The RAS family of proteins is one of the hottest targets in cancer research despite being one of the hardest for drug hunters to hit. Revolution Medicines has raised $238 million in an IPO to finance development of therapies that it says can drug these molecules in a novel way.
On Wednesday evening, Revolution priced its offering of 14 million shares at $17 each, which was the high end of its revised price range. Last week, Revolution set a preliminary target of 10 million shares priced in the range of $14 to $16 each. On Tuesday, the Redwood City, CA-based company boosted the number of shares it planned to offer to 14 million, and the targeted price range to $16 to $17. Revolution’s shares are expected to begin trading on the Nasdaq Thursday under the stock symbol “RVMD.”
Revolution aims to treat cancer by targeting the signaling pathways governing the growth and proliferation of cells. This process normally turns on and off, acting like a switch that regulates cell proliferation. But mutations in these pathways can cause abnormal or excessive signaling, which in turn leads to cancer. Revolution is developing small molecules to target two signaling pathways implicated in cancer, RAS and mTOR.
Though RAS’s role in cancer is well documented, it’s been a hard target to hit. Some companies are currently testing compounds that drug RAS in its inactive form, which Revolution calls RAS(OFF). Those efforts have yielded encouraging preliminary anti-cancer activity, which validates these proteins as a cancer target, the company says in its filing. But in both its active and inactive forms, RAS proteins are difficult to drug because they lack binding sites where a drug can latch on to the molecule. Revolution overcomes that hurdle by creating a binding site. A second protein, which Revolution calls a “chaperone,” is used to form a binding pocket for a drug. Revolution is developing drugs to target the active form of the RAS protein, which it calls RAS(ON).
Revolution’s most advanced drug candidate, RMC-4630, blocks a protein in the RAS signaling pathway called SHP2. That drug is currently in Phase 1/2 testing under a partnership with Sanofi (NYSE: SNY). Most of Revolution’s research costs for that drug are being reimbursed by Sanofi. Revolution is also evaluating how its lead drug could work paired with other cancer drugs. Early-stage tests are planned in combination with Roche’s cobimetinib (Cotellic), as well as with experimental Amgen (NASDAQ: AMGN) cancer drug AMG 510. Revolution’s research includes compounds that address other RAS targets; one of them aims for a protein that turns RAS from inactive to active. In addition to RAS, the company is researching compounds that target the mTOR pathway, though that work is in earlier stages of development.
In its prospectus, Revolution says it plans to spend $150 million to $175 million for preclinical development of its RAS programs, bringing one or more drug candidates through the completion of the research needed to seek FDA authorization to proceed with tests in humans. The cash is expected to be enough to start a Phase 1 clinical trial for one drug candidate. Another $25 million to $30 million is earmarked for development of mTOR drug RMC-5552 through the start of a Phase 1 testing. The company will also use about $1 million to fund its share of the costs for the SHP2 drug in clinical development with Sanofi.
Revolution traces its origins to venture capital firm Third Rock Ventures, which launched the company as a natural products-focused startup based on technology licensed from the University of Illinois. But that technology also showed applicability in cancer, and in 2018 the company turned its full focus to developing new cancer drugs. Later that year, Revolution added on to its cancer drug capabilities with the acquisition of Warp Drive Bio, a Cambridge, MA, biotech that was also developing drugs that target RAS.
Third Rock Ventures is Revolution’s largest shareholder, with a 21.7 percent stake after the IPO, according to the filing. The Column Group holds a 14 percent stake; Sanofi owns 5.9 percent.