Q2 2023 Revolution Medicines Inc Earnings Call
Yeah.
Good day and thank you for standing by welcome to reparation medicines second quarter 2023 earnings Conference call. At this time, all participants are in a listen only mode.
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Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Karen Graves Senior director of corporate Communications and Investor Relations. Please go ahead.
Thank you and welcome everyone to the second quarter 2023 earnings call. Joining me on today's call are Dr. Mark Goldsmith Revolution, medicines, Chairman and Chief Executive Officer, and Jack Anders Our Chief Financial Officer, Dr. Steve <unk>, our president of R&D will join us for the Q&A portion of today's call.
Paul as we begin I would like to note that our presentation will include statements regarding our current beliefs of revelation medicines with respect to our business and the proposed acquisition of EQ, Iraq, including statements regarding our development plans and timelines for our portfolio and pipeline and the expected timing and benefits of the proposed acquisition all of which are in.
<unk> tended to be covered by the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 for forward looking statements.
These statements are subject to a number of assumptions risks and uncertainties actual results may differ materially from these statements and except as required by law. The company undertakes no obligation to revise or update any forward looking statements.
I encourage you to review the legal disclaimer slide of our corporate presentation, our earnings press release, and all of our filings with the SEC concerning these and other matters.
In connection with the proposed <unk> acquisition Revolution, medicines, and EQ Rx and plan to file documents with the SEC, including our registration statement on form S. Four containing a joint proxy statement and perspective investors and security holders are urged to read carefully the joint proxy statement and prospectus when it is filed with the SEC.
And other documents filed by either Revolution medicines or <unk> with the SEC relating to the proposed transaction. When they are filed because they will contain important information with that I will turn the call over to Dr. Mark Goldsmith Revolution medicines, Chairman and Chief Executive Officer, Mark. Thanks, Erin it's good to be with you for today's call.
We will keep our prepared remarks brief given the update we provided to investors just last week.
First I'll provide a review of company progress, including the significant updates we reported last week on the schedule of upcoming presentations on our first two clinical rasp inhibitors, RMC 63, six and RMC $6 91.
Planning for late stage development activities and of course announcement of our planned acquisition of EQ Rx.
Next Jack Anders will describe our second quarter financial results.
And finally, we will open the line for questions.
Beginning with clinical and development highlights we announced last week that we will report a significant clinical update on the antitumor activity of RMC 6236 hour ground, breaking Ras multi on inhibitor in patients with non small cell lung cancer or pancreatic cancer to the scientific community and an oral.
Presentation on October 20 <unk>.
At the ESMO Congress 2023.
We also announced our intention to present additional supporting clinical data on RMC 63, six at the ACR NCI <unk> International conference on molecular targets and cancer therapeutics, commonly referred to as the Triple meeting.
This presentation will occur in October shortly before ESMO and Revolution medicines, we will deliver an invited plenary presentation entitled targeting Ras addicted cancers with investigational rasp inhibitors.
Based upon the encouraging data trends, we've seen thus far with RMC 63, six we also announced that planning is already underway for one or more single agent pivotal clinical trials potentially to begin in 2024.
Moving on to RMB 691, or <unk> 12, see selective <unk> inhibitor, we plan to present. The first report on initial clinical findings with RMC 60, 91 at the Triple meeting in October which will include preliminary evidence of differentiation from Ras off inhibitors.
In view of growing evidence in support of a favorable tolerability and anti tumor activity profile for RMC 63, six we believe it may emerge as our RASK companion inhibitor of choice to be assessed in combination with our mutant selective <unk> inhibitors.
Along with encouraging initial clinical experience with our RMC six to 91. We are also happy to report that planning is underway for a phase <unk> clinical trial to evaluate the combination of RMC $63, six and RMC six to nine one potentially to begin in early 2024.
And finally, we are pleased to have announced that site activation under an investigational new drug application is underway for our oral <unk> mutant selective K Ras <unk> D inhibitor RMC nine 800 sites.
