Equillium, Inc.
For the period ended Dec 31, 2025. Filed Mar 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 25, 2026
EQ$1.51+13.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0000950170-25-045726
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-25.
0001193125-26-124143
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 162 previous paragraphs and 139 current paragraphs.
72 unchanged; 40 reworded; 25 added; 46 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
We are a biotechnology innovator developing novel therapies to treat severe autoimmune and inflammatory disorders with the mission to develop life-changing therapeutics for patients. Our primary goal is to advance EQ504, our novel aryl hydrocarbon receptor, or AhR, modulator, into and through clinical development.
Current report
As of December 31, 2025, we had $30.3 million in cash and cash equivalents, excluding the gross proceeds of approximately $35.0 million from the closing of the March Private Placement (defined below). From inception through December 31, 2025, substantially all of our efforts have been focused on research, development and the advancement of our clinical and preclinical product candidates. We have not yet generated product sales and as a result have incurred significant operating losses and negative cash flows from operations. As a result, we had an accumulated deficit of $216.2 million as of December 31, 2025. We expect to incur additional losses in the future to conduct research and development for which we will need to raise additional capital to implement.
Current report
On August 10, 2025, we entered into a Securities Purchase Agreement, the Purchase Agreement, with certain institutional and accredited investors, the Investors, pursuant to which we agreed to sell and issue shares of our common stock, par value $0.0001 per share, and pre-funded warrants to purchase shares of common stock, in up to two closings in a private placement transaction, the Private Placement. The initial closing of the Private Placement occurred on August 12, 2025. At the Initial Closing, we issued and sold 21,814,874 shares of common stock at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 shares of common stock at a purchase price of $0.5699 per warrant share, the Warrant Price, to the Investors for gross proceeds to us of approximately $30.0 million. The Purchase Agreement also provides for a potential second closing for up to approximately $20.0 million in gross proceeds in exchange for up to approximately 35,087,717 shares of common stock, subject to achieving certain specified milestones related to clinical study initiation and stock price conditions or waiver thereof. For additional information, see Note 9 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Current report
On March 11, 2026, we entered into a Securities Purchase Agreement, the March Purchase Agreement, with a certain institutional and accredited investor, the March Investor, pursuant to which we agreed to sell and issue shares of our common stock and a pre-funded warrant to purchase shares of common stock, the March Private Placement. The initial closing of the March Private Placement occurred on March 13, 2026. At the Closing, we issued and sold 1,179,508 shares of common stock at a purchase price of $1.854 per share and a pre-funded warrant to purchase up to 17,698,593 shares at a purchase price of $1.8539 per warrant share to the March Investor for gross proceeds to us of approximately $35.0 million.
Current report
We intend to use the net proceeds from the Private Placement and the March Private Placement to fund the further development of EQ504, working capital and general corporate purposes.
Current report
We intend to commence a Phase 1 proof-of-mechanism study for EQ504, a preclinical stage, novel AhR modulator, in mid-2026, with data expected to follow approximately six months thereafter; provided, however, we cannot provide any assurances that we will be able to obtain data within those time frames or that the data which may be obtained will be favorable to the further clinical development of EQ504. Modulation of AhR, in multiple translational models, has been shown to have a therapeutically beneficial impact inducing anti-inflammatory cells and cytokines while reducing proinflammatory cells and cytokines and improving intestinal barrier function and repair. We initially intend to develop EQ504 for the treatment of ulcerative colitis, or UC, and other gastrointestinal, or GI, diseases with potential indication expansion opportunities for the treatment of inflammatory lung diseases. We acquired the exclusive worldwide rights to EQ504 through the acquisition of Ariagen, Inc., or Ariagen, in October 2024.
Current report
On September 30, 2025, the Termination Date, we entered into a termination agreement with Biocon Limited, Biocon and the agreement, the Termination Agreement, pursuant to which we terminated that certain (i) collaboration and license agreement with Biocon, dated May 22, 2017, as amended September 28, 2018, April 22, 2019, December 10, 2019, and April 14, 2021 (the Biocon License), (ii) the Memorandum of Understanding dated April 7, 2022, the MoU, and (iii) certain other corresponding agreements, collectively with the Biocon License and MoU, the Biocon Agreements, with all licenses granted by Biocon to us under the Biocon Agreements, including with respect to itolizumab, terminating and reverting to Biocon. As consideration for certain technical services that we were obligated to provide to Biocon following the Termination Date, Biocon agreed to pay us a technical service fee of $0.4 million. In lieu of Biocon paying the technical service fee to us, Biocon agreed to set off amounts which we owed to Biocon under or in connection with the Biocon Agreements through the Termination Date, with the amount of such set-off to equal such technical service fee, plus any other amount that have been or may be invoiced by us to Biocon for work performed by us with respect to itolizumab through the Termination Date, and to be limited to the aggregate amounts that have been or may be invoiced by Biocon to us, or are or may be otherwise owed to Biocon, under or in connection with the Biocon Agreements through the Termination Date. We completed our performance obligations under the Termination Agreement in the fourth quarter of 2025, resulting in the set off of amounts owed by us to Biocon totaling $0.4 million which was recorded as a reduction of research and development expense in our consolidated statement of operations in the year ended December 31, 2025.
