SEC Filing | Revolution Medicines, Inc.

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rvmd-10q_20210630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File Number: 001-39219

Revolution Medicines, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	47-2029180
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
700 Saginaw Drive Redwood City, CA	94063
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 481-6801

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock $0.0001 Par Value per Share

RVMD

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 6, 2021, the registrant had 73,581,042 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
Special Note Regarding Forward Looking Statements		ii
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3.	Defaults Upon Senior Securities	80
Item 4.	Mine Safety Disclosures	80
Item 5.	Other Information	80
Item 6.	Exhibits	81
	Signatures	82

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

•	the scope, progress, results and costs of developing our product candidates or any other future product candidates, and conducting preclinical studies and clinical trials, including our RMC-4630 Phase 1/2 clinical program;

•	the scope, progress, results and costs related to the research and development of our pipeline;

•	the timing of and costs involved in obtaining and maintaining regulatory approval for any of current or future product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate;

•	our expectations regarding the potential market size and size of the potential patient populations for RMC-4630, our other product candidates and any future product candidates, if approved for commercial use;

•	our ability to maintain existing and establish new collaborations, licensing or other arrangements and the financial terms of any such agreements, including our collaboration with Sanofi;

•	our commercialization, marketing and manufacturing capabilities and expectations;

•	the rate and degree of market acceptance of our product candidates, as well as the pricing and reimbursement of our product candidates, if approved;

•	the implementation of our business model and strategic plans for our business, product candidates and technology, including additional indications for which we may pursue;

•	the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates, including the projected term of patent protection;

•	estimates of our expenses, future revenue, capital requirements, our needs for additional financing and our ability to obtain additional capital;

•	developments and projections relating to our competitors and our industry, including competing therapies and procedures;

•	regulatory and legal developments in the United States and foreign countries;

•	the performance of our third-party suppliers and manufacturers;

•	our ability to attract and retain key scientific or management personnel;

•	our expectations regarding the period during which we will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012;

•	our expectations regarding our ability to obtain, maintain, enforce and defend our intellectual property protection for our product candidates; and

•	other risks and uncertainties, including those listed under the caption “Risk Factors.”

We have based these forward-looking statements largely on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein until after we distribute this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://ir.revmed.com), Securities and Exchange Commission (SEC) filings, webcasts, press releases and conference calls. We use these mediums, including our website, to communicate with our members and public about our company, our products and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website.

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

	June 30,			December 31,
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	195,600		$	104,268
Marketable securities		450,722			336,473
Accounts receivable		6,527			6,393
Prepaid expenses and other current assets		8,162			6,988
Total current assets		661,011			454,122
Property and equipment, net		10,744			8,902
Operating lease right-of-use asset		25,925			27,435
Intangible assets, net		60,410			60,945
Goodwill		14,608			14,608
Restricted cash		1,084			1,084
Other noncurrent assets		264			305
Total assets	$	774,046		$	567,401
Liabilities, redeemable convertible preferred stock and stockholders' equity
Current liabilities:
Accounts payable	$	10,435		$	12,609
Accrued expenses and other current liabilities		22,103			18,784
Operating lease liability, current		4,926			3,672
Deferred revenue, current		8,337			12,111
Total current liabilities		45,801			47,176
Deferred revenue, noncurrent		7,621			8,481
Deferred tax liability		7,444			7,444
Operating lease liability, noncurrent		27,566			28,992
Other noncurrent liabilities		608			632
Total liabilities		89,040			92,725
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively; zero shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized at June 30, 2021 and December 31, 2020, respectively; 73,576,989 and 66,599,748 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		8			7
Additional paid-in capital		1,032,009			740,098
Accumulated other comprehensive income		9			116
Accumulated deficit		(347,020	)		(265,545	)
Total stockholders' equity		685,006			474,676
Total liabilities, redeemable convertible preferred stock and stockholders' equity	$	774,046		$	567,401

The accompanying notes are an integral part of these condensed consolidated financial statements.

