RVMD - Revolution Medicines: An Expensive Shot At A Massive Market Opportunity

2024-04-12 04:14:54 ET

Summary

• Revolution Medicines raised $238 million via its 2020 IPO, and 4 years later has grown its share price by ~30%, bringing its market cap valuation to $6 billion.
• The company is pioneering a unique precision-based approach to developing oncology drugs that target the RAS pathway.
• Revolution's pipeline includes multiple drug candidates in clinical development, with promising early results in lung cancer and pancreatic cancer.
• Pivotal studies are planned, although this remains a tricky field in which to develop drugs - both Amgen's Lumakras and Mirati Therapeutics Krazati, which both target KRAS, have struggled commercially.
• Revolution feels a little overvalued given the tangible risks in play, however if I were a shareholder, I'd be keen to see what value may be unlocked in later stage studies.

Investment Overview

Redwood, California-based Revolution Medicines ( RVMD ) IPO'd in February 2020, raising ~$238m via the issuance of ~14m shares priced at $17 per share.

Across the past 4 years, although none of the specialist drug developer's active programs have progressed beyond the Phase 1 clinical study stage, Revolution's share price has made an overall 30% gain, giving the company a market cap valuation of ~$6bn at the time of writing....

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