With these steps we now have three compelling rason inhibitors in the clinic each with its own interesting profile at <unk>.
Major milestone for our company and we hope for the field of oncology.
Overall, we are energized by the trajectory, we see for our rason inhibitor drug candidates to enter late stage development.
And by our growing pipeline of additional mutant selective inhibitors behind these and we look forward to sharing more as these assets progress.
Regarding our ship two inhibitor RMC 4630 decisions about future development will be made after analysis of the complete dataset from the RMC <unk> III <unk> III study and other considerations, including the potential of RMC 63, six as a Ras companion inhibitor.
Likewise, the future development to RMC 5845 hour source, one inhibitor, which is not expected to offer an advantage over RMC for six <unk> will be evaluated following analysis of the complete RMC <unk> III <unk> III dataset and other factors.
Additionally, we are continuing to evaluate RMC $5 55 to <unk> one <unk> one.
As a single agent in a phase one <unk> clinical study with the aim of studying it in the future as a Ras companion inhibitor for use in combination with Ras on inhibitors, particularly in patients with Ras addicted tumors exhibiting hyper activation of the <unk> signaling pathway.
We expect to provide additional characterization of the single agent profile for this compound at the upcoming Triple meeting in October .
Turning to important business news reported last Tuesday.
We announced that Revolution medicine signed an agreement to gain more than $1 billion in additional capital through the acquisition of <unk> a deal that is focused entirely on strengthening our cash position.
We summarized the terms and timing of this transaction last week.
And provided further details in our 8-K filings, which I encourage investors to review.
With significant additional capital that is supportive of the enormous opportunity created by the scientific advances in clinical momentum we have established to date.
This deal will reinforce and help us sustain our parallel development approach for our extensive rason inhibitor pipeline in multiple Ras driven cancers by enhancing our balance sheet, thereby increasing our company's financial certainty in a challenging macro environment.
We're pleased that initial feedback we've received from investors on the transaction has been very positive.
And with important clinical updates in October and the anticipated close of the acquisition in November the second half of this year promises to be action packed.
I'll now turn to Jack Anders our CFO to provide a financial update Jack.
Thank you Mark.
Turning to our second quarter financials, we ended the quarter with $909 5 million in cash cash equivalents and investments.
Total revenue for the second quarter of 2023 was $3 8 million.
Revenue from the company's now terminated collaboration agreement with Sanofi.
Total operating expenses for the second quarter of 2023 or $112 6 million.
The increase in operating expenses over the prior year was largely due to clinical trial and manufacturing expenses for.
RMC 63, six and RMC 60 291.
Research expenses associated with our preclinical portfolio.
And an increase in personnel related expenses, resulting from additional head count.
Net loss for the second quarter of 2023 was $98 3 million or <unk> 92 per share.
We are reiterating our financial guidance and continue to expect full year 2023, GAAP net loss to be between 360 and.
$400 million.
Which includes estimated noncash stock based compensation expense of $40 million to $50 million.
Note that we are pleased to strengthen our balance sheet further through the acquisition of EQ Rx.
A transaction, we expect will close in November of this year.
But that our current financial guidance excludes the impact of this proposed transaction.
And with that I'll now turn the call back over to Mark.
Thank you Jack.
<unk> on the quarter and looking ahead to the second half of the year. It is an exciting time for Revolution medicines.
With important clinical updates for both RMC 63, six and RMC 69, one in the fall.
Planning underway for late stage development of RMC 63, six and a new clinical study of our first intra pipeline combination featuring RMC 63, six and RMC 60 91.
RMC $90 five entering the clinic and the anticipated close of the <unk> acquisition to help supercharge. Our work we have a very full plate.
Our first rate team is passionate and highly energized about fulfilling our mission of discovering developing and delivering pioneering rason inhibitor drugs on behalf of patients with Ras addicted cancers, and we are working hard to provide hope to these patients.
Importantly, our work wouldn't be possible without the support of our patients clinical investigators scientific and business collaborators advisors and shareholders.
