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Drug Price Disruptor Biotech Raises $500M in New Funds

Pills and dollar bill

(Thomas Breher, Pixabay)

11 Jan. 2021. A start-up biotechnology company that aims to bring drugs to market at lower cost is raising $500 million in its second venture funding round. The one year-old EQRx Inc. in Cambridge, Massachusetts says its business model streamlines current drug development, marketing, and distribution processes, making possible cost savings of at least 50 percent to the health care system.

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. In a company blog post in July 2020, EQRx’s chairman Alexis Borisy and president Melani Nallicheri, also the company’s co-founders, say the high cost of pharmaceuticals is now a growing unmet need in the marketplace. Borisy and Nallicheri cite data showing when out-of-pocket costs for drugs reach or exceed $250, some 70 percent of patients discontinue their treatment.

The authors say EQRx uses a fast-follow model, where their product candidates work similarly to existing drugs, but with sufficiently different chemistries to allow for their own intellectual property. In addition, the company aims to shorten the supply chain, selling their drugs directly to larger health care providers. “EQRx is the ultimate convener,” says Nallicheri in a company statement, “bringing health care stakeholders together in meaningful strategic partnerships to modernize traditional drug manufacturer-to-patient access models globally.”

Cancer drugs in the pipeline

EQRx acquires current late-stage drug candidates for further development and commercialization, and now has four cancer therapies in its pipeline. In July 2020, the company licensed lerociclib that inhibits the enzymes cyclin dependent kinase or CDK4 and CDK6, implicated in a number of cancer types, and in clinical trials as a treatment for breast cancer. Also in July, EQRx acquired the rights to almonertinib, a drug that limits epidermal growth factor receptor, or EGFR, mutations associated with non-small cell lung cancer. Almonertinib is likewise being tested in a clinical trial.

In October 2020, EQRx gained the rights to two cancer drugs from Chinese pharma company CStone Pharmaceuticals. Both sugemalimab and another candidate code-named CS1003 are immune checkpoint inhibitors that stop PD-L1 proteins from blocking immune-system attacks on cancer cells. EQRx is developing sugemalimab as a treatment for non-small cell lung cancer, other solid-tumor cancers, and lymphoma, while CS1003 is a candidate for treating liver cancer.

EQRX is raising $500 million in its second venture financing round, with participation from all of its first-round funders. As reported by Science & Enterprise last January, those funders raised $200 million, led by technology and life science investor companies Andreesen Horowitz, GV (formerly Google Ventures), and ARCH Venture Partners. Joining the round were Casdin Capital, Section 32, Nextech, and Arboretum Ventures, with other undisclosed investors. The company says it raised $750 million total since its launch.

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