Equillium Inc

Previous wording

Our current clinical-stage product candidates consist of EQ101 and itolizumab (EQ001). EQ101 is a clinical-stage, first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15, key disease-driving, clinically validated cytokine targets aimed at addressing unmet needs across a range of immuno-inflammatory indications. Itolizumab (EQ001) is a clinical-stage, first-in-class anti-CD6 monoclonal antibody that selectively targets the CD6-ALCAM signaling pathway to downregulate pathogenic T effector cells while preserving T regulatory cells critical for maintaining a balanced immune response. This pathway plays a central role in modulating the activity and trafficking of T cells that drive a number of immuno-inflammatory diseases. We are also engaged in the discovery and optimization of additional peptide-based product candidates that selectively target multiple cytokines and are currently advancing the development of EQ302, a preclinical-stage, first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21 for oral delivery. Our novel and differentiated pipeline of first-in-class immunology assets has the potential to address unmet medical needs in numerous areas, including dermatology, gastroenterology, rheumatology, hematology, transplant science, oncology and pulmonology. We are focused on developing EQ101, EQ302 and itolizumab (EQ001) as potential best-in-class, disease modifying treatments for multiple severe immuno-inflammatory disorders.

Current wording

Our current clinical-stage product candidates consist of itolizumab (EQ001) and EQ101. Itolizumab (EQ001) is a first-in-class anti-CD6 immune-modifying monoclonal antibody, or mAb, that selectively targets the CD6-ALCAM signaling pathway to downregulate pathogenic T effector cells while preserving T regulatory cells critical for maintaining a balanced immune response. This pathway plays a central role in modulating the activity and trafficking of T cells that drive a number of immuno-inflammatory diseases. EQ101 is a first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15, key disease-driving, clinically validated cytokine targets aimed at addressing unmet needs across a range of immuno-inflammatory indications. We have also been engaged in the discovery and optimization of additional peptide-based product candidates that selectively target multiple cytokines, including the preclinical development of EQ302, a first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21 for oral delivery. In October 2024, we announced that we are pausing further activities related to EQ101 and EQ302 as we prioritize the development of itolizumab (EQ001). Our novel and differentiated pipeline of first-in-class immunology assets has the potential to address unmet medical needs in numerous areas, including dermatology, gastroenterology, rheumatology, hematology, transplant science, oncology and pulmonology.

Previous wording

We acquired our rights to itolizumab (EQ001) pursuant to a collaboration and license agreement with Biocon SA (subsequently assigned to Biocon Limited, or together, Biocon) in May 2017, which has been subsequently amended, or Biocon License. In March 2022, we initiated EQUATOR, a global Phase 3 pivotal clinical study of itolizumab (EQ001) in 200 patients with acute graft-versus-host disease, or aGVHD. The decision to initiate the EQUATOR study was based on findings from our completed Phase 1b clinical study in aGVHD, called EQUATE, and feedback from both the U.S. Food and Drug Administration, or FDA, and leading physicians in the field of hematopoietic stem cell transplantation. In August 2024, we announced a positive recommendation from the Independent Data Safety Monitoring Committee, or IDMC, to continue the EQUATOR study based on the IDMC’s review of the interim analysis of unblinded efficacy and safety data of the first approximately 100 subjects. On August 1, 2024, we provided the IDMC's recommendation from the interim analysis to Ono Pharmaceutical Co., Ltd., or Ono, triggering the 90-day period for Ono to decide whether to exercise its option to acquire itolizumab, which results in the expiration of Ono’s option period on October 30, 2024. We recently completed EQUALISE, a Phase 1b proof-of-concept clinical study of itolizumab (EQ001) in patients with systemic lupus erythematosus, or SLE, and lupus nephritis, or LN. In November 2023, we announced data from the Type B LN portion of the study presented at the annual meetings of the American College of Rheumatology and the American Society of Nephrology. That data represented all but the last patient in the follow-up period and demonstrated that itolizumab (EQ001) was well-tolerated and produced a clinically meaningful response in highly proteinuric subjects. In April 2024, we announced positive topline data from the Type B LN portion of EQUALISE and that the topline data had been delivered to Ono.