Current report
Other Income (Expense), Net
Current report
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We separate our research and development costs into two broad categories: direct and indirect. Additionally, with respect to direct research and development expenses, we further divide expenses into the following product candidate categories: Itolizumab (EQ001), EQ101, EQ102, EQ504 and EQ302. Itolizumab (EQ001) includes sub-categories for the clinical studies associated with itolizumab (EQ001) including our EQUATOR, EQUALISE and UC study with Biocon. For direct research and development expenses, we track specific project research and development expenses that are directly attributable to our preclinical and clinical development product candidates that have been selected for further development. Such direct research and development expenses include nonclinical and clinical trial activities, external expenses related to CMC and supply of drug product and consulting expenses.
Current report
All remaining research and development expenses are categorized as indirect research and development expenses. Such indirect research and development expenses include employee compensation and benefits (including stock-based compensation expenses) and general overhead costs such as costs associated with our facilities and lab supplies. These expenses are not directly tied to any individual product candidate or clinical study and are generally deployed across multiple studies. As such, we do not maintain information regarding those costs incurred on an individual product candidate or clinical study basis.
Current report
Research and development expenses decreased by $24.6 million for the year ended December 31, 2025. Direct external expenses decreased significantly for the year ended December 31, 2025 compared to the same period in 2024 due to the wind down of our clinical studies in 2025 including lower clinical development expenses, lower CMC activities with Biocon and lower consulting expenses primarily related to the wind down of our EQUATOR study. In addition, we negotiated discounts with our clinical vendors on outstanding accounts payable which were recorded as a reduction to research and development expense during the year ended December 31, 2025. Indirect expenses decreased for the year ended December 31, 2025 compared to the same period in 2024 driven by lower employee compensation and benefits due to lower headcount caused by the wind down of our clinical studies.
Current report
We expect research and development expenses in future periods to increase primarily due to the advancement of EQ504, our novel AhR modulator, into and through clinical development.
Current report
The decrease of $1.1 million in general and administrative expenses for the year ended December 31, 2025, compared to the same period in 2024, was primarily related to decreases of (i) $0.6 million in overhead primarily due to lower franchise taxes, directors and officers insurance costs and travel and (ii) $0.5 million in legal expenses.
Current report
Other Income (Expense), Net
Current report
Other income (expense), net was other income of $0.4 million for the year ended December 31, 2025, compared to other expense of $0.8 million for the year ended December 31, 2024. The change in other income (expense), net for the year ended December 31, 2025, compared to the same period in 2024, was primarily due to fluctuations in net foreign currency transaction unrealized gains and losses.
Current report
August Securities Purchase Agreement
Current report
On August 10, 2025, we entered into the Purchase Agreement with the Investors, pursuant to which we agreed to sell and issue shares of our common stock, par value $0.0001, and pre-funded warrants to purchase shares of common stock, in up to two closings in the Private Placement.
Current report
The Initial Closing of the Private Placement occurred on August 12, 2025. At the Initial Closing, we issued and sold 21,814,874 shares of common stock at a purchase price of $0.57 per share and pre-funded warrants to purchase up to 30,816,705 shares of common stock at a purchase price of $0.5699 per warrant share, the Warrant Price, to the Investors for gross proceeds to us of approximately $30.0 million. Net proceeds from the Private Placement were $27.9 million, after deducting placement agent fees and offering expenses totaling $2.1 million.
Current report
The Purchase Agreement also provides for a potential second closing for up to approximately $20.0 million in gross proceeds in exchange for up to approximately 35,087,717 shares of common stock, subject to achieving certain specified milestones related to clinical study initiation and stock price conditions or waiver thereof. There can be no assurance that the specified milestones will be met or that the investors will purchase additional shares of common stock or pre-funded warrants in a second closing. For additional information, see Note 9 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
Current report
2023 through December 31, 2024. In March 2025, there were 109,410 shares sold under the 2023 ATM Facility for gross proceeds of $55,000. Issuance costs related to the 2023 ATM Facility totaled $0.5 million through March 31, 2025.
