EQRx Inc. has restructured several programs, and laid off more than half of its staff in a new drastic move.
After the close of trading on Monday, the company (Nasdaq EQRX), announced that it would be discontinuing its work on several cancer drugs. These include aumolertinib in Greater China outside of Greater China and sugemalimab. The company will also return an autoimmune disease drug, EQ121, that it licensed from Lynk Pharmaceuticals.
Leroclicib is the only drug in clinical development that EQRx has. The company is testing it currently in Phase 3 clinical trials for advanced, metastasized or recurrent low grade endometrioid cancer as well as in Phase 2 clinical trials for certain breast cancer types.
EQRx also plans to retain its early stage immune-inflammatory programs. However, it will separate them into a subsidiary that will work independently of the cancer business. In a press release, the company stated that it intends to "explore its path as an independently-owned company and pursue other funding options." It will invest $25 million in the interim to advance the early-stage portfolio.
EQRx has announced that it will be laying off 170 employees as part of its efforts. In February, the company had 300 workers after it let go 66.
EQRx currently has $1.3 billion in cash. At Monday's market close, the company's market capitalization was $899 million.
Reclaiming licensing rights
EQRx's founding principle was that it would be able to develop drugs more quickly than other companies if they created new products that targeted well-established body targets. EQRx's strategy included licensing drugs that were already in early stages of clinical trials. This would reduce the time and money EQRx had to spend to bring them to the finish line.
Sugemalimab, nofazinlimab and aumolertinib were licensed by the Chinese company CStone Pharmaceuticals. Hansoh is a Chinese pharma. The trials had already been conducted in China. This would have given EQRx a theoretical head start when it came to the U.S. Last year, however, the U.S. Food and Drug Administration started rejecting drugs that were only tested in one country, specifically China, citing the homogeneous nature of the patient population compared to those in the United States.
EQRx has returned all the license rights that it obtained from CStone. EQRx wants to find business partners for aumolertinib (the Hansoh drug) in order to market it outside Greater China.
Melanie Nallicheri, CEO of EQRx, said in a press release that the company will use its large scale of capital as well as a team of experienced drug hunters to develop clinically differentiated and high-value medicines. Lerociclib's compelling early clinical data, as well as its potential for a strong financial return, are exciting points from which we can build our pipeline. This is also true of some of our oncology early-stage programs. We plan to remove from our portfolio any programs that do not align with the new vision as part of a business reset. We will transition our promising early-stage immuno-inflammatory programs, which are potentially differentiating and have a high potential for differentiation, into a separate company under EQRx and explore its future as an independent firm.