Evelo Biosciences, Inc. (EVLO) Q4 2021 Earnings Call Transcript

Evelo Biosciences, Inc. (EVLO -4.35%)
Q4 2021 Earnings Call
Mar 24, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Evelo Bioscience's conference call to discuss its fourth quarter and full year 2021 business highlights. At this time, all participants are analysts and only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request.

At this time, I'd like to turn the call over to Kendra Sweeney of Evelo. Please proceed.

Kendra Sweeney -- Head of Investor Relations

This morning, we issued a press release that outlines the topics we plan to discuss today. This release is available at www.evelobio.com under the investors' tab. Today on our call, Simba Gill, chief executive officer; Mark Bodmer, president of R&D, and chief scientific officer; and Jonathan Zung, chief development officer will review our recent business highlights. 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.

The impact of any of our product candidates 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 forth in Evelos' annual report on Form 10-K for the fiscal year ended December 31st, 2021, 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. It is now my pleasure to pass the call to Simba.

Simba Gill -- Chief Executive Officer

Thank you, Kendra. Good morning, everyone, and thank you for joining us to review our progress during the fourth quarter. We are fortunate to face the headwinds of the current financial market from a position of strength clinically and scientifically. A goal on this call is simple, to provide you with the evidence that Evelo has an exceptional opportunity to create value with a high probability of success.

This bold statement from a major clinical-stage company working a new biology on a new mentality of medicine is objectively rooted in both clinical and pre-clinical data. However, much we do not like our current share price, it represents an exceptional opportunity for investors in both the short and the long term. We started working on SINTAX medicines five years ago with a radically innovative proposal that there is a connection between the small intestine and the rest of the immune system that would enable orally delivered, gut-restricted drugs to safely modulate immunity, and inflammation throughout the body. Preclinical and clinical results have been remarkable.

We have observed coordinated downregulation of multiple inflammatory pathways driving inflammation resolution in both lab animals, and in humans. And we now have a good understanding of the neurological mechanism that allows this to happen. The topline EDP1815 Phase 2 psoriasis clinical data that we reported last September demonstrated that a SINTAX medicine can have a therapeutic effect with safety, and tolerability comparable to placebo. And as we heard from both Dr.

Strober, as well as Dr. Daniel Rolling at a KOL event, Evelos' Phase 2 clinical data supports the potential use of EDP1815 in almost all patients, including importantly, the mild and moderate population, which represents over 85% of the 55 million patients with psoriasis worldwide, who are generally not treated with biologics or small molecules. The primary unmet need in psoriasis is for this segment of patients. We can't emphasize enough the importance of the clinical data.

The trial addressed the central question "can targeting SINTAX be the basis for a completely new type and class of medicine?" The answer is yes. Since September, we have reported two further data sets from the Phase 2 trial. The first clinical data set was the reduce production of multiple inflammatory cytokines from blood immune cells of patients receiving EDP1815. These reductions were statistically significant.

Similar reductions were seen in skin biopsies for aisle 12, aisle 17, and aisle 23. All validated cytokines in the skin pathology of psoriasis. This is human mechanistic evidence for inflammation resolution similar to what we have long observed in animal models. The second clinical data set was the 24-week follow-up data from psoriasis patients in Part B of the Phase 2 trial.

After they stopped taking EDP1815, many patients had persistent, and deepening responses with no flares or rebound of psoriasis consistent with what we now know about the cellular mechanism of action of EDP1815 from preclinical studies. We are delighted to announce data from this Phase 2 trial has been selected for a coveted late-breaking oral presentation this Saturday at 10:10 a.m. eastern time at the 2022 meeting of the American Association of Dermatology. Significant external recognition for the potential of SINTAX medicines.

Broad set of data are fundamental evidence for a new area of biology, which we can harness to create effective, safe, oral, affordable medicines to treat all chronic inflammatory diseases. In a moment, I'm going to hand over to Mark Bodmer to talk about the scientific discoveries that underpin these clinical successes. Before doing that, we wanted to announce today further exciting, positive data from the clinical trials examining a faster release capsule. As you know, we have been investigating the potential to consistently improve the release characteristics of our SINTAX medicines.

