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

Let's keep it going. Thank you for joining us. Wednesday afternoon at the Goldman Sachs Healthcare Conference. My name is Chris Shibutani, a member of the research team. We are thrilled to have live and in person, Mark Goldsmith, President, CEO and Chairman of the Board at Revolution Medicines. Mark, you and I have known each other for a very long time. And I'm always so struck that the headquarters, whenever I go there, I get lost in the parking lot. But even from pre-IPO days, through all the progress that the company has made, it's just been this tinder box of activity and you have aspects on the wall that talk about the guidance of the mission, et cetera. So you guys have always had a true north. It's not been a linear journey. I think the science and the objectives have always been there, the map kind of pathway. You faced a lot of skeptics. And now when you look at the stock, when you look at the level of interest, it's clear that we're approaching a very important and kind of prime time for the story.

How are you feeling about how things are going and the Street's appreciation for what's going on?

Well, thanks, Chris. I think we're having the time of our lives actually studying something that's really impactful for patients, very important for patients. We think that our RAS inhibitors are going to make a difference for patients with RAS-addicted cancers and that's highly motivating to everybody in the Rev Med organization, which is, by the way, quite large now compared to those...

Yes, I was going to say something first thing at the theme, is there a new headquarters in the future?

No, no, we're good. We've been growing organically in situ, and so we now have multiple buildings all around a little campus.

Okay. Okay. That makes sense. So now that I figured out the parking lot, at least next time I visit you, I won't get too lost. So KRAS G12C has been certainly part of the vernacular for a lot of investors here. Maybe just to level set, help us understand how you've been thinking about the approach. What's novel, what's proprietary, what's the underpinning of your RAS(ON) modality?

Yes. So our strategy centers around a set of inhibitors of RAS that target the activated or on form of RAS. We sort of pioneered that kind of approach. There are now some followers pursuing that sort of thing. We have 3 compounds in the clinic today that I think have garnered a lot of attention. The first is a RAS multi inhibitor, which spans multiple mutant forms of RAS as well as wild type. That's the compound that I think has the greatest visibility at the moment. Our second compound is RMC-6291, which is a G12C mutant selective inhibitor but also from the RAS(ON) inhibitor class. And our third compound, RMC-9805 is a RAS G12D selective inhibitor also in the RAS(ON) inhibitor class. So 3 exciting compounds each with its own properties. G12C is the most known RAS mutation, but it represents only about 15% of all RAS-mutant cancers. So it certainly is not the most common. G12D is the single most common mutant driver of cancer, G12B the second most common and G12C is the third most common. It is most prevalent in lung cancer. It represents about 12% of lung cancer. And there's another 18% or so that have mutations that are not G12C that is RAS mutations, not G12C. And then you find G12C occasionally in colorectal cancer and pancreatic cancer, but a very, very small fraction. It is a crowded space. It's the first space in which there are approved inhibitors adagrasib and sotorasib, of course. There are, as you point out, a dozen more behind that. And RMC-6291 is unique in its RAS(ON) inhibitor mechanism of action. We've been studying it for about 1.5 years in the clinic. It's an outstanding molecule. It's a very clean molecule. It performs very well from an activity point of view. We think it is differentiated from most, if not all, other RAS G12C inhibitors. But admittedly, it's entering an area coming from behind. It's not the white space, the rest of our portfolio addresses. And so the bar is much higher for this compound in this particular space. We have to really see a clinical impact that is differentiated from the other G12C inhibitors. Otherwise, it's not a compound that we care much about. In the early clinical phase, we saw activity of RMC-6291 in patients not only who had never seen a RAS inhibitor but also in patients who had been treated with a RAS(ON) inhibitor and progressed on either adagrasib or sotorasib. And there, we saw response rates in the 40% to 50% range that we're undifferentiated from the naive non-G12C inhibitor-treated patients. We reported those data in Boston in October of 2020 -- September of 2023, October and at the ESMO meeting.

ESMO meeting in the fall, right?

Yes. And people were quite impressed by that. We also reported monotherapy activity in colorectal cancer carrying the G12C mutation that was equivalent of combination activity by adagrasib and sotorasib with cetuximab. So it's in the sort of response rates in the 40% range. So I think that 6291 is clearly differentiated itself. Its path forward, though, is very unlikely to be in second-line lung cancer. It's much more likely to be a first-line combination treatment component.