Current wording

We acquired our rights to itolizumab (EQ001) pursuant to a collaboration and license agreement with Biocon SA (subsequently assigned to Biocon Limited, or together, Biocon) in May 2017, which has been subsequently amended, or Biocon License. Our most advanced development program with itolizumab (EQ001) is a global Phase 3 study, called EQUATOR, in patients with acute graft-versus-host disease, or aGVHD, which was initiated in March 2022. The decision to initiate the EQUATOR study was based on findings from our completed Phase 1b clinical study in aGVHD, called EQUATE, and feedback from both the U.S. Food and Drug Administration, or FDA, and leading physicians in the field of hematopoietic stem cell transplantation. In August 2024, we announced a positive recommendation from the Independent Data Safety Monitoring Committee, or IDMC, to continue the EQUATOR study based on the IDMC’s review of the interim analysis of unblinded efficacy and safety data of the first approximately 100 subjects. At the end of October 2024, we announced a decision to pause enrollment in the EQUATOR study. That decision was based on a change in business conditions and not on any issues or challenges with enrollment or other operational aspects of the study or due to any unfavorable safety or other preliminary study data. We are currently reviewing clinical options for the program, including the potential to accelerate the timeline to topline data to the first quarter of 2025 while preserving registrational integrity of the study. The accelerated timeline would be based on reduced enrollment to approximately 150 patients and unblinding the study after primary and key secondary endpoints at Day 29. We recently completed EQUALISE, a Phase 1b proof-of-concept clinical study of itolizumab

Previous wording

We are also collaborating with Biocon and co-funding a Phase 2 clinical study of itolizumab in subjects with ulcerative colitis. The study, which is being conducted by Biocon in India and commenced in November 2022, is a randomized, double-blinded, placebo-controlled clinical study in up to 90 subjects, to evaluate the safety and efficacy of itolizumab in patients with moderate to severe ulcerative colitis.

Current wording

We have also been collaborating with Biocon and co-funding a completed Phase 2 clinical study of itolizumab in subjects with ulcerative colitis. The study, which was conducted by Biocon in India and commenced in November 2022, was a randomized, double-blinded, placebo-controlled clinical study in up to 90 subjects, evaluating the safety and efficacy of itolizumab in patients with moderate to severe ulcerative colitis. We expect topline data from that study in the first quarter of 2025.

Previous wording

On December 5, 2022, we entered into the Asset Purchase Agreement with Ono pursuant to which we granted Ono an exclusive option to acquire our rights to itolizumab (EQ001), or the Option. These rights include all therapeutic indications and the rights to commercialize itolizumab (EQ001) in the United States, Canada, Australia, and New Zealand. In exchange for the Option, Ono paid us a one-time, upfront payment of an amount equal to JPY 3.5 billion, or $26.4 million.

Current wording

On December 5, 2022, we entered into an asset purchase agreement, or Asset Purchase Agreement, with Ono Pharmaceutical Co., Ltd., or Ono, pursuant to which we granted Ono an exclusive option to acquire our rights to itolizumab (EQ001), or the Option. These rights included all therapeutic indications and the rights to commercialize itolizumab (EQ001) in the United States, Canada, Australia, and New Zealand. In exchange for the Option, Ono paid us a one-time, upfront payment of an amount equal to JPY 3.5 billion, or $26.4 million. Pursuant to the Asset Purchase Agreement, we have been responsible for conducting all research and development of itolizumab (EQ001), which has been funded by Ono from July 1, 2022 through the end of the option period. Ono’s option period expired and the Asset Purchase Agreement automatically terminated on October 30, 2024 pursuant to its terms. We believe Ono’s decision to let its option lapse was a strategic business decision and not based on data from any of the itolizumab (EQ001) clinical programs.