The aim is to see consistent, faster release higher up in the small intestine. Imaging results from the next phase of the study demonstrated that the improved release capsules of EDP1815 are able to deliver drug faster, and that's higher up in the small intestine, 88% of the time. Mark will explain these results in the context of preclinical evidence that clearly predicts the potential for increased efficacy with this release profile. Putting all of this together, we will focus on this faster release capsule as we advance our programs into later-stage development.

The faster release capsule gives us confidence that we are likely to see even greater efficacy than we have seen to date, both in terms of proportion of responders and in-depth of response. Mark and Jonathan will now talk about our science and clinical development plans, and then we'll wrap up with a view of what to expect next. Mark, over to you. 

Mark Bodmer -- Chief Scientific Officer

Thanks, Simba. Two basic questions for any drug are does it get to the right place? and how does it work when it gets there? Starting with the question of the right place. The goal of Simba said is simply based on known immunology because in preclinical evidence. It is to protect the drug from acid ingested enzymes in the stomach and release it as soon as possible in the small intestine.

The new data that's above mentioned I've identified a solution. The headline result is that a faster capsule, faster release capsule of EDP1815 opened in the jejunum, higher up in the small intestine in 88% of human volunteers in the Scintigraphy Study. This is 18% with the original capsule. Release of EDP1815 can be measured by giving human volunteers a capsule at EDP1815, which contains a radioactive tracer [inaudible] 99m.

[Inaudible] emission can be followed by scintigraphy with an external gamma camera, showing how long it takes the capsules to start releasing their contents, and wherein the gut this takes place. We first tested a capsule that was used in the Phase 2 psoriasis trial. In 18% of subjects, this capsule released EDP1815 in the jejunum upper portion of the small intestine. The other 82% of subjects released in the ilium at the lower end.

This profile was still sufficient to generate the Phase 2 efficacy. Now we know from preclinical experiments that a release profile higher in the small intestine can increase efficacy by as much as ten-fold. Based on this, we tested a version of EDP1815 capsules with faster release. 15 to 17 of the human volunteers showed release higher up in the jejunum, and only two lower down in the ilium.

This is 88% higher up for the new profile versus 18% for the original one. This faster release is much more consistent overall exposure to the active drug higher in the small intestine. We tested the efficacy of these different release profiles in mice, using very small tablets formulated to replicate the profile of human capsules, which can be given orally. Faster release in the jejunum less excellent preclinical efficacy.

The version that released lower down worked significantly less well. So comparing the human scintigraphy release profile with the efficacy of equivalent profile in mice provides a clear path to building on the foundation of efficacy that we've already seen in the clinic. This is a significant result. It's simple, the faster and higher in the small intestine the capsule opens, the more opportunity a drug has to exert its effects.

Because the EDP1815 drug substance is unchanged, the faster release profile can be evaluated within our current political development plans with minimal impact on timelines. We'll let you know the plans once the details are settled. Turning now to the second basic question posed at the beginning, how does it work? What is the scientific basis for the clinical observations, both about duration of efficacy after the drug is stopped, and the range of inflammation resolving effects? I've touched on this before. If we treat mice with EDP1815, they induce a regulatory phenotype in circulating immune cells.

We've now shown that this is due to reprogramming of circulating CD4 + T cells. This was formally demonstrated by transfer of CD4 + T cells from drug-treated animals to drug-free animals, resulting in inflammation resolution in the recipients. This effect is from the transfer of CD4 cells alone. Recipient animals receive no drug only t cells from the treated mice.

Induction of regulatory T cells has been a major elusive goal of immunology drug discovery for 20 years. We've now achieved it with an oral agent, which has shown excellent safety and tolerability. This can explain the clinical observations in the Part B drug-free follow-up portion of the Phase 2 psoriasis trial. The clinical responses seen during the treatment period persisted and deepened after the drug was stopped, probably because cells that conferred efficacy remained even after the drug did not.

We have also tested for this effect in mice with a number of systemic anti-inflammatory drugs, including JAK inhibitors, and biologics. So far we've not seen it. The only other drug that does it is dexamethasone, which is not suitable anyway for chronic use because of limiting side effects. This property of generating regulatory T cells with a safe oil agent appears to be a unique characteristic of the small intestinal axis.

It has important implications for the breadth of potential benefit of SINTAX medicines. Most efforts to make more effective medicines are based on breaking common diseases down into the diverse underlying molecular mechanisms, and then, more precisely, targeting those mechanisms in subsets of patients. The biology of the small intestinal axis seems to allow us to go in the other direction toward a common mechanism for diverse diseases. I'll just finish with a brief comment about extracellular vesicles.

