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EI

Equillium, Inc. (EQ)·Q3 2025 Earnings Summary

Executive Summary

  • EPS beat on reduced operating expenses: net loss per share was $(0.06) vs Wall Street consensus of $(0.22)*, aided by R&D down 86% YoY and G&A flat .
  • Revenue was $0 vs $12.2M YoY as Ono-related funding ended in Oct 2024; net loss widened to $4.2M from near breakeven in Q3 2024 .
  • Cash, cash equivalents and short-term investments rose to $33.1M; financing closed $30M upfront with potential $20M upon EQ504 milestones; runway guided through 2027 .
  • Strategic pivot to EQ504: Phase 1 initiation now expected mid-2026 (slipped from prior target of Q1 2026), with KOL event reinforcing AhR rationale and colon-targeted formulation strategy .
  • Potential stock catalyst: additional $20M “Milestone Closing” contingent on IND clearance or first patient dosing and a VWAP price threshold or waiver .

What Went Well and What Went Wrong

What Went Well

  • Significant cost discipline: R&D fell to $1.3M (from $9.6M YoY) due to wind-down of clinical programs; G&A held flat at $3.3M .
  • Balance sheet strengthened: $33.1M cash/investments at quarter-end; $30M private placement upfront extends runway through 2027 .
  • Clear strategic focus on EQ504 with supportive KOL validation: “Our recent financing has enabled us to accelerate the development of our novel AhR modulator, EQ504…” — Bruce Steel, CEO . “AHR targeting…acts not only on immune mechanisms, but also on tissue repair.” — Dr. Francisco Quintana .

What Went Wrong

  • Revenue cliff: $0 vs $12.2M YoY after termination of the Ono Asset Purchase Agreement; net loss expanded to $4.2M vs ~$0.0M last year .
  • Timeline slippage: EQ504 Phase 1 moved to mid-2026 vs prior guidance of Q1 2026 (Q1 10-Q) .
  • Program exits: Collaboration with Biocon formally terminated; itolizumab development halted, underscoring pivot risk and loss of prior revenue support .

Financial Results

Quarterly progression (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$0.0 $0.0 $0.0
R&D Expense ($USD Millions)$5.924 $4.083 $1.301
G&A Expense ($USD Millions)$2.946 $2.145 $3.274
Net Loss ($USD Millions)$(8.654) $(5.739) $(4.230)
Diluted EPS ($USD)$(0.24) $(0.16) $(0.06)
Weighted Avg Shares (Millions)35.587 35.719 65.323

Year-over-year comparison (Q3 2024 vs Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$12.161 $0.0
R&D Expense ($USD Millions)$9.562 $1.301
G&A Expense ($USD Millions)$3.278 $3.274
Net (Loss)/Income ($USD Millions)$(0.007) $(4.230)
Diluted EPS ($USD)$(0.00) $(0.06)

KPIs and Balance Sheet

MetricQ4 2024Q3 2025
Cash, Cash Equivalents & Short-term Investments ($USD Millions)$22.575 $33.120
Total Assets ($USD Millions)$25.604 $34.506
Total Liabilities ($USD Millions)$6.543 $3.567
Total Stockholders’ Equity ($USD Millions)$19.061 $30.939

Results vs Wall Street Consensus (S&P Global)

MetricConsensus (Q3 2025)Actual (Q3 2025)Beat/Miss
Primary EPS ($USD)$(0.22)*$(0.06) Beat
Revenue ($USD Millions)$0.0*$0.0 In line
EBITDA ($USD Millions)—$(4.547)*—

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash runwayThrough 2027Runway through 2027 following initial $30M private placement (Aug 2025) Reiterated runway through 2027 Maintained
EQ504 Phase 1 startClinical initiationFirst-in-human Phase 1 targeted for Q1 2026 (Q1 10-Q) Phase 1 initiation planned for mid-2026 Lowered (timeline slipped)
Milestone financingUp to $20MContingent on EQ504 IND clearance or first patient dosing plus VWAP threshold/waiver Unchanged terms; pending milestones Maintained
Treasury strategyCorporate“Has not initiated…cryptocurrency treasury reserve strategy” “Prioritizing development of EQ504” Maintained (pause)

