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10-Q

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, 2022


☐	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 4, 2022, the registrant had 87,697,561 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 Stockholders’ Equity	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	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 3.	Defaults Upon Senior Securities	78
Item 4.	Mine Safety Disclosures	78
Item 5.	Other Information	78
Item 6.	Exhibits	79
	Signatures	80

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;

•

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 our 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 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. These forward-looking statements 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,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	105,781		$	108,497
Marketable securities		355,652			468,557
Accounts receivable		5,624			5,929
Prepaid expenses and other current assets		15,989			6,790
Total current assets		483,046			589,773
Property and equipment, net		15,910			11,544
Operating lease right-of-use asset		57,434			59,692
Intangible assets, net		59,342			59,876
Goodwill		14,608			14,608
Restricted cash		1,737			1,737
Other noncurrent assets		725			758
Total assets	$	632,802		$	737,988
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	14,067		$	14,057
Accrued expenses and other current liabilities		33,756			27,721
Operating lease liability, current		6,030			6,214
Deferred revenue, current		9,686			12,358
Total current liabilities		63,539			60,350
Deferred revenue, noncurrent		3,837			6,573
Deferred tax liability		7,444			7,444
Operating lease liability, noncurrent		58,922			60,419
Other noncurrent liabilities		219			634
Total liabilities		133,961			135,420
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively; zero shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively; 74,462,077 and 74,142,619 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		8			8
Additional paid-in capital		1,072,103			1,055,572
Accumulated other comprehensive income		(1,765	)		(376	)
Accumulated deficit		(571,505	)		(452,636	)
Total stockholders' equity		498,841			602,568
Total liabilities and stockholders' equity	$	632,802		$	737,988

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,
	2022			2021			2022			2021
Revenue:
Collaboration revenue	$	9,116		$	8,698		$	16,694		$	18,829
Total revenue		9,116			8,698			16,694			18,829
Operating expenses:
Research and development		61,001			45,936			117,491			86,794
General and administrative		10,204			7,297			19,242			13,967
Total operating expenses		71,205			53,233			136,733			100,761
Loss from operations		(62,089	)		(44,535	)		(120,039	)		(81,932	)
Other income (expense), net:
Interest income		867			236			1,170			469
Interest expense		—			—			—			(12	)
Total other income, net		867			236			1,170			457
Loss before income taxes		(61,222	)		(44,299	)		(118,869	)		(81,475	)
Benefit from income taxes		—			—			—			—
Net loss	$	(61,222	)	$	(44,299	)	$	(118,869	)	$	(81,475	)
Net loss per share attributable to common stockholders, basic and diluted		(0.82	)	$	(0.60	)		(1.60	)	$	(1.13	)
Weighted-average common shares used to compute net loss per share, basic and diluted		74,280,590			73,399,714			74,221,803			71,917,508

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,
	2022			2021			2022			2021
Net loss	$	(61,222	)	$	(44,299	)	$	(118,869	)	$	(81,475	)
Other comprehensive loss:
Unrealized loss on investments, net		(481	)		(54	)		(1,389	)		(107	)
Total comprehensive loss	$	(61,703	)	$	(44,353	)	$	(120,258	)	$	(81,582	)

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

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Income/ (Loss)			Deficit			Equity/(Deficit)
Balance at December 31, 2021		74,142,619	$	8	$	1,055,572	$	(376	)	$	(452,636	)	$	602,568
Issuance of common stock pursuant to stock option exercises		58,122		—		305		—			—			305
Issuance of common stock related to vesting of restricted stock units		26,931		—		—		—			—			—
Vesting of early exercised stock options		—		—		31		—			—			31
Stock-based compensation expense		—		—		6,644		—			—			6,644
Net unrealized loss on marketable securities		—		—		—		(908	)		—			(908	)
Net loss		—		—		—		—			(57,647	)		(57,647	)
Balance at March 31, 2022		74,227,672	$	8	$	1,062,552	$	(1,284	)	$	(510,283	)	$	550,993
Issuance of common stock pursuant to stock option exercises		54,215		—		190		—			—			190
Issuance of common stock related to employee stock purchase plan		85,802		—		1,239		—			—			1,239
Issuance of common stock related to vesting of restricted stock units		94,388		—		—		—			—			—
Vesting of early exercised stock options		—		—		24		—			—			24
Stock-based compensation expense		—		—		8,098		—			—			8,098
Net unrealized loss on marketable securities		—		—		—		(481	)		—			(481	)
Net loss		—		—		—		—			(61,222	)		(61,222	)
Balance at June 30, 2022		74,462,077	$	8	$	1,072,103	$	(1,765	)	$	(571,505	)	$	498,841

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

REVOLUTION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Shares		Amount		Capital		Income/ (Loss)			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		—		—		—		—