Good afternoon. I'm Eva Fortea-Verdejo, a Biotech Analyst here at Wells, on our next session. We have the Equillium team. We have Bruce Steel, the Chief Executive Officer. Good to see you. Good afternoon. Perhaps we can start with an overview of the company for those that are less familiar, and then we can dive into questions. Great. Thank you, Eva, for having me, and Wells Fargo. Can you guys hear me okay? I don't know if it's coming out of the mic or not. So, yeah, appreciate everybody taking their time to get an update on Equillium and, or hear the Equillium story for the first time, if this is your first time learning about the company. I will just sort of anchor around our pipeline slide. So there are effectively today two sides to our business. We have our foundational asset, itolizumab, which is a more advanced stage program, that we partnered with Ono Pharmaceutical back in December of 2022. We have a very important outcome in the immediate future in front of us as it relates to this partnership. This was a partnership structured around the option for Ono to acquire the drug. I'll tell you more about that in a few minutes, but that's sort of the asset around which we started Equillium seven years ago. Ono has been a great partner for us, and they're going to have a decision to make in the very immediate future on whether or not they proceed with their acquisition of the drug or we get it back unencumbered, and then the second side to our business is the multi-cytokine programs and platform that we acquired also during 2022 through the acquisition of a local Southern California biotech company called Bioniz. Within the multi-cytokine side of the business, we have EQ101, our lead asset, which is a peptide therapeutic targeting IL-2, IL-9, and IL-15. We've recently reported top-line data from our completed study in alopecia areata. This drug has now been in approximately 135 subjects across multiple studies. Based on the AA data, we would like to take this program ahead into more advanced phase II development in AA and possibly vitiligo, subject to resources. We have a second program in the pipeline from the multi-cytokine platform, EQ302, which is a modified peptide targeting IL-15 and IL-21 that is orally deliverable. We showed some nice data last year that this drug is stable in the gut and has greater potency than the predecessor compound. We're looking to advance that into first-in-man development later in 2025. Behind that, we have an underlying platform that allows us to generate additional sort of discovery agents from this approach of in a single therapeutic candidate having the ability to target multiple cytokines in a single agent. That's just a snapshot on the company. We have an ongoing, pretty active business development engagement across sort of the organization, thinking about broadening the pipeline as well as how we're thinking about the assets we have in the pipeline today. That's a little bit of an overview on where Equillium is. We can, you know, maybe focus a little bit on the Ono situation, because that's right in front of us, if you like. Perfect. I mean, that was exactly my first question, right? Like, before jumping into the wholly owned multi-cytokine- Yeah -program, like, can you tell us a little bit more about the partnership and kind of like the expectations here? Yeah. So, you know, very interesting partnership for us. Just as a little bit of a historical perspective, we started Equillium around the in-license of itolizumab from Biocon out of India. They're still our partner, and they still have rights to the drug in major markets outside of the U.S., such as Europe and Japan. We partnered with Ono at the end of 2022, really out of a desire to fully fund the program and the company for an extended term, as the capital markets were obviously pretty challenging going through the second half of 2021 into 2022. Very pleased to bring Ono into this program. The way this was structured was sort of a plain vanilla option-style agreement. They gave us an upfront set of payments totaling about $38 million when we signed this transaction. Importantly, they agreed to fully fund the entirety of the R&D program around itolizumab through their option period, and that option period expires on October 30th. So that period was triggered by the two data deliverables shown on the right. So when we entered into this agreement, we were in the middle of the EQUALISE study in lupus nephritis, and we had recently launched the pivotal study in first-line aGVHD. Fast-forward to where we are today, we've completed the EQUALISE study, delivered that top-line data to Ono earlier this year. I think we and Ono viewed that data very favorably. We view that data at that stage of development was very favorable compared to, say, voclosporin's data set, looking at as sort of the major endpoint in patients with lupus nephritis. All of that data was presented earlier this year. The second data set we more recently delivered to Ono, and that was the interim analysis in the pivotal GVHD study. We provided that update at the end of July, which triggered that three-month window, setting October thirtieth as their expiration date to give us a decision on whether or not they want to move ahead with their option exercise. If they do opt- in on the program, we'll get a JPY 5 billion based payment, which is around $35 