And then just to help us geek out just a little bit. The proprietary RAS(ON) mechanism, is there a simple way to ride an elevator with you and explain what makes it so unique? Because again, going back 3, 4, 5 years, I think some of the genesis came from the Warp Drive folks and just all sorts of things, there's been a journey here. Data has opened eyes, but just tell us a little bit about the uniqueness of the mechanism here because you said it's crowded, but you have a differentiated approach.

Yes. So RAS vacillates, oscillates between the off or inactive and the on or active form. It's only the on or active form that drives human cancers. Virtually all of the RAS inhibitors that are in the clinic today with the exception of very few inhibit the inactive or off form. And they try to track the molecule in this off-state, so it cannot be converted to the on state and that's their mechanism. All of our compounds work exactly in the opposite way. They bind to the on or active form. They suppress that. They prevent it from signaling downstream. And since that's really where the oncogenic activity comes from, we believe those compounds have a biological advantage and maybe a pharmacologic advantage by inhibiting in the on form.

Which is a great lead into sort of understanding how 6236 has been unique and also addressing not just discrete, but maybe other industry players in the science skepticism here as a multi-RAS everyone's been sort of keen to figure out is there, in fact, sort of a workable therapeutic window recognizing that the potential to inhibit wild-type RAS as well. It seems as every time that there was a whisper of you moving to another dose range here, it became an increment of building some confidence. But talk about that in terms of that therapeutic window and where we are in terms of building confidence that we can continue to progress with this asset.

Yes, I think that was an important question that people started out within the field, and I think it has been definitively answered. RMC-6236 is one of the best tolerated and safest RAS inhibitors that's been studied to date. And that's based on several hundred patients' worth of data, and I don't think there's any question about it any longer. Why it is well tolerated is the subject of much more scientific discussion, one of the underlying mechanisms but it does inhibit all forms of RAS, HRAS, NRAS and KRAS, so all 3 isoforms, and it inhibits both the wild type and every mutant form of RAS we've ever tested. So it is really probably the definition of a pan RAS inhibitor we call it a multi-RAS inhibitor. It does have normal tissue effects. Most patients who are treated at the -- in the dose range that we consider to be the right dose range experience a rash that is, we believe, an on-target mechanistic effect. It is a biomarker essentially of inhibiting RAS. But at the same time, it's inhibiting the mutant forms of RAS that might be the initial drivers of cancer. And we've seen now activity across not only pancreatic and lung cancer, but other tumor types as well, and we've shown some of those data as well. So it's quite an exciting molecule. And the next step for it is to move into pivotal trials around the first 1 or 2 monotherapy indication, which we expect to happen in the second half of this year.

Let's talk about dose response, dose dependency, the response rates that you've seen really from 160 milligrams QD up to 400 milligrams. Talk a little bit about the data that's been shared in terms of understanding not just the efficacy profile, but tolerability. And remind us again what the RP2D doses.

Right. So we have not defined a maximal tolerated dose just to make this point even clearer. We've not reached a maximal tolerated dose. We pretty much stopped dosing patients at 400 milligrams because we were seeing such good activity in the 160 to 300 range, and 400 milligrams is such a small increment of additional exposure above 300. It just didn't seem like it was going to be informative. If we were to go higher, we would have to go to, let's say, 600 milligrams or higher to see if we got improved outcomes. We don't think that's needed. In the 160 milligram to 300 milligram range, all of those doses are well tolerated. I can tell you even at 300 milligrams, the dose intensity that patients receive, we've now looked across all patients who have received 300 milligrams, the dose intensity is around 90%. So in other words, those patients are receiving over time, approximately 90% of the 300 milligram dose, which makes it comparable to any successful oncology targeted therapeutic. So we're compelled by that. And I think that really addresses the tolerability question. If it's intolerable, they would have a dose intensity of less than 80%. It would be in the 70% range. So dose intensity is a very good objective measure of whether patients continue to take the drug, and 90% is about as good as it gets. So we feel very confident that we could dose up to 300 milligrams and be confident about that. Now how much of a dose response is there between 160 and 300 milligrams? Hard to tell. It's really hard to answer that particular question. And I'm reminded that there are other targeted therapeutics in which it was hard over many years to differentiate between dose levels that are so close to each other. Remembering that 300 milligrams is only twice 160. It's not a very large increment. So I think we'd be comfortable with patients being dosed anywhere in that range. We prefer the 300 milligram range only because we're sort of old-fashioned and believe that the higher the dose, the more likely the more patients will get exposures in the most optimal range, and we don't want to leave anybody out. And if you start at 160 milligrams because of natural variability in pharmacokinetics, some patients will have a lower exposure than others. So we tend to lean towards a higher dose, but we've not yet announced a selected Phase II go forward -- Phase III go-forward dose. That's a discussion with the FDA, and we will disclose that when we announce the data set that drives us into that pivotal -- first pivotal trial.

