Erasca Shares Plunge After Trial Death and Patent Challenge

Overview

• Erasca stock sank roughly 35% before the bell and finished down about 48% to 50% Tuesday after the company posted early trial results and disclosed a patient death.
• The company said a 66-year-old man with advanced pancreatic cancer developed severe pneumonitis, or lung inflammation, about a month after starting ERAS-0015 and later died after withdrawing supportive care.
• J.P. Morgan and other analysts called the case likely isolated given the patient’s lung disease and prior procedure, though Evercore ISI said the true pneumonitis rate remains unclear until full data are available.
• Phase 1 dose-escalation results showed tumor shrinkage in about 62% of lung cancer patients and about 40% of pancreatic cancer patients, which some view as promising but still preliminary against small samples.
• Revolution Medicines sent a patent letter alleging ERAS-0015 is substantially equivalent to one of its compounds and urged a production halt, a claim Erasca said it will contest as Revolution’s shares rose about 8.8%.