Erasca stock collapsed roughly 50% on Tuesday, its worst single-day move on record, after a combination of disappointing trial data, a patient death, and a patent lawsuit hit all at once.
The San Diego-based company released Phase 1 data late Monday for ERAS-0015, its experimental treatment targeting pancreatic and lung cancer. The results came from dose escalation trials in both the U.S. and China.
While early data showed some promise, Evercore ISI analyst Sean McCutcheon said the results didn’t prove ERAS-0015 was “clearly differentiated” from daraxonrasib, the lead drug candidate from rival Revolution Medicines.
McCutcheon noted that even if ERAS-0015 is more potent, it’s not clear from the data whether it improves on daraxonrasib in terms of either safety or effectiveness.
Daraxonrasib has been in the spotlight recently after former Nebraska Sen. Ben Sasse, who was diagnosed with Stage 4 pancreatic cancer in December, publicly credited the drug with shrinking his tumors. He called it a “miracle drug” in a recent interview. The drug is not yet approved and is only available through clinical trials.
The Phase 1 data wasn’t the only problem for Erasca Tuesday.
The company disclosed that a 66-year-old man with late-stage pancreatic ductal adenocarcinoma — the most aggressive form of the disease — died during the trial. He was admitted to the emergency room with severe lung inflammation about a month after starting treatment.
The patient later withdrew from supported care, at which point his condition worsened and he died.
Erasca management addressed the death on a Monday call with analysts, saying this type of outcome is typical for the drug class. Evercore ISI analyst Jonathan Miller noted that context matters here, given the patient chose to withdraw from care.
The company said ERAS-0015 was generally well-tolerated, with most side effects being low-grade.
Legal trouble is piling on top of the clinical concerns. Revolution Medicines sent Erasca a letter last week alleging that ERAS-0015 is “substantially equivalent” to one of its patented treatments.
Revolution’s patent covers the use of Ras inhibitors to treat cancer. These drugs block a protein that acts as an on/off switch inside the cell membrane, controlling cell growth and division.
Revolution accused a third party of misappropriating its trade secrets in relation to an ERAS-0015 patent, and says Erasca, as the licensee, is legally liable.
The company is also accusing Erasca of making improper comparisons between preclinical data for ERAS-0015 and daraxonrasib.
Revolution is demanding Erasca stop production and halt any U.S. sales of the drug. Neither company has yet brought a product to market, making a first-to-market position a critical goal for both.
Erasca said it will fight the claims “vigorously” and called them “without merit.”
Revolution Medicines stock gained 8.8% on Tuesday as Erasca’s session unraveled.
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