Elevation Oncology (ELEV) (~$17MM market capitalization) is a clinical-stage biotech that until yesterday was pursuing the development of their lead therapeutic candidate, EO-3021, in a Phase 1 study for the treatment of gastric and gastroesophageal cancers. Due to a non-competitive risk-benefit analysis, Elevation is discontinuing development of EO-3021, implementing a 70% reduction-in-force and evaluating strategic options. If Elevation Oncology sounds familiar to some readers, they bought seribantumab and other assets from Merrimack Pharmaceuticals (formerly MACK, now a non-traded liquidating trust) in 2019 for a small upfront fee and some milestone payments. ELEV discontinued development of seribantumab in January 2023. After that failure, ELEV switched their focus to EO-3021, so this is the second swing and miss, seems time to formally waive the white flag and return cash to shareholders.
Somewhat frustratingly, ELEV is continuing pre-clinical development of EO-1022 with a planned IND in 2026, they’re guiding to their cash balance lasting them into the second half of 2026. Hopefully this is just a cheap attempt to prove the remaining development pipeline has some value and not an attempt at a third swing at drug development. On the positive side, Kevin Tang owns 8% of ELEV, this is likely too small for a reverse merger (and it seems like reverse merger activity has slowed recently anyway), I would encourage management and the board to consider the likely incoming cash + CVR offer from Tang. It will probably be the best option. A $30MM loan paired with the cash burn and risk of going forward with EO-1022 make this one a little riskier than average.
Disclosure: I own shares of ELEV