01—Abstract
Summary
Summary of the 10-K filed March 2, 2021. Cited figures are marked; the original filing is the authoritative source.
Revolution Medicines, Inc. (RVMD) is a clinical-stage precision oncology company developing targeted therapies for RAS-addicted cancers.
Its most advanced candidate, RMC-4630, a SHP2 inhibitor, is in a multi-cohort Phase 1/2 program in collaboration with Sanofi, which is responsible for reimbursing substantially all research and development costs for RMC-4630 and holds the right to terminate the agreement for convenience. The company has no approved products and has never generated product revenue. Collaboration revenue from Sanofi was $42.98 milliona in 2020 versus $50.04 million in 2019, while net loss widened to $108.2 million from $47.7 million, and the accumulated deficit reached $265.5 million as of December 31, 2020.
At year-end 2020, cash, cash equivalents and marketable securities totaled $440.7 millionb, following net proceeds of $250.7 million from the February 2020 IPO, $167.8 million from the July 2020 follow-on offering, and $281.3 million from a February 2021 follow-on offering. Management believes existing resources will fund planned operations for at least 12 months. The company's pipeline also includes RMC-5552 (mTORC1 inhibitor, IND authorized), RMC-5845 (SOS1 inhibitor, IND-enabling), and RAS(ON) tri-complex inhibitors RMC-6291 and RMC-6236, both in IND-enabling preclinical development with planned IND submissions in the first half of 2022.
The company reported 125 full-time employees at December 31, 2020, 103 of them in research and development. Its financial statements were audited by PricewaterhouseCoopers LLP, which issued an unqualified opinion dated March 2, 2021.
02—Key points
Key Highlights
- Sanofi collaboration: a 50-50 U.S. profit share and co-promote right for RMC-4630, with up to $520 million in development and regulatory milestones; Sanofi may terminate the agreement for convenience.
- Collaboration revenue from Sanofi was $42.98 million in 2020, down from $50.04 million in 2019; net loss was $108.2 million in 2020 versus $47.7 million in 2019.
- Accumulated deficit of $265.5 million as of December 31, 2020, with the company expecting losses for at least the next several years.
- Cash, cash equivalents and marketable securities of $440.7 million at December 31, 2020, plus $281.3 million in net proceeds from a February 2021 follow-on offering.
- RMC-4630 recommended Phase 2 dose is 200 mg on a D1D2 weekly schedule for monotherapy; the cobimetinib combination uses 140 mg RMC-4630 with 40 mg cobimetinib on a D1D2 weekly schedule.
- Preliminary RMC-4630-01 data (May 4, 2020 cut-off) showed a disease control rate of 17/29 (59%) across KRAS-mutant NSCLC patients, with a reported complete response in one NF1LOF uterine carcinosarcoma patient.
- RAS(ON) inhibitor programs (RMC-6291 and RMC-6236) are in IND-enabling preclinical development, with IND submissions planned for the first half of 2022; the company says it is not aware of any RAS(ON)-targeting program in clinical development.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed March 2, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $42.98M$50.04M | −14.1% |
| R&D Expenses | $132.25M$91.75M | +44.1% |
| Operating Expenses | $153.68M$104.16M | +47.5% |
| Operating Income | -$110.70M-$54.12M | −104.5% |
| Interest Expense | $71K$106K | −33.0% |
| Net Income | -$108.16M-$47.66M | −126.9% |
| EPS (Basic) | $-2.01$-22.33 | +91.0% |
| EPS (Diluted) | $-2.01— | — |
| Shares Outstanding (Basic) | 54.87M2.77M | +1879.2% |
| Shares Outstanding (Diluted) | 54.87M— | — |
05—Questions
Frequently Asked Questions
What is the status of the company's lead product candidate, RMC-4630?
RMC-4630, a SHP2 inhibitor, is the most advanced candidate and is being evaluated in four active clinical trials under the RMC-4630 Phase 1/2 program, including a Phase 1 monotherapy study, a Phase 1b/2 study with cobimetinib and osimertinib arms, an Amgen-sponsored study with AMG 510, and a Sanofi-sponsored study with pembrolizumab. The company expects to report a dose escalation safety data set for the monotherapy trial in the first half of 2021.
Who controls the development and commercialization of RMC-4630?
Sanofi holds worldwide exclusive rights to SHP2 inhibitors, including RMC-4630, and has sole responsibility for worldwide commercialization, subject to the company's right to co-promote in the United States. The company is primarily responsible for early clinical development and preclinical research, with Sanofi reimbursing substantially all costs. Sanofi may terminate the agreement for any reason on prior notice, and may terminate it upon a change of control of the company.
How much cash does the company have and how long will it last?
As of December 31, 2020, the company held $440.7 million in cash, cash equivalents and marketable securities. The company also raised $281.3 million in net proceeds in February 2021. Management believes existing resources will enable it to fund planned operations for at least 12 months following the date of the report, though the company states it will need substantial additional funding for its research and development activities.
Does the company have any approved products or product revenue?
No. The company has no products approved for commercial sale and has never generated revenue from product sales. Its revenue to date consists of collaboration revenue from Sanofi, which was $42.98 million in 2020, and the company does not expect product revenue for the next several years, if ever.
What are the main risks highlighted in the filing?
Key risks include the early stage of development with no approved products, reliance on the Sanofi collaboration (which Sanofi can terminate for convenience), the unproven nature of direct RAS inhibition, the possibility that preclinical and early clinical results are not predictive, COVID-19-related disruption to clinical trial enrollment and operations, the need for substantial additional financing, and competition from larger pharmaceutical companies.
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