Equillium, Inc. (EQ) Earnings Call Transcript & Summary

Good morning. This is Bruce Steel, Chief Executive Officer of Equillium. We appreciate you joining us today for our Analyst and Investor Day presentation featuring Dr. Arash Mostaghimi. We're very pleased to have Dr. Mostaghimi joining us today. We will be discussing some forward-looking topics. We would like to refer you to our filings for further details on our forward-looking statements. Next slide please, Steve. So the agenda today, we will be providing a brief pipeline overview as well as our recent partnership with Ono Pharmaceutical and then we'll focus on our multi-cytokine platform and development candidates with a specific focus on EQ101, our first-in-class trispecific peptide inhibitor of IL-2, 9 and 15. This will be presented by Dr. Stephen Connelly, our Co-Founder and Chief Scientific Officer. We will follow that with a more detailed discussion on our clinical program of EQ101, targeting alopecia areata that will be presented by Dr. Maple Fung, our Chief Medical Officer. And then we will engage in a discussion with Dr. Arash Mostaghimi. We're, again, very pleased to have him joining us today. He is Associate Professor of Dermatology at Harvard Medical School and Director of the Department of Dermatology at Brigham and Women's Hospital. We'll then provide some closing remarks and also offer some time for a Q&A session. So again, we appreciate everybody's time today in joining us for these updates. Quick snapshot of Equillium and recent highlights. We currently have 3 different drugs in 4 different clinical studies. We have itolizumab, our foundational asset that we recently partnered with Ono Pharmaceutical. We'll provide you some more details on that partnership in a moment. And then, of course, our multi-cytokine inhibitors with both EQ101, our IL-2, 9 and 15 program as well as EQ102, our IL-15 and 21 program currently in clinical development and we'll provide you some more details on the overall operating runway of the company and upcoming milestones around all of these programs. As it relates to our overall pipeline shown here is the full pipeline view. Again, the multi-cytokine programs are wholly owned and itolizumab, as mentioned, has recently been partnered with Ono Pharmaceutical. In terms of some details on the strategic partnership, in December of last year, we entered into next slide, please, Steve, sorry. Yes, in terms of the Ono partnership, in December last year, we entered into the strategic partnership with Ono. This is an option agreement where Ono has the right to acquire Equillium's rights to itolizumab. We have 2 data deliverables that will trigger that option period. One is the top line data from our ongoing EQUALISE study of itolizumab and lupus nephritis. The second is our interim data from our ongoing Phase III study of itolizumab in acute GVHD. This is the EQUATOR study. In terms of the transaction details, we received approximately $38 million of payments related to closing, including upfronts and the retroactive reimbursement of R&D. If Ono does opt into the program, we will receive an exercise payment of JPY 5 billion. That's approximately $35 million based on exchange rates at the time of our last filing. And then we also are eligible to receive over $100 million and milestone payments related to clinical, regulatory and first commercial sale events. Very importantly, Ono has committed to fully funding the entirety of our R&D program for itolizumab the quarterly budget is approximately $8 million, and that funding will continue through their option exercise period. Obviously, with this relationship in place, this has dramatically reduced our overall operating burn and significantly extended our operating runway. Next slide, please, Steve. With that, I'd like to turn it over to Dr. Steve Connelly to take you through the multi-cytokine platform and our therapeutic candidates. Steve?

