What happened
Shares of EQRx (EQRX) dropped 28.62% on Thursday. The stock stood at $5.45 at Wednesday's close and opened on Thursday much lower at $4.70. Shares fell to as low as $3.44 before rallying a bit at the close to $3.89. The stock has a 52-week low of $2.63 and a 52-week high of $9.99. The stock is down more than 42% this year.
So what
The clinical-stage biopharmaceutical company, which focuses on oncology and immunology therapies, released its third-quarter report on Thursday morning. In it, the company said it was shelving trials for Sugemalimab to treat stage 4 non-small cell lung cancer (NSCLC) after discussions with the Food and Drug Administration (FDA). That was the biggest bit of bad news. The company also said that its regulatory filing for Aumolertinib as a combination therapy with chemotherapy to treat EGFR-mutated NSCLC would likely be pushed back to 2027.
The two announcements signaled to investors it may be a long time until the company is profitable. It posted a net loss of $85.1 million in the quarter.
Now what
The company was founded just two years ago and went public in July last year. It still has $1.5 million in cash, so this is likely just a temporary setback. EQRx has a rising pipeline that also includes Lerociclib, which is in a phase 2 trial to treat metastatic breast cancer, and is expected to begin a phase 3 trial for metastatic endometrial cancer in the first half of 2023.
The company got a lot of hype when it went public, but like many other clinical-stage biotech companies, there's an abundance of risk here and it is at best a long-term play.