million, based on current exchange rates. We're also eligible to receive milestone payments totaling just over $100 million, a significant portion of which are tied to near-term clinical study starts that we would expect to achieve if Ono does move ahead with the acquisition. We're spending a lot of time with Ono on study planning for more advanced development, particularly in LN as an indication, and we also believe we could expand pretty quickly into more advanced development in other areas within the GVHD realm, such as chronic GVHD or steroid refractory GVHD, so if they do opt-in, we'll be in a very good cash position. We would expect to continue conducting the EQUATOR study through to completion and ready the program for BLA submission. We do believe that the study will support an approval if the data is favorable, and at that point, you know, I think we'll be in pretty good shape. So if they opt- in, we'll have a very good cash balance. Ono will continue to fund the entirety of the R&D program. In addition, at that point, we would start to pick up funding for sort of the pro rata share of our G&A expense, plus a profit margin built in on top of that. So for the last year and a half or so, this has been cash neutral to the company. We've had a budget of about $8 million per quarter. So at this point, Ono has invested north of $80 million or so into the program. So they've been very committed to this so far to date. With that said, there is some possibility that they do not proceed. And if that were the case, obviously we would have itolizumab unencumbered, significantly de-risked from where we did this transaction at the end of 2022 with these two data sets on hand. And in addition, we have an ulcerative colitis study that is nearing completion that our partner, Biocon, has been conducting down in India. We helped design that study. We're co-funding it. We haven't really highlighted it that much, but that would become quite relevant in the scenario where for some reason, Ono does not move ahead. I think that would be an interesting outcome for us, given the advanced stage of the program. And if the data is favorable in the EQUATOR study, we think it could support an approval and an indication that could be very easily launched by Equillium at our size, given the manufacturing that's already in place with Biocon, and the fact that you can tap into this patient setting with a very, very small focused sales effort. So I'd say in either way, I think we're kind of comfortable with the outcome. But Ono's been a great partner for us, and we're looking forward to their decision in the very near future. Great. I mean, that's very clear, actually. So perhaps moving on to, you know, your lead program, 101. Can you discuss a little bit, you know, your strategy behind inhibiting IL-2, IL-9, and IL-15? What's the advantage of doing this simultaneously, and kind of like the rationale in alopecia areata? Yep. So you know, generally at a high level, what we have in the multi-cytokine platform, and EQ101 specifically, is a peptide therapeutic that inhibits IL-2, IL-9, and IL-15 selectively. This work all originated at the NIH, and what we've been working with within the platform is targeting the common gamma chain receptor, which is shared by a number of cytokines, and you can, by changing the sequences, dial in or out the selectivity for certain cytokines over others. Broadly speaking, in autoimmune and inflammatory diseases, you know, you have, on one hand, drugs that have been very successful targeting a single target, such as antibodies, say, against IL-17, and then on the other side, you have things that are broadly immunosuppressive, such as corticosteroids. And then you have drugs somewhere in between, such as JAK inhibition, which is quite broad, but not entirely comprehensive, but still, as you can see from the slide here, has inhibitory activity against 50+ cytokines. And so with our platform and programs, the idea is you really want to identify, I think, in drug discovery and development, key drivers of disease, and especially where there is sort of overlap and synergy and redundancy in pathways, really target sort of the appropriate number of pathways, but not be overly broad, where you get both on and off-target side effects. And so we think with EQ101 and EQ302, we have dialed that in a bit, in terms of really focusing in on cytokines that are pretty well validated as key disease drivers. So with EQ101, this is our program that targets IL-2, IL-9, and IL-15. We believe these drug targets are appropriate in a range of autoimmune and inflammatory diseases, largely focused in the skin. Our predecessors had taken us through a pretty robust proof-of-concept study in cutaneous T-cell lymphoma, showing very nice response rates. When we acquired the asset, we did have an open IND for a phase II/III development plan in CTCL. It's an orphan indication. We also had an open IND for a phase II study in alopecia areata. We decided to focus the resources we had on advancing the program into AA, given the larger commercial opportunity and the fact that at the time there were no drugs yet approved, and the majority of drugs in development are JAK inhibitors, and we know that there's a significant opportunity to kind of follow JAK inhibitors into the market with a drug that is safer and better tolerated compared to JAK inhibitors. We