We've said before that the potential for EVs, based on preclinical data is to approach biologic levels of efficacy with these all gut restricted products. The physical and pharmacological properties of EVs have provided evidence that they may enable this diffusion, and higher packing densities due to their much smaller size than microbes. With that, I'll hand over to Jonathan to update on our clinical programs, including EDP2939. Our first EV product on track to enter the clinic later this year. 

Jonathan Zung -- Chief Development Officer

Thank you, Mark. This morning I would like to provide updates on several of our ongoing clinical trials, upcoming readouts, as well as planned trials. We announced last month the dosing in our Phase 2 trial of EDP1815 for the treatment of mild, moderate, and severe atopic dermatitis began. We continue to execute according to plan, and top-line results from this trial are expected in the first half of 2023.

As a reminder, this is a 16-week multi-center, double-blind, placebo-controlled trial being conducted in North America, Europe, and Australia. Approximately 300 patients will be randomized into one of three cohorts. Cohort one will explore a dose of 1.6 times 10 to the 11 total cells of EDP1815 who were matching placebo as two capsules administered once daily. Cohorts two and three are administered as a dose of 6.4 times 10 to the 11 total cells of EDP1815 were matching placebo, either as two capsules once daily, or one capsule twice a day, respectively.

The primary endpoint is the percentage of patients achieving an easy 50, which is a reduction of 50% in the eczema area, and severity index at week 16. Key physician reported secondary endpoints are the Investigator Global Assessment, the IGA, and Body Surface Area or BSA. Key patient reported secondary endpoints include the Dermatology Life Quality Index, DLQI, the Patient Oriented Eczema Measure or POEM, and apparatus, numerical rating scale, and arrest. All patients in the Phase 2 trial will have the opportunity to join an open-label extension trial once they complete 16 weeks of dosing.

All patients in the open-label extension will receive EDP1815 for up to 52 weeks. Results from our Phase 1 B trial of EDP1867 in a cohort of patients with moderate atopic dermatitis are anticipated in the second quarter. As a reminder, EDP1867 is from a different genus the EDP1815 and has been rendered non-live by gamma irradiation. We are excited and remain on track to bring our first extracellular vesicle, or EV candidate, EDP2939 for inflammatory diseases into the clinic in the third quarter.

The healthy volunteer portion will be followed by a cohort of patients with psoriasis. We anticipate reporting Phase 2 results in psoriasis in the second half of 2023. In terms of next steps regarding the development of EDP1815 and psoriasis, we have had discussions with community, and academic-based dermatologists around our clinical development plans. We anticipate meeting with different health authorities over the next several months to solicit their feedback.

This will in turn allow us to finalize our plans for advancing EDP1815 in psoriasis into the registrational trials. I'll now hand it back to Simba for closing remarks. 

Simba Gill -- Chief Executive Officer

Thank you, Jonathan. You've heard from Mark and Jonathan about the scientific and clinical progress we've made over the last quarter and last year. The data support a bold statement that we have proved that we can harness SINTAX to open up a massive new field, and type of medicine that goes beyond existing biotech and pharmaceutical products, and opens up the treatment of all stages of inflammation with orally delivered, convenient, safe, and well-tolerated effective medicines. We have uncovered the science that underlies the fundamental connections that link our gut to the immune and inflammatory system throughout the body.

This is a medical, and scientific breakthrough. To sum up, in the last quarter, we've hit all three of our major clinical milestones with very positive results. Firstly, the maintenance and deepening of clinical responses of psoriasis patients in the Phase 2, Part B follow-up. Secondly, the reduction in inflammatory cytokines produced by systemically circulating immune cells, and inflammatory cytokines production at the site of disease.

And then today, and thirdly, the improved faster release profile of EDP1815 capsules. This puts the future of EDP1815, and of SINTAX medicines into an even stronger position as we move closer and closer to realizing our vision to improve health for the hundreds of millions of people living with inflammatory disease around the globe. I want to thank the Evelo team and partners. These are very challenging times where remarkable commitment, and resilience is needed.

We are fortunate to have such an exceptionally committed and strong team. And with that, I'll now open for questions. Thank you.

Questions & Answers:

Operator

[Operator instruction] And our first question comes from the line of Chris Howerton with Jefferies. Your line is now open.

