In May, Revolution Medicines projected its cash and equivalents of $2.1 billion would last into the second half of 2027. With new funding from Royalty Pharma, the biotech has withdrawn that runway end date.
Revolution Medicines has signed a massive $2 billion deal with Royalty Pharma to support the biotech’s portfolio of RAS(ON) inhibitors and extend its cash runway for the foreseeable future.
The deal will provide Revolution with the $2 billion in committed capital, split between $1.25 billion in synthetic royalties for the direct RAS(ON) multi-selective inhibitor daraxonrasib and another $750 million in debt. Royalty Pharma, meanwhile, will gain worldwide royalties on future sales of daraxonrasib for 15 years. The royalty rate will decrease over time and there will be no royalties on any sales over $8 billion.
Revolution will have access to about $500 million prior to the drug’s approval, including an initial $250 million paid at the closing of the deal.
The biotech is developing RAS(ON) inhibitors for RAS-addicted cancers, a historically “undruggable” type of disease. The company has said its therapies, developed on its tri-complex inhibitor platform, can bind to different RAS(ON) proteins.
The lead therapy is daraxonrasib, which is being tested in an expansive program for pancreatic ductal adenocarcinoma (PDAC) and non-small cell lung cancer (NSCLC). A Phase III NSCLC trial dosed its first patient in May, while the drug was granted a breakthrough therapy designation by the FDA for PDAC on Monday. A Phase III test for pancreatic cancer is enrolling now.
In May, Revolution reported cash and equivalents of $2.1 billion. With the new funding from Royalty, the biotech has withdrawn its previous cash runway end date guidance, which had set the end of the runway into the second half of 2027.
Royalty financing has been picking up in the industry in recent years, and Royalty Pharma has been a frequent name in the game. Biogen tapped the company for $250 million to support a lupus program in February. A year earlier, ImmuNext went to Royalty for a $525 million investment to support a Phase III trial for a Sanofi-licensed multiple sclerosis therapy.
The $2 billion Revolution deal is by far one of the biggest in recent memory signed by Royalty. Royalty’s CEO Pablo Legorreta said the “new funding paradigm” allows Revolution to keep control of its assets and retain future value. The biotech’s CEO, Mark Goldsmith, agreed, saying the structure of the deal leaves the company with “optionality” to scale operations and build out the RAS-addicted cancers franchise.