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenue:
Collaboration revenue	$	8,698		$	10,025		$	18,829		$	21,571
Total revenue		8,698			10,025			18,829			21,571
Operating expenses:
Research and development		45,936			32,918			86,794			60,375
General and administrative		7,297			5,091			13,967			10,262
Total operating expenses		53,233			38,009			100,761			70,637
Loss from operations		(44,535	)		(27,984	)		(81,932	)		(49,066	)
Other income (expense), net:
Interest income		236			730			469			1,639
Interest expense		—			(19	)		(12	)		(40	)
Total other income, net		236			711			457			1,599
Loss before income taxes		(44,299	)		(27,273	)		(81,475	)		(47,467	)
Benefit from income taxes		—			58			—			733
Net loss	$	(44,299	)	$	(27,215	)	$	(81,475	)	$	(46,734	)
Redeemable convertible preferred stock dividends - undeclared and cumulative		—			—						(2,219	)
Net loss attributable to common stockholders	$	(44,299	)	$	(27,215	)	$	(81,475	)	$	(48,953	)
Net loss per share attributable to common stockholders - basic and diluted	$	(0.60	)	$	(0.46	)	$	(1.13	)	$	(1.11	)
Weighted-average common shares used to compute net loss per share, basic and diluted		73,399,714			58,752,494			71,917,508			44,025,372

The accompanying notes are an integral part of these condensed consolidated financial statements.

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net loss	$	(44,299	)	$	(27,215	)	$	(81,475	)	$	(46,734	)
Other comprehensive income/(loss)
Unrealized gain (loss) on investments, net		(54	)		255			(107	)		217
Total comprehensive loss	$	(44,353	)	$	(26,960	)	$	(81,582	)	$	(46,517	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

(unaudited)

											Accumulated
	Redeemable Convertible								Additional		other						Total
	Preferred Stock				Common Stock				Paid-in		comprehensive			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		income			Deficit			Equity/(Deficit)
Balance at December 31, 2020		—	$	—		66,599,748	$	7	$	740,098	$	116		$	(265,545	)	$	474,676
Issuance of common stock upon follow-on offering, net of offering costs of $18,855		—		—		6,666,666		1		281,144		—			—			281,145
Issuance of common stock pursuant to stock option exercises		—		—		166,897		—		555		—			—			555
Issuance of common stock related to vesting of restricted stock units		—		—		1,798		—		—		—			—			—
Vesting of early exercised stock options		—		—		—		—		46		—			—			46
Stock-based compensation expense		—		—		—		—		3,387		—			—			3,387
Net unrealized loss on marketable securities		—		—		—		—		—		(53	)		—			(53	)
Net loss		—		—		—		—		—		—			(37,176	)		(37,176	)
Balance at March 31, 2021		—	$	—		73,435,109	$	8	$	1,025,230	$	63		$	(302,721	)	$	722,580
Issuance of common stock pursuant to stock option exercises		—		—		64,862		—		257		—			—			257
Issuance of common stock related to employee stock purchase plan		—		—		46,201		—		1,175		—			—			1,175
Issuance of common stock related to vesting of restricted stock units		—		—		30,817		—		—		—			—			—
Vesting of early exercised stock options		—		—		—		—		34		—			—			34
Stock-based compensation expense		—		—		—		—		5,313		—			—			5,313
Net unrealized loss on marketable securities		—		—		—		—		—		(54	)		—			(54	)
Net loss		—		—		—		—		—		—			(44,299	)		(44,299	)
Balance at June 30, 2021		—	$	—		73,576,989	$	8	$	1,032,009	$	9		$	(347,020	)	$	685,006

The accompanying notes are an integral part of these condensed consolidated financial statements.

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

(unaudited)

													Accumulated
	Redeemable Convertible										Additional		other						Total
	Preferred Stock						Common Stock				Paid-in		comprehensive			Accumulated			Stockholders'
	Shares			Amount			Shares		Amount		Capital		income			Deficit			Equity/(Deficit)
Balance at December 31, 2019		39,600,423		$	305,109			3,292,124	$	—	$	4,738	$	74		$	(157,386	)	$	(152,574	)
Conversion of redeemable convertible preferred stock into common stock		(39,600,423	)		(305,109	)		39,600,423		4		305,105		—			—			305,109
Issuance of common stock upon initial public offering, net of offering costs of $23,003		—			—			16,100,000		2		250,695		—			—			250,697
Issuance of common stock pursuant to stock option exercises		—			—			11,097		—		27		—			—			27
Vesting of early exercised stock options		—			—			—		—		47		—			—			47
Stock-based compensation expense		—			—			—		—		1,567		—			—			1,567
Net unrealized loss on marketable securities		—			—			—		—		—		(38	)		—			(38	)
Net loss		—			—			—		—		—		—			(19,519