Erasca (ERAS) Shares Plunge 50% Following Patient Fatality in Cancer Drug Trial

TLDR

• Erasca’s stock plummeted approximately 50% on Tuesday, marking its biggest single-day decline in history.
• Phase 1 trial results for ERAS-0015 did not clearly distinguish it from Revolution Medicines’ daraxonrasib.
• A 66-year-old patient died during the trial after developing severe lung inflammation.
• Revolution Medicines is taking legal action against Erasca, alleging patent infringement over ERAS-0015.
• Revolution Medicines’ stock climbed 8.8% on the same day.

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(SeaPRwire) –   Erasca’s stock dropped roughly 50% on Tuesday—its worst single-day performance on record—after a trio of setbacks: disappointing trial data, a patient death, and a patent lawsuit hit simultaneously.

Erasca, Inc. (ERAS)

The San Diego-based firm released Phase 1 data late Monday for ERAS-0015, its experimental treatment targeting pancreatic and lung cancer. The findings came from dose escalation trials conducted in both the U.S. and China.

While early data showed some promise, Evercore ISI analyst Sean McCutcheon noted the results failed to prove ERAS-0015 was “clearly differentiated” from daraxonrasib, the lead drug candidate of rival Revolution Medicines.

McCutcheon pointed out that even if ERAS-0015 is more potent, the data does not clarify whether it offers improvements over daraxonrasib in terms of safety or effectiveness.

Daraxonrasib has recently gained attention after former Nebraska Sen. Ben Sasse—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 issue Erasca faced on Tuesday.

Patient Fatality Impacts Market Sentiment

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 supportive care, at which point his condition worsened and he passed away.

Erasca’s management addressed the death during a Monday call with analysts, stating this type of outcome is typical for the drug class. Evercore ISI analyst Jonathan Miller noted context matters here, given the patient chose to stop supportive care.

The company said ERAS-0015 was generally well-tolerated, with most side effects being low-grade.

Revolution Medicines Initiates Patent Lawsuit

Legal troubles are piling onto clinical concerns. Revolution Medicines sent Erasca a letter last week alleging 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 related to an ERAS-0015 patent, and claims Erasca— as the licensee—is legally liable.

The company also accuses Erasca of making improper comparisons between preclinical data for ERAS-0015 and daraxonrasib.

Revolution is demanding Erasca halt production and stop any U.S. sales of the drug. Neither company has brought a product to market yet, 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 trading session unraveled.