Thanks, Bruce, and thank you to everyone joining the live webcast this morning. So let's get started with discussing cytokines. And I'm sure you're all aware, cytokines are small signaling molecules, are responsible and critical for immune responses in both physiological and disease states. However, there's a complex relationship with the signaling of cytokines, because you can have both overlapping signals as well as synergistic signaling, which presents a unique development challenge when thinking about designing therapeutics, what I like to call the multi-cytokine problem. And from a signaling perspective, this complexity comes from the use of upstream shared receptor signaling hubs. A good example of this would be the IL-4 alpha hub with the targets such as DUPIXENT or downstream divergent kinase cascades and examples of this comes from the JAK inhibitor class. Now when we think about these challenges for cytokine signaling, we can focus here on the left-hand side with the monoclonal antibodies. These are very effective at neutralizing a single cytokine by sequestering the cytokine or blocking it's binding to the receptor and aggregating all of the downstream signaling associated with that single cytokine. Now the problem of this is it's likely to narrow when we think about complex autoimmune inflammatory disease where more than one proinflammatory cytokine plays a role. So then the field turned to inside the cells and targeting the JAK kinase pathway. So these JAK inhibitors can inhibit 50-plus cytokines including the JAK-STAT pathway intracellularly. Now the problem with this is probably 3, 4, 5 of these cytokines of pathological, whereas 45 plus of these cytokines are physiological. So we have a lot of on and off-target toxicities and safety liabilities associated with the JAK inhibitor class. Now the other challenge is that the JAK-STAT pathway is really only 1 of 3 potential pathway cytokines can signal. So although they may be very broad in the number of cytokines they can target, they're still actually somewhat narrow internally at aggregating the cytokine signaling pathways. So an optimal therapeutic approach would be one where you can inhibit the right combination of cytokines, optimal in their therapeutic effect by balancing both the potent activity of these along with potential toxicities. So we acquired Bioniz in early 2022 for the multi-cytokine platform, a platform that originated at the National Institute of Health in the lab of Tom Waldman. And this is a platform that allows us to uniquely target upstream shared receptors to selectively modulate multiple cytokine pathways in a single novel product. This is a very modular, flexible platform, allows us to generate a number of different therapeutics with intravenous subcu oral delivery. These can be modified to give you different therapeutic profiles for tissue targeting and distribution. And we have broad IP covering the platform, methods of treatment and composition of matter. Now I know this is a little bit of a complex diagram, but let's talk for a minute just what shared receptor hubs are. So these are important signaling hubs shown here in the green, the shared receptors and in the private receptor shown in blue, and you can see a relationship of multiple pro-inflammatory cytokines through the shared receptor hubs. And it's important to note that in any given biologic function, multiple cytokines, often signaling through shared receptors contribute to this. So for example, in the gamma C receptor, we have 3 pro-inflammatory cytokines that control CD4, CD8, NK and B cells that in combination or redundant to each other, play an important role in the activation, proliferation and activity of those cells. We also have an allergy for skin gut lung, a number of common receptors such as the IL-4 alpha or IL-7 that contribute to allergy in those different tissue systems. From the gp130 family, we have IL-6 and IL-11 that control fibrosis. And we also have IL-27 and IL-35 that are important for controlling inflammation. On the IL-10 data family, we have IL-10 and IL-22 that in synergy contrast to each other can actually control wound healing and tissue regeneration. And then IL-28 alpha, beta and IL-29 that in concert with each other control pathogen and antiviral responses. So this is important because if we think about shared receptor hubs, they offer an opportunity for us to modulate biology more effectively. And from the multi-cytokine platform, we have multi-cytokine activates. These are engineered proteins that engage multiple signaling pathways in a single molecule to modulate biological function. And then we have the multi-cytokine inhibitors that are engineered peptides or proteins that can block multiple signaling pathways in a single molecule to more effectively modulate biological function. So let's take a moment and focus in on the gamma c receptor, which is the first cytokine signaling hub that Equillium is targeting. Now the gamma C cytokine signaling hub is critically important for modulating T, NK and B-cell activity. it signals through 6 cytokines, IL-2, 4, 7,9, 15 and 21. You can see here the gray common gamma chain and then the private change colored individually. Now what's important to note is that IL-2 and IL-15 of the signaling hub actually have overlapping signaling activities on cytotoxic CD8 cells, whereas if you block IL-2, IL-15 can actually compensate and vice versa, highlighting the importance of blocking both of these cytokines. And you also have IL-15 and IL-21, where there's synergy between these 2 cytokines that drives a very activated and proinflammatory pathogenic phenotype of CD8 and NK cells. And we'll talk a little bit more about these in due course. But one thing that's really important of our therapeutic lineup is that IL-15 sits central to this. Now IL-15 is an apex pro-inflammatory cytokine. It actually initiates pro-inflammatory cascades preceding expression of early molecules such as TNF alpha and other cytokines. It plays a critical role in pathogenic organ-specific autoimmune disorders, stimulates the generation of NK, NKT, gamma delta, ILC and memory CD8 cells that we see driving a number of autoimmune and inflammatory pathogenesis. And there's been diverse approaches in the development of block IL-15 show on the left-hand side here from a review in 2019 by Thomas Waldman. And you can see that there are intracellular approaches through JAK kinases and a number of extracellular approaches targeting either the receptor or the soluble cytokine. But really, the point of this is to highlight the IL-15 is a critically important cytokine driving autoimmune and inflammatory disease. So how does one generate these multi-cytokine inhibitors. On the left-hand side, what you're looking at here is the IL-2 receptor complex shown just the beta and gamma subunits, the common gamma chain shown in gray, and the private receptor shown in purple. Now all of the 6 cytokines that bind to the common gamma chain are 4 helical bundles made up of the A, B, C and D helix. And what you can see is that helixes A, B and C interact with the private chain and helixes D interacts solely with the common gamma chain. And each of these different cytokines, the common gamma chain accepts that helix in slightly different orientations. But if you were to overlay those different cytokines and the D helix, you'll see a number of similar or dissimilar amino acids that play a role in the binding to the common gamma chain. And by generating and screening proprietary composite sequences, we can generate these engineered multi-cytokine inhibitors that allow us to block a number of cytokines, while releasing the others. This engineered cytokine inhibitor can then be fused, pegylated, lipidated, fused to Fc. They can be stapled. They can be added to monoclonal antibodies to generate these optimized multi-cytokine inhibitor therapeutics. And specifically, how these work from a mechanistic perspective is shown here on the left, these common receptors shown in gray have their private receptor shown in the different colors. And the cytokines bind to the private receptors at high affinity and then dimerize a lower affinity with the shared receptor. And when you have a multi cytokine inhibitor that's engineered and designed to bind to the common gamma chain in pockets that are selective for certain cytokines you can inhibit the dimerization of select cytokines, here shown as A, D and F, whereas the multi-cytokine is not very effective at inhibiting the other 3 cytokines, B, C and E. So let's talk about the multi-cytokine inhibitor advantage. So we talked about the limitations of monoclonal antibodies and JAK inhibitors. But the multi-cytokine inhibitors have a number of advantages. They can target undruggable sites, not possible with monoclonal antibodies or small molecules. They're optimized in their targeting. They can tackle multiple cytokines, allowing them to be not too narrow, but certainly not too broad either. And there's increased selectivity over things like the JAK inhibitor class can afford you a better safety profile. And that being able to inhibit cytokine signaling at a receptor level also allows us to inhibit all 3 of those downstream pathways associated with cytokine signaling. So we've got a number of different molecules in development at Equillium. We have EQ-101, which is currently Phase II/III ready. It's a peptide pegylated to inhibit IL-2, 9 and 15 that can be taken forward in cutaneous T-cell lymphoma or number of different dermatology indications as well as rheumatoid arthritis, myositis or interstitial lung disease. Now this is available as an IV with subcu in development. We also have EQ102, in Phase I normal healthy volunteer study that inhibits IL-15 and 21, also a pegylated peptide administered as subcu, currently being moved forward in celiac disease, but could have potential utility in IBD, type I diabetes, lupus or other hepatic diseases. Now the platform allows us to flexibly generate novel molecules with different tissue targeting profiles. And EQ302 is a great illustration of this. A preclinical molecule inhibiting IL-15 and 21 that's been stabilized as a peptide for oral delivery and local acting activity. So this really will change the way we can deliver these multi-cytokine inhibitors. And then the EQ400 series that is actually an activated program that allows us to go after multiple pro-inflammatory cytokines that synergize to generate activated T cells for the purpose of oncology or vaccine adjuvants. So moving forward, let's talk about and focus on EQ101. This first-in-class trispecific inhibitor of IL-2, 9 and 15. So IL-2, 9 and 15 has been translated from the preclinical data into humans. Now IL-2, 9 and 15 are important cytokines for CD8 and NK cells, whereas IL-9 is important for the inflammation in skin. And as I pointed out earlier, the relationship specifically between IL-2 and 15 makes it very important to tackle both of these cytokines as opposed to one individually. The pegylated peptide based on the D helix has been shown to be very selective at inhibiting IL-2, 9 and 15 and forgoing inhibition of others. As well as also being effective at modulating all of the downstream pathways associated with cytokine signaling. It's administered currently as a low-volume IV push with the subcutaneous formulation currently in development. Now from a modeling perspective, this has been extensively studied. In the early days coming out of the NIH, it was tested against ruxolitinib in multiple lymphoproliferative and leukemic T cell lines. And more recently, tested against ruxolitinib in a mouse model of immune-mediated hair loss or alopecia areata. We've got significant clinical experience with this molecule of over 100 subjects dosed and it's demonstrated a very safe and tolerable profile to date and also achieve proof of concept in treating refractory cutaneous T-cell lymphoma patients. Let's highlight one of the advantages we feel we get with targeting the proinflammatory cytokines at the receptor level. So what you're looking at here is the IL-2 complex with IL-2 bound. Now this will trigger all of the downstream signaling pathways as shown here in this western block when you add IL-2. You see phosphorylation of the STAT, pseudo JAK-STAT pathway, phosphorylation of ERK and PI3 kinase. Now when you add ruxolitinib, a JAK-STAT inhibitor, you, of course, see an inhibition of -- by the phosphorylation of STAT 3, 1 and 5, but you still see phosphorylation of ERK and PI3K showing that it doesn't fully suppress all of the downstream cytokine signaling. Now contrasted with that, if you're able to inhibit the binding of IL-2 to its receptor complex, you can see on the right-hand side, the ability to inhibit STAT 1, 3 and 5, but also PI3K and ERK signaling showing it is more complete in its ability to modulate those proinflammatory signals. As I pointed out earlier, with its generation at the -- its origins at the NIH, some of the early studies were actually in leukemia and lymphoproliferative T cell lines that led Bioniz Therapeutics to test this molecule in cutaneous T-cell lymphomas. Now cutaneous T-cell lymphoma is an indolent chronic cancer that causes patch plaque disease and tumors on the skin, and this disease is known to be driven by IL-2, 9 and 15 in terms of proinflammatory cytokines that drive the aberrant activity of these T cells. What's also known as blocking IL-2 or 15 alone was ineffective at treating large [ granulocytic ] cell leukemia or adult T-cell lymphoma when done individually. The need to block both of these was very clear. And the model you're seeing below is a mouse model of adult T cell leukemia. And you can see the control animals there. You see a lot of fluorescence for the tumor growing in these animals. And when you treat with EQ101 at 40 mg per kg IV BIW for 4 weeks or ruxolitinib provided as a continuous administration at 50 mg per kg per day. That's very effective at suppressing the tumor growth. Now it's perhaps more easy to see here the fluorescence of the tumors. We can see large amount of tumor growth with the PBS-treated animals and very little growth of the EQ101 and ruxolitinib treated animals. Now what I really want to illustrate from this animal model is that you can inhibit 3 cytokines and get very, very specific selective and potent inhibition of tumor growth without the need to go for a pan-JAK approach inhibiting over 50-plus cytokines. So specificity can still draw all of the efficacy in those molecules. Now historical studies to date for EQ101, it's been through over 100 subjects to date. There was 2 Phase I studies, a SAD and a MAD conducted at various different dose levels. And then a proof-of-concept study, Phase I/II in patients with LGLL or CTL, and we'll talk a little bit about that proof-of-concept data. But just to quickly summarize the experience of the normal healthy volunteers. This was observed to be safe and well tolerated, no DLT, no clinically significant lab abnormalities. No AE is greater than Grade 3 and the most common AEs seen in the SAD were headache were about 17%. And in the MAD, sore throat and headache in about 16%. We saw a dose proportional PK and PD with a half-life of approximately 5 days. And we also saw that multiple doses of EQ101 dosed at 1.5 mg per kg or longer actually led to prolonged PD effects exceeding 7 days, suggesting every week or every other week dosing was available. And no detectable antidrug antibodies or neutralization was detected in those patients. So let's switch gears and talk about the Phase I proof-of-concept study in CTCL patients. This was a study in LGLL and CTCL patients. I'm just going to describe here the CTCL portion of this. These were CTCL patients, who were heavily pretreated, so refractory to a median of 5 prior systemic treatments. In this study, which looked at a number of different doses before expanding a 2 mg per kg range. And you can see at the bottom there, a 4-week treatment followed by a 3-month extension. And actually, in the long-term extension study, many patients were dosed for this drug beyond 70 weeks. Now what we observed was dose-dependent PK/PD. It was observed to be well-tolerated, safe and no drug-related SAEs or no clinically significant lab abnormalities. And we saw dose-dependent reductions in IL-2 and 15 dependent cells alongside a concurrent improvement in what's called the modified severity weighted assessment tool. Think of that like a PASI score for the oncology field looking into patients with patch plaque tumors. And it was 2 mg per kg that was chosen for dose expansion based upon these PK/PD studies. So when we think about understanding the efficacy of the study. Perhaps it's best to contrast this to what we call the MAVERICK Phase III trial, which evaluated mogamulizumab, which is an approved therapeutic versus vorinostat, a nonspecific HDAC inhibitor in a large Phase III study and that allows us to sort of benchmark where we land with EQ101. So when we look at CTCL Stage Ib/II patients shown in the graph and the pictures below, mogamulizumab, scored an mSWAT of about 28%, and vorinostat about 19%. But in the heavily pretreated patients, treated with EQ101. We saw an M swap of 42.1%. Now even if you were to discount this a little bit for the smaller numbers of cross-trial comparisons, that's a very compelling mSWAT to achieve in these patients. And you can actually see below the improvement of these skin tumors and patch plaque lesions in these patients that continue to improve beyond week 16. And as I pointed out, many of these patients continue to be treated for beyond 70 weeks. Now CTCL is still a disease of high unmet medical need, very expensive therapeutics, very poorly tolerated therapeutics. And this was ready for a Phase III study prior to Equillium's acquisition of Bioniz in 2022. So to sort of wrap up this first part of the clinical and translational section, 100 patients have been dosed, safe, well-tolerated profile observed, compelling clinical activity observed in patients treated with EQ101 with CTCL. It's an attractive target product profile for treatments in CTCL patients with not only very good efficacy and durability, but also a very compelling safety profile observed. The FDA had largely given concurrence on moving forward with a Phase III study. But we decided to pivot at the point of acquiring Bioniz to take EQ101, into medical dermatology, such as alopecia areata, vitiligo or atopic dermatitis, where we think it's a more proximal and rapid way for us to create value in the franchise. So let's talk about that franchise. So EQ101 is very well suited in terms of its cytokine inhibition profile to tackle a number of dermatological diseases. And we've shown already proof-of-concept achieved in cutaneous T-cell lymphoma patients in that Phase II study. And we recently initiated an alopecia areata study, really having our eyes set on an alternative or substitute for JAK inhibition in this patient population. Should this be successful, we could think about expansions into vitiligo, where JAK inhibitors and anti-IL-15 approaches have been -- or are being tested. As well as subsets of atopic dermatitis that still remain refractory to current approaches or to displace drugs that we believe are less effective or less well tolerated in this patient population. So really a multibillion-dollar market opportunity for EQ101 in medical dermatology that really can lead us to have a therapy that has a safer, more tolerable long-term profile. So in alopecia areata, let's just talk quickly about the underlying immune pathogenesis. So simplified here quite heavily. In the center, you can see CD4, CD8 and NK cells. These are 3 very important cells that are driving destruction of the hair follicle. When these cells are activated, they release interferon gamma that binds to the hair follicle and causes destruction. In turn, those hair follicles can release IL-15 that further activates the CD8 cells. Now on the far left hand side, we can see 3 cytokines that are very important for driving the activation, proliferation and activity of these cells, IL-2, 9 and 15 that have all been well studied and well validated from transcriptomic profiles on human data. So by blocking these cytokines that are activating these cells, we hope to very, very effectively dampen this cycle of destruction between the cells and the hair follicle and allow the systemic inflammation to be reduced and hair to regrow over time. Now we've shown some model data of leukemia and lymphoproliferative cells. But here, I wanted to share with you some data in a model of immune-mediated hair loss in mice. Now this is a model where you take animals, you inject to them activated human cells. That causes a lot of dermal inflammation of CD8s, NK cells that causes destruction of hair follicles and then the mice become bold. And then at that point, with large amounts of inflammation, you intervene with either EQ101 at 2 mg per kg IV twice a week or ruxolitinib at 30 mg per kg twice a day. What you can see as the time goes on through the day 21 is very quick dampening of the immune response and restoration of hair in the animals treated with EQ101. You don't see as an impressive result of ruxolitinib, although by day 21, those animals are starting to regain hair. So pictures of animals a site because that can be a little subjective. Let's focus on the right-hand side. These graphs show you the cumulative levels of CD8 cells with the cytotoxic marker NKG2D. This is an activation marker of activated cells causing destruction of skin, follicles and other tissues. Now the PBS treated group, we see a lot of those activated cells. And ruxolitinib treated animals, we see about a 50% reduction. But we see over 90% reduction when treated with EQ101. And this may harken back to what I pointed out earlier is that by aggregating the cytokine signaling at the receptor level, inhibits all 3 of the downstream cytokine signaling pathways whereas you may still get some level of inflammation that's creeping through and leaking through those orthogonal pathways in the ruxolitinib treated animals. So by going after these 3 cytokines, we believe this is a more safe, selective approach to modulating the pro-inflammatory signals, but one that also could be potentially more potent long term. So at this stage, I'd like to hand it over to Dr. Maple Fung, our Chief Medical Officer, to walk you through some of the clinical data and introduce Dr. Mostaghimi to discuss the alopecia areata landscape. Maple?

