Revolution Medicines, Inc. (RVMD) Earnings Call Transcript & Summary

Let's get underway. I hope everyone had a terrific midday. Welcome to the Goldman Sachs Healthcare Conference. My name is Chris Shibutani. I'm a member of the research team covering biotechnology and pharmaceuticals. We are very pleased to have Revolution Medicines join us. It's a story that my team and I have known for quite some time here. We're really pleased that you were able to participate with us. And here joining us today as Mark Goldsmith was unavailable to -- needed to address a different situation. We certainly wish him well in regard to that. But we have with us Steve Kelsey, who is the President of Research and Development, and I think would be a wonderful discussion for us today, given the focus on all the scientific developments that we have; and Peg Horn, who is our Chief Operating Officer, and has very much been an essential component of the company as you progress through all these stages through the IPO and through this process that we're in right now.

So perhaps people are not as familiar with you, Steve. So a little bit of an outline of your background, your journey, what brought you to where you are at now? Who are you?

We all want to know.

Yes, wouldn't you?

I'm a hematologic oncologist by training. I was an academic equivalent of associate professor in London before moving into the industry about 22 years ago. And I've done pretty much early and late clinical development oncology for the first 10 years of that and then have run various research and development organizations covering conventional small molecules, antibodies, antibody drug conjugates, DNA therapeutics, messenger RNA therapeutics. I started the Oncology division of Moderna and then joined Revolution Medicines 5 years ago to head up the what is now the oncology effort for Revolution Medicines. That's what -- and that's why we're here today.

Terrific. Now, that's very helpful to have that context. And I didn't actually remember that aspect of your history with Moderna previously. Peg, other than keeping all the boys in line and behaving, tell us about your story and the essential role that you play in keeping everybody together here?

Yes, as the Chief Operating Officer of Revolution Medicines, I am responsible for sort of everything that's not in Steve's organization and keep the trains running. I have had a long career throughout biotech and large pharma and have migrated much more to building great companies. And I was employee #1 at Revolution Medicines and have been having just a ton of fun doing very interesting transactions, going through interesting processes and keeping the team on track, as I said and as you said. So we're very pleased to be here with you today, Chris.

Terrific. Thank you both for joining us. Let's set the stage, so to speak. So Steve, whenever we think about Revolution Medicines these days and going forward, it's very much about KRAS, right? And perhaps I can sort of set this up from 2 perspectives. We are always trying to understand more from a scientific standpoint. And our current reality, very excitingly, is also thinking about commercially, right, the clinical opportunity and the emerging commercial profile there. So tell us a little bit how you're thinking about what we're seeing right now in both of those regards. And where do you think we could go as we think about over the next 2, 4, 5 years or so, scientifically first perhaps and commercially?

Yes, it's obviously easier to sort of lump the scientific and clinical development together to create the basis for what is obviously a commercial opportunity. But we're beginning to see now the first green shoots of validation of mutant KRAS as a target, clinical validation. That, of course, started exclusively in the KRAS G12C mutation space, where most of the clinical stage inhibitors are right now. Of course, KRAS G12C as a mutation across the entire spectrum of RAS-addicted tumors only accounts for about 10% of RAS-addicted tumors. And so we have the other 90% to deal with. The second evolution that's occurring right now is in understanding how tumors get round inhibition of mutant KRAS G12C with the existing inhibitors. And they appear to be doing that by a plethora of different mechanisms. Interestingly, a very large proportion of them as we had anticipated from preclinical data are all essentially different ways of the tumor continuing to drive survival and proliferation through the RAS signaling pathway. So it's not that the fundamental basis of tumor escape from RAS inhibition is changing. It's just the huge variety of different ways that the tumor's leveraged to do that. So I think where we're going is essentially in 3 dimensions here. And we can get into those as we talk a little bit more about Revolution Medicines as well. But the 3 dimensions are really different RAS mutations beyond G12C and particularly KRAS G12D and KRAS G12V, which make up a very large proportion of KRAS-driven tumors. Secondly, across the different tumor types in which KRAS mutations are prevalent, most people are familiar with KRAS G12C inhibition in lung cancer. But in colon cancer and pancreatic cancer, which a very large proportion of those tumors are driven by mutant KRAS. KRAS G12C is really not a major player at all. So we have to deal with other RAS mutations. And then I think thirdly, it's really all about what do you combine a KRAS inhibitor with in order to try to delay or aggregate the inevitable resistance that the tumor develops to that single inhibitor.

