Dormant Cambridge biotech EQRx sold for $1b in cash

EQRx is done, sold for its cash.

The once-buzzy but now dormant biotech company is being acquired by Revolution Medicines, a developer of cancer drugs, the companies announced Tuesday.

The all-stock deal is essentially a balance-sheet transfer of $1 billion in cash from EQRx to Revolution. What was left of EQRx’s drug pipeline is being shelved.

Serial entrepreneur and venture capitalist Alexis Borisy debuted the Cambridge company in 2020 with a splashy business plan that aimed to invent new medicines in the same categories as high-priced cancer and specialty drugs but sell them at lower prices through a “global buyers club” that included insurers and hospitals. The plan never worked. EQRx was unable to create its own drugs, and efforts to license cancer drugs from China and bring them to the United States also failed.

EQRx then pivoted to a revised plan to pursue “marketbased pricing” for its cancer drugs, but that also didn’t work.

In May, the company announced a major restructuring that essentially halted all of its operations and laid off 60 percent of its workforce. By the end, EQRx stock price had fallen more than 80 percent from its initial public offering. Its market value was $800 million, less than the cash it had on its books.

Revolution has its own Borisy connection. The company was founded by Third Rock Ventures, the VC firm where Borisy was once a partner before striking out on his own. Borisy is also a director on Revolution’s board. The EQRx cash will be used to further develop Revolution’s pipeline of cancer drugs.