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EQRx builds cancer drug pipeline as plans to challenge big pharma take shape

EQRx, a startup trying to disrupt the pharmaceutical market by developing cheaper alternatives to branded drugs, has licensed two experimental cancer drugs from CStone Pharmaceuticals, a China-based company that has also attracted attention from Pfizer and a few U.S. biotechs.

CStone will retain rights to the drugs, called sugemalimab and CS1003, in its home market of China, plus Taiwan, Hong Kong and Macau. For the rights in other countries, EQRx will pay CStone $150 million up front and as much as $1.15 billion in milestone payments.

  • The two medicines, both in late-stage testing, are similar to the cancer immunotherapies sold by Merck, Bristol Myers Squibb and others that are used to treat a variety of different tumor types. CStone noted that EQRx’s “innovative business model” will help its drugs compete with established, rival medicines.

Acquiring rights to CStone’s drugs may put EQRx in a better position to shake up the biggest-selling class of cancer treatments. Known as checkpoint inhibitors, these treatments boost a patient’s immune response by targeting proteins that can interfere with the body’s natural defenses against cancer cells.

Checkpoint inhibitors have already proven to be highly lucrative. The top entry in the class, Merck & Co.’s Keytruda, saw sales jump 55% last year to reach $11 billion. Sales are expected to double by 2025, as Keytruda advances to become the best-selling drug in the world, according to the research firm GlobalData.

If EQRx succeeds with the new CStone medicines, there may be much cheaper alternatives for patients who are candidates for checkpoint inhibitors. Company leaders say they are reimagining the process of bringing new medications to market, with the goal to counteract the upward spiraling of drug prices.

Sugemalimab is “a potential best-in-class” medicine, CStone said in the Monday statement announcing its deal. The Food and Drug Administration has awarded the drug a breakthrough therapy designation for a certain kind of hard-to-treat lymphoma, and an orphan drug designation for T-cell lymphoma. CS1003 has an orphan drug designation, too, for a form of liver cancer.

CStone said both medicines are positioned to serve as “backbone molecules” for combination therapies, a common treatment strategy in cancer.

Aside from EQRx, CStone has inked several deals with U.S.-based drugmakers. Last month, for instance, it sold exclusive commercialization rights to sugemalimab in mainland China to Pfizer, in a deal that had the big pharma taking a nearly 10% stake in CStone.

Other China-based drugmakers, including Beigene and Innovent, are working on checkpoint inhibitor cancer therapies.

EQRx has already licensed two other cancer treatments, from G1 Therapeutics and Hansoh Pharmaceutical Group. Those medicines are similar to top-sellers of another class of cancer drugs that cost more than $100,000 a year per patient in the U.S.