UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38692 EQUILLIUM, INC. (Exact name of registrant as specified in its charter) | Delaware | 82-1554746 | | --- | --- | | (State or ...

OPEN MARKET SALE AGREEMENTSM October 5, 2023 Exhibit 10.1 Equillium, Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell from time to time through Jefferies LLC, as sales agent and/or principal (the "Agent"), shares of the Company's common stock, par value $0.0001 per share (the "Common Shares"), on the terms set forth in this agreement (this "Agreement"). Section 1. DEFINITIONS (a) Certain Definitions. For purposes of this Agreement, ...

Corporate Presentation Actual results or events could differ materially from the plans, intentions and expectations disclosed or implied in the forward-looking statements the Company makes due to the risks and uncertainties inherent in the Company's business, including without limitation, the risks described in the Company's filings with the Securities and Exchange Commission ("SEC"). You are cautioned not to place undue reliance on these forward-looking statements, which represent the Company's views as of ...

Financial Position - As of March 31, 2025, the company had $14.5 million in cash and cash equivalents, with an accumulated deficit of $202.5 million[91][100]. - The accumulated deficit as of March 31, 2025, was $202.5 million, indicating ongoing financial challenges[136]. - The company believes its cash and cash equivalents can fund operations into the third quarter of 2025, but there is substantial doubt about its ability to continue as a going concern[129]. - The company will need to raise additional capital to fund operations beyond the third quarter of 2025, with uncertainty regarding the ability to secure such funding[130]. - The company has no material non-cancelable purchase commitments with service providers, indicating flexibility in cash management[135]. - The company has experienced extreme volatility in financial markets, impacting liquidity and credit availability, which may affect future financing efforts[134]. Revenue and Expenses - The company has not generated any revenues from product sales, with past revenues derived from an upfront payment of $26.4 million under the Asset Purchase Agreement with Ono[104][105]. - Revenue for the three months ended March 31, 2025, was $0, a decrease of $10.7 million compared to $10.7 million in the same period of 2024[118]. - Research and development expenses primarily consist of costs associated with non-clinical research and clinical development of product candidates[108]. - Research and development expenses decreased to $5.9 million for the three months ended March 31, 2025, down from $9.7 million in 2024, a reduction of $3.8 million[120]. - General and administrative expenses were $2.9 million for the three months ended March 31, 2025, compared to $3.7 million in 2024, a decrease of $0.8 million[122]. - Interest income decreased to $0.2 million for the three months ended March 31, 2025, from $0.4 million in 2024, a decline of $0.2 million[123]. - Other income was $43,000 for the three months ended March 31, 2025, compared to an expense of $0.4 million in 2024, reflecting a change of $0.4 million[124]. - Cash used in operating activities was $8.2 million for the three months ended March 31, 2025, a decrease from $8.8 million in the prior year[137]. - The company expects to continue incurring operating losses and negative cash flows for at least the next several years due to ongoing development costs[136]. Clinical Development - The company plans to initiate a first-in-human Phase 1 clinical study for EQ504 in the first quarter of 2026, pending additional capital[92]. - Itolizumab (EQ001) did not meet primary outcomes in the Phase 3 EQUATOR study for acute graft-versus-host disease, but showed clinically meaningful improvements in durable complete response from Day 29 to 99[94][95]. - The company submitted data from the EQUATOR study to the FDA for Breakthrough Therapy Designation, but the FDA declined to grant it based on the current data[96]. - EQ302, a preclinical-stage product candidate, is on hold due to financial constraints, with plans to resume development contingent on securing additional funding[98]. - The company anticipates significant increases in expenses as it resumes development activities for EQ504, itolizumab (EQ001), and EQ302, contingent on raising additional capital[127]. - The company paused research and development activities pending the ability to raise capital in the second quarter of 2025, with potential strategic alternatives including mergers[91][102]. Capital Raising Activities - The company entered into a 2023 ATM Facility allowing for the sale of up to $21.95 million in common stock, with gross proceeds of approximately $55,000 from 109,410 shares sold during the three months ended March 31, 2025[126]. - The company raised approximately $53,000 from the sale of shares under the 2023 ATM Facility during the three months ended March 31, 2025[139]. - The company has contingent consideration liabilities related to potential milestone payments under various agreements, but these are considered unlikely to come due within the next 12 months[141].

