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Equillium(EQ) - 2024 Q2 - Quarterly Report
EQEquillium(EQ)2024-08-08 20:10

Revenue Generation - The company has not generated any revenues from product sales and does not expect to do so within the next 12 months[117]. - For the six months ended June 30, 2024, the company recognized 24.5millioninrevenueundertheAssetPurchaseAgreementwithOno,comparedto24.5 million in revenue under the Asset Purchase Agreement with Ono, compared to 18.0 million for the same period in 2023, representing a 36.1% increase[121][132]. - The company received a one-time upfront payment of approximately 26.4millionundertheAssetPurchaseAgreementwithOno,withpotentialadditionalpaymentsofupto26.4 million under the Asset Purchase Agreement with Ono, with potential additional payments of up to 101.4 million based on milestones[119]. Research and Development Expenses - Research and development expenses for the three months ended June 30, 2024, were 10.8million,upfrom10.8 million, up from 9.6 million in the same period in 2023, reflecting a 12.5% increase[133]. - The company plans to substantially increase research and development expenses to advance the development of EQ101, EQ302, and itolizumab (EQ001)[124]. - Research and development expenses increased by 1.7millionforthesixmonthsendedJune30,2024,comparedtothesameperiodin2023,primarilyduetoa1.7 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to a 1.9 million increase in CMC activities expenses[134]. Development Funding - Development funding recognized for the six months ended June 30, 2024, was 17.2million,comparedto17.2 million, compared to 13.5 million for the same period in 2023, indicating a 27.4% increase[132]. - As of June 30, 2024, the company had received 53.1millionindevelopmentfundingfromOnoforitolizumab[142].GeneralandAdministrativeExpenses−Generalandadministrativeexpensesareexpectedtoincreaseduetoexpandinginfrastructureandcompliancecostsassociatedwithbeingapubliccompany[126].−Generalandadministrativeexpensesremainedrelativelyconstantat53.1 million in development funding from Ono for itolizumab[142]. General and Administrative Expenses - General and administrative expenses are expected to increase due to expanding infrastructure and compliance costs associated with being a public company[126]. - General and administrative expenses remained relatively constant at 3.1 million for the three months and 6.9millionforthesixmonthsendedJune30,2024,comparedto6.9 million for the six months ended June 30, 2024, compared to 3.1 million and 6.8millionforthesameperiodsin2023[135].FinancialCondition−AsofJune30,2024,thecompanyhadanaccumulateddeficitof6.8 million for the same periods in 2023[135]. Financial Condition - As of June 30, 2024, the company had an accumulated deficit of 188.0 million and 11.1millionincashandcashequivalents,alongwith11.1 million in cash and cash equivalents, along with 22.2 million in short-term investments[139]. - The company anticipates challenges in securing additional financing due to macroeconomic factors, which could impact its financial condition and operations[117]. - If Ono does not exercise its option, the company anticipates needing to reduce cash burn by approximately 10millionbetweenNovember2024andAugust2025tofundoperations[146].InterestIncome−Interestincomedecreasedto10 million between November 2024 and August 2025 to fund operations[146]. Interest Income - Interest income decreased to 0.4 million and 0.8millionforthethreeandsixmonthsendedJune30,2024,respectively,downfrom0.8 million for the three and six months ended June 30, 2024, respectively, down from 0.6 million and 1.3millioninthesameperiodsof2023[137].StockRepurchaseProgram−Thestockrepurchaseprogramauthorizedbytheboardallowsforrepurchasesofupto1.3 million in the same periods of 2023[137]. Stock Repurchase Program - The stock repurchase program authorized by the board allows for repurchases of up to 7.5 million, with $0.3 million spent on repurchasing 298,385 shares as of June 30, 2024[144]. Option Period - The option period for Ono to exercise its option on itolizumab will expire on October 30, 2024, following the delivery of topline data and interim analysis results[120].