Previous wording

We acquired the exclusive worldwide rights to EQ101 and a proprietary platform for discovering additional, novel multi-cytokine targeting product candidates, including EQ302, through the acquisition of Bioniz Therapeutics, Inc., or Bioniz, in February 2022. EQ101 and EQ302 are synthetic peptides engineered to specifically inhibit key disease-driving, clinically validated cytokine targets aimed at addressing unmet needs in a number of immuno-inflammatory indications. In November 2022, we initiated a Phase 2 proof-of-concept clinical study of EQ101 administered intravenously, or IV, in subjects with moderate to severe alopecia areata, or AA, in Australia and New Zealand. In June 2024, we announced positive topline data from that study. Based on those positive results and feedback from key opinion leaders in the treatment of AA, we believe further development of EQ101 in AA is warranted. We are proceeding with preparations to conduct a Phase 2b placebo-controlled, dose optimization study, which we expect to initiate before the end of 2025. We continue to make progress on a subcutaneous formulation of EQ101 which could potentially be introduced in the next study. We are currently conducting preclinical development of EQ302, including in vivo pharmacology and formulation development, to further characterize and optimize the product candidate. Pending positive findings, we expect to advance the preclinical development of EQ302 toward a potential regulatory filing to enable a first-in-human clinical study in the second half of 2025.

Current wording

We acquired the exclusive worldwide rights to EQ101 and a proprietary platform for discovering additional, novel multi-cytokine targeting product candidates, including EQ302, through the acquisition of Bioniz Therapeutics, Inc., or Bioniz, in February 2022. EQ101 and EQ302 are synthetic peptides engineered to specifically inhibit key disease-driving, clinically validated cytokine targets aimed at addressing unmet needs in a number of immuno-inflammatory indications. In November 2022, we initiated a Phase 2 proof-of-concept clinical study of EQ101 administered intravenously, or IV, in subjects with moderate to severe alopecia areata, or AA, in Australia and New Zealand. In June 2024, we announced positive topline data from that study. Based on those positive results and feedback from key opinion leaders in the treatment of AA, we believe further development of EQ101 in AA is warranted. However, due to financial constraints, we announced in October 2024 that we were pausing further development activities of EQ101 pending the availability of additional funding. We have been conducting preclinical development of EQ302, including in vivo pharmacology and oral formulation development, to further characterize and optimize the product candidate. In October 2024, we announced that for business reasons we were pausing further development of EQ302 pending the availability of additional funding and resources.

Previous wording

In June 2024, we completed a Phase 1 first-in-human clinical study of another multi-cytokine targeting peptide, EQ102, in healthy volunteers in Australia. EQ102 is a bi-specific inhibitor of IL-15 and IL-21, which was also acquired as part of the Bioniz acquisition. In that Phase 1 study, EQ102 was generally well tolerated and demonstrated pharmacodynamic activity, but the bioavailability of the initial formulation was lower than expected. Preclinical and translational data have demonstrated that EQ302 has increased potency compared to EQ102, is both stable and permeable in the gut, and can be further modified for optimal systemic or gut-restricted activity. In December 2023, we announced that given our recent progress with EQ302 and its superior product profile relative to EQ102, we have transitioned away from further developing EQ102 and are instead advancing EQ302 towards the clinic for the potential treatment of patients with gastrointestinal diseases, including celiac disease, and skin diseases.

Current wording

In June 2024, we completed a Phase 1 first-in-human clinical study of another multi-cytokine targeting peptide, EQ102, in healthy volunteers in Australia. EQ102 is a bi-specific inhibitor of IL-15 and IL-21, which was also acquired as part of the Bioniz acquisition. In that Phase 1 study, EQ102 was generally well tolerated and demonstrated pharmacodynamic activity, but the bioavailability of the initial formulation was lower than expected. Preclinical and translational data have demonstrated that EQ302 has increased potency compared to EQ102, is both stable and permeable in the gut, and can be further modified for optimal systemic or gut-restricted activity. In December 2023, we announced that given our progress with EQ302 and its superior product profile relative to EQ102, we transitioned away from further developing EQ102 and instead focused on the preclinical research and oral formulation optimization of EQ302 as a potential treatment of patients with gastrointestinal diseases, including celiac disease, and skin diseases. However, we have since paused further development of EQ302 for business reasons, as announced in October 2024.

