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Revolution Medicines, Inc. (RVMD)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 results reflected expected R&D ramp and zero revenue following the Sanofi collaboration termination; GAAP net loss was $116.0M and diluted EPS was $(0.70), with cash and investments at $1.70B as of March 31, 2024 .
  • Management reiterated full-year 2024 GAAP net loss guidance of $480–$520M (including $70–$80M SBC) and projected cash runway into 2027, maintaining prior guidance from Q4 2023 .
  • Strategic focus remains on initiating two pivotal monotherapy trials for RMC-6236 in 2L PDAC and 2L NSCLC in 2H 2024, with updated monotherapy data to support trial launches; multiple first-line combination studies (including pembrolizumab and SOC chemo) are underway .
  • Near-term stock catalysts: pivotal trial initiations; updated RMC-6236 monotherapy safety/antitumor activity (including PFS components) in PDAC and NSCLC; initial 2H 2024 readouts from key combination cohorts (RMC-6236+pembrolizumab; RMC-6236+RMC-6291) .

What Went Well and What Went Wrong

What Went Well

  • Clear regulatory path and operational readiness to initiate two randomized, controlled pivotal monotherapy trials for RMC-6236 in 2H 2024; CEO: “Our highest priority in 2024 is to advance RMC-6236 into its first pivotal monotherapy trials...” .
  • Expansion into earlier lines and broader genotypes/tumor types, with observed objective responses across diverse RAS variants and initiation of first-line SOC combinations in PDAC and CRC; “confirmed complete or partial responses… including NRAS Q61K melanoma and BRAF V600E CRC…” .
  • Balance sheet strength supports ambitious clinical agenda; CFO reiterated $1.70B cash/investments and maintained FY2024 loss guidance and cash runway into 2027 .

What Went Wrong

  • Revenue declined to zero (vs $7.0M YoY) due to prior Sanofi collaboration termination; net loss widened YoY to $116.0M (vs $68.1M) on higher clinical and manufacturing expenses and headcount/SBC .
  • Cash decreased $149.4M QoQ to $1.70B, partly from normalization of accrued liabilities after 4Q’s one-time increase; reflects heavier cash usage with R&D scale-up .
  • Consensus (S&P Global) estimates for EPS/revenue were unavailable to verify potential beats/misses today, limiting immediate estimate-based performance context (S&P Global request limit) [GetEstimates error].

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$0.0 $0.7 $0.0
Diluted EPS ($USD)$(0.99) $(1.14) $(0.70)
Net Loss ($USD Millions)$(108.4) $(161.5) $(116.0)
R&D Expense ($USD Millions)$107.7 $148.5 $118.0
G&A Expense ($USD Millions)$15.5 $32.2 $22.8
Total Operating Expenses ($USD Millions)$123.2 $180.7 $140.9
Cash, Cash Equivalents & Marketable Securities ($USD Billions)$0.81 $1.85 $1.70
Weighted-Average Shares (Millions)109.2 141.2 164.7

Q1 2024 results vs Wall Street (S&P Global) consensus:

MetricQ1 2024 ActualQ1 2024 Consensus (S&P Global)Surprise
Revenue ($USD Millions)$0.0 Unavailable (request limit)N/A
Diluted EPS ($USD)$(0.70) Unavailable (request limit)N/A

Notes: S&P Global consensus values were unavailable at time of request due to daily limit; comparisons to estimates could not be completed (S&P Global) [GetEstimates error].

No segment reporting; revenue primarily collaboration historically, now terminated .

Key KPIs

KPIQ3 2023Q4 2023Q1 2024
Cash & Investments ($USD Billions)$0.81 $1.85 $1.70
Working Capital ($USD Millions)$738.9 $1,735.4 $1,635.5
Interest Income ($USD Millions, quarterly)$10.9 $19.0 $23.8
R&D ($USD Millions, quarterly)$107.7 $148.5 $118.0
G&A ($USD Millions, quarterly)$15.5 $32.2 $22.8

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2023 PR)Current Guidance (Q1 2024 PR)Change
GAAP Net LossFY 2024$480M–$520M $480M–$520M Maintained
Stock-Based Compensation (included)FY 2024$70M–$80M $70M–$80M Maintained
Cash RunwayMulti-yearInto 2027 Into 2027 Maintained

