release issued?

The press release was issued on June 24, 2020.

Who is managing the public offering for Evelo Biosciences?

Morgan Stanley, Cowen, and BMO Capital Markets are acting as joint book-running managers for the offering.

What are the risks associated with Evelo's public offering?

There are risks related to market conditions, potential stock price fluctuations, and uncertainty about the completion of the offering.

How could the public offering affect EVLO shareholders?

The offering could result in stock dilution for existing shareholders and depends on the market's reaction.