Thank you for attending Jefferies 2024 Global Healthcare Conference. My name is Roger Song, one of Senior Analysts cover SMID-cap Biotech at Jefferies here. It's my pleasure to have the fireside chat with Equillium CEO, Bruce, and the CSO, Steve. Welcome, gentlemen.
Thank you, Roger.
Awesome. So, maybe before we talk about your pipeline and the platform, and maybe, Bruce, if you can give us some high-level overview of the company for the past couple months. You know, what's the, you know, kind of opening remark?
Sure. Thanks, Roger. Pleasure to be here. So Equillium is a company developing novel, impactful therapies focused on autoimmune and inflammatory diseases. We really have two sides of our business. Our foundational asset, a first-in-class antibody targeting CD6 called itolizumab, is currently partnered under an agreement with Ono Pharmaceutical. That partnership is structured as a fairly traditional option-style agreement, where we deliver data sets to Ono, and then they have an option to acquire the drug from us. We had two data deliverables around itolizumab. The first was the recently completed study of itolizumab in lupus nephritis. We delivered that data set to Ono a couple months ago. I think we were quite pleased with the data, as is Ono, I believe. And so the second remaining data deliverable is coming up quite quickly.
That is the interim analysis from our ongoing pivotal study in acute GVHD. We did just recently announce that we crossed the enrollment mark for pulling that data set, about a month or two ago, and so we are on a pretty tight timeline to deliver that interim data to Ono, and then that will trigger a three-month exercise period within which they need to give us their decision whether or not to acquire the drug. One interesting kind of note around that data set is it's an interim analysis that's blinded to the company, will be reviewed by our Data Monitoring Committee for futility and efficacy. Our general expectation, based on prior data around the program, is that we're expecting that we'll land somewhere in the middle, but we could fall outside of those boundaries, obviously.
But we're expecting kind of a study should proceed outcome with the DMC, but we'll see how the data turns out. Ono has indicated that that's the primary remaining bar is surpassing that futility assessment for them to proceed with the acquisition. This is an important outcome for the company. If they do opt in, we will get a one-time JPY 5 billion payment, which is around $32 million based on recent exchange rates. We have over $100 million in milestone payments, a significant portion of which are tied to additional clinical study starts. If Ono does opt in, we will get a bolus of cash that will significantly extend our operating runway beyond our current guidance, which is second half of 2025, based on our Q1 cash balance.
So, that outcome is coming up pretty quickly, and in a relevant timeframe as we think about the overall business trajectory, around our wholly owned programs and pipeline and platform around the multi-cytokine programs. So that's the initial side of the business around which we started Equillium. Going forward, we have what we believe is a very compelling set of opportunities around our assets and underlying platform, around the ability to target, in a single therapeutic agent, multiple cytokines, with our lead program being EQ101, which is a peptide therapeutic that inhibits cytokines IL-2, IL-9, and IL-15.
These are cytokines that are validated across a range of autoimmune and inflammatory diseases, and we have just announced yesterday morning, the top-line data from our study of EQ101 in patients with moderate to very severe alopecia areata.
Excellent. Yeah, so since the EQ101 data is really off the press, you know, we can spend the first half of the conversation maybe focusing on that, maybe go through the details and some of the implication. I know you have some slides. We can go through that, and then obviously we can come back to the Ono deal, which adds you-- to your point, it's pretty favorable terms, term, kind of deal term, and then it's gonna be very material to Equillium for the economics.
Sure. Yeah. So we're, you know, we're excited about this program, particularly in this disease setting, in that patients with alopecia areata today have just seen recent approvals in the severe to very severe category based on JAK inhibitors that have been approved over the last 12-24 months. So there's now a very good set of comparative data to better understand not only the clinical path, but generally what the bar is. And as you're probably aware, JAK inhibitors all today carry black box warnings based on their safety and tolerability profile. They are generally pretty efficacious in this disease. The slide I'm showing currently is the baricitinib data that led to the approval of this drug, both the low and high dose.
And we reference this slide because it does highlight a few things. One, the amount of drug that is delivered has an impact on outcomes, the duration of delivery, as well as what subgroup you're looking at. So in this phase II and III studies of the JAK inhibitors, they pretty much all evaluated patients defined as severe, that's with a SALT score of 50-95, and very severe SALT score, 95-100, who are generally patients who have AU/AT disease, so areata, totalis, or universalis, so basically complete hair loss.
Mm-hmm.
As you can see from this data set, very dramatic differences in outcomes based on the low versus high dose, as well as which patient subgroup you're looking at. Week 24 was where we studied EQ101 in our recently completed study. You can see at week 24, you start to get a signal of drug activity, but not really in the very severe patient population, where at low dose baricitinib really no effect at week 24 in the very severe group. But you do see signs of drug activity in the severe patient population.