Thanks, Steve. Today, I'm going to review our ongoing alopecia areata study as well as share what we've learned about treatments for alopecia areata before getting to the highlight of today's presentation, and that's really chatting with Dr. Mostaghimi, our alopecia expert. So this first slide shows our Phase II study design. So we at Equillium are conducting this open-label single-arm Phase II study of EQ101 in subjects with moderate-to-severe alopecia areata. This study design might be familiar to you as it's similar to those that you might be familiar with from other similar products in different phases in this phase of devastation development. We targeted studying approximately 30 subjects with at least 35% scale hair loss or as defined by that SALT score of 35. This current episode of hair loss had to be at least 6 months in duration, but no more than 7 years. We -- enrollment has now been completed. And so there are no longer patients in the screening period, but the subjects are all now in the treatment period and beyond, where we are dosing subjects with EQ101 every week at 2 milligrams per kilogram with an IV bolus push for 24 weeks, followed by that follow-up period. The objective of the study is really to assess the safety and tolerability of EQ101 in alopecia areata subjects, but then establish some biologic activity through efficacy, pharmacokinetic and pharmacodynamic markers. Following this study, we could then perform a dose selection study. The next slide highlights some key attributes from the recently completed Phase III programs of ritlecitinib, baricitinib and deuruxolitinib. Clearly, it's been a great advancement for alopecia areata patients. But this also has given us a lot of learnings on how to best conduct future alopecia areata studies as well. First, I'd like to highlight the really low placebo rates of hair regrowth in these trials. They're really no more than 9% and more likely closer to the 5% to 6% in terms of hair regrowth in the placebo arms of these large Phase III programs. Second, we also like to note really the 40% to 50% hair regrowth that has been seen in these trials, knowing that, that is in the -- over 24- to 36-week time frame. So this is really what patients and physicians may be looking to achieve with additional treatment options. So this next slide reminds us from the baricitinib studies, and this has recently been published, I believe, in the British Journal of Dermatology, that hair regrowth might be dependent on the severity of the disease. On the left is the 2-milligram dose for baricitinib and on the right, the 4-milligram dose. And those with the very severe disease, which was defined in this trial as a baseline cells for a greater than 95% or greater than 95% hair loss. They had slower ability to -- and it may take -- and they have a lower success rate in reaching those SALT scores of less than 20, compared with those patients that have severe disease even of that SALT score of 50 to 94 or about 50% to 94% hair loss. And truly, the effects of treatment may take beyond 52 weeks even to fully reach their full effect. So the next slide has a lot of information on it, but we wanted to highlight some of the key late-stage assets in the alopecia areata pipeline. The 2 recent approvals are on the far left. And then following by the resubmitted deuruxolitinib program, followed by other Phase III and Phase II programs that are in development. I know there's a lot of words here, but I'm just going to highlight some key features across the different programs here. And really, we see high degrees of similarity in terms of the study designs. When we look over on the right-hand side with the Phase II programs, you'll see that the SALT scores for eligibility had to be at least 25 across the programs. And there are both placebo-controlled as well as a number of open-label study designs. At the end points for these Phase II proof-of-concept studies tend to look at percent change in the SALT at about the 24-week mark. Also when we look at the dosing towards the bottom of the slide, will see that most of the JAK inhibitors are oral, but there are a number of new drugs that are subcutaneously dosed as well. Again, just really focusing on the fact that on the left-hand side of the slide, and in later stage development and predominantly JAK inhibitors that are in development. And that leads to my final slide. where we highlight some current concerns in the alopecia areata treatment landscape. Alopecia areata is a chronic lifelong disease, unfortunately, which affects young men and women. The Spherix Global Insights recently conducted a survey of greater than 100 dermatologists, who up to -- nearly 80% reported that there's an extremely high unmet medical need to treat alopecia areata. And here in the middle panel, you'll see that the majority of them also very concerned about the safety of oral JAK inhibitors in their alopecia areata patients, likely in part due to this black box warning, which you'll see on the right-hand side that warrants up serious infections, malignancy, hematopoietic disturbances as well as cardiovascular events. And so with that, I'd like to -- in order to join the discussion today about alopecia areata clinical landscapes and treatments, I'd like to welcome Dr. Arash Mostaghimi. Dr. Mostaghimi is an Associate Professor of Dermatology at the Harvard Medical School, as you've heard before, he's Director of Inpatient Consultation services at the Department of Dermatology at the Brigham and Women’s Hospital, and he has a long been a proponent for alopecia areata patients and treatments, participating in many clinical trials with extensive publications in this area. Welcome Dr. Mostaghimi.

