The following excerpt is from the company's SEC filing.
Leveraging $1.3 Billion Cash Position; Reports
First Quarter 2023 Financial Results
Company to utilize significant scale of capital and team to advance a pipeline
of clinically differentiated, high-value therapies
Prioritizing development of lerociclib (CDK 4/6 inhibitor); initiated Phase
3 trial in first-line advanced endometrial cancer; enrollment in Phase 2 trial in first- and second-line advanced breast cancer near completion,
providing a foundation for future combination development opportunities
Seeking commercialization partnerships for aumolertinib (third-generation
EGFR inhibitor)
Terminating license agreements for sugemalimab (
anti-PD-L1
antibody)
, nofazinlimab (
anti-PD-1
antibody)
and EQ121 (
JAK-1
inhibitor)
$1.3 billion in cash, cash equivalents and short-term investments at quarter-end;
portfolio decisions and a substantial reduction in workforce expected to drive annualized cash savings of at least $125 million and significantly
lower future cash burn
EQRx to host conference call and webcast today at 4:30 p.m. ET
CAMBRIDGE, Mass.
May 8, 2023
EQRx, Inc. (Nasdaq: EQRX), today announced plans to reset its business
and reported financial results for the first quarter ended March 31, 2023.
“Going forward, EQRx will leverage its significant scale of
capital and team of experienced ‘drug hunters’ towards developing clinically differentiated, high-value
medicines,” said Melanie Nallicheri, president and chief executive officer of EQRx. “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 programs. As part of this business reset, we plan to remove programs from our existing
portfolio that are inconsistent with this new vision. Our promising and potentially differentiated early-stage immune-inflammatory
programs will be transitioned into a separate entity under EQRx, and we will explore its path as an independent company.”
Ms. Nallicheri continued, “We expect that our go-forward streamlined
organization will have a significantly lower cash burn, which, when combined with our current $1.3 billion cash position, opens up degrees
of freedom to execute against our new strategy.”
Key pipeline updates:
Lerociclib (cyclin-dependent kinases 4 and 6 (CDK4/6) inhibitor)
Initiated a randomized, double-blind, multiregional Phase 3 clinical
trial to evaluate lerociclib in combination with letrozole compared to letrozole with placebo for the first-line treatment of
advanced/metastatic or recurrent low grade endometrioid endometrial cancer, with the aim to enroll approximately 320 patients
worldwide. The primary endpoint is progression-free survival, as based on RECIST v1.1 and assessed by blinded independent central
review. The key secondary endpoint is overall survival.
A multiregional Phase 2 open-label trial evaluating lerociclib in combination
with standard endocrine therapy in first- and second-line hormone receptor positive/
human epidermal
growth factor receptor 2 negative
(HR+/HER2-) advanced breast cancer is ongoing with enrollment near completion. The primary and
secondary objectives of the trial are to evaluate the safety and tolerability of lerociclib and to investigate the efficacy of lerociclib
in combination with endocrine therapy. EQRx expects data from this trial will provide the foundation for the future development of lerociclib
in novel combinations, enabled by its potentially differentiated safety profile.
Aumolertinib (third-generation epidermal growth factor receptor (EGFR)
inhibitor)
EQRx is seeking
commercialization partnerships
for aumolertinib
outside Greater China.
Marketing authorization applications (MAAs) for aumolertinib for use in the
treatment of EGFR-mutated non-small cell lung cancer (NSCLC) are under review by both the United Kingdom’s Medicines and Healthcare
products Regulatory Agency (MHRA) for a Great Britain (GB) license and the European Medicines Agency (EMA) for a European Union (EU)-wide
license.
A U.S.-led, randomized, three-arm Phase 3b clinical trial (TREBLE), evaluating
the safety and efficacy of aumolertinib in combination with chemotherapy or alone versus osimertinib for the first-line treatment of EGFR-mutated
NSCLC, is ongoing.
Sugemalimab (anti-programmed death-ligand 1 (PD-L1) antibody) and
Nofazinlimab (anti-programmed cell death protein 1 (PD-1) antibody)
EQRx has provided notice to CStone Pharmaceuticals (CStone) of its termination of the license agreement for sugemalimab and
nofazinlimab. CStone will regain rights for the research, development and commercialization of sugemalimab and
nofazinlimab outside Greater China. The parties are in discussions regarding their respective transition obligations.
