Meet EQRx, a company that's developing new drugs it plans to charge less for that'll compete for some of the highest priced drugs on the market. The startup just raised $200 million from investors including GV, ARCH Venture Partners, and Andreessen Horowitz. CEO Alexis Borisy told Business Insider he's aiming to get the startup's first drug approved in 5 years, with the goal of having 10 approved in the company's first decade. Subscribe to Dispensed, Business Insider's weekly healthcare newsletter. Click here for more BI Prime stories.
A new startup just launched that plans to take an unusual approach to the pharmaceutical industry. EQRx wants to develop new drugs that work similarly to pills and infusions that are already on the market. In the past, drugmakers that have taken EQRx's approach have been derided for manufacturing "me-too" treatments at high costs. But EQRx wants to make drugs that rival Big Pharma's costliest offerings, and then sell them at lower prices. On Monday, the company said it had raised $200 million in a massive Series A funding round from backers like GV, Andreessen Horowitz, and ARCH Venture Partners. New kinds of drug companies have cropped up to take on the high cost of treatments. For instance, a group of hospitals created a nonprofit generic drugmaker called Civica Rx, which has the goal of making generic drugs that are in shortage or have artificially high prices. This month, California governor Gavin Newsom debuted a proposal that could make California the first state to sell its own prescription generic drugs. EQRx's founders are big names in biotech: ex-Third Rock Ventures VC Alexis Borisy is serving as the company's CEO and chairman, and former Foundation Medicine chief business officer Melanie Nallicheri is coming in as EQRx's president and chief operating officer. It's Borisy's first endeavor since leaving Third Rock this summer after a decade building and investing in biotech companies. Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center and an outspoken critic of pharmaceutical drug prices is a cofounder and will serve as an advisor to the company. Also advising is Dr. Sandra Horning, a former executive at Genentech who's also a cofounder. The idea is to develop entirely new drugs that rival some of the highest-priced drugs in the world, get them approved, and charge much lower prices for them. "I don't buy the argument that the pricing as we've seen it, that that needs to be the solution," Nallicheri told Business Insider. The approach Already, drugmakers develop their own drugs that work similarly to one another. For instance, there are six drugs that target the proteins PD-1 and PD-L1 in the treatment of certain kinds of cancer. Heart medicine Lipitor, which went on to be a blockbuster drug for Pfizer, was one of a number of drugs known as statins that worked in a similar way. Typically, the drugs all come in around the same price as their competitors, drawing criticism for driving up the cost of healthcare. Instead, EQRx's plan — if it gets its drug approved — is to charge a fraction of the price of rivals. It still wants to make a profit, in part by keeping the price of developing the new drug much lower with the help of new technologies and processes. "If we achieve that, we should be able to charge a small fraction and still be as profitable as the businesses out there today," Borisy said. EQRx will look to compete with high-priced drugs that are on the market or are expected to hit the market within the next five years in areas like oncology, immuno-inflammation, and genetic diseases. As part of that, Borisy said, it plans to strike up partnerships with health systems and other organizations who ultimately pay for prescription drugs. When first starting the company, Nallicheri and Borisy reflected on their own experiences working within the drug industry. Both had experienced instances in which patients who needed the therapies the two had worked on weren't able to get access to them without assistance programs. "What we're saying is, take an innovative novel cancer therapy, can that be priced differently, still reward innovation, but therefore become so much more accessible for patients?" Nallicheri said. Changing the drug industry's economics
As it stands now, drugmakers have no restrictions on how high they set the price of a given drug. Prices often increase over time, and even in markets where there are multiple drugs competing, prices only seem to go up and up. So why wouldn't a company — and its investors — expect to charge as much as the market can bear when developing a rival new drug? "What we're proposing is really good business," Borisy said. "I think at the scale of what we do with our products, we think we can build a highly profitable, high revenue, high growth business based on what we're doing." From an investor perspective, Andreessen Horowitz general partner Jorge Conde likens it to how Amazon charges a lower price and can still make money. "A better process will give you a better product," he said. Ideally, Conde said, investors stand to make more if EQRx can reimagine the pharmaceutical market. The promise of shifting the market was also attractive to GV, and made EQRx stand out compared to other biotechs the team has looked at. "We're really interested in changing this part of the market," GV's Krishna Yeshwant said. Yeshwant said that when investing he committed to devote 20% of his time to working with EQRx, including making introductions to hospitals and health insurers who might buy its drugs. "It's been one of the great joys of 2019 to take someone like [Borisy] who's developed tens of drugs and walk him into the door of a provider or payor he's never met before," Yeshwant said. The timeline To pull off the economics — getting to a place where drug discovery, development, and commercialization can happen much more efficiently than it does today so EQRx can justify charging a cheaper price for them — EQRx will have to move quickly. Borisy said he's aiming to get the startup's first drug approved in 5 years, with the goal of having 10 approved in the company's first decade with a dozen more in development. In 15 years, ideally, EQRx will have dozens of drugs on the market, he said. So far, Nallicheri said, the company has 16 employees. Their focus during the first year will be on identifying a half a dozen to a dozen targets to get started on. It won't be easy, Conde said. "It's a great example of a hallmark of good engineering," Conde said. "It's simple, but not easy, elegant but not obvious. That's what these guys are building."Join the conversation about this story » NOW WATCH: The Marvel movies pay incredible attention to the physics of Captain America's shield