Remind us of time lines here or general ranges of time lines that these key events will happen, including the discussion with the FDA. Is that something that you're still comfortable sharing?

Well, we intend to disclose this data set in the second half of this year. We're already around mid-June. So second half of the year is coming right around the corner, and we intend to launch the first and then the second pivotal trial in the second half of this year. So this is all right around the corner.

So these monotherapy Phase II/III pivotal trials. Two indications here, both second line non-small cell lung...

So the first trial to begin is likely to be the pancreatic cancer trial, second-line pancreatic cancer monotherapy, a randomized controlled trial with chemotherapy, standard-of-care chemotherapy as the control arm as the reference arm. In lung cancer, it will be a very similar design with docetaxel as a comparator. There are some additional details in the study that we'll reveal, we'll disclose as they get finalized. And as part of this big data package disclosure in the second half of the year, having to do with whether there will be any nesting of patients because there is a complex cohort of different genotypes within this cohort, different RAS mutations. We won't necessarily treat them all equally. We're more likely to have the G12 mutations or what we call the G12X as the core of the statistical analysis and then allow the power to be used on that core. And then if we pass that core, move on to the net -- to the outer ring of the nest, which would include the other mutations, G13 mutations, Q61 mutations and even wild-type RAS.

And then just remind us for note taking folks out there, what are the benchmarks of what good data would look like in both of these settings?

Right. So I think the key parameter that all investigators and I think most investors are looking for in this data set that we'll disclose is progression-free survival. We think that is the most informative parameter and certainly is the most likely to correspond to overall survival, which is the really a key ultimate parameter. In second-line pancreatic cancer, the benchmark for chemotherapy, virtually any form of chemotherapy is 3 to 3.5 months. It's a dismal disease, patients need something beyond that. In lung cancer, it's a whopping 4.5 months for docetaxel. They're surprisingly close to each other. And yet we think of lung cancer as a very treatable disease and pancreatic cancer is not, but they're separated by basically 1 scan. So those are the benchmarks that we would expect to be comparing against. And while it sounds easy, given how dismal they are, it's hard because it's a dismal disease and that's what drives those very poor progression-free survival numbers. But we're encouraged by everything we've seen so far. And of course, we'll disclose the data set that we think will be supportive of proceeding.

Biology is complex. Diseases are that much more monotherapy single bullets. It's almost the discipline. You have to be able to demonstrate that ability, but combinations is clearly directionally where ultimately so many of these advanced opportunities will lay. Talk about your combination trials with other agents. What are you most excited about? I think that you have some plans for 6236 combining with pembro.