This concludes our prepared remarks for today and I'll now turn the call over to the operator for the Q&A session.
Thank you we will now conduct a question and answer session as mentioned as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to the questions to one question and one follow up.
And rejoin the queue. If you have additional questions. Please standby, while we compile our Q&A roster.
Our first question comes from the line of Marc Frahm with TD Cowen. Please proceed.
Hey, Thanks for taking my questions.
You can just start on the finances, just the there's obviously a fair amount of a step up in R&D expense quarter over quarter basis, and the guidance kind of implies relatively flat the rest of the year.
But then you're also talking about cohorts supercharging.
The R&D work, how should we think about the trajectory of R&D spend as we get later into the year and into next year.
<unk> closed the deal hopefully the data looks pretty good and I was just saying a lot more trials were 63 six.
Hey, Mark Thanks for your question.
This is Jack Anders here.
Thank you. Thank you could turn to our guidance.
Guidance net GAAP GAAP net loss of $3 $60 million to $400 million alright.
Loss for the first half of the year.
166 million so the second half of the year.
Step up relative to the first half.
And do you expect any visit.
Step up relative to where you sat in one of those as well.
And then carrying on.
Forward into back into next year, and then carrying that forward into next year.
Should we think of kind of step changes as you expand out the program or is it more incremental.
No. We haven't we haven't provided any guidance relative to 2024, it's fair to say, it's not going to decrease relative to the second half of 2023.
We'll provide more guidance around 2024 spent at a future date.
Okay. Thank you one moment for our next question.
This is from the line of Jonathan Chang with Leerink partners. Please proceed.
Hey, guys. Thanks for taking the question. This is vessel associate on for Jonathan.
To ask if you could provide a little bit more color on what the single agent path forward could look like for six months to 36, how youre thinking this could be positioned relative to standard of care.
Also where you are in regulatory interactions for those studies and what steps need to occur before initiating those.
Hi, This is mark Goldsmith. Thanks for your question.
That's a terrific question probably for another time.
We will provide our clinical updates this fall as planned.
In conjunction with those disclosures, we expect to provide.
A little more visibility into what we're thinking but we'd like to be SaaS.
Forward looking set of comments on the actual data. So I think at this point stay tuned.
We will share more when we're able to do so.
I appreciate it thank you.
Yes.
Thank you.
One moment please.
Our next question comes from the line of Chris <unk> with Goldman Sachs. Please proceed.
Hi, everyone. This is Charlie on for Chris. Thank you so much for taking our questions maybe real quick on $63. Six just wondering as the dose escalation study continues to push higher how should we be thinking about the selection of a go forward dose, particularly with respect to combination settings. Just wondering is there the potential for different doses to be selected.
For different combos as you look forward. These combination studies to start next year and just wondering.
With respect to.
Further widening the therapeutic window. Thank you.
Yes.
Okay.
Selection of the optimal single agent dose for.
Scott.
As currently Al Kelly.
We like many other people are feeling our way around that.
In the context of the project to us.
Obviously, we have.
Best interest to make sure that we get the dose right for us.
We could possibly get into context.
Thanks, one dose escalation.
So.
I think you just have to trust that we will do the job.
As we as we need to do.
We will choose a dose that is.
Sure.
Tolerable.
Over the long term.
With regards to the Shaw.
Sure Paul.
Doses in combination I think we all we will always reserve the right.
So also the dose.
RMB 6300 60 combination.
Sorry to do so.
As of today.
Safety and Tolerability profile that does not automatically.
Suggests that we will need to do that.
Obviously as we start this clinical combinations, we will have to react to the.
The individual six tolerability profiles that we see so I don't think we're expecting that we will have to modify the dose combinations.
We need to then we would separate.
Okay. That's helpful. Thank you so much and maybe just a quick follow up just on the data coming up to $63 six I know, but this is going to be for the lung and pancreatic patients. In this study just wondering if there's an update on the CRC cohort in this study. Thank you.
We.
