Business Overview and History Elevation Oncology, Inc. (ELEV) is an innovative oncology company focused on developing selective cancer therapies to address significant unmet medical needs across a range of solid tumors. With a promising pipeline led by its lead candidate EO-3021, Elevation Oncology is emerging as a key player in the oncology landscape.
Elevation Oncology was founded in 2019 with the mission of discovering and developing novel cancer treatments. The company's initial focus has been on leveraging its expertise in antibody-drug conjugates (ADCs) to advance a pipeline of targeted therapies.
Since its inception, Elevation Oncology has primarily focused on the licensing, acquisition, and clinical development of its lead product candidate, EO-3021, as well as its seribantumab program. In May 2019, the company entered into an asset purchase agreement with Merrimack Pharmaceuticals, Inc. to acquire all rights and interest to patents, know-how and inventory for assets related to seribantumab, a fully humanized immunoglobulin G2 monoclonal antibody against HER3.
The centerpiece of Elevation Oncology's portfolio is EO-3021, an ADC designed to target Claudin 18.2, a protein overexpressed in various solid tumors including gastric, gastroesophageal junction (GEJ), pancreatic, and esophageal cancers. In July 2022, the company entered into a licensing agreement with CSPC Pharmaceutical Group Limited, granting Elevation Oncology exclusive rights to develop and commercialize EO-3021 outside of Greater China. Under the terms of the agreement, Elevation Oncology paid a one-time upfront license fee of $27 million to CSPC.
The company initiated a Phase 1 clinical trial of EO-3021 in the United States in August 2023 and expanded the trial to include sites in Japan in February 2024. As of the June 2024 data cutoff, the Phase 1 trial had enrolled 32 patients with advanced, unresectable or metastatic solid tumors likely to express Claudin 18.2. The initial data highlighted a 42.8% confirmed objective response rate (ORR) in the Claudin 18.2-enriched subset of patients with gastric or GEJ cancer, along with a differentiated safety profile.
In January 2023, Elevation Oncology announced a pipeline prioritization and realignment of resources to advance EO-3021 and other pipeline programs, while pausing further investment in the clinical development of seribantumab. This strategic decision resulted in $5.1 million in restructuring charges, including one-time termination and contractual termination benefits for severance, healthcare, and related benefits.
In addition to EO-3021, Elevation Oncology is advancing a second program targeting HER3, another well-validated oncology target overexpressed across various solid tumors. The company expects to nominate a development candidate for this HER3-ADC program in the second half of 2024.
Financial Overview Elevation Oncology reported a net loss of $34.0 million for the nine months ended September 30, 2024, compared to a net loss of $37.8 million in the prior-year period. Research and development expenses for the nine-month period increased to $21.95 million from $20.74 million in the same period of 2023, reflecting the company's focus on advancing its lead candidate EO-3021. General and administrative expenses also saw a slight increase to $12.11 million from $11.65 million in the prior year period.
For the most recent fiscal year, Elevation Oncology reported no revenue, as the company is still in the clinical stage of development. The net loss for the fiscal year was $45,704,000, with negative operating cash flow and free cash flow both at $56,180,000. In the most recent quarter, the company reported a net loss of $12,881,000, with negative operating cash flow and free cash flow both at $8,382,000.
Financials As of September 30, 2024, Elevation Oncology had $103.1 million in cash, cash equivalents, and marketable securities, which the company believes will be sufficient to fund its operations into 2026. This cash position was bolstered by the company's successful at-the-market (ATM) offering in 2024, which generated $44.2 million in net proceeds.
Liquidity To date, Elevation Oncology has funded its operations with proceeds from the sale of convertible preferred stock, proceeds from public offerings of common stock and warrants, and borrowings under a debt facility. The company's debt-to-equity ratio stands at 0.5497, indicating a moderate level of leverage. Elevation Oncology maintains a strong liquidity position with a current ratio and quick ratio both at 17.77, suggesting the company has ample short-term assets to cover its short-term liabilities.
In addition to its cash on hand, Elevation Oncology has secured a debt facility with K2HealthVentures, providing up to $50 million in term loans. Of this amount, $30 million was drawn at closing, with an additional $20 million available upon request, subject to certain conditions.
Key Risks and Challenges Like any clinical-stage biopharmaceutical company, Elevation Oncology faces several risks and challenges that investors should consider. These include the inherent uncertainty and high failure rate associated with drug development, the potential for delays or setbacks in the company's clinical trials, the need to secure additional financing to support its operations, and the competitive landscape in the oncology space.
Additionally, the company's reliance on its licensing agreement with CSPC for the development and commercialization of EO-3021 outside of Greater China introduces a degree of risk, as the success of the program is partially dependent on the performance and commitments of its partner.
Outlook and Conclusion Despite the risks, Elevation Oncology's progress with its lead candidate EO-3021 and its emerging HER3-ADC program demonstrate the company's potential to become a significant player in the oncology field. The promising initial data from the EO-3021 Phase 1 trial, the company's plans to expand the program into combination studies, and its strong cash position provide a solid foundation for Elevation Oncology to continue advancing its pipeline and delivering value to shareholders.
The company has initiated the dose expansion portion of the Phase 1 trial of EO-3021 and expects to provide additional data from this trial in the first half of 2025. Elevation Oncology also plans to expand the Phase 1 trial to evaluate EO-3021 in combination with ramucirumab, a VEGFR2 inhibitor, and dostarlimab, a PD-1 inhibitor, and expects to initiate dosing in these combination cohorts by the end of 2024.
As the company works to navigate the challenges of drug development and commercialization, investors will closely monitor Elevation Oncology's ability to execute on its strategic priorities and capitalize on the significant opportunities within the oncology market. The company's focus on developing targeted therapies for solid tumors with high unmet medical needs positions it well in the competitive oncology landscape, and its strong financial position provides runway to advance its pipeline programs through key clinical milestones.