No, that's a wonderful outlining, especially in the scientific realm. And I feel like I've just sat down for a terrific symposium. The British accent doesn't hurt you, by the way. Leveraging on to that conversation, thinking about the commercial evolution of what's happening right now, we concretely are now able to see revenue numbers.

Yes.

We are concretely able to ask about who is getting treated, patient subgroups. We are going beyond just contemplating combinations to sort of like starting to turn pages on data and seeing what could overcome monotherapy versus combinations. And then putting this up in a stew and then stirring and thinking about commercial success, which is a broad kind of judgment. We're all kind of glass half-empty crowd. So we're still kind of grumpy but definitions of commercial success. So thinking now about where we're at and going into the future on a commercial competitive landscape where Revolution is not yet participating, and you bring up great points from the scientific side, but set the stage again. Where are we with this from your purview? What are you seeing play out with the commercial side?

Yes. Again, so firstly, there's only one approved KRAS inhibitor right now. So Amgen are doing all the heavy lifting here. And I think we're just beginning to see the tip of the iceberg. I mean, what we're beginning to see now is what we saw in the early 2000s with when Tarceva and Iressa were approved for EGFR-mutant nonsmall cell lung cancer. And the penetration of those compounds into the market and the speed with which they were taken up and the testing, et cetera, and not just within the United States, of course, but because commercial success also depends on being able to penetrate into markets outside the United States as well. So within that small niche, you've got -- this paradigm is essentially being repeated. Firstly, you've got the original approval for Tarceva was not in the first line set -- it wasn't actually even for EGFR-mutant disease at all, but let's pretend that it was. Firstly, you've got the inevitable progression from the sort of late-stage advanced metastatic space into the first-line advanced nonsmall cell lung cancer space and then into the adjuvant space. And I think there's a huge amount of commercial potential in reaching not just a larger number of patients who carry the disease with that mutation but also in the duration of therapy. And as you go into more earlier stages of disease, inevitably, the duration of therapy goes out, and the commercial revenues go up alongside of that. So I think that if you just take G12C, KRAS G12C, you can almost look at EGFR-mutant lung cancer and look at how that's going to play out because we have to get into the first-line metastatic space. We have to get into adjuvant disease, I think, in order to have the biggest impact. But then, of course, as I said, that's 10 -- G12C in lung cancer is less than 10% of KRAS-driven cancers. So now with the receptor tyrosine kinases mutations, we've gone from EGFR to ALK rearrangement to [ RAS to REP ] to MET amplification. And we need to do that for KRAS. We need to go to the G12B, G12V, G13 mutations, the Q61 mutations and do the best we can there. And ultimately, it's about the number of patients that we can reach, the clinical impact that we have and ultimately, how long they're going to stay on therapy before they progress because with targeted therapies, as you know, most people continue to get prescribed them until the disease progresses, and then they go on to something else. So we have that similar paradigm emerging, I think, with KRAS inhibition as we've seen with a lot of the receptors tyrosine kinase inhibitors over the last 15 years or so.

Great. Another fantastic explication of what's playing out. Has it played out as you've expected? And relative to your expectations, if there's differences, what are the things that you think might have been underappreciated with the benefit of 2020 hindsight?