Earnings Call Themes & Trends

TopicQ3 2023 MentionsQ4 2023 MentionsQ1 2024 MentionsTrend
RMC-6236 pivotal monotherapy (2L PDAC/NSCLC)Planning randomized Phase 3 vs docetaxel/chemo; 2024 start Preparing regulatory packages; dose focus ≤300mg; PFS maturity for go decision Expect to launch two pivotal trials in 2H 2024; disclose supporting monotherapy data near launches Accelerating
First-line combination strategyDoublet with RMC-6291; SOC combos planned Initiated 6236+pembro; 6291+pembro; aiming to enable first-line Initiated first-line SOC chemo combos in PDAC/CRC; 6236+pembro readout 2H 2024 Expanding
Regulatory endpoints (PFS vs OS)N/APFS maturity needed for design/power; PDAC/NSCLC focus Discussion that PFS could support approval in NSCLC if “clinically meaningful”; OS in PDAC more likely Clarifying
Competitive landscape (KRAS G12C)N/AN/AAcknowledged crowding in G12C NSCLC; 6236 targets broader non-G12C mutations; trial design considers enrollment dynamics Neutral
R&D execution (ORR trends, safety)ORR ~low–mid 40% NSCLC; mid-20% PDAC; higher at 300mg; safety stable Reinforced ORR and safety trends; emphasis on PFS maturation Emphasis on data disclosure cadence; PFS expected to feature in updates Steady
Balance sheet/Runway$813M cash pre-EQRx; planned EQRx close $1.85B into 2027 $1.70B after payables normalization; runway into 2027 reiterated Strong

Management Commentary

  • “The highly innovative investigational drug RMC-6236 continues to show progress in targeting RAS-addicted solid tumors, and our highest priority is to enable our goal of initiating pivotal monotherapy trials for patients with PDAC and NSCLC this year.” — Mark A. Goldsmith, CEO .
  • “We anticipate a catalyst-rich second half of the year that has the potential to be transformative for Revolution Medicines.” — Mark A. Goldsmith, CEO .
  • “R&D expenses… were $118.0 million… primarily due to clinical trial expenses and clinical supply manufacturing for RMC-6236, RMC-6291 and RMC-9805… and an increase in stock-based compensation.” — Company statement .
  • “We ended the first quarter of 2024 with $1.7 billion in cash… The decrease… was primarily driven by net loss plus a $50.9 million decrease in accounts payable and accrued liabilities.” — Jack Anders, CFO .

Q&A Highlights

  • First-line development optionality: 6236+pembro program designed to establish combinability first; potential to enable first-line strategy with safety-focused early data readouts in 2H 2024 .
  • PDAC/NSCLC pivotal endpoints: Management expects PFS to be central in monotherapy updates; FDA may consider PFS sufficient in NSCLC if “clinically meaningful,” with OS more likely required in PDAC .
  • G12C competitive dynamics and enrollment: 12% NSCLC KRAS G12C is crowded; 6236 addresses broader non-G12C mutations, with trial design to mitigate enrollment bias; preclinical data support G12C activity .
  • Triplet regimen rationale (6291+6236+pembro): Strategy aims to surpass chemo benchmarks (~30–40% ORR chemo; ~50% with pembro+chemo) via doublet depth/durability and PD-1 synergy; initial gating is safety/combinability .
  • Ex-US partnering: Company intends to commercialize in the U.S. itself; ex-U.S. partnering likely for development/commercialization due to infrastructure needs .

Estimates Context

  • S&P Global consensus estimates for Q1 2024 EPS and revenue were unavailable at time of request due to a daily request limit being exceeded. As a result, estimate-based comparisons and surprise calculations could not be completed today (S&P Global) [GetEstimates error].
  • Given the company’s pre-commercial status and zero product revenue, near-term estimate adjustments will likely focus on operating expense cadence, trial initiation timing, and cash runway assumptions rather than top-line revenue.

Key Takeaways for Investors

  • Execution toward 2H 2024 pivotal monotherapy trial initiations in PDAC and NSCLC is intact; updated monotherapy data will underpin dose selection and designs, with PFS expected to feature prominently in the disclosures .
  • Combination strategy breadth (pembro, SOC chemo, and RAS(ON) doublets) increases first-line optionality and potential differentiation; initial safety/activity readouts are planned for 2H 2024 .
  • Cash runway into 2027 remains a key de-risking factor for development throughput despite the heavy R&D spend; Q1 cash of $1.70B supports multi-program execution .
  • Revenue is zero post-Sanofi termination; the investment case hinges on clinical milestones and registrational progress rather than quarterly P&L metrics in the near term .
  • NSCLC competitive dynamics in G12C are acknowledged; 6236’s multi-selective profile targeting non-G12C mutations may support enrollment and differentiation in broader RAS-mutant populations .
  • Watch for pivotal trial initiations and sequencing of data disclosures (monotherapy updates vs. combination safety/activity) as stock-moving events in 2H 2024 .
  • Ex-U.S. partnership path is likely, while U.S. commercialization is targeted in-house, aligning incentives for pipeline breadth and long-term franchise building .