Chris Howerton -- Jefferies -- Analyst

Hi, good morning. Thanks so much for taking the questions, and appreciate the bold statements from you and the team. So I guess for my questions would be with respect to 1815 and psoriasis, based upon the feedback that you're seeing so far from physicians. What do you think is going to be an acceptable endpoint for approval for that agent in mild to moderate psoriasis? So that would be one question.

And then the second question I would have is, as you're progressing your programs into registrational studies, what is the strategic thinking with respect to business development opportunities? Thank you. 

Simba Gill -- Chief Executive Officer

Thanks for the question. Good. So on the first question with regards to endpoint, obviously we do need to meet with regulators. The plan, just remind you and everybody, Chris, is to engage in complete regulatory interactions with FDA, MHRA, the European authorities around the middle of this year with submitting all the relevant background information shortly.

So we need to get through those meetings, obviously, to finalize what the endpoints would be at the moment. We would anticipate that a PGA score of zero one so clear or nearly clear skin is likely to be the clinical endpoint. So that's the answer the first question. With regards to moving toward registration studies and corporate pondering, a view has always been the opportunity with SINTAX mentions, and with Evelo is so enormous that corporate partnering will be a key part of what we do.

We cannot capture the massive breadth of the opportunity on our own. At the same time, we've always been unashamed, and very clear that we have one of those rare opportunities in history of science, medicine, and biotech to create something that could completely transform healthcare and biotech. We've always said that SINTAX medicines have the potential to be even more transformative than monoclonal antibodies have become. And in that context, a view philosophically is the best way to develop that type of innovation to patients is to remain a strong, independent company.

The forward integrates and becomes a key for other biotech company, but we will do that together with partners. And what it translates to is an openness to forming partnerships which allow us to do that risk. So capturing a lot of the forward value from any of the products, including 1815, and allowing us to forward integrate, and build toward a fully integrated company.

Chris Howerton -- Jefferies -- Analyst

OK. All right. Awesome. Thank you so much, Simba.

I appreciate everything moving forward. 

Simba Gill -- Chief Executive Officer

Thanks, Chris.

Operator

Our next question coming from the line of Gary Nachman from BMO Capital Markets. Your line is open.

Gary Nachman -- BMO Capital Markets -- Analyst

Hi, good morning. Data from the scintigraphy study, and the earlier release of 1815. Are there any additional GI side effects releasing drug earlier in the small intestine? And for the two patients where it didn't release earlier, 88% was clearly a good outcome. But is it ever possible to get to 100% with these formulations? And is there a chance that you'll need a small clinical bridging study before moving into Phase three for psoriasis? And then just a couple of quick follow-ups. 

Simba Gill -- Chief Executive Officer

Hey, Gary, how are you doing? Just remind me on the first question, Gary. I couldn't write quickly enough.

Gary Nachman -- BMO Capital Markets -- Analyst

The GI, if there were any GI side effect.

Simba Gill -- Chief Executive Officer

Oh, yeah. Got it. So no one on the first question and very importantly Gary, it's a core piece of the platform. We continue to see an extremely safe, and well-tolerated profile in all of the clinical studies we've done.

We've been in over 500 human subjects at this stage, and consistently seeing very very clean safety, and tolerability. So nothing to be concerned about there, including with regards to the faster release capsule. In terms of 88 versus 100%, actually always possible to do. Better, and better at life Gary is one of my whole life principles, and that also includes with regards to the science around our release efforts, etc..

Having said that, 88% is a great result. We are ecstatic, Gary. And just to remind you, in the preclinical models, exposure early, and over the full anatomy of the small intestine led to antibody-like efficacy consistently in animal models. So this type of results where we're seeing 88% release in quickly in the jejunum is remarkable and is very, very encouraging for what we're likely to see in the clinic.

And that then links to your next question. In terms of any bridging studies, we don't anticipate there'll be a requirement to do that. Obviously, we do have to have the conversations with regulators. We will be moving as quickly as possible into a Phase 2 atopic dermatitis study, and more details to follow on that.

But we expect we'll be able to do that in short order without impacting any of our existing clinical studies.

Gary Nachman -- BMO Capital Markets -- Analyst

OK. That's great. And then congrats on getting the late-breaker at. So any additional Phase 2 data on 1815 that you'll present there, or will it be what we've seen already? And then the 1867 in a topic term, what should we be expecting to see from the interim one B data? And just remind us a little bit more what the difference is between 1815 and 1867.

