EQRx abandons business plan around drug pricing

EQRx, a company that aims to lower drug prices by introducing inexpensive me-too medicines, said Tuesday that it has abandoned that plan and is laying off nearly 60% of its workforce.

The company’s original business plan was to create new medicines in the same categories as high-priced cancer and specialty drugs and to sell them at lower prices through a “global buyers club” that included insurers and hospitals. That plan was short-circuited, the company’s founders said, in part because of a decision by the Food and Drug Administration not to allow data from China to be used to back the approval of one of the first drugs it had in-licensed as well as by the passage of the Inflation Reduction Act, which could result in lower drug prices and reduce the need for competition.

Instead, EQRx is focusing on only one of several medicines it was developing — a compound called lerociclib — and on finding new medicines it can acquire using the $1.3 billion it has left from when it went public in December 2021 through a special purpose acquisition corporation, or SPAC.