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EQRx to go Public on Nasdaq Through $1.8B SPAC Deal With CM Life Sciences III

NEW YORK – Clinical-stage biotechnology firm EQRx said on Friday it will merge with CM Life Sciences III, a life science-focused special purpose acquisition company, or SPAC, allowing EQRx to go public on the Nasdaq and raise up to $1.8 billion in cash.

Once the merger is completed in Q4 2021, CM Life Sciences III, sponsored by Casdin Capital and Corvex Management, will be renamed EQRx, and its common stock and warrants will remain listed on the Nasdaq Global Market under ticker symbols "EQRX" and "EQRXW," respectively. 

The financing includes $552 million of cash held in CM Life Sciences III's trust account. The remaining $1.2 billion will be raised from a fully committed private placement of common stock, or PIPE. Healthcare investors will buy EQRx stock at $10 per share. Investors in the PIPE funding include SB Northstar, funds advised by Casdin Capital and Corvex Management, Fidelity Management & Research Company, Franklin Templeton, Invus, Rock Springs Capital, Bain Capital Life Sciences, BVF Partners, Boxer Capital, Avidity Partners, Andreessen Horowitz, Mubadala Investment Company, Verily, and other strategic partners.

Upon closing of the PIPE funding and merger, EQRx expects to have approximately $2.0 billion in cash, including $1.8 billion from the transaction and the rest from existing cash on its balance sheet. The Cambridge, Massachusetts-based company, which launched in January 2020 with the goal of efficiently developing drugs in crowded, high-cost markets and compete on price, will use the funds to advance its drug pipeline toward commercialization and pursue strategic partnerships in the healthcare system.

The company has two cancer drugs in Phase III studies: aumolertinib for the treatment of non-small cell lung cancer with EGFR mutations and sugemalimab, an anti-PD-L1 antibody also being studied in NSCLC. After seeing positive data from the aumolertinib trial earlier this year, EQRx and partner Hansoh Pharma said they would begin discussions with regulators about the drug.

Its other drugs in earlier stages of development include the CDK4/6 inhibitor lerociclib being studied in breast cancer, an anti-PD-1 antibody EQ176 being studied in liver cancer, and several undisclosed targets.

In addition to the merger and funding, the company said Melanie Nallicheri, currently chief operating officer of EQRx, will assume the role of CEO in September. The firm's current CEO Alexis Borisy will become executive chairman of its board of directors. Amy Abernethy, president of clinical research platforms at Verily, will also join the board.

"This transaction propels us into the next phase of growth, and I am excited to lead EQRx as we work to make sustainable and affordable drug pricing a reality for patients, payors and health systems," Nallicheri said in a statement. "We are moving rapidly toward the potential commercialization of our lead oncology programs while continuing to grow our pipeline to address the high-cost disease areas of today and in the future."

JP Morgan Securities is the lead financial adviser, with Goldman Sachs serving as another financial adviser for the merger. PJT Partners is financial adviser, and Goodwin Procter is legal adviser to EQRx. Jefferies and Cowen are joint capital markets advisers, and White & Case is legal adviser to CM Life Sciences III. Jefferies, Cowen, and JP Morgan Securities are joint placement agents on the offering.