We did some further analysis across JAK studies to highlight that placebo rates are generally very consistently low, averaging around 3%-4% as measured by SALT less than or equal to 20 at your endpoint, which is sort of a primary outcome, as well as measured by a change in baseline SALT score over study treatment. So consistently low placebo response rates, which is why we in our study just did this open label with an effort to really tease out a signal of our drug. I will just kind of cut to a few key slides. So we enrolled about 36, we enrolled 36 patients in the study. We did have 11 patients discontinue treatment during the course of the study.
Most of those discontinued study treatment quite early, largely due to convenience. We did have five patients that discontinued, attributed to AEs. Some, per the investigator, were deemed related, some unrelated. This slide shows the baseline SALT scores of every individual subject that was enrolled, and you can see those discontinuations were spread relatively evenly across the three core subgroups of the moderate patient, severe patients, and very severe patients. The safety and tolerability from the study we felt was favorable and in line with the prior safety experience. EQ101, prior to this study, via our predecessors, had been evaluated in roughly 100 subjects across SAD, MAD development, and then a 50-patient phase II study in patients with cutaneous T-cell lymphoma and LGLL.
And so we had a good sort of roadmap from a safety and tolerability standpoint, and generally, we felt the data was consistent with prior safety and tolerability from those studies. We do highlight in our deck that's available on our website the five TEAEs that led to discontinuations, some related, some unrelated. Worth noting that this patient population had, I think, roughly 75% a history of atopic diseases such as eczema and asthma, and reactions to drug administration. So, nothing I'd say overly surprising, and as we think about future studies, we'll certainly be evaluating EQ101 against a placebo to better understand the overall safety and tolerability profile. We do have quite a bit of data from our efficacy analysis.
We largely excluded the patients that did not complete study from our efficacy analysis, as we wanted to really understand, do we see drugs activity of a signal of drug activity in this study? We felt that was appropriate based on prior data sets demonstrating that you really need to dose patients a minimum of 12 weeks, if not out to 24 weeks, before you can really tease out drug activity. I'll sort of pause here on this slide, which is sort of the key data slide, and I think a few key takeaways. Of the three subgroups we enrolled in the study, we saw basically no patient response in the most severe subgroup of the 95 and above SALT scores, these patients that were largely AU/AT patients.
That's very consistent with the low-dose baricitinib data that I showed earlier, where at week 24, you saw no response by SALT less than or equal to 20. So pretty similar results there, I'd say, in terms of not achieving a response. However, in both the subgroups of the moderate patient, 35-50 by SALT score, as well as severe patients, those with 50-95 SALT score, we did see signs of what we felt were compelling activity, achieving overall in the subgroup, moderate to severe, roughly 29% SALT less than or equal to 20. Five of those patients achieved that mark.
As you break it down into the severe versus moderate, we saw about 21% of the severe patients achieve that SALT, then less than or equal to 20, as well as what we felt was comparable data related to change in SALT from baseline for those subgroups. I think another sort of interesting attribute that came out in our discussions with our KOLs and advisory group, who were, I think, enthusiastic about what was observed in this study, is that we saw pretty good depth of response in patients who did have a response, especially in that moderate group, where we had three patients complete the study.
One patient progressed considerably, but the other two patients improved considerably, with depth of response around 78%, I think. One patient was in the high 60s, the other was in the 80% response from baseline. So really nice depth of response. We do have details on a more of a responder analysis that shows that depth of response more clearly. And then our kind of final efficacy slide shows individual patient outcomes over the study course, removing those patients, those four patients who progressed on disease. And we felt this showed, sort of was a nice way to look at the data.
We see the five SALT less than or equal to 20 responders, but also you can see that the rest of the severe patients generally were trending in the right direction over the course of the study. And then up top, you can see the AU/AT band, where those patients showed no improvement. So overall, I think to summarize the data, we were quite pleased with the signal of activity we believe we observed here, as well as the safety and tolerability profile, generally consistent with prior data from prior studies. And we certainly feel that EQ101 warrants further development, and as a novel mechanism, think there's a really good opportunity for this drug.
And as we further discussed our data with our KOLs, you know, they highlighted the fact that, you know, most patients show up with alopecia, not as a SALT 80 or 90 or in the very severe category. They generally come in with more moderate disease as they're getting worse and progressing to more severe disease. And today, JAK inhibitors are, as a class, one, all carry black box warnings, and two, are only labeled for severe disease or worse. So we think there's an excellent opportunity to capture these patients, as they're coming in with more moderate disease, and before they progress to more severe disease, and, ideally, you know, get this patient population drugs that they badly need.
So, and the last thing worth noting, you know, a SALT patient of 40 does not really feel materially different, or their quality of life is not materially different from a more severe patient. You know, the hair loss is significant, impacts their quality of life, but yet they have no drugs approved. So, we're enthusiastic about the program with plans to finish up kind of our analysis of the study.
