Equillium(EQ) - 2025 Q2 - Quarterly Report

Financial Position - As of June 30, 2025, the company had $11.5 million in cash and cash equivalents and an accumulated deficit of $208.2 million[97]. - The accumulated deficit reached $208.2 million as of June 30, 2025[145]. - Total cash decrease was $6.59 million for the six months ended June 30, 2025, compared to a decrease of $12.16 million for the same period in 2024[145]. - Cash used in operating activities increased to $11.2 million in the first half of 2025 from $8.1 million in the first half of 2024[146]. - Net cash provided by investing activities was $4.5 million during the six months ended June 30, 2025, primarily from maturities of short-term investments[147]. - Cash used in investing activities was $4.2 million during the six months ended June 30, 2024, primarily due to purchases of short-term investments[147]. - The company raised approximately $37,000 from the sale of shares under the 2023 ATM Facility during the first half of 2025[148]. Revenue and Losses - The company incurred net losses of $14.4 million for the six months ended June 30, 2025, compared to $2.3 million for the same period in 2024[108]. - Revenue for the three months ended June 30, 2025, was $0, compared to $13.9 million for the same period in 2024, representing a 100% decrease[126]. - The company expects to continue incurring significant expenses and operating losses as it advances research and development activities for EQ504 and potentially EQ302[109]. - The company expects to continue incurring operating losses and negative cash flows for the foreseeable future due to ongoing development costs[145]. Research and Development - EQ504, a novel aryl hydrocarbon receptor modulator, is expected to enter a Phase 1 proof-of-mechanism study by mid-2026, with data anticipated approximately six months thereafter[100]. - Itolizumab (EQ001) did not meet primary outcomes in the Phase 3 EQUATOR study but showed clinically meaningful improvements in durable complete response from Day 29 to 99[102]. - The FDA declined to grant Breakthrough Therapy Designation for itolizumab (EQ001) based on the EQUATOR study data, leading to the acceleration of the study's closure[104]. - The company anticipates substantial increases in expenses as it advances research and development activities, particularly for EQ504 and EQ302[139]. Financing Activities - The company raised approximately $30.0 million in gross proceeds from the initial closing of a private placement, issuing 21,814,874 shares at a price of $0.57 per share[98]. - The Initial Closing of the Private Placement on August 12, 2025, generated gross proceeds of approximately $30.0 million from the sale of 21,814,874 shares[134]. - The company expects to fund operations through 2027 with net proceeds from the Initial Closing and existing cash[140]. - Future capital requirements will depend on various factors, including the costs and timing of clinical studies for EQ504 and EQ302[141]. Expenses - Research and development expenses decreased to $4.1 million for the three months ended June 30, 2025, down from $10.8 million in 2024, a reduction of approximately 62%[127]. - General and administrative expenses were $2.1 million for the three months ended June 30, 2025, compared to $3.1 million in 2024, reflecting a decrease of about 32%[129]. - Interest income for the three months ended June 30, 2025, was $0.1 million, down from $0.4 million in 2024, a decline of 75%[130]. - Other income was $0.4 million for the three months ended June 30, 2025, compared to other income of $0.2 million in 2024, indicating a 100% increase[131]. Commitments and Liabilities - The company has no material non-cancelable purchase commitments with service providers[144]. - There are contingent consideration liabilities related to potential milestone payments under various agreements, but these are considered unlikely to come due within the next 12 months[150]. - The company has not generated any revenues from product sales and relies on financing through equity offerings and collaborations[111]. - The company has not initiated its cryptocurrency treasury reserve strategy, prioritizing the development of EQ504 instead[99]. - The company acquired exclusive worldwide rights to EQ504 through the acquisition of Ariagen, Inc. in October 2024[100].