Equillium Announces Q1 2024 Financial Results and Clinical Updates

Equillium Inc., a clinical-stage biotechnology firm, recently announced its financial results for the first quarter of 2024 and highlighted significant progress in its clinical development programs. Specifically, the company reported a positive topline data result from the Phase 1b EQUALISE study of itolizumab in lupus nephritis patients, marking a noteworthy milestone in their partnership with Ono Pharmaceutical.

The CEO of Equillium, Bruce Steel, expressed satisfaction with this achievement and outlined other key developments expected in 2024. Enrollment has been completed for the Phase 2 study of EQ101, a multi-cytokine inhibitor, in treating moderate to severe alopecia areata. This study aims to observe clinical efficacy beyond historically low placebo response rates, with topline data anticipated in the second quarter of the year. Additionally, interim results from the Phase 3 EQUATOR study of itolizumab in acute graft-versus-host disease (aGVHD) are expected in the third quarter of 2024. This interim review will be crucial as it is the last required data to trigger Ono's option exercise period, which will conclude three months after this review. If Ono exercises the option to acquire rights to itolizumab, Equillium will receive an exercise payment of approximately $321 million, significantly extending their cash runway beyond the current projection of the second half of 2025, along with eligibility for about $101 million in additional milestone payments.

Equillium's financial performance for the first quarter of 2024 saw an increase in revenue to $10.7 million from $8.9 million in the same quarter of 2023. This revenue was derived largely from itolizumab development funding and the amortization of an upfront payment from an Asset Purchase Agreement with Ono. Development funding contributed $8.0 million, while the amortization of the upfront payment added $2.7 million. For the same period in 2023, these figures were $6.7 million and $2.2 million, respectively.

Research and development expenses rose slightly to $9.7 million in the first quarter of 2024, compared to $9.3 million during the same period the previous year. This increase was mainly attributed to enhanced chemistry, manufacturing, and control activities related to itolizumab and EQ101, as well as higher employee compensation expenses. These increases were partially offset by reduced costs in specific clinical studies and higher estimated Australian R&D tax incentive credits. General and administrative expenses remained constant at $3.7 million for both the first quarter of 2024 and 2023.

The net loss for the first quarter of 2024 was $2.7 million, or $0.08 per basic and diluted share, an improvement from the net loss of $3.9 million, or $0.11 per basic and diluted share, recorded in the same period of 2023. This reduction in net loss was primarily due to increased revenue from the Ono partnership, despite higher R&D operating expenses.

Equillium's cash, cash equivalents, and short-term investments totaled $32.3 million as of March 31, 2024, down from $40.9 million as of December 31, 2023. Operating activities used $8.8 million in cash during the first quarter of 2024, which included $2.6 million for annual employee bonuses. The company believes its current cash reserves are sufficient to fund planned operations into the second half of 2025, assuming no additional stock repurchase activities.

Equillium's pipeline includes several innovative therapies targeting severe autoimmune and inflammatory disorders. Their proprietary multi-cytokine platform is designed to block key cytokines at the receptor level, potentially avoiding broad immunosuppression and off-target effects associated with other therapeutic classes like Janus kinase inhibitors. Their current assets include EQ101, a tri-specific cytokine inhibitor targeting IL-2, IL-9, and IL-15, and EQ302, a bi-specific cytokine inhibitor targeting IL-15 and IL-21, with the latter still in preclinical development. Itolizumab, their lead product, is a monoclonal antibody targeting the CD6-ALCAM signaling pathway, playing a crucial role in modulating T effector cells while preserving T regulatory cells, and is currently being evaluated in Phase 3 clinical trials for aGVHD and Phase 1b trials for lupus nephritis. Equillium's strategic partnership with Ono Pharmaceutical could significantly impact the development and commercialization of itolizumab.