EQ121 (Janus kinase (JAK)-1 inhibitor)
EQRx has provided notice to Lynk Pharmaceuticals (Lynk) of its termination
of the license agreement for EQ121. Lynk will regain rights for the research, development and commercialization of EQ121 outside Greater
China.
Early-Stage Pipeline
EQRx continues to advance its early-stage research and development
(R&D) programs through collaborations with leading drug engineering companies, with a focus on assets with clear potential for
market-leading differentiation. Consistent with the portfolio reset, EQRx plans to terminate the development of those that do not
have the clear potential for differentiation.
EQRx plans to separate its early-stage, potentially differentiated immune-inflammatory
(I&I) R&D programs from its oncology business into a new wholly-owned subsidiary and intends to explore its path as an independent
company and pursue additional funding options. EQRx will continue to support these programs in the near-term and has allocated approximately $25 million to this effort for the remainder
of 2023.
First Quarter 2023 Financial Highlights
Cash Position:
Cash, cash equivalents and short-term investments
totaled $1.3 billion as of March 31, 2023. EQRx anticipates 2023 cash used in operations to be $275 million or less, including
non-recurring costs of approximately $45 - $55 million for wind down, termination and exit costs related to the announced portfolio
decisions and a decrease in the company’s workforce of approximately 170 positions. EQRx estimates its year-end cash, cash
equivalents and short-term investments position will be approximately $1.1 billion.
As a result of these actions, EQRx expects to generate annualized cash savings,
derived on a 2023 full-year basis, of at least $125 million and to significantly lower future cash burn.
Operating Expenses:
Total operating expenses for the first quarter
of 2023 were $101.8 million, as compared to $85.7 million for the same period in 2022.
R&D Expenses:
R&D expenses for the first quarter of 2023 were $70.9 million, as compared to $53.4 million for the same
period in 2022. This increase was primarily driven by a $13.1 million increase in discovery, preclinical and clinical development
costs, a $6.1 million increase in consulting and professional fees primarily related to MAA preparation and inspection readiness associated
with the regulatory filing and review processes in Europe, and a $2.1 million increase in employee-related expenses driven by growth in
our R&D headcount to support the development of our pipeline, partially offset by a $4.5 million decrease in milestone fees.
G&A Expenses:
General and administrative expenses for the first quarter of 2023 were $27.3 million, as compared to $32.3
million for the same period in 2022. This decrease was primarily driven by a decrease of $1.9 million in consulting and professional fees,
a $1.4 million decrease in information technology, facilities, overhead allocations and other expenses, and a $1.0 million decrease in
employee-related expenses.
Restructuring Expenses:
Restructuring expenses for the first quarter of 2023 were $3.6 million. There were no restructuring
expenses in 2022.
Net Loss:
Net loss totaled $82.6 million for the first quarter of 2023,
as compared to a net income of $20.7 million for the same period in 2022, which included $3.8 million and $105.7 million of non-cash gains
resulting from the remeasurement of the contingent earnout liability and warrant liabilities recognized upon completion of EQRx’s
business combination with CM Life Sciences III Inc. at March 31, 2023, and March 31, 2022, respectively.
Conference Call and Webcast Information
EQRx will host a conference call and webcast today, May 8, 2023,
at 4:30 p.m. Eastern Time. A live webcast of the call will be available on the “Investor Relations” page of EQRx’s
website at
https://investors.eqrx.com/news-events/events-presentations
. To access the call by phone, participants should
visit this link (registration link) to receive dial-in details. Participants are requested to register at least 15 minutes before
the start of the call. The webcast will be made available for replay on EQRx’s website beginning approximately two hours after
the event.
About Lerociclib
Lerociclib is a novel, oral, and selective small molecule cyclin-dependent
kinases 4 and 6 (CDK4/6) inhibitor, which has been studied clinically in patients with metastatic breast cancer and shown to be highly
active with an encouraging tolerability profile in combination with endocrine therapy. Clinical trials of lerociclib, including those
sponsored by EQRx, have included more than 400 patients globally. EQRx is currently conducting a multiregional Phase 3 clinical trial
(NCT05712941) to evaluate lerociclib in combination with letrozole compared to letrozole with placebo for the first-line treatment of
advanced/metastatic or recurrent low grade endometrioid endometrial cancer. In addition, EQRx is conducting a multiregional Phase 2 open-label
trial (NCT05085002) evaluating lerociclib in combination with standard endocrine therapy in first- and second-line hormone receptor positive/human
epidermal growth factor receptor 2 negative (HR+/HER2-) advanced breast cancer.
