Equillium, Inc.

Previous wording

We are currently focused on raising additional capital to advance the preclinical development of EQ504, a novel aryl hydrocarbon receptor, or AhR, modulator, and subject to raising additional capital during the second quarter of 2025, expect to be ready to initiate a first-in-human Phase 1 clinical study in the first quarter of 2026. Modulation of AhR has been shown to have a beneficial impact on tissue barrier function, inflammation, cell development and tumor suppression. We initially intend to develop EQ504 for the treatment of ulcerative colitis, or UC, with potential indication expansion opportunities in lung diseases. We acquired the exclusive worldwide rights to EQ504 through the acquisition of Ariagen, Inc., or Ariagen, in October 2024. Ariagen was majority owned by Decheng Capital, who is the largest stockholder of Equillium.

Current wording

We intend to commence a Phase 1 proof-of-mechanism study for EQ504, a novel aryl hydrocarbon receptor, or AhR, modulator, by mid-2026, with data expected to follow approximately six months thereafter. Modulation of AhR has been shown to have a beneficial impact on tissue barrier function, inflammation, cell development and tumor suppression. We initially intend to develop EQ504 for the treatment of ulcerative colitis, or UC, with potential indication expansion opportunities in pouchitis and in lung diseases. We acquired the exclusive worldwide rights to EQ504 through the acquisition of Ariagen, Inc., or Ariagen, in October 2024. Ariagen was majority owned by Decheng Capital, who is the largest stockholder of Equillium.

Previous wording

Itolizumab (EQ001), our most advanced clinical-stage product candidate, 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. 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.

Current wording

Itolizumab (EQ001), our most advanced clinical-stage product candidate, is a first-in-class anti-CD6 immune-modifying monoclonal antibody, or mAb, that selectively targets the CD6-ALCAM signaling pathway. 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.

Previous wording

In March 2025, we announced topline results from our Phase 3 EQUATOR study of itolizumab (EQ001) in patients with acute graft-versus-host disease, or aGVHD, where itolizumab (EQ001) did not meet the Day 29 outcomes of complete response, or CR, a primary outcome, and overall response rate, or ORR, a key secondary outcome, but there was a clinically meaningful improvement in durable CR from Day 29 to 99, a key secondary outcome, and statistically significant evidence of clinical benefit was also observed on pre-specified secondary endpoints of duration of CR and failure free survival. Additionally, overall survival showed positive trends in favor of itolizumab (EQ001). Post-hoc analyses of CR at Day 99 and durable CR evaluating Day 29 complete responders also showed statistically significant benefit favoring itolizumab (EQ001). Steroid tapering and rates of primary disease relapse and chronic GVHD were similar for both treatment arms. These long-term durability responses are further supported by data from the open-label Phase 1b EQUATE study in which at the 0.8 and 1.6 mg/kg dose levels, CR, once achieved, persisted through the last visit assessment in most subjects. Most subjects had responses that were durable for over 100 days.

Current wording

In March 2025, we announced topline results from our Phase 3 EQUATOR study of itolizumab (EQ001) in patients with acute graft-versus-host disease, or aGVHD, where itolizumab (EQ001) did not meet the Day 29 outcomes of complete response, or CR, a primary outcome, and overall response rate, or ORR, a key secondary outcome, but there was a clinically meaningful improvement in durable CR from Day 29 to 99, a key secondary outcome, and statistically significant evidence of clinical benefit was also observed on pre-specified secondary endpoints of duration of CR and failure free survival. Additionally, overall survival showed positive trends in favor of itolizumab (EQ001). Post-hoc analyses of CR at Day 99 and durable CR evaluating Day 29 complete responders also showed statistically significant benefit favoring itolizumab (EQ001).