As we previously disclosed publicly do not have a very nice pace.
<unk> Suisse.
Okay, Sir in the RMC $63 six phase one study.
There are a number of reasons.
That's the title.
It is to get as close to a recommended phase II dose as we can.
<unk>.
Look at the activity and safety profile of RMB $63 six in colorectal cancer.
With that dose.
So thats something that will will will happen in June .
Of course.
Having said that the.
The update all the safety and Tolerability. We will provide will include a few patients with colorectal cancer.
Doug.
Not being terribly informative.
For anybody from another perspective of.
So I think.
With regards to efficacy color recipes correctly.
Something that's high priority for us, but yet to evolve.
Thank you.
One moment please.
Our next question comes from the line of Jay Olson with Oppenheimer. Please proceed.
Oh, Hey, thanks for taking the questions can you walk us through the rationale behind the doses that you've chosen for dose escalation of <unk> three six and the timing for when you expect to have a recommended phase II dose.
I think your question is.
Yes.
Howard doses chosen in the dose escalation of <unk> three six I guess you'd ask.
Hi, Thanks for getting in Opex, what's the timing for getting to a recommended phase yes.
Well.
So thats escalation schema that we used was extremely conventional actually lease the starting dose.
I saw on the CHS Snowy guidelines, which we drew from the.
Recently, a conservative assessment of what we saw in the GOP toxicology studies.
That is still at a relatively low dose of 10 milligrams daily.
The increase.
The increase in dose from that all followed.
It has seen somewhat described us a call at five six she design, it's got absolutely not.
Being whatsoever to do with Fibonacci sequence Retold.
But what it does do is gradually reduce the percentage increase in tax as you go up through the dose escalations.
Right now.
We're investigating 400 milligrams daily.
300 milligrams taken it was considered reasonably well tolerated.
Some toxicities observed.
Not anywhere near enough for it to be.
Colver maximum tolerated dose.
Really the timing for the exploration of a recommended phase II dose.
What we see at the 400 milligram dose level, where cadence for each does travel right now is somewhere between six weeks two months per dose level to get all the patients screened.
Enrolled and treated and then evaluate.
<unk>.
So we will see I really don't know.
Mostly off to the maximum tolerated dose or a recommended phase II dosing schedule.
No.
We're dosing dose with dosing and where we will continue to dose escalate until we until we hit the top.
Okay. Thank you understood and maybe just as a follow up can you elaborate on the timing of the initiation of pivotal studies for <unk> three six next year and what factors will impact your decision on the number of pivotal studies youll be initiating next year does it depend on closing the <unk>.
Neil.
No, it's really not about the EQ Rx deal, it's much more technically driven.
You and Steve just had a conversation about selection of the recommended phase II dose, which absolutely would be required and would require FDA evaluation consideration.
Then their input into what the doses so that process in and of itself.
Just takes a while and thats after we have the data.
As Steve just discussed we don't yet know what that what the end game is for that dose escalation. So I think thats going to dictate timing next year.
And.
That's pretty straightforward.
The answer to it.
And then your second half of that sentence was.
You were asking a second part to that question.
How many phase <unk> pivotal trials.
What we're planning for one or more.
<unk>.
The details of that again with the best discussed in the context of data that will be disclosed.
At the at the ESMO meeting.
Thank you.
One moment please.
Our next question comes from the line of Amit <unk> with Needham. Please proceed.
Hi, Good evening. Thanks for taking my question with regard to RMB 603. Thanks.
Can you talk about the current standard of care for patients in lung cancer.
Pancreatic and what is.
Kind of the competitors are better in terms of either response rate or.
Duration of effect.
And we've seen some preclinical data.
From 636.
Which gives us sponsor is somewhere in the vicinity of 50% overall response rate.
Where do you think data in the clinic could fall relative to that thank you.
Okay.
Well, we certainly can answer the last question, but what we can try to answer the first question Dr. Kelsey.
Thats positioned to do that.