also believe this would be appropriate looking at vitiligo and potentially atopic dermatitis, and so with the phase II study now complete and the results we saw there, we would like to advance this into further development where we would do a couple of key things. One, transition from the IV formulation that we had on deck when we made the acquisition to a subQ formulation that we believe is commercially viable in AA. And also in the next study, do some dose ranging, so we better test an optimized dose. We don't believe that the 2 mg per kg that we evaluated in the first study that we reported on is an optimized dose. We viewed that as an active dose, but not an optimized dose. So the next study would be intended to sort of answer those questions in terms of dose optimization. Transition to subcutaneous delivery, which we think would address what I would say was where the major liability we observed from a discontinuation rate in the prior study. You know, we think this program is really well positioned, and certainly vis-a-vis the data sets that we've seen from the JAK inhibitors that have gone through phase II and III development in this patient setting. I think we have a good, good start with this program. Let me see if I can advance the slide. Oop! Yes, this is the study design that we just completed. It was a single-dose level, dosed once weekly for 24 weeks, which we felt gave us a very good read on signal. A few sort of interesting observations. One, we did have a high discontinuation rate, which we expected, given the stage of development as an initial proof of concept, as well as the fact that it was an IV bolus push. Perhaps we realized a little bit higher discontinuation rates than we would have expected or hoped, but again, we think that can be addressed as we transition to subQ delivery, but the response rates were quite good, and I'd say we view these response rates to be very much in line with what was observed with low-dose JAK inhibitors across multiple studies, that's been reported in the literature, so you can see that from both a achievement of SALT 20 and also a change in SALT from baseline, these data compare pretty similarly to low-dose JAK inhibitors across studies, so we're pretty pleased with the overall kind of efficacy signal read here, and we, as well as our key advisors, felt this data was pretty compelling and certainly warranted taking this program forward. So, that's kind of where we are with 101. Happy to dig in any further questions. Yeah, definitely. So what are the risks that you see when going from, like, your IV formulation to subcutaneous? And like, what's kind of like the progress there, and when can we learn more? Is this something that you're just gonna start the next phase II or phase III trial? Yeah, I mean, there's obviously, you know, formulation changes always include some level of risk. We have a few formulations that we're largely looking at from a stability standpoint. As soon as we're done with that assessment, we'll plan to take one of those forward into development. From a, you know, regulatory standpoint, we think there's little risk there. Far more risk going from subQ to IV than going IV to subQ, right, where you've got much higher exposures going into the IV form. So we think, you know, low regulatory risk in terms of being able to proceed with that. We may have to do some bridging studies, but, again, I think we can pretty comfortably transition stepping down from IV to the subcutaneous delivery form. In terms of the results you were showing, you're showing different responses depending on the severity of the disease. Correct. Is this something that's seen, you know, with the JAKs too, or is this specific to your program, and what's driving this? Yeah. So great, great question. Yeah, so if you look at data from the JAK inhibitors, and that data I don't think we have in this abbreviated deck for this presentation, but it's on our website, and we have a lot of detailed data in the full top-line data release that we provided a couple of months ago, but generally speaking, if you looked at low-dose JAK inhibitors, what they saw was at week 24, which was our dosing window, little to no response in the very severe patient population. Those is defined as SALT 95% or greater, and they saw response rates similar to what we've observed in the severe population, defined as SALT 50-SALT 95. Most of those programs did not look at more moderate patients, which we included at SALT 35-SALT 50. And the JAK inhibitors that have been approved today are all labeled to start at severe and up, so they're missing entirely the moderate patient category. And so we felt our data was very favorable as related to sort of those comparative data sets, where we saw basically no response in the most severe patient population, similar to low-dose JAK inhibitors, but good responses in the severe to moderate. Now, caveat is this is a small study, but nevertheless, we felt gave us a good indication of drug activity, coupled with what we observed in the CTCL data, gave us a lot of confidence that we are seeing drug activity here. Interestingly also, you know, if we think about our target product profile for this drug, it matches very much to what we've been told or have observed in terms of the unmet need. Right now, that you have multiple JAK inhibitors approved, more coming, the major