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Coronavirus researchers are crafting drug cocktails with Gilead's antiviral remdesivir, tapping the HIV playbook to fight the coronavirus
With the antiviral drug remdesivir showing modest benefits for COVID-19 patients, scientists are already plotting how...With the antiviral drug remdesivir showing modest benefits for COVID-19 patients, scientists are already plotting how to rapidly build on this progress. On its own, remdesivir is unlikely to be a game-changer in treating the coronavirus, researchers said. But finding the right drugs to combine it with could produce a much more potent therapy. It is likely to spur a flurry of combination trials that test remdesivir plus additional experimental drugs, leading COVID-19 researchers and physicians said. This mirrors the approach used for HIV, where the first drugs showed modest benefits. It took years of testing combinations to find cocktails of two or three drugs that knocked out the virus. There's optimism this testing will happen more quickly than HIV, with many therapeutic candidates already identified. Biomedical breakthroughs have built an understanding of the virus in record time, as shown by research published Thursday by a group of more than 100 scientists. Visit Business Insider's homepage for more stories. Researchers are already plotting how to build on top of the first effective coronavirus treatment. The key will be crafting the right cocktail of medications, testing additional drugs in combination with the antiviral remdesivir, COVID-19 researchers told Business Insider. This will likely lead to an explosion in combination trials testing Gilead's treatment in addition to experimental drugs to see if any boosts the benefits. HIV and cancer research have both followed a similar path, providing lessons to guide speedy COVID-19 work. Hospitalized COVID-19 patients recovered 31% faster when taking remdesivir instead of a placebo, according to preliminary study results released Wednesday by the US National Institutes of Health. Unlike the majority of early coronavirus studies, this trial's design was high quality, with data from more than 1,000 patients randomized to receive either Gilead's drug or a placebo. That 31% benefit is significant, said Dr. Jeffrey Gold, the chancellor of the University of Nebrasksa's Medical Center, one of the first hospitals to start testing remdesivir. Remdesivir's use should help free up hospital beds, intensive care units, and ventilators as patients recover faster on the drug. But the real advantage will be its potential to serve as a backbone in combination studies, Gold said. "It's a very healthy starting point," Gold said. "It opens the door to multiple combination therapies working in different ways to attack the pandemic, which will hopefully be accelerated." Read more: A failed Ebola drug is now the frontrunner to be the first effective coronavirus treatment. Here's everything you need to know about Gilead's remdesivir. Combination therapies were the true game-changers in fighting HIV The first medications for HIV were single drugs with modest benefits. The real breakthroughs came after years of testing combinations of these drugs, when three-drug cocktails led to dramatic improvements in patients. "We know clearly, as instructed by the global experience in HIV, that combination therapies often have advantages compared to single-drug therapy," Dr. Andrew Badley, director of the Mayo Clinic's HIV Immunology Laboratory, said in an interview. It won't be long before researchers start launching trials testing additional therapies on top of remdesivir, he said. "Those are critical trials, and I think will be coming in the relatively near term," said Badley, who chairs Mayo's COVID-19 research task force. At least one such trial is about to start. Remdesivir will be tested in combination with an arthritis drug The NIH's trial will soon start testing a combination therapy, said Dr. Taison Bell, an assistant professor of medicine and infectious disease at the University of Virginia, where he is a principal investigator for this study. Potentially as soon as next week, patients in the NIH study will all receive remdesivir. They will also be randomized to receive either a placebo or an arthritis drug called Olumiant, Bell said. Olumiant, made by Eli Lilly, works by interfering with the inflammatory response of the immune system. This could help patients suffering from severe cases of COVID-19, which are often marked by their immune systems overreacting. The NIH confirmed they are testing Olumiant, but declined to provide specifics on the design. The agency said details would be shared in a future announcement. Gilead outlined this trial design Thursday on an earnings call, saying the positive trial results for remdesivir will change how COVID-19 drug research is done. "This now changes the landscape of drug development within COVID-19, being one now has to think about comparing to remdesivir and/or adding to remdesivir," said CEO Daniel O'Day. The two drugs work in different ways. Remdesivir is focused on stopping the virus, while Olumiant may help alleviate some of the worst symptoms that patients suffer. Bell said he is most excited about combination trials where each of the drugs can treat distinct phases of the disease. "Looking at an agent that tries to attack the virus replication, and then an agent that targets the immune system response when it goes out of whack, looks like that would be the ideal combination for people with severe disease," Bell said. There's already a deep bench of drugs to test Finding the best HIV combinations took years and hundreds, if not thousands of trials, Badley said. But he is optimistic coronavirus research will progress much faster, given recent breakthroughs in biomedical capabilities. One research project published Thursday