Previous wording

Since our inception, substantially all of our efforts have been focused on organizing and staffing our company, business planning, raising capital, in-licensing rights to itolizumab (EQ001), conducting non-clinical research, including the initial preclinical development of EQ302, filing three Investigational New Drug applications, or INDs, conducting clinical development of EQ101, EQ102 and itolizumab (EQ001), conducting chemistry, manufacturing and controls, or CMC, activities in preparation for a potential biologics license application, or BLA, filing for itolizumab (EQ001), conducting formulation development work of our product candidates, conducting business development activities such as the acquisition of Bioniz, the Asset Purchase Agreement with Ono and other transactions not completed, initiating a stock repurchase program, and the general and administrative activities associated with operating a public company. Furthermore, in connection with the acquisition of Bioniz, we expanded our pipeline from one product candidate to multiple product candidates, all at various stages of development. This expansion may accelerate the rate at which our operating losses increase as we incur costs to further the development and seek regulatory approval for these product candidates. We have generated revenue from the Asset Purchase Agreement related to the one-time, upfront payment from Ono in exchange for the Option as well as from the itolizumab (EQ001) development funding from Ono. We have not generated any revenue from product sales, milestone payments or royalties. Since inception, we have primarily financed our operations through debt and equity financings and revenue generated from the Asset Purchase Agreement.

Current wording

Since our inception, substantially all of our efforts have been focused on organizing and staffing our company, business planning, raising capital, in-licensing rights to itolizumab (EQ001), conducting non-clinical research, including the initial preclinical development of EQ302, filing three Investigational New Drug applications, or INDs, conducting clinical development of EQ101, EQ102 and itolizumab (EQ001), conducting formulation development and chemistry, manufacturing and controls, or CMC, activities, conducting business development activities such as the acquisition of Bioniz, the Asset Purchase Agreement with Ono and other transactions, initiating a stock repurchase program, and performing the general and administrative activities associated with operating a public company. Furthermore, in connection with the acquisition of Bioniz, we expanded our pipeline from one product candidate to multiple product candidates, all at various stages of development. This expansion may accelerate the rate at which our operating losses increase as we incur costs to further the development and seek regulatory approval for these product candidates. We have generated revenue from the Asset Purchase Agreement related to the one-time, upfront payment from Ono in exchange for the Option as well as from the itolizumab (EQ001) development funding from Ono. We have not generated any revenue from product sales, milestone payments or royalties. Since inception, we have primarily financed our operations through debt and equity financings and revenue generated from the Asset Purchase Agreement.

Previous wording

We have incurred losses since our inception. For the six months ended June 30, 2024 and 2023, our net losses were $2.3 million and $7.3 million, respectively. As of June 30, 2024, we had an accumulated deficit of $188.0 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development activities, non-clinical and clinical activities, acquired in-process research and development, and general and administrative costs associated with our operations.

Current wording

We have incurred losses since our inception. For the nine months ended September 30, 2024 and 2023, our net losses were $2.3 million and $11.0 million, respectively. As of September 30, 2024, we had an accumulated deficit of $188.0 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development activities, non-clinical and clinical activities, acquired in-process research and development, and general and administrative costs associated with our operations.

Previous wording

We expect to continue to incur significant expenses and increasing losses into the foreseeable future. We anticipate our expenses will increase substantially as we advance our research and development activities, including the ongoing and future clinical development of EQ101, EQ302 and itolizumab (EQ001), potentially expand the indications in which we conduct clinical development of our product candidates, potentially acquire and/or develop new product candidates, including preclinical drug candidates identified through our multi-cytokine targeting drug discovery platform, seek regulatory approval for and potentially commercialize any approved product candidates, hire additional personnel, protect our intellectual property and incur general corporate costs.

Current wording

We expect to continue to incur significant expenses and operating losses into the foreseeable future. Although we have recently implemented operating changes and plan to take further action as necessary to decrease our spending and conserve our cash, we anticipate, subject to receiving additional capital, our expenses to potentially increase substantially as we advance our research and development activities, including the ongoing and future clinical development of itolizumab (EQ001), the potential resumption of development activities related to EQ101 and EQ302, potentially expand the indications in which we conduct clinical development of our product candidates, potentially acquire and/or develop new product candidates, including preclinical drug candidates, seek regulatory approval for and potentially commercialize any approved product candidates, hire additional personnel, protect our intellectual property and incur general corporate costs. Further, with the expiration of Ono’s option, we no longer receive reimbursement from Ono for our itolizumab (EQ001) development expenses incurred after October 30, 2024, which is expected to adversely impact our near-term net cash used in operations.