Previous wording

In the EQUATOR study, itolizumab (EQ001) was observed to be generally well-tolerated with an adverse event profile consistent with prior clinical experience and consistent with this severe aGVHD patient population. In totality, we believe these outcomes, particularly longer-term maintenance of achieved response, may offer a profound and clinically meaningful benefit for patients having aGVHD where high rates of mortality and disease recurrence persist with current treatments. As a result, in March 2025, we submitted data from the EQUATOR study and a request for Breakthrough Therapy Designation, or BTD, to the Federal Drug Administration, or FDA, and requested a meeting to discuss the sufficiency of the data for supporting a regulatory path forward for approval. In April 2025, we conducted a Type D meeting with the FDA, at which time the FDA declined to grant BTD or support an accelerated approval pathway based on the EQUATOR study data. The FDA highlighted its attention to achieving response outcomes at Day 29, per existing FDA guidance; however, the FDA did indicate openness to evaluating other endpoints, including longer term outcomes, provided independent data supports the validity of such endpoints. Based on this feedback we plan to accelerate closure of the EQUATOR study. We will continue to evaluate options to advance or partner itolizumab for planned or future clinical development that will likely be needed to support potential approval.

Current wording

Itolizumab (EQ001) was observed to be generally well-tolerated with an adverse event profile consistent with prior clinical experience and consistent with this severe aGVHD patient population. In totality, we believe these outcomes, particularly longer-term maintenance of achieved response, may offer a meaningful benefit for patients suffering from aGVHD where high rates of mortality and disease recurrence persist with current treatments.

Previous wording

We acquired the exclusive worldwide rights to EQ101 and a proprietary platform for discovering additional, novel multi-cytokine targeting product candidates, such as EQ302, through the acquisition of Bioniz Therapeutics, Inc., or Bioniz, in February 2022. That product discovery platform can be leveraged to design novel peptides to target and inhibit multiple cytokines that are involved in validated biological and disease pathways. Our selection of current and future indications is driven by our analysis of the scientific, translational, clinical and commercial rationale for advancing our product candidates into further development.

Current wording

We acquired the exclusive worldwide rights to EQ302 and a proprietary platform for discovering additional, novel multi-cytokine targeting product candidates, such as EQ302, through the acquisition of Bioniz Therapeutics, Inc., or Bioniz, in February 2022. That product discovery platform can be leveraged to design novel peptides to target and inhibit multiple cytokines that are involved in validated biological and disease pathways.

Previous wording

EQ302 is a preclinical-stage, first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21 formulated for oral delivery. Inhibiting IL-15 and IL-21 is believed to be an effective treatment approach for certain gastrointestinal indications, including celiac disease. Preclinical and translational data has shown that EQ302 is a potent inhibitor of those two cytokines and is stable and permeable in the gut. Based on the unique mechanism of action of EQ302 and its product profile, including the advantage of oral delivery, we believe that EQ302 has the potential to be an attractive therapeutic option for gastrointestinal diseases, such as celiac disease. However, due to financial constraints, we paused further development activities related to EQ302 in October 2024 pending securing additional financing. With additional funding, we would consider resuming preclinical development to optimize the product candidate and enable the initiation of a first-in-human clinical study. We would also consider partnering opportunities to advance the development of EQ302.

Current wording

EQ302 is a preclinical-stage, first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21 formulated for oral delivery. Inhibiting IL-15 and IL-21 is believed to be an effective treatment approach for certain gastrointestinal indications, including celiac disease. Preclinical and translational data has shown that EQ302 is a potent inhibitor of those two cytokines and is stable and permeable in the gut. Based on the unique mechanism of action of EQ302 and its product profile, including the advantage of oral delivery, we believe that EQ302 has the potential to be an attractive therapeutic option for gastrointestinal diseases, such as celiac disease. Currently we are not expending internal resources to advance EQ302 and are exploring partnering opportunities that would support further development of the program.