Current report
On August 3, 2025, we entered into Amendment No. 1 to the 2023 ATM Facility pursuant to which Jefferies was replaced by LifeSci Capital LLC as the sales agent under the 2023 ATM Facility. During the year ended December 31, 2025, there were 1,610,075 shares of common stock sold under the 2023 ATM Facility, as amended, for gross proceeds of approximately $0.9 million. During the year ended December 31, 2025, issuance costs related to the 2023 ATM Facility, as amended, totaled $0.2 million.
Current report
As of December 31, 2025 and through the date of the filing of this Annual Report on Form 10-K, there were no additional shares of common stock sold under the 2023 ATM Facility, as amended.
Current report
March Securities Purchase Agreement
Current report
On March 11, 2026, we entered into the March Purchase Agreement with the March Investor, pursuant to which we agreed to sell and issue shares of our common stock, par value $0.0001, and a pre-funded warrant to purchase shares of common stock. The closing of the March Private Placement occurred on March 13, 2026. At the closing, we issued and sold 1,179,508 shares at a purchase price of $1.854 per share and a pre-funded warrant to purchase up to 17,698,593 shares at a purchase price of $1.8539 per warrant share to the March Investor for gross proceeds to us of approximately $35.0 million.
Current report
Net cash provided by financing activities totaled $30.4 million during the year ended December 31, 2025 and primarily consisted of net proceeds from the sale of shares under the Private Placement transaction totaling $27.9 million, proceeds totaling $1.8 million from the exercise of stock options and net proceeds from the sale of shares under our 2023 ATM Facility totaling approximately $0.7 million.
Removed paragraphs (46)
Previous report
We are a clinical-stage biotechnology company leveraging a deep understanding of immunobiology to develop novel therapeutics to treat severe autoimmune and inflammatory, or immuno-inflammatory, disorders with high unmet medical need. Our strategy is focused on advancing the preclinical and clinical development of our product candidates, including potentially pursuing additional indications and acquiring new product candidates and platforms to expand our pipeline. We intend to commercialize our product candidates either independently or through partnerships or otherwise monetize our pipeline through strategic transactions. Our novel and differentiated pipeline of therapeutic candidates has the potential to address unmet medical needs in numerous areas, including gastroenterology, dermatology, hematology, transplant science, rheumatology, pulmonology and oncology.
Previous report
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.
Previous report
In March 2025, we announced topline results from our Phase 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.
Previous report
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 FDA and requested a meeting to discuss the sufficiency of the data for supporting a BLA. We expect feedback from the FDA during May 2025, and pending positive feedback and securing additional funding, we plan to prepare a BLA and would expect to submit in the first half of 2026 for potential approval.
Previous report
We also 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 April 2024, we announced positive topline data from the Type B LN portion of that study in which itolizumab (EQ001) was generally well-tolerated and demonstrated clinically meaningful responses in highly proteinuric patients where more than 80% of subjects achieved a greater than 50% reduction in urine protein creatinine ratio, or UPCR.
Previous report
Biocon also recently completed a Phase 2 clinical study of itolizumab in subjects with UC in India, which Equillium co-funded. The study commenced in November 2022 and was a randomized, double-blinded, placebo- and active-controlled Phase 2 clinical study of 90 subjects to evaluate the safety and efficacy of itolizumab compared to placebo and adalimumab (a global standard of care biologic treatment used as an active control). In February 2025, we announced positive topline data from the study in which itolizumab demonstrated clinical efficacy after 12 weeks of treatment, achieving a clinical remission rate of 23.3% compared to 20.0% for adalimumab and 10.0% for placebo. Further, itolizumab achieved a key secondary endpoint of endoscopic remission of 16.7% compared to 16.7% for adalimumab and 6.7% for placebo. Itolizumab was generally well-tolerated consistent with prior clinical experience, and no safety signal was observed.
Previous report
EQ101 is a clinical-stage, first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15, which are key disease-driving, clinically validated cytokine targets aimed at addressing unmet needs across a range of immuno-inflammatory indications. We completed a Phase 2 proof-of-concept clinical study in subjects with alopecia areata, or AA, in Australia and New Zealand, and 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. EQ101 has also demonstrated proof-of-concept clinical activity in patients with cutaneous T cell lymphoma, or CTCL. Those data provide support for opportunistic expansion into other dermatological conditions where IL-2, IL-9 and IL-15 inhibition is important such as vitiligo and atopic dermatitis. However, due to limited financial resources, we have paused development of EQ101 pending additional funding or partnering.