Previous wording

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval for EQ101, EQ302, or any future product candidate, which is unlikely to happen within the next 12 months, if ever. Further, under the Asset Purchase Agreement with Ono, our revenues related to itolizumab (EQ001) are limited to the upfront option fee already received, reimbursement of our development costs of itolizumab (EQ001) during the option period, and the potential option exercise fee and potential milestone payments. If Ono does not exercise its Option, we would not expect to generate any revenues from product sales of itolizumab (EQ001) unless and until we successfully complete development and obtain regulatory approval for itolizumab (EQ001), which is unlikely to happen within the next 12 months, if ever. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through a combination of equity offerings, debt financings, and collaboration and license agreements, such as our Asset Purchase Agreement with Ono. However, we may not be able to secure additional financing or enter into such other arrangements in a timely manner or on favorable terms, if at all. As a result of the conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, inflationary pressures on the economy and monetary policy responses by government agencies and other macroeconomic factors, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth and uncertainty about economic stability. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, reduce or terminate our research and development programs or other operations, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Current wording

We do not expect to generate any revenues from product sales unless and until we successfully complete development and obtain regulatory approval of itolizumab (EQ001), or EQ101 or EQ302 if we resume development activities, or any future product candidate, which is unlikely to happen within the next 12 months, if ever. Further, under the Asset Purchase Agreement with Ono, our revenues related to itolizumab (EQ001) are limited to the upfront option fee already received and reimbursement of our development costs of itolizumab (EQ001) during the option period, which expired on October 30, 2024. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through a combination of equity offerings, debt financings, and collaboration and license agreements. However, we may not be able to secure additional financing or enter into such other arrangements in a timely manner or on favorable terms, if at all. As a result of the conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, inflationary pressures on the economy and monetary policy responses by government agencies and other macroeconomic factors, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth and uncertainty about economic stability. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, reduce or terminate our research and development programs or other operations, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Previous wording

To date, we have not generated any revenues from therapeutic product sales, developmental milestones or royalties. For the six months ended June 30, 2024 and 2023, our revenues were derived from development funding from Ono and recognition of deferred revenue associated with an upfront payment under the Asset Purchase Agreement. In the future, we may generate revenue from collaboration or license agreements we may enter into with respect to our product candidates, including further revenue such as development funding and potential option exercise and milestone payments from the Asset Purchase Agreement, as well as product sales from any approved product, which approval is unlikely to happen within the next 12 months, if ever. Our ability to generate product revenues will depend on the successful development and eventual commercialization of EQ101, EQ302, itolizumab (EQ001) if Ono does not exercise its option, and any future product candidates. If we fail to complete the development of EQ101, EQ302, itolizumab (EQ001) or any future product candidates in a timely manner, or to obtain regulatory approval for our product candidates, our ability to generate future revenue and our results of operations and financial position would be materially adversely affected.

Current wording

To date, we have not generated any revenues from therapeutic product sales, developmental milestones or royalties. For the nine months ended September 30, 2024 and 2023, our revenues were derived from development funding from Ono and recognition of deferred revenue associated with an upfront payment under the Asset Purchase Agreement. In the future, we may generate revenue from collaboration or license agreements we may enter into with respect to our product candidates, including further revenue such as development funding from the Asset Purchase Agreement through the end of the option period, as well as product sales from any approved product, which approval is unlikely to happen within the next 12 months, if ever. Our ability to generate product revenues will depend on the successful development and eventual commercialization of itolizumab (EQ001), or EQ101 or EQ302 if we resume development activities, and any future product candidates. If we fail to complete the development of itolizumab (EQ001), or EQ101 or EQ302 if we resume development activities, or any future product candidates in a timely manner, or to obtain regulatory approval for our product candidates, our ability to generate future revenue and our results of operations and financial position would be materially adversely affected.

Previous wording

On December 5, 2022, we entered into the Asset Purchase Agreement pursuant to which we granted Ono the Option in exchange for a one-time, upfront payment of an amount equal to JPY 3.5 billion, or $26.4 million. These rights include all therapeutic indications and the rights to commercialize itolizumab in the United States, Canada, Australia, and New Zealand.