unmet need is for drugs that are better for long-term chronic dosing and in an indication that's not life-threatening. And so independent research has borne that out. And so, you know, our thesis is that EQ 101 will have efficacy, perhaps similar to or maybe even a little bit below JAK inhibition, but has a far more attractive, longer-term chronic dosing profile from a safety and tolerability standpoint. If that bears out, we then think we can actually pick up these patients that are more in the moderate disease setting. And if you think about patient progression, patients that have AA don't wake up with SALT 80s or SALT 90s. They typically start with some patchiness, coming in as moderate patients and then will typically progress into more severe to very severe sort of outcomes. And ideally, you'd like to intervene as soon as you can in that patient progression. And patients that have a SALT 35- SALT 40 do not feel very different than patients that have a SALT 60- SALT 75 or SALT 80. They have significant hair loss, but until they reach that 50% mark, they're basically not indicated for the approved drugs. We think that's a great kind of product profile to match up to where the unmet need is, as well as sort of the patient progression from when they first start presenting in the physician's office trying to get treatment. In terms of the moderate population, what percentage of alopecia patients, you know, at this point in time, would you say are moderate? Are moderate? Mm-hmm. That's a good question. I'm not sure I can give you specific numbers on that. But I'd say almost all of them come through the moderate phase and get more severe as they progress. I can't tell you, like, as of today, patients who have identified to have AA, what percentage is in that moderate category, but I think it's fair to say that most of them don't get out of bed with a SALT 95, right? They have a progression that goes through that moderate phase, but I don't have the numbers handy on kind of what that percent is of AA patients today. Makes sense. So you would- But just in our own study- Be targeting the whole population? Yeah, but just in our own study, you can see we had a pretty. What was our sample size that were moderate? I forget. It was, you know, a decent number, and we were not necessarily trying to recruit these patients with a focus. We did have a cut between the most severe and more below the very severe patient population. Mm-hmm. But I'd say a pretty significant percentage of patients are going to be going through that moderate phase and getting into a position for treatment. In terms of safety, obviously, with the JAKs, the bar is kind of lower because they don't have a great safety profile. What have you seen so far? Is the safety a concern perhaps for the more severe population versus the moderate population? You know, I'm not sure that this. No, I wouldn't say the agency's going to view safety differently in the severity of the patient population, 'cause again, you know, I wouldn't liken this to sort of a cancer patient, where the more severe they are, if they're terminal within a year, you're going to throw everything at them. These patients are otherwise generally pretty healthy. So I don't know that the agency will look at safety profile differently between those patient subsets. But I do think from a regulatory standpoint, we know the JAKs are not labeled until you hit severe, as defined as SALT 50 or greater. So there are no drugs approved to treat that moderate patient category. And I do think that physicians will be more inclined to prescribe a drug that has a better safety and tolerability profile than using a JAK inhibitor in that moderate patient setting, perhaps. But the labels are not indicated there. So I think it's really more of a labeling issue. And, yeah, I you know, we'll have to test that thesis. What we were told was that when Lilly first started developing the first JAK inhibitor in this category, they sort of defined the regulatory pathway, as well as sort of the clinical strategy and the patient categorization. So, you know, had Lilly targeted more moderate patients earlier on, they might have gotten labeled there, but they didn't, and I don't think they will, particularly with the black box warnings that they carry. How big is the market opportunity here? Have you shared some numbers? It's 'cause there's not much approved. Yeah, just a couple of JAK inhibitors now, but, you know, we think it's a significant market opportunity. You know, there's several hundred thousand patients that are in this category between moderate to very severe alopecia areata. You know, you've got pretty good pricing established for these programs. You know, so it's probably, you know, well, north of $500 million-$1 billion-dollar market opportunity in AA. Mm-hmm. And in terms of- It's significant. Okay. In terms of, obviously there's quite a few studies, even from JAKs, that have actually failed in alopecia. So is there something underlying the disease, any mechanism that would explain why, like, there are so many fails? Like, is this population really heterogeneous? Is there something that we're missing? Do we not understand the biology properly? You know, I think that's a good question. I don't know that there's a good explanation for the JAK failures vis-a-vis the successes. It may have just been sort of clinical