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 preclinical development of EQ504 and EQ302, filing three Investigational New Drug applications, or INDs, conducting clinical development of itolizumab (EQ001), EQ101 (a clinical-stage, first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15) and EQ102 (a clinical-stage, first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21), conducting chemistry, manufacturing and controls, or CMC, and formulation development activities, conducting business development activities such as the acquisitions of Bioniz and Ariagen, the Asset Purchase Agreement with Ono Pharmaceutical Co., Ltd., or Ono, and other transactions not completed, implementing a prior stock repurchase program, and the general and administrative activities associated with operating a public company. Furthermore, in connection with our acquisitions, we expanded our pipeline 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 our Asset Purchase Agreement with Ono, related to a one-time, upfront payment from Ono in exchange for an exclusive option to acquire our rights to itolizumab (EQ001), or the Option, as well as from itolizumab (EQ001) development funding from Ono. Ono made a strategic business decision to allow its Option to expire on October 30, 2024 and, as a result, the Asset Purchase Agreement automatically terminated on that date pursuant to its terms. 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 product rights, conducting preclinical development, filing Investigational New Drug applications, or INDs, conducting clinical development, conducting chemistry, manufacturing and controls, or CMC, and formulation development activities, conducting business development activities such as the acquisitions of Bioniz and Ariagen and the Asset Purchase Agreement with Ono Pharmaceutical Co., Ltd., or Ono, and other transactions not completed, and the general and administrative activities associated with operating a public biotech company focused on advancing novel therapeutics. Furthermore, in connection with our acquisitions, we expanded our pipeline 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 our Asset Purchase Agreement with Ono, related to a one-time, upfront payment from Ono in exchange for an exclusive option to acquire our rights to itolizumab (EQ001), or the Option, as well as from itolizumab (EQ001) development funding from Ono. Ono made a strategic business decision to allow its Option to expire on October 30, 2024 and, as a result, the Asset Purchase Agreement automatically terminated on that date pursuant to its terms. 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 three months ended March 31, 2025 and 2024, our net losses were $8.7 million and $2.7 million, respectively. As of March 31, 2025, we had an accumulated deficit of $202.5 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development activities, preclinical 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 six months ended June 30, 2025 and 2024, our net losses were $14.4 million and $2.3 million, respectively. As of June 30, 2025, we had an accumulated deficit of $208.2 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development activities, preclinical 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 operating losses into the foreseeable future if we advance our research and development activities, including any future development of EQ504, itolizumab (EQ001) and EQ302, potentially expand the indications for which we conduct clinical development of our product candidates, potentially acquire 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. Although we have implemented operating changes and plan to take further actions as necessary to decrease our expenditures and conserve our cash, we expect that our existing cash and cash equivalents as of March 31, 2025, will enable us to fund our operations into the third quarter of 2025, based on certain assumptions and estimates that may prove to be inaccurate. As a result, there is substantial doubt about our ability to continue as a going concern. If we are unable to raise additional capital in the second quarter of 2025, we expect to incur material expenses and operating losses in connection with pursuing strategic alternatives, including mergers, or winding up our operations.

Current wording

We expect to continue to incur significant expenses and operating losses into the foreseeable future. We anticipate our expenses will increase substantially as we advance our research and development activities for EQ504, including any future development of EQ302, potentially expand the indications for which we conduct clinical development of our product candidates, potentially acquire 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. We expect that our existing cash and cash equivalents as of June 30, 2025, with the net proceeds from the Initial Closing of the Private Placement, will enable us to fund our operations through 2027.

Previous wording

We do not expect to generate any revenues from product sales unless and until we successfully resume and complete development and obtain regulatory approval for EQ504, itolizumab (EQ001), EQ302, or any future product candidate, which is unlikely to happen within the next 12 months, if ever. 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, tariffs, 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 from 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 in the second quarter of 2025 will have a negative impact on our financial condition and could force us to further delay or terminate our research and development programs or other operations, grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, or wind up our operations. If we wind up our operations or otherwise enter into another strategic transaction, our investors may lose all or substantially all of their investment.

