- EQRx plans to “adopt market-based pricing” in the U.S. for two of its experimental drugs, signaling a pullback from its objective to bring to market branded medicines at “radically lower” prices. If approved, the two therapies would compete with AstraZeneca’s Tagrisso and Pfizer’s Ibrance.
- The high-profile startup also said it will not seek Food and Drug Administration approval of its lead cancer drug sugemalimab because agency officials want the company to complete a second Phase 3 trial before considering review, the company said Thursday. The drug was discovered and primarily tested in China, which has become a hot-button issue for the FDA.
- The announcements represent major strategic setbacks for EQRx, which had sought to take a “fast follow” approach to compete with blockbuster medicines. Shares fell by as much as 30% in early trading.
As the U.S. has wrestled with the growing costs of prescription drugs, a number of companies have proposed market-based solutions rather than government regulation. Civica Rx, backed by the hospital system Intermountain Healthcare and other partners, aims to ease shortages of essential generic drugs, while the state of California hopes to make its own lower-priced insulin, to name two examples.
EQRx was part of this trend, but intended to bring price competition to branded medicines rather than focusing on older drugs. Unveiled with big-name leaders and $200 million in funding nearly thee years ago, EQRx was able to gain a public market listing via a special purpose acquisition company in an August 2021 deal.
Two of its lead candidates, sugemalimab and aumolertinib, were licensed from China-based companies, CStone Pharmaceuticals and Hansoh, respectively. Sugemalimab works similarly to checkpoint inhibitors like Merck & Co.’s Keytruda, while aumolertinib is similar to AstraZeneca’s Tagrisso.
This strategy has run into trouble, however, as the FDA has taken a more critical view of drugs primarily developed and tested in China. Trials conducted in multiple countries can capture differences in genetics as well as medical care practices that could affect how long patients survive or stay in remission following treatment. Earlier this year, the FDA rejected an Eli Lilly-sponsored drug over this issue.
In a statement, EQRx said it sees “no commercially viable path” for sugemalimab in lung cancer in the U.S., but is still in discussions with the FDA for a type of lymphoma.
For aumolertinib, the company said a trial in combination with chemotherapy could meet FDA standards. That trial compares the combination to Tagrisso alone and aumolertinib alone, and might have data sufficient to support approval by 2027. Meanwhile, the drug has generated data that U.K. drug regulators have been willing to review, and EQRx may pursue additional overseas filings.
A third EQRx drug, called lerociclib and discovered by a U.S.-based company, is in an international trial in metastatic breast cancer. The company intends to start a U.S.-led Phase 3 trial in endometrial trial in 2023. That drug would compete with Pfizer’s Ibrance and Eli Lilly’s Verzenio.
Aumolertinib and lerociclib are the two drugs for which the company plans to adopt market-based pricing. “We are adapting and believe that utilizing a market-based pricing approach for our lead cancer programs, aumolertinib and lerociclib, will ensure that we can still get these important medicines to patients,” said EQRx CEO Melanie Nallicheri.