And could you ultimately pursue both for a topic term, or will you just pick one in the end?

Simba Gill -- Chief Executive Officer

Thanks. Yeah. So let me take the 1867 second question. I'll let Mark take the first in terms of the difference between 1867 and 1815.

I've done it again as you go through your first question. I'll come back to that in a moment. So in terms of how we would develop 1867, and what the expectation is. It's not an interim, the Phase 1 B will be top-line, and we're looking at essentially top-line efficacy data, which is what we'll report out in a similar way to what we've done historically.

And we should have that very soon, actually. To the degree, we got positive data that one of the many beauties of both 1867 and 1815 is what we've seen frequently has breadth of efficacy across many different areas of inflammation, including, for example, neuroinflammation. So if we were to see a positive result from 1867, there's many different directions in which we could develop it. We could potentially have two products in a topic dermatitis.

They could address potentially different segments of atopic dermatitis. We could also segment obviously inflammation and focus on 1867 in different indications to 1815. To be clear, atopic dermatitis is a clinical proof of principle for us and is not necessarily the indication in which we'll move forward with 1867. It's a way to get a false-positive result in the clinic with some fairly clear endpoints and the ability to, for example, look at patient biopsies, etc..

So lots of different ways we could take it forward. Mark, do you want to answer the question on 1867 versus 1815 in terms of how are different?

Mark Bodmer -- Chief Scientific Officer

Yeah, sure. Thanks, Gary. There are three or four points there, 1867 is isolated from a small intestinal sample. Just to reinforce that point, these would be cozily resonant microbes, not microbes that come from stool samples.

And actually, because of the resonant microbes that we find, the good activity, 1867 was probably the initial sample in a patient with cruise disease in remission. It's taxonomically quite distinct from 1815. But one of the things that we had as a strategy from the outset was to look at ways of taxonomy, which is effectively the range of biochemistry in these to find out what the potential of different types of bacterial isolates other extracellular vesicles, in fact, would be for pharmacological properties. This one has a molecular mechanism of action which is slightly overlapping, but actually different from EDP1815, different patterns of pattern recognition receptors, including toll-like receptors with very potent activity.

The other thing which was key with this is that part of the manufacturing process involves gamma radiation. And we talk a lot about the fact that our products work through direct action, and not through colonization and being live biotherapeutic products. If 1867 is dead by design to the point where a patient takes it. So all of the activity that we see clinically, and what we're looking for clinically is due to direct interactions of microbial preparation with host cells in the gut. 

Simba Gill -- Chief Executive Officer

So, Gary, I remember you have a question with regards to the presentation. First of all, that we've been selective late-breaker, as you know, very unusual for that to happen for a mid-stage clinical biotech company. I think it's great validation for [inaudible] seeing the potential for what we're doing. We will provide more color, obviously, than we've been able to do so far.

That said, obviously, the three key pieces of data beyond the top-line efficacy we reported out on obviously folks today as well as recently. So but I would encourage you to listen to. 

Gary Nachman -- BMO Capital Markets -- Analyst

Great. OK. Thank you.

Simba Gill -- Chief Executive Officer

Thanks, Gary. Saturday morning, 10:10 a.m. Good time to listen. 

Operator

Our next question comes from the line of Joseph Thome with Cowen. Your line is open.

Joseph Thome -- Cowen and Company -- Analyst

Good morning, and thank you for taking our questions. Maybe the first one on the easy candidate. Are you going to be using the same formulation as the updated formulation that releases higher in the jejunum? And is there anything differentiated about the release kinetics, or kind of where the easy candidate should release in the intestine? That may be different than an association candidate at all. Or do you expect kind of better efficacy with some of these kinetics? 

Simba Gill -- Chief Executive Officer

Yeah. So, hi Joseph. [inaudible]. But the beauty of the faster release capsule formulation is that it's platform-related as opposed to product-related.

So whether we're talking about microbes or EVs, it's a dramatically improved release profile that should be applicable for we are going forward. So we anticipate we're going to use it for the EVs straight away as well. And again, I've said it already, but we are thrilled with that result. It's really the best possible result we could have expected, and we see it as having potential to drive a very significant increase in efficacy across everything within microbes or EVs. 

