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Erasca Restructures Pipeline, Lays Off 18 Percent of Workers to Focus on In-Licensed RAS Molecules

NEW YORK – Erasca on Thursday said it has in-licensed two RAS-targeted agents amid internal pipeline restructuring and workforce reductions aimed at focusing its resources on pipeline candidates with the highest probability of success.

San Diego-based Erasca has deprioritized a Phase I/II clinical trial of its ERK 1/2 inhibitor ERAS-007 plus Pfizer's BRAF inhibitor Braftovi (encorafenib) and Eli Lilly's EGFR-targeted monoclonal antibody Erbitux (cetuximab) in patients with BRAF-mutant colorectal cancer because the efficacy of the combination seen to date did not support continued testing. The firm is also ending a Phase I/II trial of its EFGR inhibitor ERAS-801 in glioblastoma patients and said it will explore advancing this program through investigator-sponsored trials. Finally, Erasca is stopping development of its pan-KRAS drug ERAS-4, choosing instead to focus on the latest in-licensed RAS-targeted programs.

As a result of the reorganization, the firm will lay off 18 percent of its workforce, primarily employees working in drug discovery and in the deprioritized programs, the company said.

The two in-licensed assets are ERAS-0015, a pan-RAS molecular glue, and ERAS-4001, a KRAS inhibitor. Both programs are in the preclinical stage, and Erasca plans to develop them for the treatment of KRAS-mutant solid tumors.

The firm licensed ERAS-0015 from Joyo Pharmatech for $12.5 million upfront and is on the hook for paying up to $176.5 million if Joyo meets certain development, regulatory, and commercialization milestones. Joyo is also eligible to receive a low- to mid-single-digit percentage of royalty payments in the deal. Erasca will hold worldwide rights to ERAS-0015, excluding mainland China, Hong Kong, and Macau.

Erasca licensed worldwide rights to ERAS-4001 from Medshine Discovery for $10 million upfront and will pay Medshine up to $160 million if it achieves certain development, regulatory, and commercialization milestones and a low-single-digit percentage of royalties.

"Based on the compelling preclinical data generated to date, we believe both molecules have the potential to demonstrate best-in-class profiles within their respective categories of RAS inhibition," Erasca CEO Jonathan Lim said in a statement. "Over the long term, we have a unique opportunity to combine these two best-in-class molecules with distinct and complementary RAS inhibitory mechanisms to 'clamp' RAS and shut down MAPK signaling for the benefit of patients with these common RAS mutations."

Separately on Thursday, Erasca also priced a $160 million underwritten offering of 86,486,486 shares of its common stock at $1.85 per share. The underwriters will have a 30-day option to purchase an additional 12,972,972 shares of common stock at the offering price. The company expects to use its existing cash and the proceeds from the offering, expected to close on May 21, for R&D, working capital, and other general corporate purposes. JP Morgan and BofA Securities are joint bookrunning managers for the offering.