I think there's -- on the positive side, I mean, firstly, the impact of KRAS inhibition with the single mutant selective inhibitor has been surprisingly good. I mean, let's be clear. I mean, we have not seen the sort of impact in KRAS mutant nonsmall cell lung cancer as we have seen with sotorasib [indiscernible] before this. There's just -- it's unprecedented. So I think in terms of the validation of the -- mutant KRAS as a cancer driver, I think it's actually been at least equal to if not exceeding expectations. And in diseases like pancreatic cancer where treatments of targeted therapies have, frankly, been dismal, and most treatments have actually been pretty dismal, we're now seeing response rates. I think Amgen's latest update at ASCO showed a response rate in excess of 20% for patients who have been heavily pretreated, which I think is hugely validating for the approach that we're taking by trying to target the mutant driver. When you first do that, you don't really know whether it's a driver or not. And it's the clinical responses that demonstrate that it is. So I think we're beginning to see clinical activity, which is probably in excess of what we had expected for -- particularly for a disease like pancreatic cancer, which is essentially a death sentence. The other thing that maybe was underappreciated before possibly not so much by people who've done this for a living as by other people is the heterogeneity of the cancer when you start treating it and the heterogeneity of the mechanisms that it harnesses to try to get around the treatment. And that, I think, is becoming increasingly clear with the circulating tumor DNA data that's emerging. We now have 3 data sets. They're all pretty consistent with each other. And they all show that KRAS mutant tumors, particularly colon cancer, will try absolutely everything it can to get around the block. So that leads us inevitably into combination therapy is pretty much upfront right from the off.

Right, very much kind of chess against a supercomputer here, nothing to be underestimating the kind of cleverness of the biology of KRAS as a tumor. So perfect segue to thinking about the role that you guys will play. In particular, we're at this juncture now with a company where over the next year, 2 years or so, we're going to begin to see some cards turn over on the clinical front. But to level set here, let's be clear, the proprietary aspect of the way Revolution Medicines is approaching RAS(ON). Just clarify for us what that is, and in particular, trying to understand, are there aspects of this approach that generates a competitive advantage or that uniquely could position you to address some of these shortcomings that we're observing and that we're tackling?

Yes. Well, firstly, we -- our inhibitors are differentiated right now in as much as they do target the ON form of RAS as opposed to the OFF form of RAS. For those people who are not intensely familiar with the field, normal wild-type RAS cycles between the OFF and the ON form and that rate of cycling and -- is driven by a number of upstream and downstream factors. But the reality is in the physiological state, most of it's in the OFF state and not in the ON state. When it mutates, it tends to be a lot more in the ON state than the OFF state. The importance of that is that the ability of mutant KRAS to cycle back to the OFF state is very different across the different mutations. And it's largely the intrinsic ability of mutant KRAS to cycle back to the OFF state that's driving whether it does, which means a lot of these mutations are essentially locked in the ON state. If you have an OFF inhibitor, it's not going to work very well or it's going to take a long time to capture all the RAS and all the time the cells making more mutant KRAS molecules, which default to the ON state immediately. So it turns out G12C is one of the more rapidly cycling mutations, and that's probably why the OFF inhibitors of G12C have activity. But when you start getting into G12D and G12V particularly and then the Q61 mutations, the ability of those mutations to cycle the OFF state is much lower. And so you really -- at this point, you really are going to be better off, I think, with an ON inhibitor rather than an OFF inhibitor. And I think that's where we have a sort of a proprietary advantage, at least for now. We're not the only company working on inhibitors of the ON state of KRAS, particularly KRAS G12C, but we're definitely the most advanced with them. And the fact that we are close now to starting the clinical trials with 2 of them, I think, exemplifies that. The other proprietary advantage we have is the active loyalty. Our drugs bind to this inter cellular chaperone protein called [indiscernible]. And that has the ability to create certain advantages in terms of tumor cell distribution and selectivity and potency that you wouldn't necessarily get from a small molecule that was just dancing around inside the cell without having interacted with a chaperone-like [indiscernible]. So I think we have -- this will all obviously is about to be tested in the alternate mammalian model, which is homo sapiens. And we'll see.

Differentiated by approach is certainly potentially an advantage, yet nothing is perfect. What limitations might there be potentially to your approach whether it's target flexibility, better pharmaceutical properties? What might you consider maybe front run the competition who would sort of say, well, you better be paying attention to this as well?