Joseph Thome -- Cowen and Company -- Analyst

And then I know on the [inaudible] call the other week, they mentioned potentially using it in 15 psoriasis, and more severe patients potentially has a combination approach, I guess. How straightforward is that clinically, or are you able to get reimbursement for combination therapies, and have physicians prescribe this? Or would you need to have additional data showing combinatorial benefit in more severe patients before uptake in that segment?

Simba Gill -- Chief Executive Officer

Yeah. So in the real world, very straightforward. It was actually touched on very briefly about the KOL event we had recently. So we may, for example, have to go through, step through at least initially in the mild and moderate, a certain segment with mild to moderate, where topicals are the gold standard.

Joe, but that will be very, very straightforward. Clinicians are used to doing it, and it should be a very straightforward process. And what we've been through that then in the real world, use in combination will be very, very straightforward. We expect patients will, for example, in test at least initially go on acute topicals to treat acute flares, for example, and then essentially the equivalent of maintenance on 1815 with insufficient use of topical.

So we expect where this will we'll start off and then moving potentially to monotherapy with 1815. So we think it's going to be very, very straightforward.

Joseph Thome -- Cowen and Company -- Analyst

Perfect. Thank you very much. And see later today. 

Simba Gill -- Chief Executive Officer

Thank you. Look forward to that.

Operator

Our next question coming from the line of Kristen Kluska with Cantor. Your line is open. 

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Hey. Good morning, everybody. Thanks so much for taking the questions. With the new data that you reported today.

I wanted to ask how specific and topical targeting of the small intestine relates to the targeting of the dirt, expels the macrophages, and also how the sense correlates with the intestinal resident immune cells.

Simba Gill -- Chief Executive Officer

More interesting. Always good to hear your voice. I'll let Mark answer that. 

Mark Bodmer -- Chief Scientific Officer

Yeah, actually, Kristie, that's a really interesting question. The more detailed view of the preclinical support for this hypothesis of higher release includes looking at the distribution of immune cells longitudinally throughout the gut to give some very nice publications about this, which we refer to. Interestingly, the cells, in particular, are at higher densities in the gut wall, in the upper parts of the gut in the jejunum, which is relatively short into the jejunum. And so we have the hypothesis from the outset that that would be a place to target.

The other thing is, if you think about the primary role job of the gut immune system, it's actually to stop the immune system responding to things, because the gut, you know, the mouth and the stomach is where massive amounts of foreign stuff are coming into the body constantly. And it would be a disaster if we had immune responses against all those things. So actually, what we're doing is we're harnessing the natural ability of the gut to actually prevent inflammatory responses against all the foreign stuff that's coming in. Although at a principled level, I think that's what our drugs are doing.

We're providing a pharmacological level stimulus at the right dose to engage those systems, whose natural function is to maintain homeostasis in the face of continual foreign powers of food, and all the microbes and everything else that's in the food that we ingest and that we take is one of only two things that is focused on the higher parts of the small, small intestine. So it was we'll talk about this very much because it gets a bit complicated in immunology. We've actually built into the understanding of small intestinal immunology, and actually just taking a step back and thinking about it when it's really well, as most people think the immune system's role is to protect against infection and cancer. At one level, that's true.

But if you've got a system like that, you need an even more potent system to prevent it continuously being in uproar. And that's essentially what policy SINTAX with these types of medicines appears to be doing. And doing that as simple as emphasizes for immune resolution or multiple pathways of inflammation. So this is not molecular targeted single pathway intervention as occurs naturally, all systems are taken down in parallel to reestablish the normal homeostasis of just what the body normally does.

And of course, one final point. It's able to do that because of the way the immune system works without generating immunosuppressive responses, we do not immunosuppressed ourselves by failing to have adverse reactions to most of the foreign antigens were exposed to. So this whole clinical profile that we're describing that's complete sense in terms of the distribution of immune cells in the gut and in terms of the predominant requirement functionally, the gut immune system. With that, I hope it was clear enough.

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Yes, it was. Thank you for that. And then I wanted to ask you about the pediatric market for psoriasis, how you view this, and in light of everything that you've communicated, the care well said about out of administration, safety, etc., is there anything that you would emphasize, or perhaps say is different about the opportunity for an oral therapy for pediatric? Thank you.