Right. So I think monotherapy and second line makes a lot of sense. But our real ambition is to move RMC-6236 into first-line treatment paradigms. And the first-line treatment for pancreatic cancer has a few months of advantage over the second line. In other words, it's also pretty dismal. And -- so how will we approach this? Well, let's start with the most obvious. Maybe monotherapy RMC-6236 is a relevant option for first line. That would depend on how it looks from a progression-free survival perspective in second line, so people will get a sense of that when we disclose those data. So that's one possibility. Another possibility and basically, the most conventional would be to combine it with first-line chemotherapy, which is typically a 5-FU containing regimen or for those who can't tolerate that a gemcitabine Abraxane regimen. Those are the standard treatments. So one of the things we're doing in 2024 is to combine RMC-6236 with chemo to ensure -- convince ourselves that that's a safe thing to do. It's really important. So it's really a safety study or a tolerability study. It's not an efficacy study. And -- but of course, we collect activity, antitumor activity data as part of that as well. In lung cancer, there's a similar analogy that for second line, monotherapy is a very reasonable approach. But in first line, monotherapy is just not an option, unlike in pancreatic cancer, and that's because Keytruda is the big gorilla. Virtually everybody in first-line lung cancer has an opportunity to get access to Keytruda, you have to be able to combine with Keytruda or one of the PD-1 therapeutics to really have an option in first line. So we're evaluating RMC-6236 in combination with Keytruda. We're doing that now. That's also a safety study. I've been asked, do we have a particular concern about that? We don't. There's not any particular thing that we're looking for, except that the history in the field is that RAS inhibitors combined with Keytruda have yielded an unacceptable level of hepatotoxicity. And exactly why that is, is not known, but it seems as if the early RAS inhibitors in and off themselves had a hepatotoxic effect, Keytruda through immunologic mechanisms has a hepatotoxic effect, and you put them two together and it's intolerable. That's why sotorasib is not combined, adagrasib at a lower dose can be combined. Merck's compound can be combined, but it showed hepatotoxicity, others have failed along the way. And now olomorasib from Eli Lilly has shown some encouraging results combining with Keytruda. So that's an important hurdle to get over. I think we have to just evaluate that. And we have some preliminary data that gives us a preview of what we might see in the future. And that is in the lung cancer monotherapy RMC-6236 treated patients that we disclose in October, about 40 patients at that time, 20 or 21 of them had actually been treated with pembrolizumab within 90 days. They had come off of pembrolizumab within 3 months of starting 6236, that window is considered a high-risk period because pembrolizumab has a long half-life, it has long biological effect. And typically, with sotorasib and adagrasib, you do see hepatotoxicity in those patients who had just recently come off of pembro. We did not see significant hepatotoxicity. We reported that back in October. We saw no grade 3 signals, LFG signals. And so that's encouraging. That's a reasonable number of patients. It gives us some reason to believe that we won't have an issue when we do the combination study directly. Now we're doing it. And we'll find the results. We hope by the end of this year to have enough information from that to be able to declare one way or the other. And if that's clean, that certainly gives us a path forward into first line.

Maybe as a good bridge to the mutant-specific inhibitors that you have, but still keeping it to 6236, you've contemplated and discussed potentially combining 6236 with your G12C 6291, help us understand some of the thinking there, what the motivation is?

Right. So returning to the 6291 story. I think the last thing I said at the beginning of this discussion was 6291 is monotherapy and second-line G12C lung cancer is probably not an attractive thing for us to pursue even though it is among the best-in-class molecules without any doubt. It's really all about first line. So we can either just take 6236 alone and, let's say, combine it with pembro and say that's our treatment strategy or we can try to make 6236 even better potentially by combining it with RMC-6291. That's the first RAS-RAS doublet in the field, which is back to the beginning of this conversation, doing things that are really new and that might really make a difference is highly motivated. The way we got to that study was from preclinical work in which we found some lung cancer tumor models that simply didn't show much of an effect by either RMC-6236 or RMC-6291 and that happens. There are tumor models out there that are just more resistant to treatment. Our team took a handful of those models and said, what happens if we combine these two molecules? Do we get the same result or something different? And what came out of it was a remarkable increase in tumor regressions and the durability of those regressions. And so we kind of had to retrofit the idea to explain that. And the best we can think of now is that the breadth of activity of RMC-6236, including its activity on wild type and other mutant alleles provides sort of a wet blanket over RAS pathway signaling broadly, makes it hard for resistance mutations to emerge in that setting. And the RMC-6291 provides covalent very potent, deep inhibition of the G12C molecule in the same cells and that, that combination leads to a biologically distinct characteristic. We're excited by that. We've done that experiment many times across many different models. We, by the way, have now repeated that with RMC-9805, our G12D inhibitor. When we combine it with RMC-6236, we see a superior biological effect on tumors in preclinical models. So this does seem to be a replicatable observation now we're testing it in humans. So there have been patients already dosed now with RMC-6236 plus RMC-6291 that's the Vanguard experiment for this doublet idea. And those patients have been observed, and we've been dose escalating from there. So we're looking to sort of get to the highest doses that are achievable in that combination strategy, while we're testing each of those two compounds with pembro as I mentioned. And once we have that information, we might find ourselves able to do sort of the holy trinity experiment where we combine 6236 plus 6291 plus Keytruda in which case, we might have a chemo-free regimen that could be used in first-line lung cancer for G12C patients and perhaps the same thing for G12D with the 9805 molecule. So you can see we've got some vision associated with this. And we want to establish the answers to these fundamental doublet questions as quickly as we can from a safety point of view so that we can move on to enhance studies that will give us more efficacy information.