Thanks so much for having me Maple.

Dr. Mostaghimi, before we tackle some questions on the alopecia areata treatments, unmet needs and thoughts on EQ101 in development. Can you provide the audience a bit more detail on your background as well as a clinical overview of alopecia areata.

Sure. Absolutely. So my interest in alopecia areata comes not only from my work as a clinician and researcher. But also I'm a parent of a daughter with alopecia areata. My daughter developed alopecia universalis at age 5, which began my interest in this field and it's been remarkable to see the growth and progress that's been made over the years. So alopecia areata is a fascinating disease. It's really a disease of inflammation of the hairball. So we look at eczema, we look at psoriasis, we see that the skin is red through the inflammation. In alopecia areata, you also have profound inflammation, but is deep, is under the skin. It's right at the base of the hair. So what happens if the hair weakens, it falls out and then the inflammation remains and keeps the hair from regrowing. So one of the major differences between alopecia areata and these other conditions is that because the inflammation is deeper, often a lot of our topical treatments don't penetrate sufficiently into the skin to reach the inflammation. So our reliance is on either systemic agents, such as the ones that were described earlier by Steve or for more mild-to-moderate disease, we actually rely a lot on injection. So we commonly will have people come in on a monthly basis, who don't receive steroid injections to their scalp, this is painful. It's difficult. COVID has shown us how difficult it is to get somebody to get one injection once for a vaccine. These are patients coming in for 20 injections into their scalp every 4 to 6 weeks. You can imagine how difficult it is for adolescents and children who really are traumatized by it. And it's the same treatment we've had for the last 50 years. So I'm excited that we're finally able to talk about new options.