Previous report
During the year ended December 31, 2024, we recognized $41.1 million of revenue under our Asset Purchase Agreement with Ono consisting of $28.3 million of development funding and $12.8 million related to the amortization of the upfront payment.
Previous report
Interest Expense
Previous report
Interest expense consists of interest and amortization of discounts on our prior term loans payable.
Previous report
Other Expense, Net
Previous report
During the year ended December 31, 2023, we recognized revenue of $36.1 million under our Asset Purchase Agreement with Ono. Development funding represented $27.0 million and amortization of the upfront payment represented $9.1 million.
Previous report
$0.6 million increase in preclinical expenses, primarily related to the preclinical asset acquired from Ariagen;
Previous report
$0.3 million increase in clinical development expenses, primarily driven by our EQUATOR clinical study as well as CMC activities; and
Previous report
$0.3 million increase in consulting expenses; offset by
Previous report
$0.8 million decrease in employee compensation and benefits primarily driven by lower bonus expense.
Previous report
$1.0 million decrease in employee compensation and benefits primarily driven by lower bonus expense;
Previous report
$0.3 million decrease in audit and tax professional fees;
Previous report
$0.2 million decrease in consulting expenses; and
Previous report
$0.1 million decrease in overhead related costs primarily driven by lower directors and officers insurance expenses.
Previous report
Interest Expense
Previous report
There was no interest expense for the year ended December 31, 2024, compared to $0.5 million for the year ended December 31, 2023. Interest expense consists of interest on our prior term notes payable.
Previous report
Other Expense, Net
Previous report
Other expense, net was $0.8 million for the year ended December 31, 2024, compared to $0.1 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, other expense, net consisted primarily of net realized foreign currency transaction losses related to our Australian subsidiary.
Previous report
Asset Purchase Agreement with Ono
Previous report
As of December 31, 2024, we have received $67.1 million in development funding payments from Ono.
Previous report
Ono’s decision to let its option lapse unexercised materially impacts our funding requirements. As a result, we have evaluated a variety of different adjustments to our operating plans to preserve cash and extend our runway. While we have planned budgets for various scenarios, there can be no certainty that we have captured all potential scenarios.
Previous report
We believe that our cash, cash equivalents and short-term investments as of December 31, 2024, can fund 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. Our projected cash runway is based on estimates of reduced expenses related to cash savings initiatives and operational changes including accelerating the completion of the Phase 3 EQUATOR study based on reduced enrollment, not undertaking further development activities related to EQ302 and EQ101, eliminating certain positions, pausing of prosecution and renewals of patents related to itolizumab, and reducing certain discretionary expenditures. We may need to implement further cost cutting measures, which may require us to discontinue the development of certain of our product candidates or result in the delay of their development and commercialization, if approved.
Previous report
We will need to raise additional capital to be able to fund our operations beyond the third quarter of 2025. We are actively pursuing sources of additional capital, including potentially the 2023 ATM Facility as well as other financing sources that may be available to us. However, since raising capital is outside of our direct control, we cannot provide any assurance that we will be able to raise additional capital, monetize assets, or obtain new financing on commercially acceptable terms, if at all. If we are unable to raise additional capital, we may be required to further curtail or delay or development plans of any current or potential product candidates. The uncertainty related to being able to raise sufficient capital necessary to fund our operations for at least twelve months from the date of this filing creates substantial doubt in our ability to continue as a going concern. Further, if we are unsuccessful in raising additional capital, which ability would be adversely impacted if our expected FDA feedback is negative, we expect we will need to promptly pursue strategic alternatives, including mergers, or wind up the company’s operations entirely. As a result, there can be no assurance that we will be successful in implementing our plans to alleviate this substantial doubt about our ability to continue as a going concern.
Previous report
In July 2023, our board of directors authorized a stock repurchase program pursuant to which we could repurchase up to $7.5 million of shares of our common stock through December 31, 2024. As of December 31, 2024, we had repurchased 298,385 shares of our common stock under the stock repurchase program for a total of $0.3 million, all of which occurred prior to 2024. This program expired as of December 31, 2024.