Your blanket metaphor maybe think of a question...

Wet blanket.

Wet blanket, but I certainly know wet blanket would be a revelation in terms of thinking about what the potential resistance mechanisms are the G12C inhibitors because you talked about being able to go into the post current G12C inhibitor population and still being able to give it another try and actually seeing some reasons to continue to move forward there. So what are your thoughts?

We don't have any data to share publicly yet about actually observed resistance mechanisms for RMC-6236 treatment. We will have such data, and obviously, we'll share that when we can. Our impression is that 6236 is a very powerful selection pressure against the RAS pathway. And so whatever emerges from that will be some particularly clever or a powerful way to get around it. That's just the way nature works. So I don't have anything new to say about that today. I will mention a patient who we reported at the AACR meeting a few months ago as part of a set of vignettes that our Chief Medical Officer, Wei Lin, presented. One of these patients was quite remarkable. It was a patient with colorectal cancer. Actually, the first patient with colorectal cancer we ever presented from these data. This patient started out with a BRAF mutation, a V600E mutation. Why am I telling this story, well, when the patient was treated with a BRAF inhibitor, they developed resistance to the BRAF inhibitor, not surprisingly, that happens. And among the resistance mutations that were identified were 3 new RAS mutations that had not been seen in the cancer before, just showing you how malleable, how plastic these cancers are now that's well known in the cancer field, but to see it in the face of a BRAF inhibitor is quite astounding. This patient had mutations that I think, at least 2 different positions, maybe 3 different RAS positions. So what did they do? They showed up at one of our clinical sites and asked to enroll in our Phase I/II RMC-6236 monotherapy trial. You can imagine that had we been asked as a company, should we enroll this patient, we might have said that just doesn't seem like a patient who's likely to benefit from this, but I don't think we were asked and the protocol allowed it, and so they were enrolled. This patient developed a partial response. And so it says to us, it really was the first direct evidence in a patient that multiple RAS mutants even within the same tumor and in this case, mutants that had been selected by previous treatment with a BRAF inhibitor could now be suppressed by RMC-6236. To me, it's a little bit of a mind-blowing observation. It's not that I want us to go look for BRAF inhibitor failure patients to treat with RMC-6236, but when you see things like that, where you see a complete response. Although these are anecdotal, they give you a sense of the power of the molecule. And then when you combine it with the overall data, quantitative data, it really makes moving forward with RMC-6236 very compelling, and it does suggest that those combination strategies could be viable.

Right. No nothing sort of segments of Rosetta Stone, which is continually revealing itself particularly through these anecdotes, but a lot of the compassionate care is, I think, an indication of the magnitude of the unmet demand. If you can just talk about a little bit more about 9805. How should we think about the strategy here, monotherapy combinations, when we learn more specifically about that, you highlighted G12D as being such a substantial potential opportunity.

Right. As I mentioned, G12D is the single most common mutation of RAS that causes human cancer. So it's the most important if we could have started there, we would have. RMC-9805 is a particularly interesting molecule, not only is a G12D-selective and it's active against the activated form or on form of RAS, but it's a covalent molecule, meaning that it forms a permanent attachment with the D part of G12D, which is aspartic acid that's never been achieved in a drug in the history of the drug industry. And in fact, we were told many times it was chemically impossible to do, which just motivated our chemists to work harder on it. And we particularly appreciate it when it was declared at ASCO 2 years ago that it was impossible to do. And by that point, we already had hints that it was possible. So 9805 is a covalent inhibitor. In other words, it's analogous to all the G12C covalent inhibitors, but it targets only the D at position 12. It's now in the clinic. We have been dose escalating. We have not shared a lot of information about it. Other than that, we're dose escalating. And one of the reasons we haven't shared a lot of information about it is because we haven't felt the need to. There's so much to talk about with 6236. We felt we could keep folks focused on the lead molecule, but we will, by the end of this year, I expect to be able to share information on RMC-9805. It's a really exciting molecule. For us, it means that Revolution Medicines has the 2 first G12D inhibitors in the clinic, RMC-6236 and RMC-9805. So we're really excited to have multiple ways of going after that mutant cancer driver and potentially ultimately to put them in combination with each other. And we did announce at our earnings call in May that we do expect to combine RMC-6236 with 9805.