will to take some of those programs forward at a certain stage. From an understanding the disease, I think it's reasonably well established that IL-15 and... Sorry, IL-2 and IL-15 are pretty implicated in the pathology. Yeah, so hard to know necessarily, but I think what we have observed is JAK inhibitors are quite effective, and we think we kind of have good coverage of what are some of the key disease drivers there. How much are... From your KOL checks, how much are they actually using the JAK inhibitors? Like, is this something that they're just reserving for, like, the very severe patients, or are they actually- Because derms don't usually like to use JAK inhibitors, right? I mean, I think it's a little bit newer for them to be using it, but no, I think, you know, anecdotally, I think it's getting good utilization across the spectrum from severe to very severe. You know, and you've got- Yeah You know, several of the KOLs are. I'd say they're pretty comfortable prescribing and sort of leading the field in that. So I don't think they're necessarily holding it back for the very severe. As they get more patient experience, that may change over time, but you know, from what we've heard, it's getting pretty good utilization across the indicated range. Okay. So, unless there's anything else you want to say about this program- Yeah -we can move on to 302. Sure. The bispecific cytokine inhibitor. So how are these cytokines relevant to T and B cell biology? So, IL-15 and IL-21 are also. I thought we might have had a slide in here, you know, relevant to GI disease- Mm-hmm ... on both T and NK cell activity. There's some very good data showing, and so IL-15's been used to target celiac disease, and other GI indications. What I think has been established, and we have more of these slides in our broader deck, is that IL-15 tends to be insufficient on its own. We've got some nice data that our predecessors completed showing, looking at the peptide for EQ302, comparing it to IL-15 antibodies and IL-21 antibodies, both alone and in combination. And what you see is that alone, they have some effect in this CD8 disease model, but in combination, they have very good synergistic effect. And when we looked at EQ302, or the peptide under EQ302, you saw very comparable activity to IL-15 and IL-21 antibodies combined. So, you know, we think some pretty good data to support that. We've also looked at this peptide in ex vivo models of human tissue, which are, I'd say, better predictors than murine models of disease, showing some good effects. So, you know, we think it's pretty relevant for both celiac disease as well as we think we will take a look at IBD as a therapeutic area as well. You know, clinically, particularly in celiac disease, there's been some progress with the agency, where they have commented on sort of approval pathways. Challenge studies, I think, can be quite useful in sort of initial proof of concept evaluation, so you know, we're still thinking about our clinical strategy, which could likely involve sort of an early challenge type study, but as we think about a development path in celiac disease, which, you know, has been a little bit of a graveyard for drug development, we do think there's some alternative approaches now to think about it more like you would IBD development, looking sort of at, you know, endoscopy, for example, as a way to measure outcomes, compared to sort of traditional development in this disease. So, you know, we think it's an interesting opportunity. Obviously, this program is a little bit earlier. This is a sort of re- a reboot of our 102 program, taking the same peptide, stapling it, so it can be orally delivered. And we're sort of excited about that delivery approach. Obviously, the ability to sort of deliver this topically in the gut, if you will, I think is very attractive for both of these diseases that we're initially going to be thinking about targeting. Would you consider targeting both, or are you going to start with one, kind of like, try to get proof of concept and move on from there? You know, a little bit probably premature to answer that question. I think a lot of that is subject to resourcing. At a minimum, we'll sort of foray into one of those disease areas, will be kind of initially out the gate go into both. I don't know. I think the phase I development plan would obviously include a SAD and MAD, I think, to be followed sort of like we initially had with the 102 program, to be followed sort of as an add-on part to the study of looking at patients with disease over some period of time. So we'll have to make that call a little bit down the road. What are the gatekeeping steps to initiate the phase I? So we still have kind of some formulation work ongoing, and then we're going to have to do sort of all the preclinical workup from a tox standpoint. Okay. And are we gonna get an update from, like, the formulation work, or, like, when are we gonna hear more about this program? We'll likely have more of an update once we've kind of selected for the lead candidate and start going into sort of all the preclinical work that we'll need to conduct. But we're still, you know, targeting, trying to get this into development during the course of 2025. Okay. And in terms of, like, the variables that go into making the decision of, you know, indication selection, because you have IBD, which