Previous report
whether the expected FDA feedback related to our EQUATOR study data is positive;
Previous report
our ability to timely implement and realize the benefit of significant expense reductions;
Previous report
the potential that, the EQUATOR study data would be insufficient to support a BLA and require further clinical studies;
Previous report
Net cash used in financing activities totaled $9.2 million during the year ended December 31, 2023, driven by payments totaling $9.1 million related to our former loan and security agreement with Oxford Finance LLC and SVB, or Loan Agreement, and $0.3 million in stock repurchases, offset by $0.2 million of cash received from employee stock purchases related to our Employee Stock Purchase Plan.
Previous report
On May 25, 2023, we prepaid in full all amounts owed under, and terminated, the Loan Agreement. In connection with the prepayment and termination of the Loan Agreement, we paid a total of approximately $6.8 million, which consisted of (i) the remaining principal amount and interest outstanding of approximately $6.2 million as of the date of the repayment, (ii) a prepayment fee of approximately $62,000, (iii) a final payment of approximately $0.5 million, and (iv) the remainder for transaction expenses. Following the termination of the Loan Agreement, we have no further obligations under the Loan Agreement.
Previous report
Revenue Recognition
Previous report
We recognize revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration we are entitled to receive in exchange for such product or service. In doing so, we follow a five-step approach: (1) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) the customer obtains control of the product or service. We consider the terms of a contract and all relevant facts and circumstances when applying the revenue recognition standard. We apply the revenue recognition standard, including the use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances.
Previous report
A customer is a party that has entered into a contract with us, where the purpose of the contract is to obtain a product or a service that is an output of our ordinary activities in exchange for consideration. To be considered a contract, (i) the contract must be approved (in writing, orally, or in accordance with other customary business practices), (ii) each party’s rights regarding the product or the service to be transferred can be identified, (iii) the payment terms for the product or the service to be transferred can be identified, (iv) the contract must have commercial substance (that is, the risk, timing or amount of future cash flows is expected to change as a result of the contract), and (v) it is probable that we will collect substantially all of the consideration to which we are entitled to receive in exchange for the transfer of the product or the service.
Previous report
A performance obligation is defined as a promise to transfer a product or a service to a customer. We identify each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the same pattern of transfer) that is distinct. A product or a service is distinct if both (i) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) our promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract. Each distinct promise to transfer a product or a service is a unit of accounting for revenue recognition. If a promise to transfer a product or a service is not separately identifiable form other promises in the contract, such promises should be combined into a single performance obligation.
Previous report
The transaction price is the amount of consideration we are entitled to receive in exchange for the transfer of control of a product or a service to a customer. To determine the transaction price, we consider the existence of any significant financing component, the effects of any variable elements, noncash considerations and consideration payable to the customer. If a significant financing component exists, the transaction price is adjusted for the time value of money. If an element of variability exists, we must estimate the consideration we expect to receive and use that amount as the basis for recognizing revenue as the product or the service is transferred to the customer. There are two methods for determining the amount of variable consideration: (i) the expected value method, which is the sum of probability-weighted amounts in a range of possible consideration amounts, and (ii) the most likely amount method, which identifies the single most likely amount in a range of possible consideration amounts.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (40)
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. We also have ongoing translational biology programs to assess the therapeutic utility of our product candidates in additional indications where the mechanism of action is believed to play an important role in the pathogenesis of a particular disease. 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 GI 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 GI diseases, such as celiac disease. We are evaluating further advancement of EQ302, including product manufacturing and toxicology studies capable of supporting a potential IND filing and a first-in-human clinical study.
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, filing three Investigational New Drug applications, or INDs, conducting clinical development of itolizumab (EQ001), EQ101 and EQ102, conducting CMC and formulation development activities, conducting business development activities such as the acquisitions of Bioniz and Ariagen, the Asset Purchase Agreement with 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 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 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 product rights, conducting preclinical development, filing INDs, conducting clinical development, conducting CMC and formulation development activities, conducting business development activities and the general and administrative activities associated with operating a public biotech company focused on advancing novel therapeutics. 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 years ended December 31, 2024 and 2023, our net losses were $8.1 million and $13.3 million, respectively. As of December 31, 2024, we had an accumulated deficit of $193.8 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 years ended December 31, 2025 and 2024, our net losses were $22.4 million and $8.1 million, respectively. As of December 31, 2025, we had an accumulated deficit of $216.2 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development activities, preclinical and clinical activities 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 as we advance our research and development activities, including the ongoing and future development of itolizumab (EQ001), potentially resume development activities related to 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 recently 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, cash equivalents and short-term investments as of December 31, 2024, 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 unsuccessful in raising additional capital, which ability would be adversely impacted if our expected FDA feedback is negative, we expect we will need to promptly pursue strategic alternatives, including mergers, or wind up the company’s operations entirely.