Yes. I think it's very difficult to predict right now whether our compounds have liabilities and how to rank order those liabilities. The -- a lot of the preclinical -- we've done extensive preclinical studies with our compounds. The ones that we've chosen as development candidates are extremely well-behaved molecules. The toxicities that we see for the mutant-selected inhibitors are really rather, I would say, uninspiring. But for the RAS multi inhibitor that inhibits wild-type RAS, the toxicities associated with inhibiting wild-type RAS. So we're not expecting to see anything particularly unusual. And of course, the clinical data will, I think, allow us to ascertain whether there are things that need to be tweaked or improved or fixed or whether the competitors have an edge. The biggest competitive edge we have right now is our ability to target mutants of RAS that are not G12C frankly. I mean, our RASMULTI inhibitor inhibits pretty -- incredibly potent against pretty much every mutation of KRAS. It's not that every cell for the KRAS mutation is equally dependent on that KRAS mutation. So the phenotype varies, but particularly tumors with KRAS G12 mutations seem very addicted and very sensitive to it. And I think the clinical data will show their liabilities. The one place where we get a lot of questions, and I think it's important to be upfront about this is whether or not our compounds penetrate into the brain, whether they'll get into brain metastases and be able to treat brain metastases. We didn't design them to treat brain metastases. Frankly, when -- it's not as though they don't get into brain. I mean, when we've done tissue PK in rodents, we do measure compound in the brain at some concentration. What we have not been able to do, frankly, is characterize how well they get into brain metastases when there's a disruptive blood-brain barrier. And if they do, whether or not they actually have a beneficial effect there. That's not something we've extensively characterized in preclinical systems. So I think that's largely going to be a clinical experiment, and we will see. But in as much as they were not explicitly designed to treat brain metastases, maybe there will be some compounds in the G12C space that may be better at doing that than our compounds as well. We'll have to see.

No, that's fair.

But just to put a fine point on it, I mean, one thing that we also get a lot of questions about is oral bioavailability. Our compounds are orally bioavailable across all the development candidates and the compounds that we're working on in our pipeline. And so that's part of the question that also follows some of these lines of thinking. We've nailed that one.

Okay. No, that's helpful and helps fill out the picture here. So the 4 horsemen of the Revolution. The first of these assets that will enter the fray of the clinic, RMC-6236. The first out of the gate is often the 1 that can be most harshly and memorably judged. This is a multi RAS. Why a multi RAS? Everybody else is going after the specific targets. You kind of partially answered it but in this context?

Well, we're also going after mutant selective inhibitors as well. I mean, we have 3, and we're developing at least another 3. They're not -- we haven't development -- declared development candidates yet. But we are making mutant selective, very potent and orally bioavailable mutant selective inhibitors against a range of different KRAS mutations. So why are we developing a RASMULTI inhibitor? I think there are 3 reasons while we're doing that. Firstly, the RASMULTI inhibitor, RMC-6236, is essentially 2 drugs in 1. It's a very potent inhibitor of mutant KRAS across a range of different mutations. But as I said, the tumors that seem to be particularly addicted to mutant KRAS are the ones carrying G12 X mutation. So G12 C, D, V and R, particularly and S actually. Those tumors are very -- as far as we can tell from our preclinical modeling, highly addicted to mutant KRAS. And they don't survive when you inhibit the mutant KRAS. But the other component of the RASMULTI inhibitor is the ability to inhibit RAS wild type. A lot of people see that as a liability. But actually, it isn't. It's deliberately designed into the molecule because so much of the escape from inhibiting mutant KRAS goes through wild-type KRAS. And don't forget, there are 3 types of wild-type KRAS in a tumor. One is the wild-type allele of KRAS, which is left. Only one allele is usually mutated. The other one is left is wild type. So there's a wild-type KRAS and a mutant KRAS. And then there are the 2 other isoforms of KRAS, HRAS and NRAS. So the tumor, the first thing it will do if you inhibit the mutant KRAS, it will switch on signaling through the wild-type KRAS and through the H and NRAS. And that's been demonstrated very elegantly in both preclinical systems. And now, of course, the emerging data that a lot of the escape is occurring through receptor tyrosine kinase upregulation, which signals through KRAS. So I think the 6236 has the ability to both inhibit the mutant KRAS and inhibit the -- a lot of the potential escape mechanisms. And that's the first thing that I -- the first reason and probably the most important reason I would give for developing 6236. The second is, it is a drug for a lot of mutations. A lot of mutations are not going to be served by mutant selective inhibitors in the short term. But RMC-6236 is there, and patients can receive it as part of the clinical trial. And we'll begin to figure out whether or not it's everything they wanted or whether it's just part of it. The third component of RMC-6236 is, again, is because of the properties I described, because of the wild-type properties I described, it actually turns out to be a pretty good companion for mutant selective inhibitors as well. So even if for some reason it is suboptimal as a stand-alone drug, as a companion to mutant selective inhibitors like RMC-6291, which is our KRAS G12C inhibitor, it could be an excellent companion. It might actually be the companion of choice. So I think there's a whole lot of reasons why RMC-6236 should be put into clinical testing.