About EQRx
EQRx is a biopharmaceutical company committed to developing and commercializing
innovative medicines for some of the most prevalent disease areas. To learn more, visit www.eqrx.com and follow us on social media: Twitter:
@EQRx_US
LinkedIn
EQRx™ and Remaking Medicine™ are trademarks of EQRx.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws. These forward-looking statements may be identified by the use of words such as
“believe,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “design,” “strategy,” “future,” “opportunity,”
“continue, “aim,” “goal,” “plan,” “may,” “look forward,”
“should,” “will,” “would,” “will be,” “will likely result,” and similar
expressions. These forward-looking statements include, but are not limited to, express or implied statements regarding EQRx’s
clinical trials, including initiation and enrollment; savings from portfolio reset and reduction in force; EQRx’s ability to
leverage its capital and advance a pipeline of therapies; EQRx’s I&I programs and formation of a new subsidiary (including
funding thereof); EQRx’s plans for aumolertinib; and EQRx’s cash burn, cash savings, cash runway and 2023 cash used in
operations; among others. Forward-looking statements are predictions, projections and other statements about future events that are
based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause
actual future events to differ materially from the forward-looking statements in this press release, including but not limited to
the inherent risks in pharmaceutical development, including with respect to the conduct of clinical trials and risk of delays; risks
that the results of prior clinical trials may not be predictive of future results or that additional clinical trials become
necessary due to changes in standard of care; risks associated with successfully demonstrating the safety and efficacy of its drug
candidates and obtaining regulatory approvals; risks associated with EQRx’s ability to otherwise implement its business plans,
including risks associated with its growth and commercialization strategies; variations in operating performance across competitors;
changes in the competitive and highly regulated industries in which EQRx operates, including laws and regulations affecting
EQRx’s business such as the recently enacted Inflation Reduction Act; and other risks associated with its plans to create a
new kind of pharmaceutical company, among others. The foregoing list of factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the “Risk Factors” section in EQRx’s most
recent Annual Report on Form 10-K as well as any other filings with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and EQRx assumes no obligation, and does not intend, to update or revise these forward-looking
statements, whether as a result of new information, future events, or otherwise.
Investors and others should note that EQRx communicates with its investors
and the public using its website www.eqrx.com, including, but not limited to, EQRx disclosures, investor presentations and FAQs, SEC filings,
press releases, public conference call transcripts and webcast transcripts. The information that EQRx posts on its website could be deemed
to be material information. As a result, EQRx encourages investors, the media and other interested parties to review the information that
EQRx posts there on a regular basis. The contents of EQRx’s website shall not be deemed incorporated by reference in any filing
with the SEC.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
Three months ended
Operating expenses:
Research and development
70,933
53,428
27,277
32,263
101,798
85,691
Loss from operations
(101,798
(85,691
Other income (expense):
Change in fair value of contingent earn-out liability
101,774
Change in fair value of warrant liabilities
Interest income, net
15,442
Other income (expense), net
Total other income, net
19,247
106,417
Net income (loss)
(82,551
20,726
Net income (loss) per share - basic
Net income (loss) per share - diluted
Weighted average common shares outstanding - basic
480,010,594
470,627,083
Weighted average common shares outstanding - diluted
491,792,152
Selected Condensed Consolidated Balance Sheet
Data
(in thousands)
December 31,
1,325,942
1,399,286
Working
capital
1,295,094
1,376,170
Total assets
1,383,955
1,455,016
Total stockholders’ equity
1,314,311
1,388,862
Restricted cash
Working capital is defined as current assets less current liabilities.
EQRx Contacts:
Media:
Dan Budwick
dan@1abmedia.com
Investors:
investors@eqrx.com
The above information was disclosed in a filing to the SEC. To see the filing, click here.
To receive a free e-mail notification whenever CM Life Sciences III Inc. makes a similar move, sign up!