Current wording

We do not expect to generate any revenues from product sales unless and until we successfully resume and complete development and obtain regulatory approval for EQ504 and EQ302, or any future product candidate, which is unlikely to happen within the next 12 months, if ever. 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, tariffs, 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 from 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. In 2022, 2023 and 2024, our revenues were derived from an upfront payment under the Asset Purchase Agreement as well as from development funding from Ono. In the future, we may generate revenue from collaboration or license agreements we may enter into with respect to our product candidates, 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, if we resume development activities, will depend on the successful development and eventual commercialization of EQ504, itolizumab (EQ001), EQ302, and any future product candidates. If we fail to resume and complete the development of EQ504, itolizumab (EQ001), EQ302, 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. In 2022, 2023 and 2024, our revenues were derived from an upfront payment under the Asset Purchase Agreement as well as from development funding from Ono. In the future, we may generate revenue from collaboration or license agreements we may enter into with respect to our product candidates, 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 EQ504 and any future product candidates. If we fail to complete the development of EQ504, 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

We plan to continue to incur substantial research and development expenses for the foreseeable future if we are able to successfully raise additional capital and resume and complete development of EQ504, itolizumab (EQ001) 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 EQ504, itolizumab (EQ001) and EQ302 is highly uncertain. At this time, due to the inherently unpredictable nature of preclinical 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

We plan to continue to incur substantial research and development expenses for the foreseeable future as we advance the development of EQ504, and potentially 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 EQ504 and EQ302 is highly uncertain. At this time, due to the inherently unpredictable nature of preclinical 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

We anticipate that our general and administrative expenses will increase in future periods, if we resume development activities of EQ504, itolizumab (EQ001) and EQ302, reflecting an expanding infrastructure, increased legal, audit, tax and other professional fees associated with being a public company and maintaining compliance with stock exchange listing and SEC requirements, director and officer insurance premiums associated with being a public company, and accounting and investor relations costs. In addition, if we obtain regulatory approval for any product candidate, we expect to incur expenses associated with building the infrastructure and capabilities to commercialize such product. However, the timing of any such approval is highly uncertain, and it may be several years, if ever, that we receive any such regulatory approval.

Current wording

We anticipate that our general and administrative expenses will increase in future periods, reflecting an expanding infrastructure, increased legal, audit, tax and other professional fees associated with being a public company and maintaining compliance with stock exchange listing and SEC requirements, director and officer insurance premiums associated with being a public company, and accounting and investor relations costs. In addition, if we obtain regulatory approval for any product candidate, we expect to incur expenses associated with building the infrastructure and capabilities to commercialize such product. However, the timing of any such approval is highly uncertain, and it may be several years, if ever, that we receive any such regulatory approval.

Previous wording

The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table sets forth our results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

During the three months ended March 31, 2025, there was no revenue recognized under our Asset Purchase Agreement with Ono. During the three months ended March 31, 2024, we recognized revenue of $10.7 million under our Asset Purchase Agreement with Ono. For the three months ended March 31, 2024, development funding represented $8.0 million and amortization of the upfront payment represented $2.7 million. Ono made a strategic business decision to allow its Option to expire on October 30, 2024 and, as a result, the Asset Purchase Agreement automatically terminated on that date pursuant to its terms.

Current wording

During the three and six months ended June 30, 2025, there was no revenue recognized under our Asset Purchase Agreement with Ono. 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. Ono made a strategic business decision to allow its Option to expire on October 30, 2024 and, as a result, the Asset Purchase Agreement automatically terminated on that date pursuant to its terms.

Previous wording

Research and development expenses were $5.9 million and $9.7 million for the three months ended March 31, 2025 and 2024, respectively. The decrease of $3.8 million in research and development expenses primarily related to a decrease in clinical development expenses due to the wind down of our clinical studies and CMC activities as well as a decrease in employee compensation and benefits and consulting expenses offset by higher non-clinical expenses, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Research and development expenses were $4.1 million and $10.0 million for the three and six months ended June 30, 2025, respectively, compared to $10.8 million and $20.6 million for the three and six months ended June 30, 2024, respectively. The decrease of $6.7 million and $10.6 million in research and development expenses for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily related to a decrease in clinical development expenses due to the wind down of our clinical studies and CMC activities as well as a decrease in employee compensation and benefits, consulting and non-clinical expenses.