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, potentially pursue 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 December 31, 2025 plus the gross proceeds from the March Private Placement will enable us to fund our operations into 2029.
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 itolizumab (EQ001), EQ302 if we resume development activities, 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, potential 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, which ability would be adversely impacted if our expected FDA feedback is negative, 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 for EQ504, 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, government shutdowns, 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 will depend on the successful development and eventual commercialization of itolizumab (EQ001), EQ302 if we resume development activities, and any future product candidates. If we fail to complete the development of itolizumab (EQ001), 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.
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
Research and development expenses primarily consist of costs associated with our non-clinical research and clinical development of our product candidates. Our research and development expenses include:
Current wording
Research and development expenses primarily consist of costs associated with our nonclinical research and clinical development of our product candidates. Our research and development expenses include:
Previous wording
costs related to preparing and filing three INDs with the FDA and other regulatory interactions and submissions;
Current wording
costs related to preparing and filing INDs with the FDA and other regulatory interactions and submissions;
Previous wording
external expenses related to chemistry, manufacturing, and controls, or CMC, and supply of drug product; and
Current wording
external expenses related to CMC and supply of drug product; and
Previous wording
Our direct research and development expenses consist principally of external costs, such as fees paid to CROs and consultants in connection with our non-clinical research and clinical development.
Current wording
Our direct research and development expenses consist principally of external costs, such as fees paid to CROs and consultants in connection with our nonclinical research and clinical development.
Previous wording
We plan to continue to incur substantial research and development expenses for the foreseeable future as we advance the development of itolizumab (EQ001), and EQ302 if resume development activities, 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 EQ302 if we resume development activities 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
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 planned of future 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:
Previous wording
the number of clinical studies required for approval;
Current wording
the number of planned or future clinical studies 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 planned or future clinical studies;
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 planned or future clinical studies;
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 planned or future clinical studies;
Previous wording
the costs of procuring drug product for our clinical studies;
Current wording
the costs of procuring drug product for our planned or future clinical studies;
Previous wording
Other expense, net consists primarily of foreign currency transaction gains and losses related to our Australian subsidiary.
Current wording
Other income (expense), net consists primarily of foreign currency transaction gains and losses related to our Australian subsidiary.
Previous wording
During the year ended December 31, 2024, we recognized revenue of $41.1 million under our Asset Purchase Agreement with Ono. For the year ended December 31, 2024, development funding represented $28.3 million and amortization of the upfront payment represented $12.8 million.
Current wording
During the year ended December 31, 2025, there was no revenue recognized under our Asset Purchase Agreement with Ono. During the year ended December 31, 2024, we recognized revenue of $41.1 million under our Asset Purchase Agreement with Ono. For the year ended December 31, 2024, development funding represented $28.3 million and amortization of the upfront payment represented $12.8 million.
Previous wording
Research and development expenses were $37.4 million for the year ended December 31, 2024, compared to $37.0 million for the year ended December 31, 2023. The increase of $0.4 million in research and development expense primarily includes the following changes:
Current wording
Research and development expenses were $12.8 million for the year ended December 31, 2025, compared to $37.4 million for the year ended December 31, 2024.
Previous wording
General and administrative expenses were $11.9 million for the year ended December 31, 2024, compared to $13.6 million for the year ended December 31, 2023. The decrease of $1.6 million in general and administrative expense primarily includes the following changes:
Current wording
General and administrative expenses were $10.8 million for the year ended December 31, 2025, compared to $11.9 million for the year ended December 31, 2024.
Previous wording
Interest income was $1.4 million for the year ended December 31, 2024, compared to $2.3 million for the year ended December 31, 2023. The decrease in interest income was primarily due to lower average cash, cash equivalents and short-term investment balances in 2024 compared to 2023.
Current wording
Interest income was $0.8 million for the year ended December 31, 2025, compared to $1.4 million for the year ended December 31, 2024. The decrease in interest income was primarily due to lower average cash, cash equivalents and short-term investment balances in 2025 compared to 2024.
