Erasca, Inc. (ERAS) experienced a dramatic 30.08% decline in overnight trading, as the clinical-stage oncology company faces serious legal challenges from competitor Revolution Medicines. The steep selloff was triggered by allegations that Erasca's development of its lead cancer drug, ERAS-0015, infringes on existing patents and relies on stolen trade secrets.

According to regulatory filings and news reports, Revolution Medicines sent Erasca a legal letter alleging that ERAS-0015 is "substantially equivalent" to one of its patented treatments. The competitor also claimed that a third party had misappropriated its trade secrets related to the patent involving ERAS-0015, and that Erasca is liable as a licensee under trade secret laws. Revolution Medicines has demanded that Erasca cease producing and selling ERAS-0015 in the United States.

While Erasca has stated it believes the assertions are without merit and intends to contest them vigorously, the allegations introduce significant uncertainty about the future of the company's key pipeline asset. The legal challenge overshadowed positive preliminary Phase 1 data that Erasca recently reported for ERAS-0015 in patients with RAS-mutant solid tumors, including lung and pancreatic cancer.