Current wording

On December 5, 2022, we entered into the Asset Purchase Agreement pursuant to which we granted Ono the Option in exchange for a one-time, upfront payment of an amount equal to JPY 3.5 billion, or $26.4 million. These rights included all therapeutic indications and the rights to commercialize itolizumab in the United States, Canada, Australia, and New Zealand.

Previous wording

During the three and six months ended June 30, 2024, we recognized $13.9 million and $24.5 million of revenue under our Asset Purchase Agreement with Ono, respectively. During the three and six months ended June 30, 2023, we recognized $9.1 million and $18.0 million of revenue under our Asset Purchase Agreement with Ono, respectively.

Current wording

During the three and nine months ended September 30, 2024, we recognized $12.2 million and $36.7 million of revenue under our Asset Purchase Agreement with Ono, respectively. During the three and nine months ended September 30, 2023, we recognized $8.9 million and $26.9 million of revenue under our Asset Purchase Agreement with Ono, respectively.

Previous wording

As of June 30, 2024, aggregate deferred revenue related to the Asset Purchase Agreement was $8.4 million.

Current wording

As of September 30, 2024, aggregate deferred revenue related to the Asset Purchase Agreement was $2.1 million.

Previous wording

external expenses related to CMC, formulation and device development, and supply of drug product; and

Current wording

external expenses related to chemistry, manufacturing, and controls, or CMC, formulation and device development, and supply of drug product; and

Previous wording

We plan to substantially increase our research and development expenses for the foreseeable future as we advance the development of EQ101, EQ302, and itolizumab (EQ001) if Ono does not exercise its option, potentially expand the number of indications for which we are developing those product candidates, and potentially acquire or develop new product candidates. The successful development of EQ101, EQ302 and itolizumab (EQ001) is highly uncertain. At this time, due to the inherently unpredictable nature of pre-clinical and clinical development, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of our product candidates or the period, if any, in which material net cash inflows from the sales from our product candidates may commence. Clinical development timelines, the probability of success, and development costs can differ materially from expectations.

Current wording

Although we have recently implemented operating changes and plan to take further action as necessary to decrease our spending and conserve cash, subject to raising additional capital, we anticipate our expenses to potentially increase substantially as we advance our research and development activities, including the ongoing and future clinical development of itolizumab (EQ001), potentially resume development activities related to EQ101 and EQ302, potentially expand the number of indications for which we are developing those product candidates, and potentially acquire or develop new product candidates. The successful development of itolizumab (EQ001), and if we resume development activities, EQ101 and EQ302, is highly uncertain. At this time, due to the inherently unpredictable nature of pre-clinical and clinical development, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the remainder of the development of our product candidates or the period, if any, in which material net cash inflows from the sales from our product candidates may commence. Clinical development timelines, the probability of success, and development costs can differ materially from expectations.

Previous wording

Completion of clinical studies may take several years or more, and the length of time generally varies according to the type, complexity, novelty, and intended use of a product candidate. The cost of clinical studies may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others:

Current wording

Completion of clinical trials may take several years or more, and the length of time generally varies according to the type, complexity, novelty, and intended use of a product candidate. The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development, including, among others:

Previous wording

the number of clinical studies required for approval;

Current wording

the number of clinical trials required for approval;

Previous wording

the number of sites and the number of countries included in our clinical studies;

Current wording

the number of sites and the number of countries included in our clinical trials;

Previous wording

the inefficiencies and additional costs related to any delays and potential restarts of clinical studies;

Current wording

the inefficiencies and additional costs related to any delays and potential restarts of clinical trials;

Previous wording

the number of patients that participate in our clinical studies;

Current wording

the number of patients that participate in our clinical trials;

Previous wording

the drop-out or discontinuation rates of patients in our clinical studies;

Current wording

the drop-out or discontinuation rates of patients in our clinical trials;

Previous wording

the number and complexity of procedures, analyses and tests performed during our clinical studies;

Current wording

the number and complexity of procedures, analyses and tests performed during our clinical trials;

Previous wording

the costs of procuring drug product for our clinical studies;

