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EI

Equillium, Inc. (EQ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was mixed: revenue declined sharply quarter-over-quarter, but operating discipline kept OpEx lower and the company emphasized positive longer-term outcomes from the Phase 3 EQUATOR study despite missing the Day 29 primary endpoint .
  • EPS beat Wall Street consensus: Q4 2024 actual EPS was $(0.16) vs S&P Global consensus of $(0.31); revenue was $4.392M vs a consensus of $0.0*, reflecting recognition tied to the terminated Ono agreement .
  • Strategic milestones are front‑and‑center: Equillium submitted Breakthrough Therapy designation and secured an FDA meeting on a potential Accelerated Approval path for first‑line aGVHD, with feedback expected in May 2025; BLA targeted for 1H 2026, subject to capital .
  • Liquidity: cash and short‑term investments were $22.6M at 12/31/24; runway into Q3 2025, down from prior commentary of runway into Q4 2025, highlighting financing needs tied to regulatory strategy .

What Went Well and What Went Wrong

What Went Well

  • Statistically significant and clinically meaningful longer‑term outcomes in Phase 3 EQUATOR for first‑line aGVHD: CR at Day 99 (44.9% vs 28.6%), duration of CR (median 336 vs 72 days), and failure‑free survival (median 154 vs 70 days); favorable safety/tolerability profile .
  • Positive Phase 2 topline in moderate‑to‑severe ulcerative colitis: clinical remission 23.3% vs 20.0% (adalimumab) and 10.0% (placebo); endoscopic remission 16.7% vs 16.7% (adalimumab) and 6.7% (placebo) .
  • Management secured an FDA meeting and requested Breakthrough Therapy designation; quote: “We expect feedback from the FDA during May 2025 and, if positive, subject to raising additional capital, we would plan to submit a biologics license application during the first half of 2026.” — Bruce Steel, CEO .

What Went Wrong

  • EQUATOR primary endpoint miss at Day 29 (complete response and overall response rate), requiring reliance on longer‑term endpoints and regulatory dialogue for path forward .
  • Revenue fell materially q/q following the Ono agreement termination backdrop and lower recognized funding/amortization in Q4 vs Q3 .
  • Runway shortened to Q3 2025; prior quarter commentary suggested runway into Q4 2025 contingent on operational measures, highlighting increased urgency for capital .

Financial Results

Core P&L vs Prior Periods and Prior Year

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$13.853 $12.161 $4.392
Net Income (Loss) ($USD Millions)$0.468 $(0.007) $(5.792)
Diluted EPS ($USD)$0.01 $0.00 $(0.16)
Net Income Margin (%)3.4% (derived from cited figures) ~‑0.1% (derived from cited figures) ‑131.9% (derived from cited figures)

Notes: Net Income Margin derived from reported revenue and net income in cited sources.

Operating Expenses

MetricQ2 2024Q3 2024Q4 2024
R&D Expense ($USD Millions)$10.808 $9.562 $7.314
G&A Expense ($USD Millions)$3.145 $3.278 $1.775
Total Operating Expenses ($USD Millions)$13.953 $12.840 $9.089

Balance Sheet / Liquidity

MetricQ2 2024 (6/30)Q3 2024 (9/30)Q4 2024 (12/31)
Cash, Cash Equivalents & Short‑Term Investments ($USD Millions)$33.299 $25.877 $22.575
Cash Runway (Company View)≥12 months (adjusted if Ono doesn’t exercise option) Into Q4 2025 (assumes operational changes) Into Q3 2025 (assumptions may prove inaccurate)

Q4 2024 vs Wall Street Consensus (S&P Global)

MetricActualConsensusSurprise
EPS ($USD)$(0.16) $(0.31)*+$0.15 (Beat)
Revenue ($USD Millions)$4.392 $0.000*+$4.392 (Beat)

Values with asterisks retrieved from S&P Global.

Segment Breakdown / KPIs

  • No revenue segments disclosed; revenue consisted entirely of itolizumab development funding and amortization of Ono upfront payment (terminated Asset Purchase Agreement) .
  • Clinical KPIs emphasized: longer‑term efficacy signals (CR Day 99, duration of CR, failure‑free survival) in EQUATOR; UC Phase 2 remission endpoints achieved .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCorporateInto Q4 2025, assuming operational changes and no further repurchases Into Q3 2025; assumptions/estimates may be inaccurate Lowered
EQUATOR Topline Timing (aGVHD)Program MilestonePotential acceleration to Q1 2025 Topline announced Mar 27, 2025 Achieved (timeline met/accelerated)
UC Phase 2 ToplineProgram MilestoneExpected Q1 2025 Positive topline announced Feb 6, 2025 Achieved
Regulatory Path (aGVHD)2025 MilestoneNot previously specifiedBreakthrough Therapy request submitted; FDA meeting on Accelerated Approval, feedback expected May 2025 New specificity
BLA Timing (aGVHD)2026 MilestoneNot previously specifiedPlan to submit BLA in 1H 2026, subject to capital New specificity

Earnings Call Themes & Trends

(Equillium did not publish a Q4 2024 earnings call transcript in our document set; themes below are synthesized from company press releases and 8‑Ks.)