Thanks, Dr. Mostaghimi. So with that, we can go ahead and move to the first question.

So how are you treating patients with alopecia areata? If you could talk about a little bit about how different severities impact that treatment? And what treatments do patients prefer as well as what patients might physicians prefer?

Yes. So the way that we can think about alopecia areata is kind of 2 different approaches for severity. One is the severity that's defined into clinical trials, where really patients with 50% or more hair loss is defined as severe. When I think about that, I think about show me 45% of your hair that you'd be willing to lose and not consider having severe disease, right? So in clinical practice, a lot of the severity is not just based on a lot of hair loss, but also how much it impacts the patient, also non-scalp hair loss such as eyebrows and eyelashes are really important and can really change the way that one look. So the goal in alopecia areata is to get somebody to the point where they can present themselves comfortably, as themselves and not either feel the individual psychological [indiscernible] of the disease, but also not to receive stigma on the basis of having this condition. So the majority of patients, as we talked about before, we're going to have limited disease. So this is about 95% of folks. And by limited, I mean that they're not at the most severe 50% and up phenotype. Most -- the prevalence over one's life is 1% to 2%. The incident rather over once life was 1% to 2%. So it's a fairly common disease. But the majority of patients only have 1 or 2 spots that will go away or they resolve automatically. For another group of patients, we'll continue to have more chronic disease, either with relapsing patches, or that they will extend and continue to have a more extensive disease, such as the people in the studies that we mentioned. Now the struggle is that with the first round of drugs for this indication, the JAK inhibitors to maintain a risk-benefit ratio. They really focus on people with the most severe phenotypes. So patients, who had all or almost all of their hair loss or at least 50%. So the majority of the people in the trials that were reviewed are really tended towards chronic disease with substantial hair loss. But there's a large number of people, who are in that middle range in that sort of 20% to 50% range, which would not be considered a success in trials. Success in trials is low SALT below 20s. So you -- or but they don't qualify for the trial. So there's a lot of a nomad zone there. And that represents a tremendous need in this field because, as mentioned before, injectable steroids -- are there still the mainstay of treatment, oral prednisone is an option, but not something that you can do long term. Other drugs such as cyclosporin or methotrexate, old [indiscernible] inhibitors or antimetabolites, have successes that are really in the 10% to 15% range with a tremendous amount of side effects. So really enable what we're left with is we really have to move towards these new JAK inhibitors and move towards them early, because they're not displacing evented treatments. They're really entering a void where they really previously weren't very many efficacious treatments.

That's very helpful, Dr. Mostaghimi. Do you want to talk a little bit about what treatments patients prefer?

So when patients are deciding what treatments they want, they're really looking at 3 things. And it's pretty consistently these top 3 things, although the order may be a little bit different on the patient. First, it's clear they want their hair back, right? So the hair regrowth in terms of both extend and quality of hair is super important for them. Secondly, they want to know that the drug they're taking is going to be safe, right? So they're often risk averse. These are not patients like atopic dermatitis where they're itching all the time getting infected, and things along those lines. This is a lot of psychosocial impact. So a lot of patients while they want to feel better, don't want to take a tremendous physiological risk on that basis. And the third thing is on durability of results. So basically, once you get your hair, how long does it last? So unlike, let's say, a flare in atopic dermatitis or psoriasis, let's say that you get a little bit of a flare, you get a little bit itchy scratch a little bit, you move from there and conditions with such as alopecia areata, if you get a flare, you may lose some hair, that might be 12 inches of hair, even if your hair starts coming back and starts growing, it may take 6 to 12 months up to 2 years to get yourself looking and feeling the way that you did before. So that can often be challenging. The result is, as you see in this graph, there's profound dissatisfaction with current therapies. Up to 70% of people are saying that they're not satisfied with their current therapeutics, and there's a lot of alternative medication use. So there really is a tremendous need for additional therapeutics.

Great. And how about physicians, what types of treatments do you prefer in patients?

So as a specialist and expert in alopecia, I'm comfortable with using JAK inhibitors, but that's not something that is shared by a lot of my colleagues. Dermatology has been spoiled by the success we've had with the biologics that have been developed for psoriasis and the ones that have been developed for eczema. So these are really highly, highly efficacious medications that precisely target the key and core pathways of these diseases. Whereas in alopecia areata, we're left with sort of these broad inhibition the way that Steve outlined in his presentation on mechanism of action. The net result is that we're not exactly sure what to make of the net immunosuppression in these folks, right, not just from an immune status, but there's also a fairly ubiquitous expression of JAK proteins throughout the whole body. And other risks such as thrombosis and the other things you saw on the black box warning, are real risk that dermatologists are often uncomfortable not only exposing patients to, but even in discussing with patients. So the need for ongoing lab monitoring, these are the potential risks, makes it challenging for a lot of dermatologists and the adoption has not -- is climbing, but it's not where it needs to be.

That makes sense. Thanks Dr. Mostaghimi. I think the other question we had was about the time it takes to see hair regrowth and the timing that, that -- is that an issue for patients?

Yes. So as I mentioned before, you have those 3 main things that patients are looking for, efficacy, safety and durability. Velocity of improvement and how fast things get better is also super important. Patients want their hair immediately. But it's given an option between something that is safer and more durable in response versus something that might not work more quickly, but has a questionable side effect profile. I think the majority of patients would prefer that safety profile. As I talked -- told my patients, it's a marathon. It's not a sprint. The goal is to get your hair back, the goal is to maintain your hair, the goal is to get you looking and feeling the way that you want. If it takes a little bit longer to get there as long as we can get you there and maintain either, and that's the most important thing.

Great. Great. Very helpful. And I guess, before we move on to unmet needs, just the last question on treatment here is that when you decide to -- at what point do you make a decision to change treatment options? Is there a specific time period in which you're waiting to see certain results?

Yes. So this is something that is critical when talking to patients. So the best way to think about the JAK inhibitors are that they're a tremendous move forward for the field of alopecia areata. In the same way that Enbrel was a tremendous move forward for patients with psoriasis. But our hope is that much like Enbrel, although it was a major move forward, we come up with much better treatments down the road, which is what we're discussing in this conference today. The part of the issue is that these drugs work very slowly. So you may need at least 6 to 9 months of therapy before you can make a decision as to whether or not these drugs are working or not. You presented data that went all the way out to 52 weeks. So beyond sort of the 24 and 36 weeks that was the primary endpoint of these trials. There's even data now that's suggesting that up to 104 weeks -- some patients are still regrowing hair and not on where they want to be. So it's a very, very, very slow process. And even to say that you were not successful alone, not successful in terms of not reaching your goal, but not even beginning to get towards that. It takes about 6 to 9 months minimum really to be able to get there. So this is very different than atopic dermatitis where we tell patients in a week, your issues going to get better in 2 months, nobody would know you ever had this disease. So we have a long ways to go.