We have some more work to do around the PK/PD analysis, but we do, you know, we really would like to advance this forward, where we can do a study that is more focused on dose optimization, which could include dosing higher, as well as perhaps extending the dose interval, as we take this drug forward to see what we can do for patients. So I'll pause there, Roger, and see what questions you might have.
No, that, that's very, very comprehensive and, you know. Actually, at the early study, you have done a very thorough analysis as well. Maybe just a few questions related to—we start from the efficacy. You know, you did a good job to lay out the JAK inhibitor, so what we have seen at this time point, kind of for your study. So how should we think about the your drug stack up to JAK inhibitor, just on the drug side? I understand that we can talk about the placebo side because you don't have the placebo in your in your study.
Yeah, I think, again, we have a small sample set, right? We basically had 25 patients complete study treatment. So, you know, I think that is a caveat of our study. It was a signal finding study versus the phase II and III JAK studies that had a larger sample size. But if we just look at the data that came out of that, we would say that EQ101 at our single, you know, what we feel is sort of a low dose that was tested, is very comparable to the low-dose baricitinib data. If you look at the week 24 outcomes, whether it's SALT less than or equal to 20 or change from baseline, we would say very comparable to that data set.
Mm-hmm. Awesome. And then in terms of the placebo, you don't have that in your study, but also you have the historical control, and we know, you know, pretty consistent across trial. But just for your study, those patient baseline characteristics, any reason to believe if those patients will perform, behave differently compared to other alopecia JAK inhibitor study?
Yeah, I think as I highlighted earlier, so the data sets on the JAK inhibitors we have on our deck are from the phase II and III studies that studied patients who were in that SALT 50 and above. You know, we had a handful of patients in the moderate category. I think we had a total of 6, 6 patients in the moderate category. So if you look at other data sets in that moderate category, and there aren't that many, there certainly is more noise in the system-
Mm-hmm.
In those moderate patients. Clearly, a patient with a SALT 40 has a shorter distance to go to reach a SALT less than or equal to 20 than a SALT 80 patient does.
Yeah.
And that's why our KOLs were very interested in our responder analysis. They wanted to better understand, okay, for the patients who did have a response, really, what was the depth of that response? And, you know, I think they were impressed and/or intrigued by the two moderate patients that responded, had, you know, greater than 65, I think it was a mean of 78%. So one was a high 60s, the other, I think, was a high 80s, response rate as a change from baseline, from that moderate category. So we felt that that was, you know, really interesting data and a very strong, deep response in those two patients.
So, you know, we know there's an unmet need here, that we do intend to focus on a bit more as we, you know, intend to advance EQ101 forward.
Yeah, got it. And then, you know, let's talk about a little, a little bit about the safety. So understanding you have done this study in more than 100 patients, in the past, you only see one discontinuation due to AE. This time you see a little bit more, and some of them are drug-related. So what drove that? And then, so how concerned you are, and then, you know, and particularly for your advisors?
Yeah. So we, you know, we had 11 discontinuations. You know, I, I'd say we were expecting a, you know, comparatively higher discontinuation rate in this study, say, compared to the JAK studies, in that this drug had not been tested previously in AA, so there was no history of activity here. And so, and also the IV access, you know, is a little bit inconvenient. So we did have over half of the discontinuations were really more for convenience-
Mm-hmm.
... you know, broadly speaking. Of the five that discontinued to AEs, you know, some were related to drug as deemed by the investigator, which doesn't necessarily mean causality.
Mm-hmm.
But, you know, they did designate several of those as related. Several, a couple were not related to the study drug. So I don't think necessarily surprising... until we get into a larger study, now that we have what we think is a story to tell around potential drug activity in this patient setting, I think patients will be more motivated as we go into more advanced development. You did see, I think, a discontinuation rate on the order of 10%, at least in some of the JAK phase II, III studies. So, you know, there's always gonna be some discontinuation rate. As it relates to our prior studies, you know, I think you can certainly say that the, you know, patients with CTCL, LGLL are pretty motivated.
And so again, the AE profile we didn't think was meaningfully different from what was observed in those studies, but maybe we just had a more motivated patient base.
Yeah. On one end, you have pretty big or a pretty decent size of the data safety database, but on the other side is a different patient population.
Right.
You may have patient may behave differently, right?
Correct.
In terms of the motivation. Okay, and then, so you alluded that you will move forward this program with those optimization, particularly maybe some formulation, dose, interval, and the higher dose. I believe, you know, Steve, we also see some PK/PD, CD132 kind of a reduction. So how this PD marker and the safety tie to your potential higher dose? Because as you said, Bruce, early on, the efficacy you see is comparable to low-dose JAK, but we wanna see maybe higher because we, you know, we cannot see higher efficacy.
