On December 6, 2022 Equillium, Inc. (Nasdaq: EQ), a clinical-stage biotechnology company focused on developing novel therapeutics to treat severe autoimmune and inflammatory disorders, and Ono Pharmaceutical Co., Ltd. ("Ono"), reported an option and asset purchase agreement through which Ono gains the exclusive option to purchase Equillium’s rights to itolizumab, a first-in-class monoclonal antibody targeting CD6 (Press release, Equillium, DEC 6, 2022, View Source [SID1234624838]). These rights include all therapeutic indications and the rights to commercialize itolizumab in the United States, Canada, Australia, and New Zealand.

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"We are very pleased to partner itolizumab with Ono, a leading Japanese pharmaceutical company dedicated to fighting disease and pain," said Bruce Steel, Chief Executive Officer at Equillium. "This strategic partnership validates the potential of itolizumab to address autoimmune and immuno-inflammatory disorders for patients in significant need of new therapies. Through this partnership we have secured the resources necessary to continue advancing our Phase 3 EQUATOR study of itolizumab in the treatment of first-line acute graft-versus-host disease, a severe life-threatening disease, and our ongoing EQUALISE study in lupus nephritis. Based on our current operating plan we expect this strategic partnership will enable us to fund operations into 2025, enabling us to advance our wholly-owned pipeline of multi-cytokine inhibitors through multiple key milestones, including our ongoing Phase 2 study of EQ101 in alopecia areata and Phase 1 study of EQ102 in celiac disease."

"We believe this collaboration with Equillium reinforces our commitment to research and development and creating innovative therapeutics in immunology," said Gyo Sagara, President and Chief Executive Officer of Ono. "We are very pleased to be partnering with Equillium to develop a novel medicine for patients with difficult-to-treat immuno-inflammatory disorders. We hope that itolizumab will serve as our foundation for expanding our business in the United States and pave the way for becoming a global specialty pharmaceutical company."

Under the terms of the agreement, Equillium will receive a non-refundable upfront payment of approximately $26.0 million (¥3.5 billion) and will also be eligible to receive up to an aggregate of approximately $138.5 million (¥18.7 billion) for exercise of the option and milestone payments from development through first commercial sale. Equillium will be responsible for the conduct of all research and development of itolizumab, which will be fully funded by Ono on a quarterly basis commencing July 1, 2022 through the option period.1 The option period will expire three months following delivery of topline data from the EQUALISE study in lupus nephritis and interim data from the EQUATOR Phase 3 study in acute GVHD.

Upfront and option exercise payments are based in Japanese yen and subject to currency exchange rates at the time of payment (U.S. dollar amounts are estimates based on the average exchange rate on December 2, 2022). R&D funding and milestone payments are to be paid in U.S. dollars.

Conference Call

Management will host a conference call to discuss the option and asset purchase agreement with Ono Pharmaceutical Co., Ltd. for analysts and institutional investors, at 8:30 a.m. ET today, December 6, 2022. To access the call, please dial (888) 350-3846 or (646) 960-0251 and, if needed, provide confirmation number 8770084. A live webcast of the call will also be available on the company’s Investor Relations page at www.equilliumbio.com/investors/events-and-presentations/default.aspx. The webcast will be archived for 180 days.

About Itolizumab

Itolizumab is a clinical-stage, first-in-class anti-CD6 monoclonal antibody that selectively targets the CD6-ALCAM pathway. This pathway plays a central role in modulating the activity and trafficking of T cells that drive a number of immuno-inflammatory diseases. Equillium acquired rights to itolizumab through an exclusive partnership with Biocon Limited.

About Multi-Cytokine Platform: EQ101 & EQ102

Our proprietary Multi-Cytokine Platform (MCP) generates rationally designed composite peptides that selectively block key cytokines at the shared receptor level targeting pathogenic cytokine redundancies and synergies while preserving non-pathogenic signaling. This approach provides multi-cytokine inhibition at the receptor level and is expected to avoid the broad immuno-suppression and off-target safety liabilities that may be associated with other therapeutic classes, such as JAK inhibitors. Many immune-mediated diseases are driven by the same combination of dysregulated cytokines, and we believe identifying the key cytokines for these diseases will allow us to target and develop customized treatment strategies for multiple autoimmune and inflammatory diseases.