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
Regulatory/LegalInitiated/ongoing discussions via Ono option; platform and study updates Ono partnership ended; Equillium retained rights to itolizumab Request for Breakthrough Therapy; FDA meeting on Accelerated Approval pathway scheduled; feedback May 2025 Increasing regulatory focus
R&D Execution (aGVHD EQUATOR)Positive interim review; proceed as planned Paused enrollment to evaluate acceleration; aim for Q1 2025 topline Primary Day 29 endpoint missed; longer‑term outcomes statistically significant; favorable safety Mixed: endpoint miss vs positive longer‑term
R&D Execution (UC Phase 2)Not highlightedTopline expected Q1 2025 Positive topline announced Feb 6, 2025 Improving
Partnership/StrategicOno option timing and potential cash impact End of Ono partnership; retained rights; operational adjustments Post‑Ono path clarified; independent regulatory push Transition to independence
Cash/Runway≥12 months; contingent on Ono decision Into Q4 2025 with operational changes Into Q3 2025; highlights need for capital Tightening
Manufacturing/CMCIncreased CMC spend to support potential BLA Continued CMC; operational changes Implied ongoing prep for BLA Ongoing

Management Commentary

  • Bruce Steel, CEO: “While we did not meet Day 29 outcomes of complete response - our primary endpoint - and overall response rate, itolizumab did demonstrate statistically significant and clinically meaningful benefit in important longer-term outcomes, including complete response at Day 99, duration of complete response and failure-free survival.”
  • “We have submitted a request for Breakthrough Therapy designation and have been granted a meeting with the FDA to discuss the potential for Accelerated Approval… We expect feedback from the FDA during May 2025 and, if positive… we would plan to submit a biologics license application during the first half of 2026.”
  • Q3 context (Ono exit, acceleration): “We have enrolled over 150 patients in EQUATOR… temporarily paused enrollment to review clinical options… potential to accelerate our timeline to topline data to the first quarter of 2025…”

Q&A Highlights

  • No Q4 2024 earnings call transcript was found in our document set; therefore Q&A themes and clarifications are unavailable. We searched for an earnings-call-transcript between 2025‑03‑01 and 2025‑04‑30 and found zero documents [ListDocuments result].

Estimates Context

  • Q4 2024 EPS beat: actual $(0.16) vs S&P Global consensus $(0.31)*, a positive surprise driven by lower G&A/R&D vs prior periods and recognized revenue tied to the Ono agreement .
  • Q4 2024 revenue beat: actual $4.392M vs S&P Global consensus $0.0*, reflecting amortization/funding recognition despite the termination of the Ono agreement .
  • Implications: Given the primary endpoint miss, consensus models may shift to incorporate the FDA’s view on the longer‑term outcomes; EPS/OpEx assumptions likely to depend on capital timing and regulatory path clarity.
    Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

  • Regulatory “binary” in May 2025: FDA feedback on Breakthrough Therapy and Accelerated Approval could be a major inflection point for valuation and financing prospects .
  • Despite primary endpoint miss, EQUATOR’s longer‑term endpoints (CR at Day 99, duration of CR, failure‑free survival) offer a potential regulatory narrative; monitor FDA’s stance on surrogate/longer‑term endpoints in aGVHD .
  • Liquidity is the gating factor: runway into Q3 2025 and BLA planned for 1H 2026 are contingent on raising capital; financing timing and structure will drive dilution and program continuity .
  • UC program adds optionality: positive Phase 2 topline supports broader itolizumab franchise value beyond aGVHD, diversifying clinical risk .
  • Operating discipline evident: OpEx trended lower into Q4; continued G&A/R&D optimization may cushion EPS while the company navigates regulatory decisions .
  • Estimate revisions: Expect sell‑side to recalibrate on the back of the EPS/revenue beat and evolving regulatory outlook; key modeling variables are financing assumptions, CMC/BLA timing, and potential accelerated pathway acceptance.
  • Trading lens: Near‑term catalysts are heavily event‑driven (FDA meeting outcome). Positioning should consider scenario analysis around accelerated approval vs additional data requirements, and financing overhang.