Current wording

the costs of procuring drug product for our clinical trials;

Previous wording

The following table sets forth our results of operations for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table sets forth our results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

During the three and six months ended June 30, 2024, we recognized revenue of $13.9 million and $24.5 million, respectively, under our Asset Purchase Agreement with Ono. For the three months ended June 30, 2024, development funding represented $9.2 million and amortization of the upfront payment represented $4.7 million. For the six months ended June 30, 2024, development funding represented $17.2 million and amortization of the upfront payment represented $7.3 million, of which $1.3 million represented an increase to revenue resulting from a change in the estimate of the duration of the option period under our Asset Purchase Agreement with Ono. During the three and six months ended June 30, 2023, we recognized revenue of $9.1 million and $18.0 million, respectively, under our Asset Purchase Agreement with Ono. For the three months ended June 30, 2023, development funding represented $6.8 million and amortization of the upfront payment represented $2.3 million. For the six months ended June 30, 2023, development funding represented $13.5 million and amortization of the upfront payment represented $4.5 million.

Current wording

During the three and nine months ended September 30, 2024, we recognized revenue of $12.2 million and $36.7 million, respectively, under our Asset Purchase Agreement with Ono. For the three months ended September 30, 2024, development funding represented $8.1 million and amortization of the upfront payment represented $4.1 million, of which $1.0 million represented an increase to revenue resulting from a change in estimate related to the total aggregate development funding over the option period under our Asset Purchase Agreement with Ono. For the nine months ended September 30, 2024, development funding represented $25.2 million and amortization of the upfront payment represented $11.5 million, of which $2.3 million represented an increase to revenue resulting from a change in estimate related to lower aggregate development funding estimated over the option period due to a change in the estimate of the duration of the option period coupled with lower total estimated aggregate development funding. During the three and nine months ended September 30, 2023, we recognized revenue of $8.9 million and $26.9 million, respectively, under our Asset Purchase Agreement with Ono. For the three months ended September 30, 2023, development funding represented $6.7 million and amortization of the upfront payment represented $2.2 million. For the nine months ended September 30, 2023, development funding represented $20.1 million and amortization of the upfront payment represented $6.8 million.

Previous wording

Research and development expenses were $10.8 million and $20.6 million for the three and six months ended June 30, 2024, respectively, compared to $9.6 million and $18.9 million for the three and six months ended June 30, 2023, respectively.

Current wording

Research and development expenses were $9.6 million and $30.1 million for the three and nine months ended September 30, 2024, respectively, compared to $9.0 million and $27.9 million for the three and nine months ended September 30, 2023, respectively. The increase of $0.6 million in research and development expenses for the three months ended September 30, 2024, compared to the same period in 2023, was primarily driven by the following changes:

Previous wording

$1.9 million increase in expenses associated with CMC activities primarily performed by Biocon necessary to support a potential BLA filing related to our EQUATOR study;

Current wording

$0.5 million increase in expenses associated with CMC activities primarily performed by Biocon related to itolizumab (EQ001);

Previous wording

$0.1 million increase in non-clinical research expenses related to itolizumab (EQ001); offset by

Current wording

$0.3 million increase in non-clinical research expenses; and

Previous wording

$0.2 million decrease in clinical study expenses primarily driven by our EQUALISE and EQ102 clinical studies, partially offset by higher costs for our EQUATOR clinical study.

Current wording

$0.4 million decrease in clinical study expenses primarily driven by our EQUALISE and EQ101 clinical studies, partially offset by higher costs for our EQUATOR clinical study.

Previous wording

The increase of $1.2 million in research and development expenses for the three months ended June 30, 2024, compared to the same period in 2023, was primarily driven by the following changes:

Current wording

The increase of $2.3 million in research and development expenses for the nine months ended September 30, 2024, compared to the same period in 2023, was primarily driven by the following changes:

Previous wording

$0.9 million increase in expenses associated with CMC activities primarily performed by Biocon necessary to support a potential BLA filing related to our EQUATOR clinical study;

Current wording

$2.5 million increase in expenses associated with CMC activities primarily performed by Biocon related to itolizumab (EQ001);

Previous wording

$0.1 million increase in employee compensation and benefits, primarily related to increased headcount; and