Great. Thank you, Dr. Mostaghimi. So now we'll kind of switch gears related to does there remain an unmet need in the treatment of alopecia areata with the approval of JAK inhibitors? And are there concerns about long-term use?

Absolutely. So the reality is that about 1/3 of patients will get to where they want with JAK inhibitors, which is awesome for those patients, but that means there's 2/3 of patients with severe disease, we really don't respond to that. And remember, the outcome in this trial when they're considered success, it's SALT less than 20, which means they go from having over 50% hair loss, a SALT of over 50 to having less than 20% hair loss. Now while some of those patients may have a complete add of hair, there a lot of patients that have 10%, 15%, 20% of hair loss, which can still really impact the way that you look and the way that you need to style your hair. So again, going back to the analogy of Enbrel, there was PASI 30, PASI 50 outcomes, which are considered great with Enbrel. Now the new drug blow that out of the water. So we're hoping that we are really thinking about SALT less than 10, SALT less than 5. So if you look at for this slide here for 100 patients with alopecia areata, about 10 of them will have that severe, defined as greater than 50%. And about half of them with the current treatments will have a successful treatment, defined as SALT less than 20. That really means that there's 95% of the population that doesn't have new and effective treatments. Even -- and not only the other 5 out of 100 that have severe AA, but also patients that will have significant hair loss that's less than 50% that really are impacted but don't qualify for the current medications. You asked me also, Maple, about long-term side effects. I think that's really the million-dollar question for this drug. The reality is that we don't know what the long-term side effects are. We do know that there is some laboratory abnormality, some increased risk of infection and then idiopathic rates of thrombosis that we've seen in the data we have across all JAK inhibitors right now, which can be really challenging to talk to patients about. This is not something -- the thrombotic risk is not something that you can monitor and adjust the medicine up or down. It's something that either happens to you or doesn't happen to you and when it does happen to you, it can be incredibly life-threatening and dangerous. The other thing that we don't know is what if you're on these medications for 5 years, 10 years, 15 years, the data from JAK inhibitors shows that if you're on the medication, it works and if you stop the medication or dose reduce, so in baricitinib going from 4 milligrams to either 2 milligrams or off leads to reduction in those gains, where about 80% of people, who were successful will lose their hair again. So only 1 out of 5 folks are going to be able to maintain the hair once coming off the medication. And we don't know which of those -- out of the 5, we don't know which 1 that person is going to be. So when I give this medication to patients or we treat them, the idea is really this is a long-term treatment until something better comes along, and then we can replace it or that we have a better sense of the safety of this is improved.

Great. Thank you for that. So what are dermatologists looking for then?

So dermatologists are looking for really what we have in psoriasis and eczema, which is a targeted therapy that really impacts the parts of the immune system that are necessary and sufficient to cause this disease. The idea is a little bit like Goldilocks and the Three Bears, right? If you hit block everything that's too much, if you don't block enough, you may not get the hair back. We want to kind of get a sense of what's just right. And I think that's what we're seeking. So the ability to have a targeted treatment that has good efficacy, good durability of treatment and a strong safety profile would be ideal.

Is there anything in development that you think is promising, Dr. Mostaghimi?

I think looking across that slide of development that you showed before, a lot of JAK inhibitors are on that slide. They may have slight differences in terms of efficacy or safety between JAK inhibitors, but ultimately, the concerns that we're discussing are really a class effect. So allows always nice to have additional options. It's not going to be a dramatic advance to have a new JAK inhibitor on the market. What's most compelling, I think, is the specific targeted treatments, ones that are looking at specific cytokines, blocking specific pathways from that regard. And there are a couple of options in addition to a [indiscernible] molecule on that list that you showed.

Great. Thank you very much. So for our final question here, can you share your thoughts on EQ101 mechanism of action and its potential use in alopecia areata patients? And what are you hoping to observe in this ongoing study of ours?

Yes. So something that's really fascinating about alopecia areata is that unlike, let's say, psoriasis, right, psoriasis, if you look at effective versus unaffected skin, there's 1,000 genes that are expressed differently. It looks like almost all of these go through the pathway of IL-17 and IL-23. So you have these highly specific molecules that are specific to this condition that when you block them, you can retain the rest of the immune system and really have profound efficacy. We haven't identified that yet in alopecia areata. So we know that IL-2, IL-15 and IL-9 are critical to the pathogenesis of this disease. We know that cyclosporine, which is a very toxic drug when used on a short-term basis can regrow hair. We know that, as Steve demonstrated the interferon pathway basically cycles with the increased production of IL-15, propagating this disease and leading to continued inflammation suggesting that IL-15 block, which has not only been shown in animals, but in humans as well may lead to regrowth. And then, of course, IL-9 has broad inflammatory expression in the skin. So that combination, the idea that I don't have to just throw 1 dart, but I get 3 chances at hitting the target is super valuable and useful and an exciting component of this specific medication. The other thing that we don't know yet, disease is whether or not patients are the same from an inflammatory basis. We don't know how heterogenous they are. So it may be that each of these molecules in different amounts and different components is perpetuating disease in patients. The 2 patients, let's say, that have severe phenotype may actually have different specific nature to their inflammation and hitting that's causing it. So hitting multiple cytokines simultaneously in a manner that maintains the rest of the immune system intact seems exciting from that standpoint. What we're looking for in this study, I think, is just a question of does hair grow in humans, right? And that could be eyebrow hair it could be eyelash year, it could be scalp hair. And are we beginning to get that regrowth in folks, who previously didn't have that hair among the harness and most refractory -- to treat the most refractory to current treatments. And are we maintaining the safety profile that we've seen across all the other trials for this medication. The speed, I think, is less important. I think that there may be a function of dosing, obviously, that need to be adjusted. But ultimately, we're trying to get to the point where we can tell patients, "Hey, if you use this medication, it will work, the work over the long term, it will be safe for you to use it. We're confident in its efficacy and safety."

Great Dr. Mostaghimi. Just a last question here. Is there a specific attribute of EQ101 that gives you reason to believe it will demonstrate a signal?

I think specifically, that IL-15 blockage, IL-15 really seems to be uniquely involved in this pathway. And not only the development, but also the propagation and maintenance of alopecia areata. So I'm particularly excited in that component of the 3 cytokines that are being targeted by this drug.

Thank you, Dr. Mostaghimi. So just to wrap up, do you have any final thoughts then on our discussion today?

I think it's important for us to note that we're really in the very early innings of this disease that having the first 2 FDA approved medications that are both in the same class for this disease is a profound step forward and something that's very meaningful for patients. But in the same way that the story of psoriasis began with Enbrel and Humira and didn't end there that it really behooves us to look for better options. Not only better from a side effect profile, safety profile, but also we're really not there yet with the long-term efficacy. So I'm really excited that additional attention is being paid to new mechanisms of action for this condition.

