Equillium(EQ) - 2024 Q1 - Quarterly Results

Overview and Business Update Equillium achieved key clinical milestones for itolizumab and EQ101, with potential for significant milestone payments and cash runway extension Q1 2024 Highlights & CEO Commentary Equillium achieved positive Phase 1b itolizumab data and completed EQ101 Phase 2 enrollment, anticipating a significant Ono milestone - Announced positive topline data from the Phase 1b EQUALISE study of itolizumab in lupus nephritis patients, representing the first of two data sets for Ono Pharmaceutical's option exercise decision[1][3] - Completed enrollment in the Phase 2 study of EQ101 for moderate to severe alopecia areata, with topline data anticipated in Q2 2024[2] - If Ono Pharmaceutical exercises its option to acquire rights to itolizumab, Equillium would receive an exercise payment of approximately $32.1 million (5 billion JPY) and remain eligible for up to $101 million in additional milestone payments[2][4] Anticipated Upcoming Milestones Key 2024 milestones include EQ101 Phase 2 data, itolizumab EQUATOR interim review, and Ono Pharmaceutical's option decision - Topline data from the Phase 2 clinical study of EQ101 in alopecia areata is anticipated in Q2 2024[5] - The interim review for the Phase 3 EQUATOR study of itolizumab in acute graft-versus-host disease is anticipated in Q3 2024[5] - Ono Pharmaceutical's option exercise decision for itolizumab is anticipated in the second half of 2024, following the final data deliverable from the EQUATOR interim review[2][5] First Quarter 2024 Financial Results Equillium reported increased revenue and a narrowed net loss in Q1 2024, maintaining a cash runway into the second half of 2025 Financial Performance Summary Q1 2024 revenue increased to $10.7 million, with net loss narrowing to $2.7 million or $(0.08) per share Financial Performance Summary | Financial Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $10.7M | $8.9M | +20.2% | | R&D Expenses | $9.7M | $9.3M | +4.3% | | G&A Expenses | $3.7M | $3.7M | 0% | | Net Loss | ($2.7M) | ($3.9M) | -30.8% | | Net Loss per Share | ($0.08) | ($0.11) | -27.3% | - Revenue growth was driven by increased development funding ($8.0 million in Q1 2024 vs $6.7 million in Q1 2023) and amortization of the upfront payment ($2.7 million vs $2.2 million) from the Ono partnership[6] - The increase in R&D expenses was primarily due to higher chemistry, manufacturing and controls (CMC) activities for itolizumab and EQ101, and increased employee compensation[7] Financial Position and Cash Runway Equillium ended Q1 2024 with $32.3 million in cash, sufficient to fund operations into the second half of 2025 Financial Position | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents and short-term investments | $32.3M | $40.9M | - The current cash balance is expected to provide a cash runway into the second half of 2025[1][10] - Cash used in operating activities in Q1 2024 was $8.8 million, which included $2.6 million for annual employee bonuses[10] Clinical Pipeline and Platforms Equillium's pipeline features the multi-cytokine platform with EQ101 and EQ302, alongside itolizumab, a first-in-class anti-CD6 monoclonal antibody Multi-Cytokine Platform (EQ101 & EQ302) The multi-cytokine platform develops composite peptides to selectively block pathogenic cytokines, with EQ101 in Phase 2 and preclinical EQ302 - The proprietary platform generates rationally designed composite peptides that selectively block key cytokines (e.g., IL-2, IL-9, IL-15, IL-21) at the shared receptor level[11][15] - EQ101 is a clinical-stage, first-in-class, selective, tri-specific inhibitor of IL-2, IL-9, and IL-15[12][15] - EQ302 is a preclinical-stage, first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21 designed for oral delivery[12][15] Itolizumab Itolizumab, a first-in-class anti-CD6 monoclonal antibody, is in Phase 3 for aGVHD and completed Phase 1b for lupus nephritis - Itolizumab is a clinical-stage, first-in-class anti-CD6 monoclonal antibody[14] - It selectively targets the CD6-ALCAM signaling pathway to downregulate pathogenic T effector cells while preserving T regulatory cells[14] - It is currently under evaluation in a Phase 3 clinical study for acute graft-versus-host disease (aGVHD) and has completed a Phase 1b study for lupus nephritis[15] Financial Statements The financial statements detail Q1 2024 balance sheet changes and income statement performance, showing a narrowed net loss Condensed Consolidated Balance Sheets As of March 31, 2024, total assets were $43.6 million and total liabilities were $22.5 million, reflecting a decrease from year-end 2023 Condensed Consolidated Balance Sheets (In thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash, cash equivalents and short-term investments | $32,285 | $40,866 | | Total assets | $43,597 | $50,530 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $22,208 | $27,573 | | Total liabilities | $22,503 | $27,957 | | Total stockholders' equity | $21,094 | $22,573 | | Total liabilities and stockholders' equity | $43,597 | $50,530 | Condensed Consolidated Statements of Operations Q1 2024 revenue was $10.7 million, with a net loss of $2.7 million or $(0.08) per share, an improvement from the prior year Condensed Consolidated Statements of Operations (In thousands, except per share data) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $10,689 | $8,879 | | Total operating expenses | $13,480 | $12,987 | | Loss from operations | $(2,791) | $(4,108) | | Net loss | $(2,734) | $(3,940) | | Net loss per common share, basic and diluted | $(0.08) | $(0.11) |