One year after founding, startup EQRx raises $500M to advance goal of cheaper cancer drugs

One year after founding, startup EQRx raises $500M to advance goal of cheaper cancer drugs

A high-powered startup has raised $500 million toward its goal of making drugs for cancer and other chronic diseases more affordable and unveiled some of its most promising candidates.The company, Cambridge, Massachusetts-based EQRx, was co-founded last January by a prominent health policy expert and a biotech executive, among others. Its latest funding, announced this week, brings its total haul to roughly $750 million.At the heart of the company is what it describes as a market-based approach to drug development designed to bring down the cost. It is a mission pursued by other companies, all of which see opportunity in finding a more efficient path for drug discovery, development and distribution.“There is an urgent need for change in the industry’s approach to drug pricing, and although challenging, changing the model is not only possible, it is critical,” Alexis Borisy, co-founder, chairman and chief executive officer of EQRx, said in a statement.The company’s co-founders also  include Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, and Sandra Horning, former executive vice president, chief medical officer and global head of product development at Genentech/Roche.EQRx is evaluating drug candidates for cancer and inflammatory conditions that it says could eventually consume 40% of the spending on drugs for the highest-cost diseases by 2025. The company’s development model is focused on proven druggable targets and efficiency, alongside partnerships with health systems and payers, in a bid to improve the odds of regulatory success.The idea is to develop drug candidates as monotherapies or to leverage partnerships to create high-quality, lower-cost regimens that include EQRx’s drugs.“With this Series B financing, EQRx is well-poised to make sustainable drug pricing a reality for people, payers and health systems,” Melanie Nallicheri, co-founder, president and COO of the company, said in a statementFour drug candidates that EQRx has identified so far are all in various stages of development and show promise in treating lung, breast and other cancers. All were licensed from other companies.EQRx purchased rights for two of the candidates in October from China-based CStone Pharmaceuticals in a deal valued at up to $1.15 billion. The upfront payment was $150 million with milestone payments and tiered royalties to follow, according to a press release last fall.One is sugemalimab, an immune checkpoint inhibitor that has shown promise in treating non-small cell lung cancer, and may also have potential for gastric cancers, esophageal cancers and lymphomas, according to EQRx. The other is a PD-1 antibody formerly known as CS1003. It has won Orphan Drug Designation from the U.S. Food and Drug Administration to treat a type of liver cancer.Another candidate is almonertinib. China-based Hansoh Pharma won approval in China for the drug’s use in treating a form of non-small cell lung cancer and the drug is in late-stage clinical trials elsewhere in the world. In July, EQRx licensed the drug outside of China for an upfront payment of $100 million and undisclosed milestone payments, according to a press release at the time.A fourth drug, lerociclib, was licensed by EQRx last summer from G1 Therapeutics, a clinical-stage oncology company based in Research Triangle Park, North Carolina. G1 received an upfront payment of $20 million with milestone payments up to $290 million, as well as potential royalties, to follow.Lerociclib is a CDK4/6 inhibitor that targets hormone-receptor positive HER2 negative breast cancer, the most common form of the disease.Investors EQRx include GV, ARCH Venture Partners, a16z, Casdin Capital, Section 32, Nextech and Arboretum Ventures.

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