Biotech Values

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A Biotech Veteran Thinks He Can Undersell the Entire Drug Industry
By Josh Nathan-Kazis
Jan. 12, 2020 12:19 pm ET

Biotech veteran Alexis Borisy thinks he can undersell the drug industry.

Here’s the idea: Borisy is starting a company to develop drugs that copy the drugs that big pharma and biotech companies are making, and sell them for about a third of what the competitor drugs are going for.

These won’t be generic drugs, which specialty drugmakers already sell at a steep discount—but only after the patents on the drugs they copy expire.

Instead, Borisy aims to make fast followers—unique medications, protected by their own patents, that copy a drug or class of drugs. Borisy’s will hit the market just a few years after their competitors at a fraction of the price.

“We’re going to make great new drugs, and we’re going to build a sustainable business at scale that can make those great new drugs be available for people and health systems at radically lower prices,” he said.

The new company is called EQRx, and is being unveiled on the first day of the J.P. Morgan Healthcare Conference, a major annual gathering for pharmaceutical industry companies and investors. The start-up has raised $200 million in Series A funding from big-name biotech venture-capital firms, including Alphabet (ticker: GOOG) subsidiary GV, life sciences investment firm Casdin Capital, and Section 32.

Others in the industry, including its biggest players, have also worked on so-called fast followers. The strategy brings risks, including legal challenges.

“If you’re in the fast follower, you have to have a very sharp team of patent litigators and scientists look at your molecule, and you look at the claims in all existing patents, to make sure that you’re not infringing on a claim that is broad enough to include your molecule,” said Erik Gordon, a professor at the University of Michigan Ross School of Business, speaking generally about fast followers.

Gordon noted that while fast followers don’t require basic research, their developers do need to do enough preclinical research to get approval from the Food and Drug Administration to do human tests.

https://www.barrons.com/articles/biotech-veteran-thinks-he-can-undersell-the-entire-drug-industry-51578849551?mod=hp_DAY_2