Revolution Medicines, Inc. (NASDAQ:RVMD) on Tuesday partnered with Royalty Pharma Plc (NASDAQ:RPRX) on $2 billion in flexible funding to support Revolution Medicines’ independent global development and commercialization strategy and operations.
Revolution Medicines retains full strategic and executional control of product development and commercialization for its portfolio of RAS(ON) inhibitors in the U.S. and internationally, enabling the company to leverage its assets, capabilities and momentum toward establishing new global standards of care and creating value for shareholders.
The funding agreement provides $2 billion in committed capital comprised of up to $1.25 billion in synthetic royalty monetization on sales of daraxonrasib, the company’s RAS(ON) multi-selective inhibitor, and up to $750 million in corporate debt.
Also Read: Why Is Cancer Drug Developer Revolution Medicines Stock Trading Higher On Monday?
The agreement provides significant flexibility to Revolution Medicines, with $1.25 billion of the total funding reserved as optional to the company at its discretion.
Royalty Pharma will provide up to $1.25 billion in exchange for tiered royalties on worldwide annual net sales of daraxonrasib for a term of 15 years; the royalties decrease based on sales, and for sales above $8 billion, the royalty rate is zero.
The debt facility is an up to $750 million senior secured term loan consisting of three $250 million tranches linked to commercialization of daraxonrasib.
On Monday, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to daraxonrasib for previously treated metastatic PDAC in patients with KRAS G12 mutations.
In May, the company dosed the first patient in RASolve 301 Phase 3 trial to evaluate the safety and efficacy of daraxonrasib in patients with previously treated, locally advanced or metastatic RAS mutant non-small cell lung cancer compared to docetaxel chemotherapy.
Entering into this funding agreement with Royalty Pharma caused the company to remove its cash runway end date guidance.
The company projected cash, cash equivalents, and marketable securities of $2.1 billion to fund planned operations into the second half of 2027.
RVND Price Action: Revoluation Medicines stock is up 0.77% at $40.35 at publication on Tuesday
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