EQRx, founded by biotech investor Alex Borisy back in 2020 to shake up the US drug industry with a new pricing model, will be taken over by Revolution Medicines, another of Borisy's companies. The all-stock transaction announced Tuesday is expected to add more than $1 billion in cash to Revolution's balance sheet, although it does not plan to advance any of EQRx's R&D portfolio, instead maintaining its focus on RAS(ON) inhibitors for patients with RAS-driven cancers. Melanie Nallicheri, chief executive of EQRx, said the deal "is a result of a rigorous process run by an independent committee of directors…that thoroughly explored and considered strategic alternatives to maximise value." When it launched a few years ago, EQRx set out to offer a "market-based solution" to address drug costs, with ambitious targets of bringing its first medicine to market in five years, which would be sold for up to a third the cost of competing products. However, the company was forced to scrap its plans for the anti-PD-L1 antibody sugemalimab, partnered with CStone Pharmaceuticals, after determining there was "no commercially viable path" in the US due to the FDA's view on applications supported only by clinical data generated in China – a stance some have criticised as short-sighted in light of challenges regarding access to lower cost immunotherapies in the US (see ViewPoints: FDA – We don't talk about pricing). Earlier this year, EQRx decided to refocus on clinically differentiated medicines, shifting its resources to lerociclib, a CDK 4/6 inhibitor that had recently entered Phase III testing for first-line advanced endometrial cancer. The pivot also saw the company eliminate 170 jobs and outline plans to split its early-stage immune-inflammatory R&D programmes from its oncology business into a new wholly-owned subsidiary. In tandem with drug development, EQRx had launched a 'Global Buyers Club' and signed accords with a number of payers and health systems covering a combined 210 million lives. The agreements would kick in once approvals had been secured for drugs developed by EQRx. Speaking on a recent conference call, Nallicheri remarked "we tried something groundbreaking, something that we all knew was going to be hard… But ultimately, you need to have approved drugs for the Buyers Club to pull them through." The companies noted Tuesday that the number of shares in the all-stock buyout will be based on an exchange-ratio formula equal to roughly 7.7 million Revolution shares, plus shares equal to $870 million divided by a price that is a 6% discount to the five-day weighted average of Revolution's share price closer to the stockholder vote. According to the drugmakers, EQRx shareholders representing more than 40% of voting shares have agreed to support the deal, which is expected to close by November. Three priority RAS assets
The company indicated that planning is under way for one or more single-agent pivotal trials of the RASMULTI(ON) inhibitor RMC-6236 potentially to begin in 2024. It also highlighted "encouraging initial clinical experience" with the KRASG12C(ON) inhibitor RMC-6291, adding that it plans a Phase I/Ib trial to evaluate the combination of RMC-6236 plus RMC-6291 possibly early next year, while continuing single-agent evaluation of RMC-6291. Meanwhile, study site activation is ongoing under an investigational new drug (IND) application for a Phase I/Ib trial of the KRASG12D(ON) inhibitor RMC-9805. Revolution noted that EQRx will begin winding down its programmes and return any associated intellectual property to its partners.