Right. And then you have this collection of insights and knowledge from preclinical work that guides and shapes the clinical development.

Yes. absolutely.

Then you designed your Phase I clinical study in a certain way to then further inform ultimate kind of clinical development. So take us through those.

Absolutely. Absolutely. So the first and most obvious thing is the dosing, right? So you have to follow the guidelines, get the starting dose and blah, blah. But we know what dose -- we know what exposure we're targeting. So that's the first thing. The second is the selection of the cancer types and particularly the mutation types. So as I said, the G12 mutations seem to drive cancer addiction, and those will be prioritized in the early stages of the clinical trial. The third is dosing and scheduling. As with our SHP2 inhibitor, we are now beginning to generate some data suggesting that there are schedules of RMC-6236 that might be preferred. And we will probably disclose that at scientific meeting at some point in the not-too-distant future, but there's definitely scheduling advantages from inhibiting both mutant and wild-type KRAS of 6236. And then I think the fourth thing and obvious is combinations. There are -- because RMC-6236 already has a wild-type KRAS component baked into it, there are certain in-pathway combinations that are unlikely to be well tolerated. But there are a number of out-of-pathway combinations that are extremely well tolerated and as far as we can tell, extremely effective companions for RMC-6236. So the Phase I program, which isn't a single -- it's not a sort of a stand-alone trial that's been designed today and will stay like that in perpetuity. I mean, it will undoubtedly evolve. But the initial phases of the Phase I dose escalation have been absolutely pegged to what we've learned from preclinical testing.

Okay. Great. I probably need to pick up the pace just a little bit, but I was just so enjoying how much I was learning from this process. It's like -- it's really like it's blooming. It's fantastic. So we have to schedule a part 2 at some point. So let's just tick through the other horsemen here. The entrant into the G12C arena, 6291 here. I think where the progress is that we're heading towards the first patient to be dosed in second part of this year, right? What's unique about the profile there? How does this one play in that G12C arena there, the Phase I, how is that being designed to show that?

Maybe before he gets into that, just a little information for you. We are proud to announce that the IND has been submitted on 6291.

So earthshaking news at the Goldman conference. Okay.

It's not earthshattering, but it's breaking news and keeps us on track for that second half first patient.

Okay. Earthshaking, which we will take here in biotech.

RMC-6291 is going to be the first KRAS G12C(ON) inhibitor to go into the clinic. We are assuming that the Food and Drug Administration will approve our IND maybe with a few minor modifications. But I think that it's a very strong package that we put in, and we expect that to -- the clinical testing to start very shortly. So it will be the first. It will be the first G12C(ON) inhibitor. There are already -- we've already described advantages from inhibiting G12C(ON) versus G12C(OFF). I think that as -- again, it goes back to this receptor tyrosine kinase signaling is a very powerful means of driving resistance to G12C(OFF) inhibitors. It tends to shift the dose response curve to those inhibitors very significantly to the right so they become less potent. RMC-6291 because it's an ON inhibitor seems to be less susceptible to that mechanism. So that's the first thing. Second thing is there are additional mutations that could be acquired in the mutant KRAS G12C allele, which render the KRAS G12C completely resistant to the existing inhibitors. And -- but they remain sensitive to RMC-6291. So when we have screened RMC-6291 across a panel of nonsmall cell lung cancer PDX models, we see better efficacy, frankly, in the preclinical systems. And we do expect that to be able to play out in the clinic. The second thing about RMC-6291 is its ability to combine with RMC-6236. And I've already tried to outline why I think that could be a very powerful combination. And it could be a very powerful combination for -- across multiple tumor types carrying the G12C mutation, but probably where it could make the most immediate splashes in patients that are escaping from KRAS G12C(OFF) inhibitors like [ psoriasis ].

