Equillium Announces Up to $50 Million Financing to Advance EQ504, a Novel Aryl Hydrocarbon Receptor Modulator, into the Clinic

Financing led by ADAR1 Capital Management and Janus Henderson Investors

$30 million up front with the potential to receive an additional $20 million at clinical study initiation

Phase 1 clinical study initiation planned mid-2026; data anticipated approximately 6 months thereafter

Equillium, Inc. ("Equillium" or the "Company") (NASDAQ:EQ), a biotechnology innovator developing novel therapies to treat severe autoimmune and inflammatory disorders, today announced it has entered into a definitive securities purchase agreement with leading healthcare investors that will provide up to $50 million in gross proceeds to Equillium. The private placement is comprised of (i) an initial upfront financing of approximately $30 million in gross proceeds in exchange for approximately 52.6 million shares of common stock (or, for certain investors, pre-funded warrants in lieu of common stock), representing a purchase price of $0.57 for each share of common stock sold at the initial closing (or $0.5699 for each pre-funded warrant sold in lieu of common stock at the initial closing), and (ii) the potential for up to an additional $20 million in gross proceeds in exchange for up to approximately 35.1 million shares of common stock (or, for certain investors, pre-funded warrants in lieu of common stock), subject to achieving specified milestones related to clinical study initiation and share price.

The financing is being led by new investors ADAR1 Capital Management and Janus Henderson Investors, and includes participation from additional new investors Adage Capital Partners LP, Coastlands Capital, and Woodline Partners LP.

"We're delighted to have the support of such a strong syndicate of top-tier biotech investors who share our vision for advancing transformative therapies for patients," said Bruce Steel, Chief Executive Officer of Equillium. "This funding marks a significant milestone for Equillium, enabling us to accelerate the clinical development of EQ504 into a Phase 1 proof-of-mechanism study in mid-2026, with data expected to follow approximately six months thereafter."

The aryl hydrocarbon receptor (AhR) is critical to barrier organ physiology and immunology. Modulating AhR induces IL-10 and IL-22, two cytokines that mitigate excessive inflammation, restore barrier function and promote regeneration of tissues. Modulation of AhR has been clinically validated in the treatment of both skin and gastrointestinal (GI) diseases through tapinarof (VTAMA®) and indigo naturalis, a botanical treatment rich in natural AhR modulators. AhR binds a diverse array of heterocyclic or aromatic compounds, including several approved drugs. Recently, Abivax SA reported Phase 3 data in the treatment of ulcerative colitis with obefazimod. The structure of obefazimod has similarities to other AhR modulators and in pre-clinical models of colitis obefazimod was seen to induce both IL-10 and IL-22, both hallmarks of AhR modulation.

"IL-10 and IL-22 are both powerful cytokines that are the basis of many drug development programs," said Dr. Stephen Connelly, Chief Scientific Officer of Equillium. "In combination, we believe that their induction through AhR modulation affords a differentiated, multi-modal and non-immunosuppressive approach to treating tissue inflammation. We intend to develop EQ504 as a novel oral, colon-targeted treatment that we believe has the potential to make a meaningful impact in the treatment for ulcerative colitis and pouchitis, and we're excited to advance this program into the clinic."

Equillium intends to use the proceeds from this financing to fund the further development of EQ504, working capital and general corporate purposes. The Company has not initiated its recently announced cryptocurrency treasury reserve strategy and is prioritizing development of EQ504. Equillium expects net proceeds from the initial closing of the financing will extend its cash runway through 2027.

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

The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The investors have been granted customary resale Form S-3 registration rights for the shares of common stock issued to them in the financing. This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About EQ504

EQ504 is an investigational potent and selective aryl hydrocarbon receptor (AhR) modulator designed with a multi-modal, non-immunosuppressive mechanism of action to be complementary to other inflammation and immunology agents. AhR is critical to barrier organ tissue physiology and immunology, maintaining barrier function and promoting tissue repair and regeneration, while regulating resident immune cells with anti-inflammatory responses. EQ504's preclinical properties provide the potential for targeted, local delivery via enteric coating for the treatment of ulcerative colitis and pouchitis or inhaled formulations for the treatment of inflammatory lung diseases.

About Equillium

Equillium is a clinical-stage biotechnology company leveraging a deep understanding of immunobiology to develop novel therapeutics to treat severe autoimmune and inflammatory disorders. The Company's pipeline consists of novel immunomodulatory assets and a product platform targeting immuno-inflammatory pathways.

For more information, visit www.equilliumbio.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "could", "continue", "expect", "estimate", "may", "plan", "outlook", "future", "potential" and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters.

These statements include, but are not limited to, statements regarding the timing, size, pricing and completion of the proposed private placement, including the milestone closing; Equillium's plans to initiate a phase 1 clinical study for EQ504 by mid-2026 and the anticipated timing for date therefrom; Equillium's intent to develop EQ504 as an orally delivered, colon-targeted treatment, the potential of EQ504 to treat ulcerative colitis and pouchitis; Equillium's expectation that the net proceeds from the initial closing will extend its cash runway through 2027; Equillium's expected use of the net proceeds from the private placement; Equillium's intent to prioritize development of EQ504; and other statements that are not historical facts. Because such statements are subject to risks and uncertainties, many of which are outside of Equillium's control, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks that contribute to the uncertain nature of the forward-looking statements include: risks and uncertainties related to market conditions; volatility in the trading price of Equillium's common stock; risks inherent in achieving clinical milestones and stock price thresholds; Equillium's ability to initiate or progress clinical trials on the anticipated timelines, if at all; the potential for results from clinical trials to differ from nonclinical, early clinical, preliminary or expected results; reliance on the clinical results from third-party product candidates and/or approved drugs to support advancement and the potential of Equillium's product candidates;; implementation of Equillium's strategic plans for its business and product candidates; the sufficiency of Equillium's capital resources and need for additional capital to achieve its goals; and other risks and uncertainties described more fully under the heading "Risk Factors" in Equillium's Quarterly Report on form 10-Q for the quarter ended March 31, 2025 filed with the Securities and Exchange Commission (SEC), as supplemented by the Current Report on Form 8-K filed with the SEC on August 4, 2025, and elsewhere in Equillium's filings and reports, which may be accessed for free by visiting the SEC's website and on Equillium's website under the heading "Investors." Investors should take such risks into account and should not rely on forward-looking statements when making investment decisions. All forward-looking statements contained in this press release speak only as of the date on which they were made. Equillium undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

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