Financial Position - As of March 31, 2025, Equillium, Inc. reported estimated cash, cash equivalents, and short-term investments of approximately $14.5 million[6]. Financial Reporting - The actual financial statements for the quarter ended March 31, 2025, are not yet available and will be subject to final adjustments[7]. - The preliminary financial data should not be viewed as a substitute for financial statements prepared in accordance with generally accepted accounting principles[7]. - The company has not audited or reviewed the preliminary financial data, which reflects information available only at this time[9]. - Risks related to preliminary financial results include potential discrepancies upon completion of financial closing procedures[9]. Forward-Looking Statements - Forward-looking statements in the report are based on current management expectations and reasonable assumptions, but actual results may differ materially[9]. - The company undertakes no obligation to update any forward-looking statements to reflect new information or events[9]. Regulatory Information - The company is registered with the SEC under the Securities Exchange Act of 1934[1]. - Equillium, Inc. is listed on the Nasdaq Capital Market under the symbol EQ[4]. Press Release - The report includes a press release dated April 24, 2025, which is incorporated by reference[9].

Core Viewpoint - Equillium, Inc. (EQ) has experienced a significant decline of 52.2% in its stock price over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick suggesting that the stock found support after hitting a new low during a downtrend [4][5]. - This pattern signals that bears may have lost control, and the success of bulls in preventing further price declines indicates a potential trend reversal [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for EQ, with the consensus EPS estimate for the current year increasing by 11.2% over the last 30 days, indicating that analysts expect better earnings than previously predicted [7][8]. - EQ holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9]. This rank serves as a strong indicator of improving company prospects and potential trend reversal [9].

Core Insights - Equillium, Inc. released topline data from the Phase 3 EQUATOR study evaluating itolizumab for acute graft-versus-host disease (aGVHD), showing no significant difference in complete response (CR) or overall response rate (ORR) at Day 29 compared to placebo [1] - The study indicated statistically significant and clinically meaningful benefits in longer-term outcomes, including complete response at Day 99 and duration of complete response [2] - Itolizumab demonstrated a favorable safety profile, not increasing the risk of infections or sepsis, which are major causes of mortality in aGVHD [3] Regulatory and Future Plans - The company has filed for Breakthrough Therapy designation and has a meeting scheduled with the FDA to discuss potential Accelerated Approval for itolizumab, given the high one-year mortality rate of over 40% in aGVHD [4] - Feedback from the FDA is expected in May, with plans to submit a biologics license application in the first half of 2026 if the feedback is positive [4] Secondary Endpoint Results - Statistical significance was achieved in several secondary endpoints, including: - Duration of complete response favoring itolizumab with a median of 336 days versus 72 days, p-value 0.017 [7] - Failure-free survival favoring itolizumab with a median of 154 days versus 70 days, p-value 0.043 [7] - Complete response at Day 99 favoring itolizumab with 35 (44.9%) patients versus 22 (28.6%) patients, p-value 0.035 [7] - Positive trend in overall survival with mortality rates of 19 (24.4%) for itolizumab versus 25 (32.5%) for placebo [7] Market Reaction - Following the study results, Equillium's stock price fell by 33.3%, trading at $0.51 [6]

