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New Biotech Aims to Bring Down Drug Prices

Pills on money

(TBIT, Pixabay)

13 Jan. 2020. A biotechnology company launched yesterday that plans to discover and develop therapies faster and at lower cost than many of today’s new drugs. EQRX, in Cambridge, Massachusetts, also raised $200 million in its first venture funding round that includes top-tier technology investors.

EQRx aims to re-engineer the processes of bringing drugs to market, as well as getting treatments to patients, which reduce the time needed to produce drugs, but also their prices. Alexis Borisy, the company’s founder and CEO, says in a EQRx statement, “society has benefited from unprecedented technological advances and a deeper understanding of disease biology, revolutionizing the way many diseases are treated today. That said, the pricing of new therapeutic approaches is pushing beyond the limits of common sense, preventing people and society from equally benefiting from innovation.”

Accomplishing this, according to Jorge Conde, a major investor in EQRX, requires a focus more on the process than the product. Conde, in an essay on the web site of venture investor Andreesen Horowitz where he’s a general partner, says “the most effective revolutionaries break out from the inside, where they can see the cracks most clearly.” Those cracks, he says, may be where the drug’s targets are already identified, and technology can streamline much of the subsequent product-development process.

“EQRx shifts science risk to execution risk,” notes Conde, “by focusing on known biology, where drug targets have been validated and proven valuable for treating a disease. They remove friction within the system through early and deep partnerships across the health care value chain. And most importantly, they integrate data science and technology end-to-end throughout the discovery and development process.”

In an interview with the health care industry publication STAT, Borisy tells Matthew Herper that EQRx will produce treatments for addressing those targets, but with different mechanisms from high-price drugs already on the market. The company will then sell its lower-priced drugs directly to hospital chains and insurance companies. “The key question,” Herper says, “is whether health insurers and giant hospital systems have gotten desperate enough to want to shake up the system.”

Herper adds that Borisy “calls this ‘a radical proposition.’ In any other sector, it would just be called ‘business.'” Nonetheless, Borisy, with co-founder and company president Melanie Nallicheri, set ambitious goals for EQRx, telling Herper that the company aims to bring to 10 new products to market in the next 10 years, with the first product within five years.

EQRx is raising $200 million in its first venture funding round. The financing is led by technology and life science investor companies Andreesen Horowitz, GV (formerly Google Ventures), and ARCH Venture Partners. Joining the round are Casdin Capital, Section 32, Nextech, and Arboretum Ventures, with other undisclosed investors.

Hat tip: Endpoints News

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