Erasca, Inc. (ERAS) experienced a pre-market plunge of 34.78% on Tuesday, as the clinical-stage oncology company faces serious legal challenges from competitor Revolution Medicines.

The sharp decline 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, Revolution Medicines sent Erasca a legal letter alleging that ERAS-0015 is "substantially equivalent" to one of its patented treatments and that a third party had misappropriated its trade secrets.

Revolution Medicines has demanded that Erasca cease producing and selling ERAS-0015 in the United States, creating significant uncertainty about the future of the company's key pipeline asset. While Erasca has stated it believes the assertions are without merit and intends to contest them vigorously, the legal challenge has prompted a substantial market reassessment of the stock's valuation.