Clinical Development and Efficacy - Itolizumab (EQ001) demonstrated a median duration of complete response (CR) of 336 days and median failure-free survival of 154 days in the Phase 3 EQUATOR study, compared to 72 days and 70 days for placebo [25]. - Itolizumab demonstrated a clinical remission rate of 23.3% in a Phase 2 study for ulcerative colitis, compared to 20.0% for adalimumab and 10.0% for placebo [47]. - The EQUATOR study enrolled 158 patients, making it the second largest clinical study for first-line aGVHD treatment [60]. - Itolizumab (EQ001) was well-tolerated, with no increased risk of infection or sepsis compared to placebo [67]. - EQ302 is a first-in-class, orally delivered selective inhibitor of IL-15 and IL-21, targeting gastrointestinal diseases like celiac disease [75]. - EQ101 is a tri-specific inhibitor of IL-2, IL-9, and IL-15, showing safety and tolerability in Phase 1/2 studies for cutaneous T cell lymphoma [76]. - EQ101 completed a Phase 2 proof-of-concept study for alopecia areata, showing positive topline data, but further development is deprioritized due to limited financial resources [34]. - EQ101 demonstrated a 20% overall response rate with a SALT score of ≤20 after 24 weeks in a Phase 2 study involving 36 subjects with alopecia areata [81]. - In the same study, 29% of subjects with moderate to severe disease achieved a SALT score of ≤20, indicating significant efficacy [81]. - The EQUATE clinical study involved 30 subjects treated with itolizumab (EQ001) at doses of 0.4, 0.8, or 1.6 mg/kg, showing a 70% steroid taper at Day 29 and 99% at Day 169 [58]. - The estimated 1-year overall survival rate for patients treated with itolizumab (EQ001) was 66.7%, compared to 49.6% for placebo [64]. Financial Status and Funding Needs - The company has incurred significant losses since inception and expects to continue incurring losses for the foreseeable future, raising doubts about its ability to maintain profitability [22]. - The company requires substantial additional funding to complete the development and commercialization of itolizumab (EQ001) and other product candidates, with potential delays in research and development if funding is not secured [22]. - The company has paused development of EQ302 and EQ101 pending additional funding or partnerships [26][27]. - The company is exploring partnership opportunities to advance the clinical development of EQ101 and other assets due to financial constraints [34]. - The company aims to opportunistically expand its pipeline by conducting preclinical studies and acquiring high-value therapeutic programs [34]. Regulatory and Market Considerations - The company plans to submit a Biologics License Application (BLA) for itolizumab (EQ001) for acute graft-versus-host disease (aGVHD) in the first half of 2026, pending positive regulatory feedback [31]. - The company expects feedback from the FDA regarding its request for Breakthrough Therapy Designation (BTD) in May 2025 [31]. - The FDA requires a biologics license application (BLA) for product candidates like itolizumab (EQ001) after completion of pivotal clinical studies [116]. - The FDA allows for expedited review programs such as priority review and fast track designation for products addressing unmet medical needs [127][129]. - There are currently no FDA-approved therapies for the first-line treatment of aGVHD, with existing treatments being off-label immunosuppressives [109]. - The only available treatment for celiac disease is a strict gluten-free diet, with no FDA-approved therapies currently available [111]. Intellectual Property and Competition - The company aims to protect its intellectual property through patent applications covering various therapeutic approaches and product candidates [90]. - The patent portfolio includes six families related to EQ101 and EQ302, with expected expiration dates ranging from 2032 to 2041 [93][96][97]. - The company recognizes the uncertainty in obtaining patent protection and the potential for patents to be challenged or invalidated by third parties [102]. - The company plans to seek patent term extensions for any issued patents covering products once they receive FDA approval [103]. - The company faces significant competition from major pharmaceutical and biotechnology companies, as well as smaller firms with collaborative arrangements [106]. Operational and Organizational Structure - The company has no marketing and sales organization and may need to invest significant resources to develop these capabilities [23]. - The company has not yet established a commercial organization or distribution capabilities and may collaborate with pharmaceutical companies for commercial activities [112]. - The company employs 35 full-time employees as of December 31, 2024, focusing on research and development, operations, and administration [182]. - The company has three wholly-owned subsidiaries, enhancing its operational capabilities and market reach [183]. - The company is classified as a "smaller reporting company," allowing it to utilize scaled disclosures [184]. Compliance and Regulatory Challenges - Companies must comply with cGMP requirements to ensure consistent production quality and may face inspections by the FDA [137]. - The FDA can withdraw product approval if regulatory compliance is not maintained or if new safety issues arise post-marketing [138]. - Compliance with various federal and state healthcare regulations is essential, with potential penalties for violations including civil and criminal penalties, fines, and exclusion from government programs [158]. - Data privacy and security regulations, including HIPAA, impose strict requirements on the handling of individually identifiable health information, complicating compliance efforts [152]. Market Access and Reimbursement - Coverage and reimbursement for new product candidates are uncertain and depend on third-party payors, including government healthcare programs and private insurers [159]. - Obtaining adequate reimbursement may require expensive pharmacoeconomic studies to demonstrate medical necessity and cost-effectiveness [162]. - The federal Physician Payments Sunshine Act requires manufacturers to report payments or transfers of value to healthcare professionals, with penalties for non-compliance [155]. - The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into national rebate agreements to receive federal matching funds for outpatient drugs [153]. - The Anti-Kickback Statute prohibits remuneration intended to induce purchases of items reimbursable under federal healthcare programs, with broad interpretations of what constitutes remuneration [146]. - The federal False Claims Act prohibits knowingly presenting false claims for payment to the government, with significant legal implications for violations [148]. Legislative and Economic Environment - The Inflation Reduction Act of 2022 has introduced drug pricing reforms that could negatively impact the company's ability to commercialize its products [166]. - The Affordable Care Act continues to exert downward pressure on coverage and pricing for approved products, potentially harming the company's business [169]. - Legislative changes, such as the Budget Control Act of 2011, impose aggregate reductions to Medicare payments, affecting the company's revenue [171]. - The Medicare Drug Price Negotiation Program, initiated under the IRA, will progressively include more products, impacting pricing strategies [172].

