EQ Equillium Inc

By Colin Kellaher

Shares of Equillium Inc. rose sharply in premarket trading Tuesday after the clinical-stage biotechnology company inked an option and asset-purchase agreement with Japan's Ono Pharmaceutical Co. for the rights to the drug candidate itolizumab.

Equillium said it will receive an upfront payment of about $26 million from Ono, which gets an exclusive option to buy Equillium's rights to itolizumab and will fund the La Jolla, Calif., company's research and development of the drug during the option exercise period.

Equillium said it also is eligible for up to $138.5 million in option-exercise and milestone payments from development of the drug through the first commercial sale.

Equillium, which acquired the rights to itolizumab through an exclusive partnership with Biocon Ltd., said it expects the partnership with Ono gives it a runway to fund its operations into 2025.

Shares of Equillium, which closed Monday at $1.65, were recently up 12% to $1.85 in premarket trading.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

December 06, 2022 07:46 ET (12:46 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.