01—Abstract
Summary
Summary of the 10-K filed March 30, 2020. Cited figures are marked; the original filing is the authoritative source.
Revolution Medicines, Inc. (RVMD) is a clinical-stage precision oncology company focused on RAS and mTOR signaling pathways.
Its most advanced product candidate, RMC-4630, is a SHP2 inhibitor being evaluated in a Phase 1/2 program with Sanofi, which shares profits and losses 50-50 in the United States and receives royalties outside it. The company has no approved products and has never generated product revenue, and it reported net losses of $47.7 milliona for 2019, $41.8 million for 2018 and $31.1 million for 2017, with an accumulated deficit of $157.4 million at December 31, 2019. Collaboration revenue from Sanofi rose to $50.0 million in 2019 from $19.4 million in 2018.
As of December 31, 2019, the company held $122.8 millionb in cash, cash equivalents and marketable securities. It completed its IPO on February 18, 2020, issuing 16,100,000 shares at $17.00 per share for net proceeds of approximately $251.0 million. Management believes existing resources fund operations for at least 12 months following the filing date.
The company states it has 95 full-time employees and that its pipeline beyond RMC-4630 is preclinical, including mutant-selective RAS(ON) inhibitors and the mTORC1 candidate RMC-5552. The filing reports preliminary Phase 1 data for RMC-4630 with 63 patients treated as of November 6, 2019, including one confirmed partial response in KRAS G12C non-small cell lung cancer, and it notes treatment-related adverse events such as anemia, fatigue, thrombocytopenia and edema, with one treatment-related serious adverse event on the intermittent schedule. The filing also notes that COVID-19 may delay clinical trial timelines.
02—Key points
Key Highlights
- Lead asset RMC-4630, a SHP2 inhibitor, is in a Phase 1/2 program with Sanofi, including a Phase 1 monotherapy study (63 patients as of November 6, 2019) and a Phase 1b/2 combination study with cobimetinib (8 patients as of November 14, 2019).
- Sanofi collaboration: Sanofi reimburses substantially all SHP2 program research and development costs, the company shares profits and losses 50-50 in the United States, and Sanofi can terminate the agreement for convenience.
- Collaboration revenue related party increased to $50.0 million in 2019 from $19.4 million in 2018; net loss narrowed to... widened to $47.7 million in 2019 from $41.8 million in 2018.
- Accumulated deficit of $157.4 million as of December 31, 2019, with no products approved for commercial sale and no product revenue to date.
- IPO closed February 18, 2020, with net proceeds of approximately $251.0 million after 16,100,000 shares were issued at $17.00 per share.
- Cash, cash equivalents and marketable securities totaled $122.8 million as of December 31, 2019, which management believes funds operations for at least 12 months.
- Pipeline beyond RMC-4630 is preclinical: four mutant RAS(ON) targets (KRAS G12C, KRAS G13C, KRAS G12D, NRAS G12C) with a first development candidate expected in 2020, plus SOS1 and the mTORC1 candidate RMC-5552 advanced to IND-enabling development in June 2019.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed March 30, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $50.04M$20.16M | +148.2% |
| R&D Expenses | $91.75M$51.08M | +79.6% |
| Operating Expenses | $104.16M$60.49M | +72.2% |
| Operating Income | -$54.12M-$40.33M | −34.2% |
| Interest Expense | $106K$116K | −8.6% |
| Net Income | -$47.66M-$41.79M | −14.1% |
| EPS (Basic) | $-22.33$-21.24 | −5.1% |
| Shares Outstanding (Basic) | 2.77M2.30M | +20.6% |
05—Questions
Frequently Asked Questions
What is the company's lead product candidate and where is it in development?
The lead candidate is RMC-4630, a potent and selective SHP2 inhibitor. It is in a multi-cohort Phase 1/2 program with Sanofi, consisting of a Phase 1 single-agent study (RMC-4630-01) and a Phase 1b/2 study with the MEK inhibitor cobimetinib (RMC-4630-02). The filing describes the company as at an early stage of clinical testing.
How is the Sanofi collaboration structured financially?
Sanofi is responsible for reimbursing substantially all of the company's research and development costs for the SHP2 program, and the company receives a 50-50 profit share and co-promote right in the United States. The company is eligible for royalties on net sales outside the United States. The company received a $50 million upfront payment and may receive up to $520 million in development and regulatory milestones. Sanofi may terminate the agreement for any reason on prior notice.
What are the main safety findings reported so far?
For the intermittent dosing schedule, the most common treatment-related adverse events were anemia (35.7%), fatigue (35.7%), thrombocytopenia (35.7%) and edema (28.6%), with one related serious adverse event (grade 3 abdominal distension). For the daily schedule, the most common were thrombocytopenia (28.6%), diarrhea (24.5%) and anemia (22.4%). The filing also reports two cases of grade 4 respiratory failure on the daily schedule that were discussed as serious adverse events.
How much cash does the company have and how long will it last?
The company had $122.8 million in cash, cash equivalents and marketable securities as of December 31, 2019, and raised approximately $251.0 million net in its February 2020 IPO. Management believes existing resources will fund planned operations for at least 12 months following the filing date. The company states it will need substantial additional funding over time and may seek it through equity, debt, or collaborations.
What are the key risks for investors?
Key risks include the company's limited operating history, accumulated losses and expectation of continued losses, the early stage of its clinical programs, the unproven nature of its RAS(ON) tri-complex approach, reliance on Sanofi for the SHP2 program, competition from larger companies with RAS programs, COVID-19 disruption to clinical trial enrollment and supply chains, and dilution from future financings. Interim data may differ from final results, and the filing notes that the company has no issued patents yet for its SHP2 program.
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