It's easy to just focus on what happens to patients with non small cell lung cancer and pancreatic cancer one site.
The first slide of chemotherapy for advanced disease, otherwise I'll, probably Peter.
Sure.
Yeah.
Yes.
All of the patients in the study right now.
See some form of a type of chemotherapy plus or minus immunotherapy for.
<unk> cell lung cancer and pancreatic cancer.
Brian .
Full if you don't have achieved 12 mutation.
Some of the characters tax.
That is an option to give them that JAK inhibitors.
Such as <unk>.
The Docetaxel, which has some impact on favorable.
Favorable impacts on.
Essentially the.
As the regulatory standards, which.
Anyway, it would be held.
Is that fair.
Thank you.
<unk> also lastly household cell lung cancer has failed.
Q as a checkpoint inhibitor I think.
The transactional outcomes are readily accessible from looking at the comparator arm.
Andrew has covered 200 study I mean, I think what Amgen soul.
In the first.
Tax law that study is a reasonable representation of what would happen in the real world.
With docetaxel patients with.
Pancreatic cancer is very is much more complicated because.
There is not really.
In a single established standard of care patients, who are really fit probably tolerate.
Lifeful fair enough upfront so less.
<unk>.
Jim site speed based chemotherapy upfront.
I wish Michael.
There's more of that to the therapeutic armamentarium. So a lot of patients get along to offer clinical trials most of the clinical trials that have been published.
Upbeat experimental versions of cytotoxic drugs, and frankly that comes with being pretty poor I mean, the response rates.
<unk> tightened so 14% progression free survival is anything anywhere between three to three and a half now so those are the sort of standards.
<unk>.
We're lucky to be with us.
With RMC 63 six.
Offsetting the dates so that we have which won't be final data by a long shot because we're still dose escalating.
Thanks for that.
We look at data cuts.
The presentations will be what they are at a time and neither either mark or I already.
So that you can kind of predict what we're going to see at.
At this stage all we know is the.
We presented some preliminary guidance back in February in the door.
The data that we have coming in in real time to speak Directionally.
Favorable.
Great. Thanks, and maybe just a quick follow up on <unk>.
Six to nine one.
Can you sort of.
Talk to how you're thinking about.
What is sort of the bar in terms of safety.
That you'd like to see to be able to sort of explore combination therapy in frontline.
Yes.
Yes, I think.
Pretty well established for the GE 12 C inhibitor that's on me.
Firstly, the tolerability of any any cog.
That's going to be better than single agent Docetaxel.
Specifically with regards to Ras inhibitors, particularly.
<unk> inhibits.
The real test I think of.
Yes.
Any <unk> inhibitor.
Sustainable.
And officials agencies and lung cancers, whether or not it can be combined with a checkpoint inhibitor.
Hey, this is a well established standard of care.
Our non small cell lung cancer.
And it's very hard to find a niche where nox.
But even the meta analysis, the food and drug administration presented Alaska suggests.
Yeah.
Combining chemotherapy with anti PD, one PDL one inhibitor.
As beneficial across the entire.
Representation of patients with non small cell lung cancer. So I think that's the that's the real barometer of the safety Tolerability protocol for up for Ras inhibitor or there are other there are.
Lots of things as well I mean, you can look at the safety profile for <unk>.
The graph in the center, absolutely get a sense of what's acceptable with regards to Gi toxicity.
I know the toxicities, but I think the reality is it's all boiling types of liver toxicity at whether or not you can get.
If these these agents in combination with <unk> five or within a month of stocking.
<unk> pipeline of course, there's still a lot of the store.
Correct.
In the months after after the last dose.
That's really the key thing.
Thank you.
One moment please.
Okay.
Our next question comes from the line of Alec Stranahan with Bank of America. Please proceed.
Hey, guys. Thanks for taking the questions two from US first just to put a finer point on 6236 pivotal studies.
Obviously appreciating that the majority of fiscal will happen after the.
Data at ESMO.
But assuming that you see activity in say, two or three tumor types or two or three.