Financial Performance - Revenue for Q4 2024 was $4.4 million, down from $9.2 million in Q4 2023; full year revenue increased to $41.1 million from $36.1 million in 2023[6] - R&D expenses for Q4 2024 were $7.3 million, compared to $9.2 million in Q4 2023; full year R&D expenses slightly increased to $37.4 million from $37.0 million[7] - G&A expenses for Q4 2024 decreased to $1.8 million from $3.2 million in Q4 2023; full year G&A expenses were $11.9 million, down from $13.6 million[8] - Net loss for Q4 2024 was $5.8 million, or $(0.16) per share, compared to a net loss of $2.3 million, or $(0.07) per share in Q4 2023; full year net loss was $8.1 million, or $(0.23) per share, down from $13.3 million, or $(0.38) per share in 2023[9] Clinical Results - Itolizumab demonstrated a median duration of complete response of 336 days compared to 72 days for placebo, with a p-value of 0.017[4] - Itolizumab showed a median failure-free survival of 154 days versus 70 days for placebo, with a p-value of 0.043[4] Future Plans - The company expects FDA feedback on the Breakthrough Therapy designation request and Accelerated Approval pathway in May 2025[5] - The company plans to submit a biologics license application in the first half of 2026, pending positive FDA feedback and additional capital[2] Financial Position - Cash, cash equivalents, and short-term investments totaled $22.6 million as of December 31, 2024, down from $40.9 million as of December 31, 2023[11] - The total assets decreased to $25.6 million in 2024 from $50.5 million in 2023[18]

Core Viewpoint - Equillium, Inc. (EQ) has shown a recent downtrend, losing 5.3% over the past week, but a hammer chart pattern suggests a potential trend reversal due to increased buying interest [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottom in the stock price, suggesting that selling pressure may be exhausting [2][4]. - This pattern forms when there is a small candle body with a long lower wick, indicating that the stock opened lower, made a new low, but closed near its opening price, reflecting some buying interest [3][4]. - Hammer candles can appear on various timeframes and are utilized by both short-term and long-term investors [4]. Fundamental Analysis - Recent upward revisions in earnings estimates for EQ serve as a bullish indicator, correlating strongly with near-term stock price movements [6]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 29.4%, indicating that analysts expect better earnings than previously predicted [7]. - EQ holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [8].