Equillium secures up to $50 million in private placement financing

LA JOLLA, Calif. - Equillium, Inc. (NASDAQ:EQ), a biotech company with a current market capitalization of $17.7 million, announced Monday it has entered into a securities purchase agreement with healthcare investors to provide up to $50 million in gross proceeds for advancing its autoimmune and inflammatory disorder therapies. According to InvestingPro data, the company has seen significant stock movement recently, with a -12% return over the past week.

The private placement includes an initial $30 million upfront in exchange for approximately 52.6 million shares of common stock at $0.57 per share, with potential for an additional $20 million upon achieving clinical study initiation and share price milestones. InvestingPro analysis indicates the stock is currently trading below its Fair Value, presenting a potential opportunity for investors interested in the biotech sector.

ADAR1 Capital Management and Janus Henderson Investors are leading the financing, with participation from Adage Capital Partners LP, Coastlands Capital, and Woodline Partners LP.

The funding will primarily support the development of EQ504, an aryl hydrocarbon receptor (AhR) modulator designed for treating ulcerative colitis and pouchitis. Equillium plans to initiate a Phase 1 clinical study by mid-2026, with data expected approximately six months afterward.

"This funding marks a significant milestone for Equillium, enabling us to accelerate the clinical development of EQ504," said Bruce Steel, Chief Executive Officer of Equillium.

The company noted that AhR modulation induces IL-10 and IL-22, cytokines that reduce inflammation, restore barrier function, and promote tissue regeneration. This mechanism has been clinically validated in skin and gastrointestinal diseases through other treatments.

Equillium expects the proceeds from the initial closing to extend its cash runway through 2027. The company stated it will prioritize EQ504 development over its previously announced cryptocurrency treasury reserve strategy. InvestingPro data shows the company maintains a healthy current ratio of 2.7 and holds more cash than debt on its balance sheet, though it’s currently burning through cash rapidly. Discover 9 more exclusive ProTips and comprehensive financial metrics with an InvestingPro subscription, essential for making informed decisions in the volatile biotech sector.

Leerink Partners is acting as lead placement agent for the financing, with LifeSci Capital as co-placement agent.

The securities offered in this transaction have not been registered under the Securities Act of 1933 and may not be resold in the United States without registration or an exemption from registration requirements, according to the press release statement.

In other recent news, Equillium Inc. announced an amendment to its 2018 Equity Incentive Plan, increasing the authorized shares for issuance by 1.78 million. This decision was made during the company’s Annual Meeting, following prior approval by the Board of Directors. Additionally, stockholders ratified the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. A reverse stock split was also approved, with a ratio between 1-for-2 and 1-for-20, at the discretion of the Board. In a separate development, Equillium revealed plans to integrate cryptocurrency into its treasury reserve strategy. This move aims for diversification and long-term capital appreciation, with further updates expected in the third quarter of 2025. These recent developments highlight Equillium’s strategic initiatives to enhance its financial and operational framework.

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