Previous wording
Income tax expense was $0.4 million for the year ended December 31, 2024, compared to $0.6 million for the year ended December 31, 2023. Our 2024 and 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 the year ended December 31, 2025. Income tax expense was $0.4 million for the year ended December 31, 2024. Our 2024 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 December 31, 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 December 31, 2024, we had an accumulated deficit of $193.8 million and anticipate that we will continue to incur net losses for the foreseeable future. As of December 31, 2024, we had $18.1 million in cash and cash equivalents and $4.5 million in short-term investments.
Current wording
From inception through December 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 December 31, 2025, we had an accumulated deficit of $216.2 million and anticipate that we will continue to incur net losses for the foreseeable future. As of December 31, 2025, we had $30.3 million in cash and cash equivalents, excluding the gross proceeds of approximately $35.0 million from the Company's equity financing in March 2026.
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. As of the filing of this Annual Report on Form 10-K, we have not sold any shares 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
Previous wording
Although we have recently 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 development of preclinical assets, and potentially prepare a BLA submission for and launch itolizumab (EQ001), if approved. Our expenses could also increase as a result of potentially resuming development activities related to 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. 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 has, and is expected to continue to, adversely impact our net cash used in operations.
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 nonclinical 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 complete the development and commercialization of itolizumab (EQ001) and EQ302 if we resume development activities, or any of our other product candidates or whether, or when, we may achieve profitability.
Current wording
We believe that our cash and cash equivalents as of December 31, 2025 plus with proceeds from the March Private Placement can fund operations into 2029. 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 of our ongoing and future non-clinical and clinical studies of itolizumab (EQ001), EQ302 if we resume development activities, and other 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, potential tariffs and inflationary pressures on the economy;
Current wording
the initiation, progress, timing, costs and results of our planned or future nonclinical 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 of EQ302, if we resume development activities, 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 cost, timing and outcome of regulatory review of any BLA, or New Drug Application, or NDA, we may submit for our product candidates;
Current wording
the cost, timing and outcome of regulatory review of any NDA we may submit for our product candidates;
Previous wording
the costs and timing of manufacturing itolizumab (EQ001) and other product candidates;
Current wording
the costs and timing of manufacturing EQ504 and other product candidates;
Previous wording
the extent to which we acquire or in-license other product candidates and technologies or engage in in-house discovery and non-clinical research of new product candidates;
Current wording
the extent to which we acquire or in-license other product candidates and technologies or engage in in-house discovery and preclinical research of new product candidates;
Previous wording
the cost associated with commercializing 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, potential 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, which ability would be adversely impacted if our expected FDA feedback is negative, we would be forced to delay, reduce or eliminate our research and development programs or other operations. Further, we may need to pursue strategic alternatives, including mergers, or wind up the company’s operations entirely, if we are unable to secure additional capital. 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 $193.8 million as of December 31, 2024. 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 itolizumab (EQ001), EQ302 if we resume development activities, 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, government shutdowns, 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 $216.2 million as of December 31, 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, EQ302 and any of our other product candidates.
Previous wording
Our expected material cash requirements are comprised of contractually obligated expenditures, including amounts due under our operating leases. For additional information relating to our leases, see Notes 6 and 11 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. We have no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis. Our expected material cash requirements do not include potential contingent payments upon the achievement by us of regulatory and commercial milestones that we may be required to make under the terms of the merger agreement pursuant to which we acquired Bioniz or potential contingent payments upon the achievement by us of regulatory milestones that we may be required to make under the terms of our stock purchase agreement with Ariagen, nor do they include potential contingent payments upon the achievement by us of regulatory and commercial milestones or royalty payments that we may be required to make under license agreements we have entered into or may enter into with various entities pursuant to which we have in-licensed certain intellectual property, including the Biocon License.
Current wording
Our expected material cash requirements are comprised of contractually obligated expenditures, including amounts due under our operating leases. For additional information relating to our leases, see Note 6 and 10 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. We have no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase order basis. Our expected material cash requirements do not include potential contingent payments upon the achievement by us of regulatory and commercial milestones that we may be required to make under the terms of the merger agreement pursuant to which we acquired Bioniz or potential contingent payments upon the achievement by us of regulatory milestones that we may be required to make under the terms of our stock purchase agreement with Ariagen, nor do they include potential contingent payments upon the achievement by us of regulatory and commercial milestones or royalty payments that we may be required to make under license agreements we may enter into with various entities.
Previous wording
The following table sets forth the primary sources and uses of cash for each of the periods set forth below (in thousands):
Current wording
The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods set forth below (in thousands):
Previous wording
During the year ended December 31, 2024, cash used in operating activities was $19.0 million compared to $21.8 million during the year ended December 31, 2023. Cash used in operating activities during the year ended December 31, 2024 primarily related to our net loss of $8.1 million, adjusted for non-cash items of $3.9 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 $14.9 million. Cash used in operating activities during the year ended December 31, 2023 primarily related to our net loss of $13.3 million, adjusted for non-cash items of $3.4 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 $11.9 million.