All right. Well, thank you so much, Dr. Mostaghimi for those insightful comments and we look forward to the Q&A. So Dr. Mostaghimi is going to stay on for additional Q&A. But for right now, we're going to turn it back to Bruce Steel, our Chief Executive Officer here at Equillium.

Yes. Thank you both for that in lighting discussion. So coming back to sort of the upcoming milestones and forecast. And again, to revisit our mission as a company is to develop highly impactful novel therapeutics to treat a range of severe autoimmune and inflammatory diseases. In most of the cases, particularly with the indications we're pursuing, there are a few and in some cases, no drugs currently approved for these severe diseases. So we're very pleased and fortunate to have this opportunity to be working currently on 3 novel programs that we hope can bring significant improvements to patient outcomes and quality of life. With EQ101, as discussed here, we expect to have some initial data on the ongoing alopecia areata study before the end of the year, importantly, followed by our top line data with guidance currently expected for midyear 2024 next year. With EQ101, we're currently in our SAD/MAD study and do plan to provide an update on this portion of the study prior to the end of the year with a view that EQ102 and/or its follow-on program, EQ302, which we just released some information on this morning, could be very well targeted for patients with celiac disease, again, an indication or a disease area with no approved drugs currently on the market. And then last, itolizumab, we do plan to have a significant update on the equalize study in lupus nephritis. We will be presenting posters at both ASN and ACR in November. We do hope you will tune into that. This will be a very robust update with a prelude to the type of data we'll be delivering to Ono early in the new year. We have brought in that guidance that we expect to deliver the LN top line data to Ono early in the new year. This then be followed by the interim data from the EQUATOR study in GVHD, our Phase III program for acute GVHD expected during the course of 2024. And based on the time lines and current enrollment in the EQUATOR study, we do expect both that data deliverable and Ono's option exercise period to occur during the course of 2024. So with that, I think we will open this up to any Q&A for Dr. Mostaghimi and/or our team.

[Operator Instructions] Our first question comes from Catherine Novack with Jones Trading.

Can you hear me?

We can, Catherine, go ahead.

Okay, great. So I guess my first question is actually on the oral peptide delivery technology that you released this morning, it's very interesting. And how do you expect to validate this clinically? Do you see a commercial proposition for using this technology to generate partnerships in addition to using it on your own molecules?

Yes. So a couple of questions in that question, Catherine, and I'll welcome Steve to maybe join in the response. I think first is a significant portion of the acquisition of Bioniz was not only the clinical development programs, including EQ101, which had already been through 90 subjects at the time of the acquisition, with readiness to quickly move into the alopecia areata study as well as an open IND for a Phase II/III development in cutaneous T-cell lymphoma, where that initial proof of concept was completed. But also the underlying platform technology, which included the concept of taking these peptides and aiming to deliver them in alternative routes of administration over and above the subcu or IV routes that were already established with EQ101 and 102. So clearly, in indications that are chronic and particularly those, say, in the GI tract where you may be able to deliver your targeted agent directly where it's needed. Oral delivery would be a very attractive route of administration. But I'll let Steve also add a little bit of context here.

Yes. Thanks, Bruce. I think one of the really interesting things about this platform and the fact that we're working on natural molecules or fragments thereof is that they can be modified to bind to antibodies, they can be modified to attach to Fcs, they can be delivered orally systemically, maybe even topically or inhaled as well. The small fragment that we're talking about here of EQ302 is about 20 amino acids. That's then being screened and optimized and hydrocarbon stable. And that's a number of really interesting things to the molecule that we've shown in the sort of early proof-of-concept studies, is it allows us to get very good GI stability, permeability and translation of that molecule working locally acting in quite aggressive animal models of GI inflammation. Now when we think about the utility of this to something like celiac disease, where those aggressive CD8 cells are essentially just behind that first layer of cells in the gut lumen. So what we have now is a molecule that we could administer orally that could be locally acting and very, very effective at suppressing the activity of those cells. Now the same technology of stapling could be applied to other molecules. Such as EQ101 that could then perhaps be unpegylated and then used orally and/or potentially topically to certain diseases as well. So I think there's just -- there's a number of things. First, it highlights the ability to modify these molecules to give you better drug-like properties. So we call second-generation molecules, more targeted in that approach. But you highlighted another really important part, which was a strategic priority for Equillium, which was by being able to tap this platform and be able to target these shared receptors in a way that I think is unique and proprietary to Equillium and then generate these molecules is it really allows us to open up the opportunity to partner these molecules for different indications different markets, et cetera. And that's something that really further derisks the company, because it allows us to, in these more sort of fiscally frugal environments is to become more self-sufficient on our platform, on our partnerships to be able to create value for shareholders without having to tap capital markets.

Yes. And obviously, during the course of the last year, we've demonstrated, I'd say, a pretty robust business development capability with a lot of focus on strategic partnering with 2022 being a very important year for us, including closing on the acquisition of Bioniz in the early part of the year and then recruiting Ono into our strategic partnership. And as Steve highlights in these periods and cycles that we as an industry go through where the capital waxes and wanes, and this is an extended period where the equity capital markets have been extraordinarily challenging, having this type of flexibility as well as capability on board and active, I think, is quite important as we think about capitalizing the business and program. So yes, we're pretty active on the strategic BD front on an ongoing basis.

Great. And just one more on the time line of EQ101. The previous -- you mentioned earlier, doing a dose optimization study following the alopecia areata study? And then you've also talked about a subcutaneous formulation. So do we be thinking about after these data, dose optimization and a potential bridging study for subcutaneous? Or how should we be thinking about the development progress of EQ101 forward?

Yes. Good question, Catherine. So generally, assuming we feel that we've seen the program has continued to demonstrate favorable safety and tolerability in a new patient setting here with patients with alopecia areata. And sufficient signal in this initial evaluation of the program in these patients, then we would plan to move ahead with a Phase II/III development program. We obviously don't want to provide a lot of details on something that's a little bit premature at this point. But generally, I think we'd likely want to test probably another dose level, and we would also be expecting to move from the current IV push into a subcu delivery formulation, which is well underway, obviously, given that we would look to turn things around quickly following the top line data if we do get conviction that this overall approach could be differentiated for this patient setting.

Our next question comes from Raghuram Selvaraju, with H.C. Wainwright. How much the dose vary between various medical dermatology indications for EQ101? And how might that differ from oncology dose? What are the implications on both safety and efficacy?

I can go ahead and take that one if that works. So great question. And clearly, we're still continuing to learn more about EQ101. I mean we're fortunate that the package that came to us when we acquired Bioniz and those products had a great safety profile and early efficacy for sure, in that cutaneous T-cell lymphoma. I think that since we've acquired that, our team internally is continuing to work on pharmacodynamic type of markers to understand better what dose should be used in both indications. And so we're certainly waiting anxiously the data from our alopecia areata study, and we'll have a close look at that and compared to the data to understand what doses might be needed in either of those indications. Again, I'm very fortunate that the range of doses that have been administered in the trials to date have been pretty well tolerated and quite safe. So we have a nice range to work amongst.

Our next question comes from Thomas Smith with SVB Leerink.