Previous wording

General and administrative expenses were $2.9 million and $3.7 million for the three-month periods ended March 31, 2025 and 2024, respectively. The decrease of $0.8 million in general and administrative expenses was primarily due to a decrease in employee compensation and benefits during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

General and administrative expenses were $2.1 million and $5.1 million for the three and six months ended June 30, 2025, respectively, compared to $3.1 million and $6.9 million for the three and six months ended June 30, 2024, respectively. The decrease of $1.0 million and $1.8 million in general and administrative expenses for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to a decrease in employee compensation and benefits.

Previous wording

Interest income was $0.2 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in interest income was primarily due to lower average cash, cash equivalents and short-term investment balances during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Interest income was $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively, compared to $0.4 million and $0.8 million for the three and six months ended June 30, 2024, respectively. The decrease in interest income for the three and six months ended June 30, 2025 compared to the same periods in 2024, was primarily due to lower average cash, cash equivalents and short-term investment balances.

Previous wording

Other income (expense), net was income of $43,000 for the three months ended March 31, 2025, compared to an expense of $0.4 million for the three months ended March 31, 2024. The change relates primarily to an increase in net foreign currency transaction unrealized gains during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Other income (expense), net was other income of $0.4 million for each of the three and six months ended June 30, 2025, respectively, compared to other income of $0.2 million and other expense of $0.2 million for the three and six months ended June 30, 2024, respectively. The change in other income (expense), net for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to fluctuations in net foreign currency transaction unrealized gains and losses.

Previous wording

From inception through March 31, 2025, 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 March 31, 2025, we had an accumulated deficit of $202.5 million and anticipate that we will continue to incur net losses for the foreseeable future. As of March 31, 2025, we had $14.5 million in cash and cash equivalents.

Current wording

From inception through June 30, 2025, 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, 2025, we had an accumulated deficit of $208.2 million and anticipate that we will continue to incur net losses for the foreseeable future. As of June 30, 2025, we had $11.5 million in cash and cash equivalents.

Previous wording

In October 2023, we entered into an at-the-market facility with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $21.95 million from time to time through Jefferies acting as our sales agent, or the 2023 ATM Facility. During the three months ended March 31, 2025, we sold an aggregate of 109,410 shares of common stock under the 2023 ATM Facility for gross proceeds of approximately $55,000. There were no shares sold under the 2023 ATM Facility from October 2023 through December 31, 2024. Issuance costs related to the 2023 ATM totaled $0.5 million inception-to-date. Since March 31, 2025 and through the date of the filing of this quarterly report on Form 10-Q, there have been no additional sales of the Company's stock under the 2023 ATM Facility.

Current wording

In October 2023, we entered into an at-the-market facility with Jefferies LLC, or Jefferies, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $21.95 million from time to time through Jefferies acting as our sales agent, or the 2023 ATM Facility. There were no shares sold under the 2023 ATM Facility from October 2023 through December 31, 2024. During the three months ended June 30, 2025, there were no shares sold under the 2023 ATM Facility. During the six months ended June 30, 2025, there were 109,410 shares of common stock sold under the 2023 ATM Facility for gross proceeds of approximately $55,000. Issuance costs related to the 2023 ATM totaled $0.5 million.

Previous wording

Although we have implemented operating changes and plan to take further action as necessary to decrease our spending and conserve our cash, subject to raising additional capital, we anticipate our expenses to potentially increase substantially as we advance our research and development activities, including potentially resuming development of our preclinical assets, EQ504 and EQ302, and our clinical asset, itolizumab (EQ001). We expect that our primary uses of capital will be for non-clinical research, clinical development, CMC activities, formulation development, product supply, potential acquisition of new products, legal and other regulatory compliance expenses, employee compensation and related expenses, insurance premiums, working capital and other general overhead costs.

