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Yesterday pharmaceutical startup EQRx announced a $500 million Series B funding round, bringing the company’s total haul to a whopping $750 million in its first 12 months of existence.
In a pharma landscape where lobbying for higher prices is the norm, EQRx is leaning into a contrarian business model: undercut the competition with lower-cost, "fast follower" therapies.
Imitation is the Sincerest Form of Market Disruption
Playing copycat is standard operating procedure in the world of healthcare. Generic and “biosimilar” drugs typically hit the market immediately after a brand-name drug loses patent protection.
The EQRx model is different. Instead of waiting until after a brand-name drug loses protection, EQRx will develop entirely new drugs that leapfrog off validated clinical research:
- In essence, EQRx will tweak the biological mechanisms of other drugs and go through their own set of clinical trials to develop what they call "equivalars."
- By doing so, CEO Alexis Borisy says they can get through clinical and regulatory approval more quickly and for a fraction of the cost vs. other drugs (savings which they plan to pass through to payers).
The Players: The bold plan has drawn skepticism from some, but the fundraising haul and top-flight investors — including Alphabet subsidiary GV and life sciences investment firm Casdin Capital — suggest this is no Theranos redux.
Pharma Economic Realities In The USA
While the U.S. brings more therapeutic innovation to market than any other country in the world - consumers and the broader healthcare system are paying for it.
Americans pay more for prescription drugs — about $1,200 per person per year — than any other nationality in the world.
We'll see if EQRx can bring down the average.