EQRx

EQRx, Inc. was a pharmaceutical company based in Cambridge, Massachusetts, founded in 2019 and publicly launched in January 2020 with the stated goal of developing and commercializing new medicines for prevalent and chronic disease areas and selling them at substantially lower prices than incumbent branded drugs. Rather than pursuing generics or biosimilars, EQRx set out to develop chemically distinct "me-too" drugs against proven, already-validated targets and mechanisms, arguing that lower development risk and faster, cheaper development would allow it to price products at roughly one-third to one-fifth of comparable branded drugs while remaining profitable. Stated focus areas at launch included oncology, immuno-inflammation, autoimmune and inflammatory disease, and rare or genetic disease. Management set a target of one approved drug within five years and ten within a decade, with estimated development spend of $300–400 million per program.

The company built its pipeline primarily through in-licensing rather than internal discovery. Disclosed assets included sugemalimab (a PD-L1 immune checkpoint inhibitor) and a PD-1 antibody formerly known as CS1003, both licensed from China-based CStone Pharmaceuticals in October 2020 in a deal valued at up to $1.15 billion with $150 million upfront; almonertinib, licensed ex-China from Hansoh Pharma in July 2020 for $100 million upfront; and lerociclib, a CDK4/6 inhibitor licensed from G1 Therapeutics in 2020 for $20 million upfront plus up to $290 million in milestones.

The model faltered. At the end of 2022 EQRx decided not to pursue FDA approval of sugemalimab after regulators indicated they would not accept the China-based clinical data. In May 2023 the company announced a "reset," cutting 170 employees (about 57% of staff) and reducing R&D to a single program, lerociclib. In August 2023 Revolution Medicines agreed to acquire EQRx in an all-stock transaction, primarily for its cash; the deal closed on November 9, 2023, adding approximately $1.1 billion in net cash to Revolution Medicines' balance sheet, with EQRx programs wound down and intellectual property returned to partners.

Founding story

EQRx was founded in 2019 by Alexis Borisy, who left venture firm Third Rock Ventures after a decade and had previously founded or helped launch companies including Foundation Medicine and Blueprint Medicines. Co-founders included Melanie Nallicheri, former chief business officer of Foundation Medicine, who joined as president and COO; Peter Bach, an oncologist and drug-pricing critic at Memorial Sloan Kettering Cancer Center, as co-founder and adviser; and Sandra Horning, former chief medical officer and head of product development at Genentech/Roche, also as co-founder and adviser. Robert Forrester, former CEO of Verastem Oncology, joined as CXO. Borisy and Nallicheri have said the idea grew out of their experience with patients unable to access therapies they had worked on without assistance programs.

Business model

EQRx intended to develop novel small molecules and biologics targeting established, clinically validated disease mechanisms, then commercialize them at prices far below competing branded drugs — reportedly one-third to one-fifth of incumbent pricing — while still generating profit through lower development costs and higher volume. Rather than competing via rebates and formulary negotiation, the company planned direct contracting-style relationships with the entities that pay for drugs.

Planned product revenue from sales of approved prescription medicines priced at a fraction of comparable branded therapies, with profitability intended to come from reduced discovery, development and commercialization costs rather than premium pricing. No product ever reached market.

Traction

EQRx raised roughly $750 million across a $200 million Series A (January 2020) and a $500 million Series B (January 2021), assembled a four-asset in-licensed oncology pipeline within its first year, and later listed on the Nasdaq Global Market under the ticker EQRX. It never obtained a drug approval. By late 2022 it held about $1.3 billion in cash and equivalents; at the time of a Robinhood market snapshot the shares carried a market capitalization of about $1.14 billion with a 52-week range of $1.58 to $3.86.

Latest developments

Revolution Medicines completed its acquisition of EQRx on November 9, 2023. Each EQRx share converted into 0.1112 shares of Revolution Medicines common stock, with roughly 55 million shares issued and approximately $1.1 billion in net cash added to Revolution Medicines' balance sheet after wind-down and transition costs. EQRx shares ceased trading on Nasdaq, all R&D programs are being wound down and associated intellectual property returned to partners. Sandra Horning joined Revolution Medicines' board as a Class II director at closing. Goldman Sachs was lead financial advisor and MTS Health Partners additional advisor to EQRx, with Goodwin Procter as legal counsel.