Current wording

We expect our expenses to increase substantially as we advance our research and development activities, including resuming development of our preclinical asset, EQ504 and potentially resuming development of EQ302. We expect that our primary uses of capital will be for non-clinical research, clinical development, CMC activities, formulation development, product supply, potential acquisition of new products, legal and other regulatory compliance expenses, employee compensation and related expenses, insurance premiums, working capital and other general overhead costs.

Previous wording

We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Furthermore, our operating plans may change, and we may need additional funds sooner than planned. Additionally, the process of testing product candidates in clinical studies is costly, and the timing of progress in these studies is uncertain. Because the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully resume and complete the development and commercialization of EQ504, itolizumab (EQ001) and EQ302, or any of our other product candidates or whether, or when, we may achieve profitability.

Current wording

We believe that the net proceeds from the Initial Closing of the Private Placement with our cash and cash equivalents as of June 30, 2025 can fund operations through 2027. We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Furthermore, our operating plans may change, and we may need additional funds sooner than planned. Additionally, the process of testing product candidates in clinical studies is costly, and the timing of progress in these studies is uncertain. Because the outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully complete the development and commercialization of EQ504 and EQ302, or any of our other product candidates or whether, or when, we may achieve profitability.

Previous wording

the initiation, progress, timing, costs and results, if we resume development activities, of our planned or future non-clinical and clinical studies of EQ504, itolizumab (EQ001), EQ302 and other future product candidates, including as such activities may be adversely impacted by public health epidemics or outbreaks, the evolving conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, tariffs and inflationary pressures on the economy;

Current wording

the initiation, progress, timing, costs and results of our planned or future non-clinical and clinical studies of EQ504 and EQ302 and other future product candidates, including as such activities may be adversely impacted by public health epidemics or outbreaks, the evolving conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, tariffs and inflationary pressures on the economy;

Previous wording

the advancement and cost of preclinical research, if we resume development activities, of EQ504, EQ302 and other novel preclinical drug candidates;

Current wording

the advancement and cost of preclinical research of EQ504, EQ302 and other novel preclinical drug candidates;

Previous wording

the costs and timing of manufacturing EQ504, itolizumab (EQ001) and other product candidates;

Current wording

the costs and timing of manufacturing EQ504 and other product candidates;

Previous wording

the cost associated with commercializing EQ504, itolizumab (EQ001) or any of our other product candidates, if approved for commercial sale.

Current wording

the cost associated with commercializing EQ504 or any of our other product candidates, if approved for commercial sale.

Previous wording

Until such time as we can generate substantial product revenues, if ever, we expect to finance our cash needs through a combination of equity offerings, debt financings, and collaboration and license agreements. The sale of additional equity or convertible debt could result in additional dilution to our stockholders and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. The incurrence of debt financing would result in debt service obligations and the governing documents would likely include operating and financing covenants that would restrict our operations. As a result of the conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, tariffs, inflationary pressures on the economy and monetary policy responses taken 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. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. 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. If we raise additional funds through collaboration or license agreements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. If we are unable to raise capital during the second quarter of 2025, we would be forced to further delay or eliminate our research and development programs or other operations. Further, if we are unable to timely secure additional capital, we will need to pursue strategic alternatives, including mergers, or wind up the company’s operations entirely. Any of these actions could have a material effect on our business, financial condition and results of operations. We have experienced net losses and negative cash flows from operating activities since our inception and expect to continue to incur net losses into the foreseeable future. We had an accumulated deficit of $202.5 million as of March 31, 2025. If we are able to raise additional capital and resume development activities, we expect operating losses and negative cash flows to continue for at least the next several years as we incur costs related to the development of EQ504, itolizumab (EQ001), EQ302 and any of our other product candidates.