Right. No, that's very helpful. And the novelty of the approach to the combination, I think, is something to be very mindful of. G12D, G13C are #3 and 4 on my list here. For G12D, we have RMC-9805. You're also planning to bring that into the clinic, an oral covalent inhibitors, mid-next year or so. The member of my group who has some experience working on your side of the equation asks, how are you able to do that with the [indiscernible]?

Well, all I'm going to say about that is that we have assembled a very, very good team of candidates, and they have managed to crack that problem. We've been working on it for a number of years. And at the end of last year, we solved the problem. We disclosed RMC-9805 as a development candidate, I think, at the beginning of this year. So it's a great molecule. I mean, it's extremely potent. It is mutant selected for G12D across a myriad of different assay systems that we've run. The actual degree of selectivity depends very much on which assay you run, but it is a G12D selective inhibitor. It is covalent, which definitely contributes to the potency and the selectivity. And it's orally bioavailable, which the main competitors are not as far as we can tell. Right now, there is a G12D degrader in the clinic. Astellas, I think, are just about to start clinical testing. That is not an orally administered drug. And Mirati 1133 is not an orally administered drug as of today. So this will be probably, if not the first and certainly one of the first orally available inhibitors of KRAS G12D and undoubtedly well, one of the first inhibitors of the KRAS G12D(ON). As I said, it's really important to hit the ON state of G12D. G12D does not cycle very effectively back to the OFF state. So an OFF inhibitor is going to be pretty much useless. You have to inhibit the ON state of G12D.

Got it. I'll let the #4 stay gently quiet for a while for our next conversation. I would be remiss if I did not ask you something about the SHP2, RMC-4630. It's the most advanced clinically, and it was the story that the lifting of the curtain and you guys going public there. We will see some additional data through your partners here. What do we hope to learn?

If you're referring to Amgen's announced release of data at CodeBreaK 101C study, obviously, you know we can't get out in front of our partner in terms of their disclosures. So there's really not much we can say on that combination.

Okay. I think that the focus and the transition of the story and the shift here is really sentinel to the opportunity. And you've really outlined very clearly sort of like the span and the breadth of your approaches, and there's a novelty here. Investors are not at all underappreciating the magnitude of this opportunity, I think just broadly speaking, but perhaps not recognizing the role that you could play. We often see that when there is sort of industry tagging or validation or a little bit of heat that comes to a direction, that could also be something that can help. Talk to us about your view on strategy, potential for partnerships, direction, a lot of assets these can go. Where are you in your thinking there?

Our thinking constantly evolves there. We have probably the deepest RAS-targeted therapeutics pipeline in the industry. That has not been lost on the strategics and the big pharmas. At AACR, we had 7 oral presentations on our RAS portfolio. And quite frankly, we got extreme high inbound interest following that. We, of course, follow up on those conversations. At the same time, we know the benefits, the positives and the challenges of partnering, particularly with such an integrated pipeline. So we're evaluating, we're considering it. But of course, any partnering decision is going to be made in the context of our aspirations as a company and other financing options that we have. So at this point, no definitive path either direction.

Got it. And yet the paths are very broad and promising and plenty to watch for in the next 6, 12, 24 months, for sure, as we own to the clinic. All the best with the 4 horseman. Steve, thank you so much.

Pleasure.

[indiscernible] much of you. It was a fantastic conversation. Peg, always great to see you, and thank you for your help.

Thanks, Chris.

Thanks, Chris.

Thank you, everybody.