The disruptors at EQRx have their eyes on the PD-(L)1 market — teeing up $150M cash to grab 2 backbone therapies from China
EQRx is paying top dollar to bring a pair of PD-(L)1 drugs into its portfolio of fast-follow therapies, offering $150 million upfront in what could shape up to be a $1.3 billion alliance with China’s CStone.
As early as 2017 Celgene had bet on a made-in-China PD-1 via its pact with BeiGene, quickly followed by Arcus as the second checkpoint wave was looming; more recently Eli Lilly imported longtime partner Innovent’s PD-1 in a $1 billion deal. All are diving into a space now dominated by Merck’s Keytruda franchise, where six other players are trying to catch up by carving out their own niches — and more are on their way to tap into the various I/O pairings anchored by a PD-(L)1. But none so far has quite shared EQRx’s explicit mission to disrupt the multibillion-dollar market by offering a lower cost option.
With seven drugs already approved, though, one has to wonder: Why hasn’t there been more competition on price? And what makes EQRx think it can make any difference?
“That’s a really interesting question, isn’t it? In most industries that’s what you’d expect,” Alexis Borisy, co-founder and CEO, told Endpoints News. “There’s a lot of answers to it[…] It’s a very complex set of interactions, the net result of which has been spiraling ever higher prices in our industry.”
The promise at EQRx, as Borisy and Melanie Nallicheri widely pitched at this year’s JP Morgan confab, is not just to develop drugs against known targets more efficiently — but also set a new model for how the industry brings drugs to market.
A Sanofi vet who spent several years in New Jersey before moving back to Shanghai, CStone CEO Frank Jiang is clearly a big fan of what Borisy is building at EQRx in terms of selling drugs and paving a path to adoption, even though the details won’t be public for another year or two.
“Many of those things are confidential but when you look into it, these are really transforming the way that we do the business, like normal business,” Jiang told investors on a call. “Their innovative model can position them, put both sugemalimab and PD-1 competitively against the existing alternative therapies in many of the largest healthcare global markets by having strategic collaborations with payers and health systems.”
Aside from scoring cash to invest in what he calls CStone’s pipeline 2.0, Jiang noted that his R&D team will be able to tag along as EQRx plots global trials for various combination therapies utilizing CS1003 as a backbone.
The CStone deal is notably larger than the other two EQRx has disclosed so far: Licensing the CDK4/6 inhibitor lerociclib from G1 Therapeutics took $20 million upfront and $290 million in milestones, while the license for Hansoh Pharma’s EGFR-targeted almonertinib is valued at around $100 million.
Yet sugemalimab is also arguably higher profile, having scored breakthrough therapy designation from the FDA just days ago for relapsed or refractory extranodal natural killer/T-cell lymphoma. CStone has repeated touted it as a potential best-in-class drug, posting some encouraging Phase III data in non-small cell lung cancer this summer.
While a Third Rock partner, Borisy also co-founded Blueprint Medicines, a CStone partner that’s contributed three clinical assets to the pipeline. And that’s given him a front row seat in how Jiang does his business.
“The quality of the data that they generate and the quality of the team is absolutely excellent,” he said.
Having launched with a timeline to bring its first medicine to market by 2025, Borisy added that his crew is now ahead of the original schedule, with multiple drugs slated for approval in the next handful of years.
With the deal — which covers worldwide rights except in the region known as Greater China — CStone has now fully sold all rights to the PD-L1 drug sugemalimab. In a licensing pact unveiled last month, Pfizer bagged China commercialization rights by buying up $200 million worth of CStone stock.
The Chinese biotech, though, retains rights to develop the PD-1 inhibitor CS1003 in mainland China, Taiwan, Hong Kong and Macau.