Simba Gill -- Chief Executive Officer

So, to go above psoriasis just in terms of responding to the question. So if you look at inflammatory diseases, particularly HPs. Massive issue in children and pediatric populations. And obviously, when we're dealing with children, the safety and tolerability side of things becomes even more paramount than it is normally.

And it is a major limitation of almost all current inflammatory products. Very, very hard to prescribe them to the pediatric population. I don't even know if you've got children, Kristen, but anybody who has a child, just to put it in context, has about a one in four chance of any topic, inflammatory disease and condition. And obviously, as a parent of all those children, you want safe, very well-tolerated products.

So we have the safety and tolerability profile, which I'll keep emphasizing. It is essentially completely unique in the world of inflammation and is ideally suited to use in the massive pediatric population who suffer from inflammatory diseases, HPs in particular. But more broadly, the next piece is obviously what you're touching on, which is how do you give children, particularly little ones, medicines from a formulation perspective. Obviously, if we're talking about teenagers and so on, relatively straightforward, even unruly teenagers are able to swallow tablets and capsules.

So no issue there in terms of formulation. The issue is obviously, as you go younger, administration cannot be done through an oral capsule delivery, for example, in very young patients. So we're working already on alternative formulations, which would allow ingestion for that pediatric population. And that's a work in progress.

But Kristen, confident we'll be able to get there. So no issues around all of that. And I think the most important thing is we're really excited about the potential here for the pediatric population, very, very happy to have a clear path forward. And in the first instance, and we see huge potential for what we're doing in pediatrics.

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Great. Thank you. 

Operator

Our next question coming from the line of [inaudible] from Morgan Stanley. Your line is open.

Unknown Speaker

Good morning, everyone. This is [inaudible]. We have one question, and the question is what would the unplanned clinical study of the fast release EDP1850 capsule look like in terms of design and size? And has there been any regulatory input to guide the study design that you have in mind here?

Simba Gill -- Chief Executive Officer

Good morning. Appreciate the single focus. One question and I think you focused on the right topic. So again, most importantly, we are thrilled with the faster release capsule, and it dramatically improves the likelihood that we're going to be able to get great responses in a very significant proportion of patients.

We have just got the data, Gospel, so we have not yet interacted with regulators. We're working through clinical study designs, more to follow on that, but we expect we will move forward with a pilot Phase 2 study to show clear benefit in topic dermatitis, and that will get going very quickly, and we expect we'll likely have results from that. Certainly, there's not yet formal guidance, but I would expect somewhere around first half of next year as an informal directional sense of what we're expecting and will interact with regulators in due course cost.

Unknown Speaker

All right. Thank you very much.

Operator

And I'm showing no further questions at this time. I would now like to turn the call back over to Simba Gill, for any closing remarks.

Simba Gill -- Chief Executive Officer

Thank you very much. So thanks very much, everyone. Obviously a remarkably exciting time for us. Things continue to progress from strength to strength.

So we are extremely excited about where we are and are very confident that we're going to be able to realize the broad vision that we have for value. It is very clear at this stage that the small intestinal access exists, and at an investor conference right now, and have had some very interesting discussions on the ski slopes and over nice glasses of wine. But what's very clear from those conversations is what we've always said. This is one of the rare situations in biotech, in medicine, and science, where we've uncovered a fundamental platform linked to a completely new area of human biology that we didn't know existed before.

That plays a fundamental role in regulating systemic immunity and inflammation throughout the body. As you've heard from us repeatedly, including today from Mark, we have uncovered the key connection between the gut and systemic immunity and inflammation that probably links to the evolutionary background of microbes needing to make sure, as Mark said, they don't trigger a systemic inflammatory response. And very quickly, we've now generated a very clear, positive Phase 2 clinical data showing that we can harness that with something that's very safe and well-tolerated. And today's fossil release capsule formulation really takes it to the next level.

So we're in a fantastic place and look forward to keeping everybody updated. We've got a lot of continuous news flow in the near future. Thanks very much, everyone.

Operator

[Operator signoff]

Duration: 49 minutes

Call participants:

Kendra Sweeney -- Head of Investor Relations

Simba Gill -- Chief Executive Officer

Mark Bodmer -- Chief Scientific Officer

Jonathan Zung -- Chief Development Officer

Chris Howerton -- Jefferies -- Analyst

Gary Nachman -- BMO Capital Markets -- Analyst

Joseph Thome -- Cowen and Company -- Analyst

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Unknown Speaker

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