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After a Speedy IPO, Equillium Expands Antibody R&D to Renal Disease

Xconomy San Diego — 

Equillium, a biotech that’s looking to develop an antibody drug for immuno-inflammatory diseases, has added a form of renal disease to the indications for which it aims to develop medicines.

It’s the latest step in a fast-moving journey for the La Jolla, CA-based company, which raised about $65 million in an initial public offering in October just 19 months after its founding.

Headed by former Amylin CEO Dan Bradbury, Equillium (NASDAQ: EQ) has licensed the drug, itolizumab, which it calls EQ001, from Indian pharma giant Biocon Limited for development in the United States and Canada.

Equillium was formed to advance itolizumab, which had already undergone Phase 1 testing by Biocon in about 330 patients in Australia, as a treatment for acute and chronic graft-versus-host disease (aGVHD and cGVHD), a complication seen in transplant patients, and for a severe form of asthma.

On Tuesday, Equillium added lupus nephritis (LN), a kind of kidney damage often seen in patients with lupus—a chronic condition in which a person’s immune system attacks their own healthy tissues and organs—to the list of therapeutic areas in which it will study the drug.

Lupus affects five million people globally, with 16,000 new cases reported annually, according to the Lupus Foundation of America. The kidney inflammation characteristic of LN can eventually cause renal failure. No FDA-approved treatment exists; medications used to relieve LN symptoms, including corticosteroids and immunosuppression drugs, often come with side effects.

The condition is one of the most common and dangerous complications of lupus, according to Kenneth Farber, president and CEO of the Lupus Research Alliance, in the Equillium statement. Equillium says there are more than 100,000 LN patients in the U.S.

The company plans to initiate a proof-of-concept trial for EQ001 as an LN treatment in the second half of this year, and says the data will inform future development of the drug in systemic lupus as well as a form of the disease that affects solely the skin.

The company also announced it would delay its plans for a Phase 2 trial of the drug in patients with cGVHD until data from a Phase 1b/2 aGVHD trial, slated to start in March with about 84 patients, is available: a move it described as a more “sequential” approach to its study of the drug in patients with GVHD. The FDA has granted EQ001 fast-track approval for the treatment of aGVHD and orphan drug status for the prevention and treatment of the condition.

Equillium also aims to launch a proof-of-concept trial in severe asthma sometime next quarter. The company is also eying gastrointestinal and neuroinflammation conditions as potential indications for EQ001 in the future.

The company said EQ001 targets a receptor called CD6 that modulates the activity of T-effector cells, which have been implicated in a broad range of immuno-inflammatory diseases. The aim is to dampen the activity of these cells.

The compound is the only one to which Equillium has rights, although Bruce Steel, Equillium’s president and chief business officer, said in an interview with Xconomy earlier this year that the company is actively looking for additional programs to in-license.

In that interview, the management team described how the company came together and how and why they took it from inception to IPO in less than two years.

Bradbury’s previous company Amylin, a San Diego developer of diabetes treatments, was acquired by Bristol-Myers Squibb (NYSE: BMY) in 2012 for $5.3 billion. Bradbury, who spent 18 years at Amylin and oversaw the launch of three medicines there, was subsequently recruited by Steel as the first advisor to an in-house venture fund Steel had started at BioMed Realty, a San Diego-based real estate investment trust (REIT). Previously, Steel was in the biotech industry, as an executive at San Diego’s Anaphore, a co-founder and CEO of Rincon Pharmaceuticals, and head of corporate development at Ambit Biosciences.

(BioMed was acquired in 2016 by private equity giant Blackstone for about $8 billion.)

Bradbury also joined the board of directors at Biocon, with which he had worked while at Amylin—a relationship that, a few years later, would prove serendipitous.

Equillium’s chief scientific officer, Stephen Connelly, joined the BioMed ventures team in 2016 following an introduction from Bradbury. It was Connelly, previously with San Diego biotech aTyr Pharma (NASDAQ: LIFE), who brought itolizumab to Steel’s attention.

“Bruce [Steel] said, ‘Do you think [Biocon] would be interested, if we started a company, to turn it over and make it available for us to develop here in North America?’” Bradbury said.

Biocon was amenable, and Equillium (initially called Attenuate Biopharmaceuticals) acquired the U.S. and Canadian rights to itolizumab, which is approved and marketed in India by Biocon as ALZUMAb as a treatment for moderate to severe plaque psoriasis, a skin condition. The drug is an outlier for Biocon, which is primarily a maker of biosimilars.

The deal with Biocon, India’s largest biopharma company, includes an exclusive supply agreement for clinical and commercial EQ001, which Biocon makes at commercial scale at an FDA-regulated facility. Biocon, which is not well known in the U.S., is the fourth largest maker of insulin worldwide.

After forming Equillium, the management team raised funds from friends and family. Later, the executives visited a number of crossover investors—companies that invest in both public and private entities—as they considered how best to raise funds to advance its programs.

Bradbury and his team soon realized they could move quickly to the public markets.

“The reality was that we were able to get the IND approved [to start clinical testing] in a very timely manner, we were very capital efficient in terms of what it took, so we still had plenty of capital,” Bradbury said. “We talked to a number of investment bankers, and basically had the opportunity take the company public and fully fund all the programs we had been planning to do.”

The management team’s experience at public companies also smoothed the path, he added. Jason Keyes, the company’s chief financial officer, worked with Bradbury at Amylin and held roles at other publicly traded businesses, as did Christine Zedelmayer, Equillium’s vice president of operations.

Today the company has 14 people, plus roughly double that number of people working remotely as long-term consultants. As of Sept. 30, it had recorded net losses of about $9.5 million since its inception in March 2017. The funding it had as of the end of 2018, about $66 million, is enough to keep the company operating for at least the next 24 months, according to a recent document filed with securities regulators.