Current MCP assets include EQ101, a first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15, and EQ102, a first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21.. These rights include all therapeutic indications and the rights to commercialize itolizumab in the United States, Canada, Australia, and New Zealand.

"We are very pleased to partner itolizumab with Ono, a leading Japanese pharmaceutical company dedicated to fighting disease and pain," said Bruce Steel, Chief Executive Officer at Equillium. "This strategic partnership validates the potential of itolizumab to address autoimmune and immuno-inflammatory disorders for patients in significant need of new therapies. Through this partnership we have secured the resources necessary to continue advancing our Phase 3 EQUATOR study of itolizumab in the treatment of first-line acute graft-versus-host disease, a severe life-threatening disease, and our ongoing EQUALISE study in lupus nephritis. Based on our current operating plan we expect this strategic partnership will enable us to fund operations into 2025, enabling us to advance our wholly-owned pipeline of multi-cytokine inhibitors through multiple key milestones, including our ongoing Phase 2 study of EQ101 in alopecia areata and Phase 1 study of EQ102 in celiac disease."

"We believe this collaboration with Equillium reinforces our commitment to research and development and creating innovative therapeutics in immunology," said Gyo Sagara, President and Chief Executive Officer of Ono. "We are very pleased to be partnering with Equillium to develop a novel medicine for patients with difficult-to-treat immuno-inflammatory disorders. We hope that itolizumab will serve as our foundation for expanding our business in the United States and pave the way for becoming a global specialty pharmaceutical company."

Under the terms of the agreement, Equillium will receive a non-refundable upfront payment of approximately $26.0 million (¥3.5 billion) and will also be eligible to receive up to an aggregate of approximately $138.5 million (¥18.7 billion) for exercise of the option and milestone payments from development through first commercial sale. Equillium will be responsible for the conduct of all research and development of itolizumab, which will be fully funded by Ono on a quarterly basis commencing July 1, 2022 through the option period.1 The option period will expire three months following delivery of topline data from the EQUALISE study in lupus nephritis and interim data from the EQUATOR Phase 3 study in acute GVHD.

Upfront and option exercise payments are based in Japanese yen and subject to currency exchange rates at the time of payment (U.S. dollar amounts are estimates based on the average exchange rate on December 2, 2022). R&D funding and milestone payments are to be paid in U.S. dollars.

Conference Call

Management will host a conference call to discuss the option and asset purchase agreement with Ono Pharmaceutical Co., Ltd. for analysts and institutional investors, at 8:30 a.m. ET today, December 6, 2022. To access the call, please dial (888) 350-3846 or (646) 960-0251 and, if needed, provide confirmation number 8770084. A live webcast of the call will also be available on the company’s Investor Relations page at www.equilliumbio.com/investors/events-and-presentations/default.aspx. The webcast will be archived for 180 days.

About Itolizumab

Itolizumab is a clinical-stage, first-in-class anti-CD6 monoclonal antibody that selectively targets the CD6-ALCAM pathway. This pathway plays a central role in modulating the activity and trafficking of T cells that drive a number of immuno-inflammatory diseases. Equillium acquired rights to itolizumab through an exclusive partnership with Biocon Limited.

About Multi-Cytokine Platform: EQ101 & EQ102

Our proprietary Multi-Cytokine Platform (MCP) generates rationally designed composite peptides that selectively block key cytokines at the shared receptor level targeting pathogenic cytokine redundancies and synergies while preserving non-pathogenic signaling. This approach provides multi-cytokine inhibition at the receptor level and is expected to avoid the broad immuno-suppression and off-target safety liabilities that may be associated with other therapeutic classes, such as JAK inhibitors. Many immune-mediated diseases are driven by the same combination of dysregulated cytokines, and we believe identifying the key cytokines for these diseases will allow us to target and develop customized treatment strategies for multiple autoimmune and inflammatory diseases.

Current MCP assets include EQ101, a first-in-class, selective, tri-specific inhibitor of IL-2, IL-9 and IL-15, and EQ102, a first-in-class, selective, bi-specific inhibitor of IL-15 and IL-21.