Yeah, sure. So we chose the 2 mg per kg dose to take forward as a proof of concept, single dose. You know, just ask the question, is this a mechanism that affects alopecia areata? Now, prior studies went as high as 6 mg-
Yeah
or 4 mg in the CTCL. Now, there were no dose-responsive safety events there, but we at the time chose to advance the 2 mg per kg dose. So that's where our largest dataset comes from. Now, that's by no means the highest dose we see pharmacodynamic activity at. So I think there's certainly room, headroom, to go from, you know, certainly coverage we have from a toxicology perspective. Got human experience that exceeds that, and we don't have any reason to believe that we're seeing any dose-responsive safety events if we do escalate. So I think in future studies, we'll certainly look at that. Now, what we've seen to date in the alopecia areata population is target engagement.
So we know that along with these compelling signs of clinical efficacy, that we have target engagement by a reduction in CD132, and we see that on the CD8 and NK cells, which are the bad actors. I think moving forward, as we think about exploring additional doses, increasing the dose, will help me answer a question is where are we on that S-curve? But I know from, for, for to date, we're certainly not at the top of that. That wasn't a dose we selected based on activity. It was a dose we selected because then we can sort of draw upon that large safety database and make those comparisons. So I think there's a lot of opportunity here, to explore dose and, you know, even if this was only as effective as low-dose baricitinib, conversations with KOLs are, that's a decent bar. That's a drug.
Certainly because safety is supreme in dermatology. But there's no reason to believe that this mechanism, by targeting the cytokines in a very durable fashion, allows us to sort of even, you know, not just be competitive with JAKs, but potentially be superior. But because this is really just a signal finding study, unfortunately, it's not really an opportunity for us to benchmark.
Got it. Okay. We have a couple more minutes, but I wanna really highlight this Ono deal is very meaningful to Equillium, given the economics associated. I think, Bruce, you already, you already laid out earlier. But maybe the key question here is, you're waiting for the GVHD interim data, which is a blinded analysis. How this data this analysis or the outcome gonna make the, make an Ono to make the decision, what are the key criteria they're looking for?
Yeah, well, as mentioned, it's an interesting data event. It's a blinded review to the company and to Ono, so we'll have access to blinded data.
Mm-hmm.
So, you know, certainly get a good read on the overall safety and tolerability across all patients. Our DMC, which we, I think, announced at our most recent, you know, update, had no concerns over the safety and tolerability at that most recent review, so, you know, we were pleased to hear that. So data will be blinded to us and to Ono, will be reviewed unblinded by our DMC, and it really is sort of a one-page, you know, recommendation of study should proceed or not. And if not, you know, what are the reasons? So, you know, our view is Ono's gonna be probably looking to see, you know, across the study, how's the safety and tolerability holding up?
But, you know, importantly, do we clear the futility assessment, I think, is what they're looking to see from the interim.
Yeah. So for the blinded analysis, or the unblinded analysis for the efficacy is a futility analysis, and then if they meet the bar, and they will go forward. That's all for the efficacy side.
That, that's our... Well, so the interim includes stopping points for both futility and efficacy. So there's one measure, do we clear futility? There's another, do we exceed the efficacy boundary? Probability-wise, we're expecting to land somewhere in the middle.
Mm-hmm.
We'll see. Obviously, we need to turn the data over, but that's our expectation, generally from how you set these futility boundaries are kind of set pretty wide. You don't want to discontinue a study early prematurely that might end up succeeding, and similarly, you don't wanna stop a study early unless the efficacy is really quite, you know, quite overwhelming. So that's our expectation. I think that's Ono's expectation, and that's what they're looking to see based on what they've communicated to us.
It's fair to assume if no unexpected safety tolerability issue, and then the study proceed as planned without the futility, that probably is sufficient for Ono too?
We would think so. I mean, they're pretty committed to the program. They'll have quite a bit of capital invested at the time of this interim analysis. They've been great partners to the company. I mean, really, really great partners. And we've been very engaged cross-functionally since we started this partnership a year and a half ago. So, you know, we're very pleased with this relationship, and, you know, we're hoping this drug performs and that they can take it forward and get this to patients. There's a very high unmet need in this first-line acute GVHD, particularly in the patient group that we're studying, which are, you know, pretty severe patients, very high mortality rates.
You know, patients have to basically progress past standard of care to get JAK inhibitors as sort of rescue therapy. So, you know, we're hopeful this all works out for everybody.
Yeah. Excellent. Okay, just, remind us the cash, runway, and then do you any other last minute?
Yeah. So cash guidance is we have cash on the balance sheet per our operating plan into the second half of 2025. I think we reported around $32 million in cash at the end of Q1. Burn rate's been very modest based on the Ono funding of itolizumab. So, the runway and cash does not contemplate the Ono scenario, where they opt in and exercise their rights to the drug, so that would add considerably to the cash balance and runway.