EQ-121

EQRx has dubbed its pipeline, partnership and staff cuts a “reset." EQRx is abandoning its plan to provide drugs that are typically expensive at lower prices. The biotech is also cutting ties with two of its partners, letting go of 170 staff members and slashing all assets from its pipeline except one.  The restructuring has been dubbed a “reset” of EQRx’s business and clinical focuses, according to a May 8 earnings call and an accompanying release.    The Massachusetts-based biotech initially set out to radically reduce drug prices via a “global buyers club” made up of insurers and hospital systems worldwide. However, the dream lost traction at the end of last year when the biotech chose not to seek FDA approval of cancer drug sugemalimab because officials wouldn’t accept clinical data from China.    Shortly after, the immuno-inflammatory company trimmed its team by 18%, leaving around 300 staff members at the end of March of this year. The move was made in hopes of streamlining expenses and was projected to save $18 million annually.   Now, EQRX has reduced its workforce again, eliminating 170 roles, or about 57% of its team. Alongside the workforce culls, the company won’t be filling positions of prior departures. The company is also ditching all of its programs except lerociclib, a CDK 4/6 inhibitor that was licensed from G1 Therapeutics in 2020. The therapy is currently being tested in a phase 3 trial in combo with approved drug letrozole in patients with first-line advanced endometrial cancer, as well as a phase 2 trial in patients with first- and second-line advanced breast cancer alongside letrozole or faslodex. As for the rest of its (former) pipeline, EQRx has dedicated $25 million to rolling out all its early-stage, immuno-inflammatory cancer programs into a new wholly owned subsidiary. The biotech is also looking for a partner to commercialize its third-generation EGFR inhibitor, dubbed aumolertinib, outside of China. The asset is currently being studied in a three-arm phase 3b clinical trial as a monotherapy or combo treatment with chemotherapy compared to approved drug Tagrisso as a first-line treatment of EGFR-mutated non-small cell lung cancer. Part of the reset includes ending deals with CStone Pharmaceuticals and Lynk Pharmaceuticals, both China-based biotechs. EQRx inked a deal with CStone back in 2020, paying out $150 million cash and with up to $1.15 billion possible in milestone payments for a pair of PD-1/PD-L1 meds. The biotech is now returning the rights to nofazinlimab, an anti-PD-1 antibody in development for various tumors, and the aforementioned sugemalimab, a PD-L1 inhibitor that’s being studied in several types of cancer. The Lynk deal, also penned in 2020, gave EQRx exclusive licensing rights for the research, development and commercialization of LNK-207, a JAK-1 inhibitor also known as EQ121. The U.S. biotech gained global rights to the asset except in mainland China, Hong Kong, Macau and Taiwan, paying an undisclosed upfront fee giving Lynk the chance to make up to $172 million in milestone payments in return.   When it’s all said and done, EQRx estimates total restructuring costs for the year could top out at $55 million. The reset is expected to save at least $125 million annually, EQRx President and CEO Melanie Nallicheri said on the May 8 call. The company had $1.3 billion in cash, cash equivalents and short-term investments at the end of quarter one to funnel toward lerociclib’s development. “We're bringing our cash burn way down—this is a time when this scale of capital is extremely valuable,” Nallicheri said. “Capital has become expensive and there are a lot of people out there that are trimming their portfolios; there are a lot of companies that are trading below cash.” The CEO said the $1.3 billion puts the company “in an interesting position” to put together “an interesting portfolio.”

EQRx is eliminating 170 jobs and axing several programmes as it "resets" its focus on clinically differentiated medicines. The company was launched in 2020 on the premise of being able to deliver life-saving treatments at significantly lower cost, although signs of trouble emerged late last year when it acknowledged that it saw "no commercially viable path" in the US for its lung cancer hopeful sugemalimab, a drug partnered with CStone Pharmaceuticals that it is now cutting from its pipeline."Going forward, EQRx will leverage its significant scale of capital and team of experienced 'drug hunters' towards developing clinically differentiated, high-value medicines," remarked CEO Melanie Nallicheri in a statement Monday.The anti-PD-L1 antibody sugemalimab showed a survival benefit in a Phase III trial of patients with Stage IV non-small-cell lung cancer (NSCLC). However, the study was conducted entirely in China, and the FDA had signalled a tougher stance on filings backed by China-only data when it declined to approve Eli Lilly and Innovent Biologics' similar treatment sintilimab earlier last year. EQRx said that in addition to sugemalimab, it is also ending work on the anti-PD-1 antibody nofazinlimab, another programme partnered with CStone, as well as the JAK 1 inhibitor EQ121, which was being co-developed with Lynk Pharmaceuticals.Pivot to lerociclibEQRx reiterated that it will now shift its focus to advancing the CDK 4/6 inhibitor lerociclib, which recently entered a Phase III trial for first-line advanced endometrial cancer. Enrollment in Phase II testing is also nearly done in first- and second-line advanced breast cancer. "Lerociclib, with its compelling early clinical data and potential for strong financial return, is an exciting starting point from which to build our pipeline, along with some of our early-stage oncology programmes," Nallicheri said.Meanwhile, EQRx is also looking to set up commercialisation partnerships for aumolertinib outside China. The third-generation EGFR inhibitor is currently under review by regulators in the EU and UK for the treatment of EGFR-mutated NSCLC. The Phase IIIb TREBLE study of aumolertinib in the US is ongoing for use in combination with chemotherapy or alone versus AstraZeneca's Tagrisso (osimertinib) for first-line EGFR-mutated NSCLC. The company previously said that a US filing for aumolertinib would have to wait until 2027.EQRx also intends to split its early-stage immune-inflammatory R&D programmes from its oncology business into a new wholly-owned subsidiary, and intends to "explore its path as an independent company," Nallicheri said. It plans to continue financially backing these projects "in the near term" and has allocated about $25 million to this effort for the remainder of 2023.