01—Abstract
Summary
Summary of the 10-K filed February 27, 2023. 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.
It has never generated product revenue and has no approved products. Net losses were $248.7 milliona in 2022, $187.1 million in 2021 and $108.2 million in 2020, bringing the accumulated deficit to $701.3 million as of December 31, 2022. Its only revenue, $35.4 million of collaboration revenue in 2022, came from the Sanofi Agreement for the SHP2 inhibitor RMC-4630.
Sanofi terminated that agreement for convenience in December 2022, effective June 2023, after which Revolution Medicines regains global rights to RMC-4630 and Sanofi's reimbursement obligations end. The company's pipeline centers on RAS(ON) inhibitors, led by RMC-6236 (a RAS-multi inhibitor in a Phase 1/1b trial), RMC-6291 (KRASG12C(ON)) and RMC-9805 (KRASG12D(ON), in IND-enabling stages), plus RAS Companion Inhibitors RMC-4630, RMC-5552 (mTORC1) and RMC-5845 (SOS1). Management states that existing cash, cash equivalents and marketable securities of $644.9 millionb will fund planned operations for at least 12 months.
It notes that it will need substantial additional financing and that research and development expenses rose to $253.1 millionc in 2022 from $186.9 million in 2021. The filing also highlights significant risks, including unproven tri-complex technology, early-stage clinical data, dependence on third-party CROs and contract manufacturers, and the transition of SHP2 rights from Sanofi. PricewaterhouseCoopers issued an unqualified audit opinion and concluded internal control over financial reporting was effective as of December 31, 2022.
02—Key points
Key Highlights
- Net loss of $248.7 million for 2022, up from $187.1 million in 2021; accumulated deficit of $701.3 million at December 31, 2022.
- Collaboration revenue of $35.4 million in 2022 (vs. $29.4 million in 2021), all from the Sanofi Agreement; the company has never generated product sales.
- Sanofi terminated the SHP2 collaboration for convenience in December 2022, effective June 2023; rights to RMC-4630 revert to Revolution Medicines, and Sanofi's reimbursement obligations end.
- Cash, cash equivalents and marketable securities of $644.9 million at December 31, 2022; management believes this funds operations for at least 12 months.
- Research and development expenses rose to $253.1 million in 2022 from $186.9 million in 2021, driven by RMC-6236 and RMC-6291 clinical trials and preclinical spending.
- Lead RAS(ON) candidate RMC-6236 is in a Phase 1/1b monotherapy dose-escalation study; the company expects to provide additional single-agent activity evidence in mid-2023.
- As of December 31, 2022, the company had 246 full-time employees, 202 of them in research and development.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 27, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $35.38M$29.39M | +20.4% |
| R&D Expenses | $253.07M$186.95M | +35.4% |
| Operating Expenses | $293.66M$217.40M | +35.1% |
| Operating Income | -$258.28M-$188.01M | −37.4% |
| Interest Expense | $0$12K | −100.0% |
| Net Income | -$249.00M-$187.00M | −33.2% |
| EPS (Basic) | $-3.08$-2.57 | −19.8% |
| EPS (Diluted) | $-3.08$-2.57 | −19.8% |
| Shares Outstanding (Basic) | 80.63M72.81M | +10.7% |
| Shares Outstanding (Diluted) | 80.63M72.81M | +10.7% |
05—Questions
Frequently Asked Questions
Does Revolution Medicines have any products approved or generating sales?
No. The filing states the company has no products approved for commercial sale and has never generated revenue from product sales. Its revenue to date is collaboration revenue from the Sanofi Agreement.
How much cash does the company have, and is it enough?
The company held $644.9 million in cash, cash equivalents and marketable securities as of December 31, 2022. Management believes this will fund planned operations for at least 12 months, but it states it will need substantial additional financing to achieve its goals.
What happens to RMC-4630 now that Sanofi terminated the collaboration?
Sanofi's termination is effective June 2023. After that date, Revolution Medicines regains global rights to RMC-4630 and the related commercial proceeds, while Sanofi's reimbursement obligations end. The company must manage the transition of activities, which the filing identifies as a risk.
What are the company's lead programs?
The first wave of RAS(ON) inhibitors includes RMC-6236 (RAS-multi), RMC-6291 (KRASG12C(ON)) and RMC-9805 (KRASG12D(ON)). RMC-6236 and RMC-6291 are in Phase 1/1b monotherapy studies, and RMC-9805 is in IND-enabling stages. RMC-4630 (SHP2) is the most advanced RAS Companion Inhibitor.
What are the main risks highlighted in the filing?
Key risks include the early stage of development, unproven tri-complex technology for direct RAS inhibition, uncertainty of preclinical and early clinical data, dependence on third parties for trials and manufacturing, competition from larger companies, and the need for additional financing that may dilute stockholders.
06—Continue