<unk> K Ras mutations would the plan be then to pursue all of those in parallel for the broadest label possible or would you.
Prioritize certain tumors or certain mutations first and then seek for label expansions.
Down the road.
A follow up.
Yes, I think there are two parts to the to the answer the first part Alex is very much we're committed to as much on apparel.
Approach to late stage development as is practical and as makes sense.
And in fact, Thats part of the motivation for the.
The <unk> acquisition just to make sure that we have the financial depth to be able to do so.
So we are committed to pursuing things in parallel when there is a compelling path to do so.
Obviously that's.
Intended to maximize the potential benefit for patients as quickly as possible and of course there are also now other.
External factors like the Iras that makes it much harder.
To pursue a serial program.
We just continuously add on indications at the backend.
It becomes a.
Okay framing you can provide around the update we should expect that the triple a meeting I'm, giving you know there was some single agent activity and their prior update you know a number of patients duration of follow up just just broad strokes. If he kept thank you.
Yeah.
Nicole.
Four or 555 to qualify as a potential rash pandean inhibitor used in combination with Ras inhibitors, and particularly a combination of our Ras entrepreneurs. So that's really what we've been doing and we've we felt that we had at the time.
You know to do this carefully into dose.
Optimization, which is really what we've been doing dose optimization.
And.
Marilee smell a dose going forward.
That we can we can work with.
Finished with brass on inhibitors. So that's what you'll see is sort of more of that dose optimization.
We don't currently have plans to pursue it as a as a single agent beyond.
Getting to understand that those.
Safety relationship the dose tolerability relationship and and so really you'll start to see activity. Most important activity data will come in front of the combination work in the future.
And we don't have yet today, a plan to lay out for you about that.
Thank you.
One moment please.
My last question comes from Denver Stifel. Please proceed.
Alright, Thank you I would've just out both basketball Orange C 6236, the Red multi program.
He goes higher where you are there plans to assess different dose schedules or with a focus really be on a single schedule like a different doses.
Yeah, I think we've made that pretty clear for the laughs the number [laughter], maybe six months that that we're using a daily dosing schedule.
That seems to be behaving well, we get good coverage over over you know many hours after dosing so essentially pretty continuous coverage of the target. So it's not clear to us. It certainly isn't clear why wouldn't my increase the frequency of dosing and the only advantage of decreasing the frequency.
C would be if we could somehow drive to higher exposure levels at peak.
Balance that with some sort of tolerability benefit by allowing the exposure suit to fall over over the interval at the moment, we don't have explicit plans to evaluate those ultimate kinds of schedules, we retain the flexibility to do so we of course have a lot of experience with that from our arms.
4630 shipped to inhibitor program, but we don't have any immediate plans or concrete plans to do so because the the daily dosing is working out very well for us.
Okay. Okay. That's great if I could just add one more follow up on RMC 63 six.
Recognizing that you recently provided a bit of an update last week, but do you have any more clarity as to whether or not we might get to see some patient data at 400 big dose level and either be October updates.
Don't know.
No as in no page data for them to make their no more clarity.
Oh, Yeah that was I don't know I don't know.
<unk> Oh, Yeah, Oh, if the question was well we can't we provide more clarity no [laughter], but I don't know the answer the question of whether or not there will be any 400 milligram patients if they if we have evaluation data.
At the time that we do with data caught that will include those data I mean, there's not we're not hands picking which.
Which patients to include but you know that that cohort was just launched relatively recently so I just think yeah. The screening the screens I'll go it says <unk>.
The timing of the dosage is Saint help with the timing of the <unk>, which slide with recovery answer your questions.
The officers hopefully we'll have some types of.
Parents.
Okay. Okay.
I appreciate it thank you.
Thank you.
I'm showing no further questions at this time and then now like to turn the conference back to Doctor Marco Smith for closing remarks.
Thank you operator, and thank you to everyone for participating today and for your continued support a family medicines.
This concludes today's conference call you may now disconnect.
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