in the journal Nature maps a blueprint of how the coronavirus works. An international team of more than 100 researchers identified the dozens of proteins critical to the coronavirus and the hundreds of proteins in humans it needs to grow and replicate. Then, they found existing drugs that could inhibit these human proteins, hoping that could prevent the virus from growing in cells. They identified 10 drugs that showed strong ability to inhibit the virus when tested in monkey cells. It's an eclectic group of compounds, including antihistamines, antipsychotics, and even cancer treatments. Read more: Here's how 13 top drugmakers are sprinting to develop a coronavirus vaccine or treatment that can halt this pandemic Nevan Krogan, a leader of the project and a biologist at the University of California, San Francisco, said he sees the future of COVID-19 research in "adding multiple drugs like a cocktail." "We are excited to be testing our drugs and compounds in combination with each other as well as other antivirals such as remdesivir," Krogan said. These drugs hold particular potential to work with remdesivir, since they have different targets that aren't covered by Gilead's drug, said UCSF chemist Kevan Shokat, another author of the research. "In that way, we hit multiple aspects of the viral life cycle all at once," Shokat said. Mayo's Badley said research like this project has identified dozens of drugs that can be repurposed against the coronavirus. It gives him hope the timeline for breakthroughs will be much quicker than HIV. "The fact that those publications exist is a testament to where we are with biomedical science today," he said. "We were not in a similar place when HIV came along." "I am personally very optimistic that within weeks to months, we will begin to get significant signals of activity of some of these agents as therapies of COVID," he added.Join the conversation about this story » NOW WATCH: 4 potential coronavirus treatments that researchers are working on right now
Gilead plans to spend up to $1 billion to ramp up manufacturing of its coronavirus treatment, but execs dodged Wall Street's questions about turning a profit (GILD)
The California biotech giant Gilead Sciences is planning to spend up to $1 billion to ramp...The California biotech giant Gilead Sciences is planning to spend up to $1 billion to ramp up production of its promising coronavirus treatment remdesivir. The manufacturing ambitions come before the antiviral drug is approved by any health regulators for use in COVID-19, the disease caused by the coronavirus. Hospitalized patients with COVID-19 who got remdesivir recovered 31% faster than a similar group taking placebos, the US National Institutes of Health announced Wednesday. On a Thursday earnings call, Gilead executives said they will donate roughly 1.5 million doses of the drug. But beyond that, they dodged Wall Street's questions about a pricing strategy for the treatment. They pledged to make the drug affordable. Visit Business Insider's homepage for more stories. Gilead Sciences is planning to spend some serious cash to boost production of a promising coronavirus drug. The company is expecting to commit as much as $1 billion to manufacturing the antiviral treatment remdesivir, executives at the biotech company said on a Thursday earnings call. Remdesivir has not been approved to treat coronavirus patients by health regulators. But study results released Wednesday showed the treatment helps patients recover more quickly from COVID-19, the disease caused by the novel coronavirus. The ultimate size of the investment will depend on how the drug's data and the pandemic evolve, said Andrew Dickinson, Gilead's chief financial officer. Through the end of March, Gilead had spent about $50 million on remdesivir, without knowing whether or not it worked. CEO Daniel O'Day said there will be an "exponential increase" in remdesivir supply during the second half of 2020. The biotech anticipates making more than 1 million treatment courses by year's end. Read more: Here's how 13 top drugmakers are sprinting to develop a coronavirus vaccine or treatment that can halt this pandemic The company also pledged to donate its current supply of remdesivir, which amounts to about 140,000 courses of treatment. Looking beyond the immediate term, Gilead executives declined to say how they'll set a price for the pill, which is now the frontrunner to be the first effective coronavirus treatment. Hospitalized patients who got remdesivir recovered 31% faster than a group taking placebo, the US National Institutes of Health found in a clinical trial. The Gilead executives called it "too premature" to discuss pricing for the drug, which is given as an IV infusion in hospitals. Several Wall Street analysts inquired, but company leaders offered little beyond a general aim to make the drug "accessible and affordable." SVB Leerink biotech analyst Geoff Porges, for instance, referenced the profit margins Gilead has made selling medicines for other infectious diseases like HIV and Hepatitis C. "What's special about COVID?" Porges asked. "I don't think there is a precedent for this," O'Day replied, saying a market for a COVID-19 treatment will be unique and different from these other diseases. "There is no rule book out there. other than that we need to be very thoughtful about how we can make sure we provide access of our medicine to patients around the globe and do that in a sustainable way for the company, for you as shareholders, and we acknowledge that," he added. Read more: Coronavirus researchers are crafting drug cocktails with Gilead's antiviral remdesivir, tapping the HIV playbook to fight the coronavirus Later on the call, O'Day said that as the company measures production for remdesivir in the millions of doses, "we have to have a sustainable economic model that works." As the frontrunner in the sprint to an effective COVID-19 treatment, Gilead will be first to face the task of mapping a commercial strategy for a coronavirus drug. At least for now, the company isn't ready to share a plan.Join the conversation about this story » NOW WATCH: 4 potential coronavirus treatments that researchers are working on right now
Frustrated by high prices, health insurers plan to start manufacturing generic prescription drugs.