Investing.com -- Shares of Equillium Inc (NASDAQ: EQ ) continued to decline, falling an additional 9.2% in premarket trading today after dropping 35.6% in yesterday’s session. The biotechnology company’s stock movement reflects investor response to the topline data from its Phase 3 EQUATOR study for itolizumab in the treatment of acute graft-versus-host disease (aGVHD). The study did not meet the primary endpoint of complete response at Day 29, nor the key secondary endpoints, which has led to skepticism about the drug’s regulatory path forward.

Equillium announced that while the itolizumab treatment did not show a meaningful difference in the primary endpoint at Day 29 when compared to a placebo, it did exhibit a favorable safety profile and achieved statistically significant benefits in longer-term outcomes. These include a median duration of complete response of 336 days versus 72 days for the placebo, and a median failure-free survival of 154 days versus 70 days. Despite these findings, the initial failure to meet early-stage endpoints has cast doubt on the drug’s prospects.

Leerink analyst Thomas Smith reacted to the news by downgrading Equillium’s stock rating to Market Perform from Outperform and slashing the price target from $3.00 to $1.00. Smith commented, "The study failed to achieve its primary endpoint of complete response (CR) at Day 29 and both key secondary endpoints. While encouraging trends emerged with longer-term follow-up and the safety profile appears generally clean, we see an uncertain path forward for ito ahead of regulatory interactions expected in the next ~2 months."

The company’s CEO, Bruce Steel, remains optimistic, citing the longer-term outcomes and the potential for itolizumab to benefit patients where no approved therapies currently exist. Equillium has filed for Breakthrough Therapy designation and expects to meet with the FDA to discuss the possibility of Accelerated Approval. Feedback from the FDA is anticipated during May, and if positive, Equillium plans to submit a biologics license application in the first half of 2026.

Despite the mixed results, Dr. John Koreth from Dana-Farber Cancer Institute highlighted the importance of the longer-term outcomes, noting that no drug candidates have previously demonstrated efficacy beyond four weeks in first-line therapy for aGVHD. The positive trends in overall survival and the achievement of statistical significance in several secondary endpoints suggest itolizumab could still play a role in treating this condition.

Investors, however, remain cautious as the initial failure to meet early clinical endpoints overshadows the longer-term benefits demonstrated in the study. With regulatory discussions on the horizon, Equillium’s path forward remains under close scrutiny.

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