Can you hear me okay?

We can, Tom, go ahead.

Okay great. Yes. Thanks for putting together this event. Yes, first for the Equillium team, you mentioned that you've completed enrollment in the EQ101 alopecia study, congrats on that. I was wondering if you could comment with a bit more detail on the baseline characteristics of the patients that you've enrolled and how that compares versus the bari, ritlecitinib and deurux population? And how should we think about the differences in patient populations when it comes to interpreting the initial results from the EQ101 study?

Yes, Tom. So excellent questions. And obviously, in this presentation today, we provided, I think, some insights into those different patient populations, the very severe versus severe. In our initial data update on the program later this year, we will provide a full breakdown of the patient segmentation is our expectation. And obviously, the very severe patients are demonstrably harder to treat, compared to the less severe patients based on predecessor data from the JAK inhibitors. So this is the type of information we plan to elaborate on, on that upcoming initial data that we'll provide later this year. And I can add -- we do have a significant number of patients that fit the very severe criteria. In terms of starting this initial study, those patients were pretty queued up, again, indicating that the high unmet medical need there, but we will have a blend of patients across the spectrum.

Got it. And then one for Dr. Mostaghimi, thanks for the overview on your insights here. I was just wondering if we could push you a little bit to put some numbers around the signal that you'd like to see in this proof-of-concept study for EQ101. What would be promising SALT score improvement for this type of study, first in patient data?

Yes. So I think I would break down the regrowth into a couple of categories. If somebody regrew eyebrows and eyelashes even by itself, is such a leading indicator of additional success that even with minimal scalp hair regrowth, that would be a wonderful sign. Beyond that, sort of a clinically meaningful difference in terms of SALT score on the scalp for an individual patient is a shift of about 20 to 30 points. So we're beginning to see that sort of regrowth even if it does not achieve SALT less than 20, but it means that, that patient is on their way and towards that regrowth. But ultimately, really, for a proof of concept, given the extremely low placebo rates, this is something that we've evaluated across many trials that really, if you had a significant hair disease -- hair loss, you're not going to have spontaneous improvement any signal with regards to a meaningful change in hair growth would be a positive sign. Those things I mentioned before would be ideal, but any sort of positive signal for terminal hair growth in a patient that hasn't had it for a long period of time will be a great sign.

Yes, Tom, just to maybe kind of follow on to that. So again, we're testing a single dose this may not be the optimal dose for this patient setting. And I think we want to see a good evidence of some drug activity, again, against that very low background rate of patients not spontaneously growing here on a placebo arm from the other studies to then take forward and really test the dose level in the next set of studies. But we do feel that from an overall target product profile, we clearly want this drug to be competitive with the recently approved JAK inhibitors. And that's in the context of not only their efficacy, but their longer-term safety and tolerability profile recognizing that black box warnings for non-life-threatening, albeit severe disease here. with that type of profile, maybe is not the most optimal way to chronically -- to treat a chronic illness. So we're pretty, I'd say, optimistic about the mechanistic targeting and where we hope our drug can end up from an overall target product profile compared to certainly the existing programs.

Our next question comes from Roger Song with Jefferies.

Great. Thanks for the event and very informative presentation. So a few quick questions. The first one, maybe a follow-up on Tom's question earlier. Just curious outside of the background of baseline disease severity, any other factors can kind of way -- how we interpret the data for your Phase II, in terms of compare across different trials, any other factors will be able to impact the final results for the efficacy?

I can probably start and see if Dr. Mostaghimi has anything else to add. There again, we're learning a lot from the ongoing trials and the trials that recently been completed. So besides severity of disease, something else that's being looked at is the length of duration of that episode and maybe even duration of the disease. Dr. Mostaghimi, is there anything else that we should be keeping a close eye on that when we're interpreting our results in terms of baseline characteristics?

No, I think the 2 things that have been consistently demonstrated is that the more severe disease you have and the longer you've had it, particularly with perhaps a steep cutoff at the 4-year point, it leads to harder to treat disease, both measured by the amount of resolution of hair, but also the length of time it takes to get there. Given -- I think it's very difficult to compare across trials of very different characteristics of the patients that are within the trials, even with the existing JAK inhibitor trials is very hard to compare directly between the 2, given the variation in demographics and the variation and outcomes. But I think you can contextualize some of the challenges on the basis of those 2 main factors, extend that duration.

Excellent. And in terms of the dosing, understanding you will do the further dose optimization in the phase -- in the next phase of the study. But just curious for your current CTLC (sic) [ CTCL ] study, do you see any dose dependence in terms of maybe TD or the efficacy from the trials? And also maybe just remind us what's the rationale to take that 2 mg per kg for the CTLC and also for the alopecia as well?

Sure. And perhaps I can take this one, and Maple chime in if I miss anything. So in the CTCL study, we saw dose-dependent decreases in IL-2 and 15 independent cells, things like CD8 central memories, NKs, et cetera. And that started to plateau out at about 4 mg. So the jump between 2 and 4 mg wasn't huge, and that's actually part of the rationale why the 2 mg per kg was taken forward. Now there are a number of things we can think about when dose optimize. Of course, these are 2 different diseases. So one chooses a dose as a rationale to start, but then you continue to learn and you continue to test on that. As a signal finding study, we think 2 mg per kg should generate a signal. Now it may not generate an optimal signal. We'll have to have a look at the data when that comes out. And different levers one could think about pulling is you could increase the dose but also extend the regimen, you could increase the dose and potentially move the regimen out longer to talk about instead of weekly dosing like it is now, you can go to biweekly. And actually, that was certainly seen with the pharmacodynamic markers in the CTCL subjects and normal healthy volunteers, which is at the higher doses, the PD certainly extended much longer. There are different ways to think about dose optimizing. But I think from a signal detection perspective, we got 90% of our bang for our buck in the CTCL study at 2 mg per kg. So it made sense, given that's where most of the data collected to date from the dose expansion in CTCL as I pointed out, many of those patients dosed beyond 70 weeks. Is to sort of start there in alopecia areata patients. And then the next study, one could think about changing the dose or increasing the dose, but moving the regimen as a way to sort of think about optimizing signals there. Now of course, one is happening in the body across patients, CTCL patients. It's patch plaque disease across the surface of the body. Whereas an alopecia areata, that drug has to get into sort of immune privileged spaces like the hair follicle. So there are always things that you should be mindful of is, but when you carry on dose forward from one indication to another, is that there are other things at play that may lead to that being either too much or too little drug, but you must start somewhere and 2 mg per kg is what we believe would be a very reasonable, suitable place to start with the alopecia areata study.

We have run out of time for any additional questions. Additional questions can be directed to the company directly. Thank you.

Yes. In closing, I would like to thank everybody who joined today to hear the updates on Equillium with the focus on EQ101 in our efforts in alopecia areata . And then again, the special thanks to Dr. Mostaghimi for joining us today. If there are any follow-up questions or comments, please feel free to reach out to us. You can find our information on our company website at equilliumbio.com. Thank you very much.