Equillium reports Q4 and full-year 2023 financial results

Equillium, Inc. announced financial results for the fourth quarter and full year 2023, as well as corporate and clinical highlights.

“The past year we have been focused on clinical execution that has set up the potential milestones we have in front of us in 2024,” said Bruce Steel, chief executive officer at Equillium. “The Phase 1b EQUALISE study of itolizumab in patients with lupus nephritis is now complete. We presented positive data from this study at the annual meetings of both ASN and ACR in the fourth quarter last year and we expect to deliver the topline data to our partner Ono in the coming weeks. We expect to announce the results of the interim review by the data monitoring committee of our Phase 3 EQUATOR study of itolizumab in patients with acute graft-versus-host disease in the third quarter, which would represent the final data deliverable to trigger Ono’s option exercise period, which will expire three months following such deliverables. If Ono exercises their option to acquire our rights to itolizumab we would receive an exercise payment of approximately $331 million, which would significantly extend our cash runway beyond the second half of 2025 – our current guidance – and we would remain eligible to receive approximately $101 million in additional milestone payments.

“Our lead multi-cytokine inhibitor, EQ101, a first in class, tri-specific inhibitor targeting IL-2, IL-9 and IL-15, has completed enrollment in a Phase 2 study for the treatment of moderate to severe alopecia areata. There remains a large unmet medical need for safer alternatives to JAK inhibitors, which carry black-box warnings and are today the only approved class of drugs to treat alopecia areata patients. This is the first study in which EQ101 has been tested in alopecia areata patients, where we are looking for signs of clinical activity above historically low observed placebo responses. We’re pleased to have completed enrollment of this study and look forward to announcing topline data in the second quarter this year.”

“In addition to clinical execution, we have also focused efforts on advancing the rest of our novel multi-cytokine inhibitor programs,” said Steve Connelly, chief scientific officer at Equillium. “EQ302, our first-in-class, bi-specific inhibitor of IL-15 and IL-21, is a second-generation peptide with improved potency that is orally deliverable and stable in the gut. We believe this represents a compelling product profile well positioned to target gastrointestinal indications including celiac disease, inflammatory bowel disease, and eosinophilic esophagitis. We look forward to advancing this program towards the clinic.”

Fourth quarter and full year 2023 financial results
Revenue for the fourth quarter of 2023 was $9.2 million, compared with $15.8 million for the same period in 2022. For the full year of 2023, revenue was $36.1 million, compared with $15.8 million for the full year of 2022. Revenue in 2023 and 2022 consisted entirely of itolizumab development funding and amortization of the upfront payment from Ono resulting from the Asset Purchase Agreement with Ono executed in December 2022, which included such development funding retroactive to the beginning of the third quarter of 2022.

Research and development (R&D) expenses for the fourth quarter of 2023 were $9.2 million, compared with $8.5 million for the same period in 2022. For the full year of 2023, R&D expenses were $37.0 million, compared with $37.5 million for the full year of 2022. The nominal year-over-year decrease in R&D expenses was driven by a decrease in non-clinical research expenses and lower employee compensation and benefits, which were partially offset by increased clinical development expenses, primarily driven by the EQUATOR, EQ101 and EQ102 clinical studies.

General and administrative (G&A) expenses for the fourth quarter of 2023 were $3.2 million, compared with $5.2 million for the same period in 2022. For the full year of 2023, G&A expenses were $13.6 million, compared with $17.2 million for the full year of 2022. The year-over-year decrease was driven by decreased legal expenses primarily related to 2022 business development activities, lower employee compensation and benefits, and lower consulting and general overhead expenses, which were partially offset by greater audit and tax related professional fees.

Net loss for the fourth quarter of 2023 was $2.3 million, or $(0.07) per basic share and diluted share, compared with net income of $2.8 million, or $0.08 per basic and diluted share for the same period in 2022. Net loss for the full year of 2023 was $13.3 million, or $(0.38) per basic and diluted share, compared with a net loss of $62.4 million, or $(1.85) per basic and diluted share for the full year of 2022. The decrease in net loss for the full year of 2023 compared to the full year of 2022 was primarily due to lower operating expenses driven by the non-cash in-process R&D expense related to the acquisition of Bioniz Therapeutics, Inc. in 2022 and lower G&A expenses, greater revenue related to the Ono partnership, greater income on investments, and less interest expense due to the retirement of our former debt facility, which was partially offset by greater income tax expense.

Cash, cash equivalents and short-term investments totaled $40.9 million as of December 31, 2023, compared to $71.0 million as of December 31, 2022. Net cash used in operating activities in the fourth quarter was $5.7 million. Equillium believes that its cash, cash equivalents and short-term investments on the balance sheet as of December 31, 2023, will be sufficient to fund its currently planned operations into the second half of 2025, assuming no further repurchases under our stock repurchase program.
MB Bureau