Current wording
During the year ended December 31, 2025, cash used in operating activities was $22.7 million compared to $19.0 million during the year ended December 31, 2024. Cash used in operating activities during the year ended December 31, 2025 primarily related to our net loss of $22.4 million, adjusted for non-cash items of $2.0 million, primarily consisting of non-cash stock-based compensation expenses, and net cash outflows from changes in other operating assets and liabilities of $2.3 million. Cash used in operating activities during the year ended December 31, 2024 primarily related to our net loss of $8.1 million, adjusted for non-cash items of $3.9 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 $14.9 million.
Previous wording
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, and similarly did not and do not have any holdings in variable interest entities. We do have certain contingent consideration liabilities in the form of potential milestone payments that are included in our Biocon License, in our merger agreement with Bioniz and our stock purchase agreement with Ariagen which are not reflected in our balance sheet. However, based on our current operating plans and our assessment of the probability and potential timing of such payments, we believe those payments, if any, are remote and highly unlikely to come due within the next 12 months.
Current wording
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, and similarly did not and do not have any holdings in variable interest entities. We do have certain contingent consideration liabilities in the form of potential milestone payments that are included in our merger agreement with Bioniz and our stock purchase agreement with Ariagen which are not reflected in our balance sheet. However, based on our current operating plans and our assessment of the probability and potential timing of such payments, we believe those payments, if any, are remote and highly unlikely to come due within the next 12 months.
Previous wording
We are required to estimate our expenses resulting from our obligations under contracts with vendors, consultants and contract research organizations, in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. We reflect research and development expenses in our consolidated financial statements by matching those expenses with the period in which services and efforts are expended. We account for these expenses according to the progress of the non-clinical study or clinical study as measured by the timing of various aspects of the study or related activities. We determine accrual estimates through review of the underlying contracts along with preparation of financial models taking into account discussions with research and other key personnel as to the progress of studies, or other services being conducted. During the course of a study or clinical study, we adjust our rate of expense recognition if actual results differ from our estimates.
Current wording
We are required to estimate our expenses resulting from our obligations under contracts with vendors, consultants and contract research organizations, in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. We reflect research and development expenses in our consolidated financial statements by matching those expenses with the period in which services and efforts are expended. We account for these expenses according to the progress of the nonclinical study or clinical study as measured by the timing of various aspects of the study or related activities. We determine accrual estimates through review of the underlying contracts along with preparation of financial models taking into account discussions with research and other key personnel as to the progress of studies, or other services being conducted. During the course of a study or clinical study, we adjust our rate of expense recognition if actual results differ from our estimates.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On September 19, 2025, we filed a prospectus supplement with the SEC under which we may offer and sell shares of our common stock having an aggregate offering price of up to $75.0 million, pursuant to the 2023 ATM Facility, as amended.
Current report — wording carried from elsewhere
Net cash provided by investing activities was $4.5 million during the year ended December 31, 2025 and primarily consisted of maturities of our short-term investments.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
In December 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. In exchange for the Option, Ono paid us a one-time, upfront payment of $26.4 million and funded all of our itolizumab (EQ001) research and development expenses from July 1, 2022 through October 30, 2024, the end of the option period. Ono made a strategic business decision to allow its option period to expire on October 30, 2024 and, as a result, the Asset Purchase Agreement automatically terminated on that date pursuant to its terms.
Previous report — wording carried elsewhere
On December 5, 2022, we entered into the Asset Purchase Agreement with Ono, pursuant to which we granted Ono the exclusive right, but not the obligation, to acquire our rights to itolizumab. These rights included all therapeutic indications and the rights to commercialize itolizumab 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.
Previous report — wording carried elsewhere
We were responsible for conducting all research and development of itolizumab, which has been funded by Ono from July 1, 2022 through October 30, 2024, the end of the option period. The option period expired and the Asset Purchase Agreement automatically terminated on October 30, 2024.
Previous report — wording carried elsewhere
Net cash used in investing activities was $4.8 million during the year ended December 31, 2023. Purchases of our short-term investments totaled $54.7 million, which was offset by maturities of short-term investments totaling $50.0 million. Purchases of property and equipment for the year ended December 31, 2023 totaled $0.1 million.