Which triple meeting this fall, I think I like by -- [ England ] or Barcelona?

Barcelona. Yes.

Okay. Wonderful. Okay. I think the last fall in Boston was a very exciting meeting for you guys. Let's zoom up a little bit and think about the strategic big picture again, through the arc of the history of the company, you spent some time with some larger organizations in partnership relationships and collaborations. And the company is now different, but in terms of the advancements of your own portfolio. Pros and cons, when is the right time would you consider thinking about this. And I'm also thinking, obviously, the big picture for this investor audience, thinking about strategic optionality, it would be malpractice for companies in the oncology space, not be paying close attention to your portfolio here. But as Skipper, Chairman, President and CEO of the enterprise going forward, how are you thinking about possibly reaching across the table and shaking hand in some form collaboration partnership, looking ahead to commercialization, wherever you want to take this, but there's a logical thread here that I think is worth discussing.

I'm going to add Skipper to my business card. I like that. The best of all of them Skipper. Yes. Yes, we have a fair amount of experience with partnerships. We think they can be valuable in the right way at the right time. We have done pretty well in the last 5 or 6 years going it alone with these RAS inhibitors. And I think part of what made that possible was having the independence and the independent wherewithal to do what we thought was right. Even if people in the field told us this can't work and that can't happen and that can't be whereas partners tend to tell you what to do. So we've wanted to direct our own fate. With that said, we have an enormous clinical opportunity here, an enormous commercial opportunity associated not only with these first 3 RAS inhibitors. But with all the other RAS inhibitors, we never talk about that are in our pipeline as well as second-generation molecules and all of our long-term investments that we're making. So we do plan to be around for a long time. And that means we're likely to require a great deal of capital to support the company as it becomes what we hope will be a commercial company and a commercial company with real legs. So yes, I think a partnership is in our future. The way we've articulated this to the many companies that have spoken to us pretty much every company has spoken to us is that we are unlikely to commercialize our products outside the U.S. ourselves. We have no footprint. We don't really even have a footprint inside the U.S. And so let's sort of walk and run before we ever think about outside the U.S. We're just not going to do it in any time in the foreseeable future. So a partner can help us with that. I think a rest of world partner could be attractive to us. The timing of that will be driven by all sort of considerations, some of which have to do with the partners and some of which have to do with us. Ultimately, we have to find common ground and believe that putting the two together increases our wherewithal in some way. And if we believe that and we're excited by the terms associated with that, we would do so. Right now, we don't feel any urgency but we're certainly in constant dialogue with many of these companies.

And when you're sitting down with everybody, it's certainly always good advice to be doing so, knowing that your bank account is quite healthy. Remind us where you finished the last quarter, I think there was a B associated with that number.

Yes, it was almost $2 billion. It was a $1.7 billion balance sheet in terms of cash investments. And we worked really hard to get the balance sheet to that point, including the acquisition of EQRx last November. It will provide us with a lot of backbone in the coming months and years. It already allows us to make our decisions based on what we think is right rather than some other artificial constraint. It's not an infinite amount of money. And the kinds of decisions we're making today come in $200 million increments, not in $2 million or $20 million increments, they come in much larger increments and we have to make sure that we stay ahead of that. But we're in a very strong position today, both from a pipeline, from an organizational point of view and from a financial point of view.

And those numbers, I believe, are on the record as saying that takes you into 2027.

That's correct.

Okay. Terrific. Very exciting time. I appreciate this update. Spoken with genuine clarity. So I think from that standpoint, sometimes this can be such an alphabet [indiscernible] acronyms, but I think we see a clear path forward, looking forward to more data updates to come.

Thank you.

Mark, thank you for joining us.

Bye-bye.