Current wording

$0.7 million increase in employee compensation and benefits, primarily related to increased headcount; and

Previous wording

$1.6 million decrease in clinical study expenses primarily driven by our EQ102 clinical study and to a lesser extent by our EQUALISE study, partially offset by higher costs for our EQUATOR and EQ101 clinical studies;

Current wording

$1.3 million decrease in clinical study expenses primarily driven by our EQUALISE and EQ102 clinical studies, partially offset by higher costs for our EQUATOR study and to a lessor extent our ulcerative colitis Phase 2 study; and

Previous wording

$0.1 million decrease in non-clinical research expenses related to itolizumab (EQ001).

Current wording

$0.1 million decrease in non-clinical research expenses.

Previous wording

There was no interest expense for each of the three and six months ended June 30, 2024. Interest expense was $0.3 million and $0.5 million for the three and six months ended June 30, 2023, respectively. Interest expense consists of interest on our prior term notes payable, which were paid off in May 2023.

Current wording

There was no interest expense for each of the three and nine months ended September 30, 2024 as well as for the three months ended September 30, 2023. Interest expense was $0.5 million for the nine months ended September 30, 2023. Interest expense consists of interest on our prior term notes payable, which were paid off in May 2023.

Previous wording

Interest income was $0.4 million and $0.8 million for the three and six months ended June 30, 2024, respectively, compared to $0.6 million and $1.3 million for the three and six months ended June 30, 2023. The decrease was primarily due to lower average cash, cash equivalents and short-term investment balances in 2024 compared to 2023.

Current wording

Interest income was $0.3 million and $1.1 million for the three and nine months ended September 30, 2024, respectively, compared to $0.6 million and $1.8 million for the three and nine months ended September 30, 2023. The decrease was primarily due to lower average cash, cash equivalents and short-term investment balances in 2024 compared to 2023.

Previous wording

Other income (expense), net was $0.2 million of other income, net and $0.2 million of other expense, net, for the three and six months ended June 30, 2024, respectively, compared to $0.1 million and $0.3 million of other expense, net, for the three and six months ended June 30, 2023, respectively. The changes in both the three and six months ended June 30, 2024 compared to the same periods in 2023 were primarily driven by changes in foreign currency transaction unrealized gains and losses.

Current wording

Other income, net was $0.3 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, compared to other expense, net of $0.1 million and $0.4 million for the three and nine months ended September 30, 2023, respectively. The changes in both the three and nine months ended September 30, 2024 compared to the same periods in 2023 were primarily driven by changes in net foreign currency transaction gains and losses.

Previous wording

There was no income tax expense for each of the three and six months ended June 30, 2024. Income tax expense was $8,000 and $0.1 million for the three and six months ended June 30, 2023, respectively. Our 2023 income tax expense was primarily attributable to domestic cash tax expense resulting from differences between book and tax treatment of certain items. We do not record a deferred tax provision as there is a full valuation allowance offsetting our deferred tax assets.

Current wording

There was no income tax expense for each of the three and nine months ended September 30, 2024. Income tax expense was $0.5 million and $0.6 million for the three and nine months ended September 30, 2023, respectively. Our 2023 income tax expense was primarily attributable to domestic cash tax expense resulting from differences between book and tax treatment of certain items. We do not record a deferred tax provision as there is a full valuation allowance offsetting our deferred tax assets.

Previous wording

From inception through June 30, 2024, we have financed our operations primarily through the sale of equity and debt securities and income generated from our Asset Purchase Agreement with Ono as described in more detail in the Sources of Liquidity section below. As of June 30, 2024, we had an accumulated deficit of $188.0 million and anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2024, we had $11.1 million in cash and cash equivalents and $22.2 million in short-term investments.

Current wording

From inception through September 30, 2024, we have financed our operations primarily through the sale of equity and debt securities and income generated from our Asset Purchase Agreement with Ono as described in more detail in the Sources of Liquidity section below. As of September 30, 2024, we had an accumulated deficit of $188.0 million and anticipate that we will continue to incur net losses for the foreseeable future. As of September 30, 2024, we had $15.5 million in cash and cash equivalents and $10.4 million in short-term investments.