Earnings Call Themes & Trends

Note: No earnings call transcript available for Q3 2025; KOL event (Nov 5) used to assess narrative.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Financing/runwayGoing concern language; cash $14.5M at Q1; ATM used modestly $30M private placement closed; runway through 2027 Improved liquidity
Strategic focusPause and pivot; wind-down of legacy programs; Ono agreement ended Full pivot to EQ504; KOL validation; colon-targeted delivery Clearer focus
R&D executionR&D declines from wind-down; controls on spend R&D down sharply; formulation work and IND-enabling completed Cost-down, targeted build
Regulatory pathTargeting Phase 1 in Q1 2026 Phase 1 now mid-2026; plan for SAD/MAD in Australia/NZ with biopsies Slight delay; more detail
Product rationale (EQ504/AhR)AhR efficacy signals in UC; positioning for pre-biologic/combo Dual anti-inflammatory + tissue repair; strong KOL support Reinforced thesis
Legacy programsEQUATOR ended; Biocon collaboration terminated No further itolizumab development De-risked focus

Management Commentary

  • “Our recent financing has enabled us to accelerate the development of our novel AhR modulator, EQ504…with potential to be a first-in-class, oral and colon-targeted therapeutic for ulcerative colitis.” — Bruce Steel, CEO .
  • “AHR targeting acts not only on immune mechanisms, but also on tissue repair.” — Dr. Francisco Quintana, Harvard Medical School .
  • “We will formulate EQ504 to deliver directly to the colon…to maximize tissue exposure and minimize systemic exposures.” — Stephen Connelly, President & CSO .
  • “Combination therapy is the new black…huge opportunities for new MOAs to provide novel combinations.” — Dr. Brian Feagan .

Q&A Highlights

  • Development plan and gating items: IND-enabling complete; Phase 1 SAD/MAD with sigmoidoscopy biopsies in Australia to optimize tissue PK/PD; potential rapid proof-of-concept cohorts thereafter .
  • Mechanistic positioning: AHR modulation offers anti-inflammatory and mucosal repair advantages vs pure cytokine blockers; potential complementary role in combinations .
  • Formulation/colon targeting: Considering dual-trigger enteric strategies (pH and microbiome) to mitigate UC pH variability risks; colon release prioritized .
  • EQ504 vs benchmarks: Internal assays confirm obefazimod has AHR activation but with less potency than EQ504, supporting selective, potent EQ504 colon targeting .
  • Maintenance paradigm: AHR’s ability to stabilize regulatory T-cells and promote barrier integrity supports maintenance potential post-induction .

Estimates Context

  • EPS beat: $(0.06) actual vs $(0.22) consensus*, reflecting expense cut-through without revenue .
  • Revenue in line at $0 vs $0 consensus*, with coverage sparse (EPS estimates count = 1; revenue = 2)*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Expense-led EPS beat and sequentially narrowing losses as R&D winds down prior programs; trend supports near-term dilution control while pivoting to EQ504 .
  • Liquidity improved: $33.1M cash/investments and $30M financing provide runway through 2027; watch for $20M milestone tranche contingent on EQ504 regulatory and trading thresholds .
  • Timeline slip to mid-2026 for Phase 1 suggests regulatory strategy refinement; near-term catalysts include formulation disclosure and Phase 1 initiation updates .
  • EQ504’s dual anti-inflammatory and tissue-repair MoA plus colon-targeted delivery positions it for pre-biologic use and combinations, potentially enhancing efficacy ceilings in UC .
  • Revenue reset to $0 post-Ono termination increases dependency on capital markets and clinical progress; volatility likely given thin sell-side coverage (low estimate counts)* .
  • Monitor KOL engagement and biomarker strategy (CYP1A1, IL-10/IL-22) to validate tissue target engagement in Phase 1—key for derisking before patient POC .
  • Trading implication: milestone financing’s VWAP threshold could create event-driven price dynamics around IND clearance or first dosing .