By Kamal Choudhury
April 28 (Reuters) – Erasca shares tumbled on Tuesday after the company disclosed a patient death in an early-stage trial of its experimental cancer drug, even though analysts said the incident was unlikely to signal a broader safety issue.
Shares of the San Diego-based company fell 46% to $10.30 in early trading. They were on track to shed about $2.75 billion in market value, if the losses hold.
Erasca said a 66-year-old pancreatic cancer patient who had received its experimental drug, ERAS-0015, developed severe lung inflammation, known as pneumonitis, about a month after starting the treatment.
The patient was treated aggressively with high-dose steroids and other medications, but later chose to withdraw supportive care and died.
While the death was “likely an isolated case in a complex patient, it introduces tension with the otherwise benign safety narrative and raises questions around attribution and reporting consistency,” H.C. Wainwright analysts said.
On an analyst call on late Monday, Erasca CEO Jonathan Lim said that the investigator told the company “if the patient had continued supportive care, then it might have been a different outcome.”
J.P. Morgan analyst Anupam Rama said it was “more of a one-off case versus a clear drug-related concern,” noting the patient had pulmonary tumors and a history of a prior lung procedure.
Analysts at Clear Street gave a similar opinion, saying the patient had withdrawn care before resolution and that the “management does not expect pneumonitis frequency to rise meaningfully with broader use.”
Even so, Evercore ISI analyst Jon Miller said, “it’s tough to conclude what the true rate of pneumonitis is for Erasca at this point, pending full results.”
In the same trial, ERAS-0015 shrank tumors in 62% of lung cancer patients, who had undergone prior treatments without any success, well above the 38% seen with Revolution Medicines’ rival drug, daraxonrasib, in a comparable early study.
In pancreatic cancer patients, ERAS-0015’s response rate was 40%, ahead of the 29% comparator.
Rama reiterated an “overweight” rating on the stock, calling the share decline “materially overdone.”
(Reporting by Kamal Choudhury in Bengaluru; Editing by Shinjini Ganguli)
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