is, like, very competitive- Yeah ... but very big market, or like celiac disease, which I guess it's, like, difficult because everything has failed, kind of. Yeah. So I'm not sure what the question is. Like, how are we going to decide which to pursue? Exactly. I think obviously, obviously keeping kind of an eye on what's going on externally and how these, markets change. I mean, even in our own development, in history as a company, the markets we, you know, went into initially have changed a lot over, the ensuing time period. And we may do some additional modeling just to kind of see how effective we think these are, in sort of the relevant, disease models and then make a call. Okay. Either one, I think, would be fine, but we just haven't made the decision yet which way we're gonna go on that. Okay. So perhaps a little bit more of a general question. How are you thinking about your platform capabilities and kind of like, your ability to monetize them? And is this a priority to do more partnerships or, or kind of like, develop your own program? Yeah, I mean, we have. So we have, you know, kind of some skunk works going on in Steve's team, in our research group around the platform. We have what we think are some interesting constructs. These are pretty low-spend activities to generate kind of discovery candidates, if you will. We're looking at some things that are more agonistic as opposed to inhibitory. And we have an ongoing kind of BD effort. So, you know, our BD efforts sort of run the gamut from thinking about how we monetize what we currently have in the pipeline, in the platform capability, as well as other assets that might be a fit for us at a later stage, perhaps. So, I guess we have, you know, kind of a fair bit of sort of activity as well as sort of as we think about the strategic optionality in front of us, kind of trying to keep all doors open. And sort of our job is to think about the business holistically, how we can capitalize the programs. As the capital market sort of wax and wane, you know, you shift a little bit more attention, perhaps to partnering, sort of like we did during 2022, where we were pretty active on the partnering front. So yeah, we're kind of always mindful about what we have, what we can create, how we can, you know, generate dilutive or non-dilutive capital to finance what we want to do. So yeah, we've got kind of a lot going on those fronts. But we do have some activity going on in the platform with the multi-cytokine programs, but still, you know, quite early and sort of in the research stage. Okay. So, last question from me. Can you just discuss your cash runway and kind of like, what milestones can you reach? Yeah. So, cash runway, you know, is good right now. If Ono opts- in on itolizumab, it will be very good. You know, we're currently trading right around cash, give or take a little bit, based on recent trading range, about a $35 million market cap, I think. I didn't actually have time to look at the close today. So if Ono opts- in, that'll represent roughly a dollar's worth of additional cash coming on the balance sheet. We would expect to achieve some of the clinical milestones in the nearer term, which could add, you know, up to an additional dollar of cash. So, if Ono opts- in, we'll be in a very good cash and runway position, and then our plan will be focused on advancing, you know. EQ101 and EQ302 back into the clinic during the course of next year. If for some reason Ono does not opt in, we'll be in a much tighter cash position. However, we'll have itolizumab unencumbered, and personally, I think that's a pretty attractive asset to have unencumbered at this stage, given the data sets we've generated. I think we can finance that program through to completion, and we also would kind of reboot the partnering activity around that, and we have, obviously, a pretty good read on the large strategics that are interested in that asset, for these indications, based on the prior work we did, but we're two years into it, roughly, you know, north of $80 million invested in the program from Ono. So, it'd be kind of an interesting shift in focus. We'd be kind of back to Itolizumab as our lead and advanced asset, but with a tighter cash runway based on the balance sheet today. Any final remarks with the last couple minutes? No, it's going to be an interesting month or so in front of us. I'd say our attention really is just getting through this Ono decision and being ready for sort of any outcome there. That's sort of, I'd say, key job I have, is to make sure we sort of have options to pursue either way. But yeah, it's going to be kind of an exciting time for the company, and I sort of have told our team, either way with Ono, I think we're going to be in an interesting place. We'll either have a very well-capitalized company with the MCI programs as our lead story, or we have itolizumab back, sort of unencumbered, much further along, significantly de-risked and at a very advanced stage from a development standpoint with the GVHD program. Okay, great. It's going to be an interesting October for us. Thank you very much for joining us today. Yeah, I'm happy to. We have a couple minutes if there are any questions from the group here. All right. It's late. Everybody wants to get out of here. Yeah. Cocktail hour. Okay. Thank you. Thank you very much. Thanks, Eva, I appreciate it.