Current wording

Until such time as we can generate product revenues, if ever, we expect to finance our cash needs through a combination of equity offerings, debt financings, and collaboration and license agreements. The sale of additional equity or convertible debt could result in additional dilution to our stockholders and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. The incurrence of debt financing would result in debt service obligations and the governing documents would likely include operating and financing covenants that would restrict our operations. As a result of the conflict between Russia and Ukraine, the conflict in the Middle East, bank failures, tariffs, inflationary pressures on the economy and monetary policy responses taken 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. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. 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. If we raise additional funds through collaboration or license agreements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or other operations. Any of these actions could have a material effect on our business, financial condition and results of operations. We have experienced net losses and negative cash flows from operating activities since our inception and expect to continue to incur net losses into the foreseeable future. We had an accumulated deficit of $208.2 million as of June 30, 2025. We expect operating losses and negative cash flows to continue for at least the next several years as we incur costs related to the development of EQ504 and EQ302 and any of our other product candidates.

Previous wording

During the three months ended March 31, 2025, cash used in operating activities was $8.2 million compared to $8.8 million during the three months ended March 31, 2024. Cash used in operating activities during the three months ended March 31, 2025 primarily related to our net loss of $8.7 million, adjusted for non-cash items of $0.6 million, primarily consisting of non-cash stock-based compensation expenses, and net cash outflows from changes in other operating assets and liabilities of $0.1 million. Cash used in operating activities during three months ended March 31, 2024 primarily related to our net loss of $2.7 million, adjusted for non-cash items of $1.1 million, primarily consisting of non-cash stock-based compensation expenses, and net cash outflows from changes in deferred revenue and other operating assets and liabilities of $7.2 million.

Current wording

During the six months ended June 30, 2025, cash used in operating activities was $11.2 million compared to $8.1 million during the six months ended June 30, 2024. Cash used in operating activities during the six months ended June 30, 2025 primarily related to our net loss of $14.4 million, adjusted for non-cash items of $0.8 million, primarily consisting of non-cash stock-based compensation expenses, and net cash inflows from changes in other operating assets and liabilities of $2.4 million. Cash used in operating activities during six months ended June 30, 2024 primarily related to our net loss of $2.3 million, adjusted for non-cash items of $1.6 million, primarily consisting of non-cash stock-based compensation expenses, and net cash outflows from changes in deferred revenue and other operating assets and liabilities of $7.4 million.

Previous wording

Net cash provided by investing activities was $4.5 million during the three months ended March 31, 2025 and primarily consisted of maturities of our short-term investments.

Current wording

Net cash provided by investing activities was $4.5 million during the six months ended June 30, 2025 and primarily consisted of maturities of our short-term investments.

Previous wording

Net cash used in investing activities was $2.8 million during the three months ended March 31, 2024. Purchases of our short-term investments totaled $7.3 million, which was offset by maturities of short-term investments totaling $4.5 million.

Current wording

Net cash used in investing activities was $4.2 million during the six months ended June 30, 2024. Purchases of our short-term investments totaled $17.6 million, which was offset by maturities of short-term investments totaling $13.5 million.

Previous wording

Net cash provided by financing activities totaled $0.1 million during the three months ended March 31, 2025. We received net proceeds from the sale of shares under our 2023 ATM Facility totaling approximately $53,000. There were no sales of shares under the 2023 ATM Facility until March 2025. During the three months ended March 31, 2025, we received proceeds totaling $38,000 from the exercise of stock options.

Current wording

Net cash provided by financing activities totaled $0.1 million during the six months ended June 30, 2025. We received net proceeds from the sale of shares under our 2023 ATM Facility totaling approximately $37,000. There were no sales of shares under the 2023 ATM Facility until March 2025. During the six months ended June 30, 2025, we received proceeds totaling $38,000 from the exercise of stock options.