Good day. My name is Christie, and I'll be your conference facilitator today. Welcome to the Revolution Medicines Second Quarter 2022 Earnings Conference Call. Today's call is being recorded.

[Operator Instructions] I would now like to hand the conference over to David Arrington, Revolution Medicines' SVP of Investor Relations and Corporate Affairs for opening remarks. David, you may begin..

Thank you, and welcome, everyone, to our second quarter earnings call. Joining me on today's call are Dr. Mark Goldsmith, Revolution Medicines' Chairman and Chief Executive Officer; Dr. Steve Kelsey, the Company's President, Research and Development; and Jack Anders, our SVP of Finance and Principal Accounting Officer.

As we begin, I would like to note that our presentation will include statements regarding the current beliefs of the company with respect to our business that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are subject to a number of assumptions, risks and uncertainties.

Actual results may differ materially from these statements, and except as required by law, the company undertakes no obligation to revise or update any forward-looking statements.

I encourage you to review the legal disclaimer slide of our corporate presentation or the earnings press release as well as all of the company's filings with the SEC concerning these and other matters. With that, I will turn the call over to Dr. Mark Goldsmith, Revolution Medicines' Chairman and Chief Executive Officer.

Mark?.

to provide top line data from the 4630-03 study of 4630 plus sotorasib in 2023 and to disclose additional evidence of single-agent activity for RMC-5552 in 2023.

In summary, we remain deeply committed to our science-driven approach to treating patients with RAS-addicted cancers, and our pipeline and R&D efforts have entered an exciting and important phase.

The first wave of RAS(ON) Inhibitors, which includes three differentiated drug candidates has advanced significantly with RMC-6236 now dosing patients, RMC-6291 preparing to begin dosing patients shortly and RMC-9805, continuing progress toward the clinic.

Our differentiated RAS companion inhibitors have shown evidence of single-agent clinical activity along the path towards strategic combinations with direct RAS inhibitors, and the first clinical evidence has now emerged in support of RMC-4630 as a RAS companion inhibitor combined with a RAS inhibitor.

As we intensify efforts to progress these assets to significant milestones in the coming period, we are also continuing to make a significant investment, pipeline expansion activities based on our productive RAS innovation engine.

Building on this exciting company momentum, I'll now turn to Jack Anders, our Senior Vice President of Finance, to provide a financial update.

Jack?.

Thank you, Mark. We are pleased to have strengthened our balance sheet in July with the upsized public offering of common stock, raising gross proceeds of $264.5 million. Net proceeds were approximately $248 million after deducting underwriting discounts, commissions and estimated offering costs.

Our cash and investment balance as of June 30, 2022, was $461.4 million, which does not include proceeds from the financing.

As a result of the financing and concentration of our development resources as described earlier by Mark, we are updating our cash runway guidance and now expect our current cash and investment balance to fund planned operations through 2024.

We have updated our 2022 financial guidance and lowered the top end of our 2022 GAAP net loss range by $10 million. We now expect full year 2022 GAAP net loss to be between USD260 million and USD280 million.

We are also lowering our estimated non-cash stock-based compensation expense for the year and now expect full year 2022 non-cash stock-based compensation expense to be between USD30 million and USD35 million. Turning to the quarter.

Revenue from our collaboration agreement with Sanofi was $9.1 million in the second quarter of 2022 compared to $8.7 million in the prior year period. Total operating expenses for the second quarter of 2022 were $71.2 million, and increased by 34% over the prior year period.

The increase in operating expenses was largely due to expenses associated with our preclinical portfolio, increased headcount and related facilities and infrastructure costs and stock-based compensation expense. Net loss for the second quarter of 2022 was $61.2 million or $0.82 per share. And that concludes the financial update.

I'll now turn the call back over to Mark..

Thanks, Jack. Revolution Medicines continues robust efforts to outsmart RAS-addicted cancers and with recent scientific and business progress, we believe that the company is in an excellent position to fulfill our mission on behalf of cancer patients. This concludes our prepared remarks for today.

And I'll now turn the call over to the operator for the Q&A session.

Operator?.

[Operator Instructions] And your first question comes from the line of Marc Frahm with Cowen & Company. Your line is open..

Thanks for taking my questions. [technical difficulty] prioritization and making sure you prove out ship to and the companions on one side and the brass on makes a lot sense. But guys, you hopefully find some efficacy signals with the direct RAS inhibitors.

Mark how do you weigh the pros and cons of using your limited -- your limited resources to rapidly expand out that positive signal with combinations versus using as proof-of-concept for the platform and then kind of rapidly falling behind with things like the G13C and more on target, yes specific inhibitors..

On exhibitor, which is our highest priority to move additional RAS(ON) the inhibitors in the clinic, or to expand out the work around the inhibitors has been shown to be active as monotherapy.

Is that your question?.

Yes..

Yes. You know, I'm not sure we're going to have to make a choice. At that point, you know, clearly, once one has a clinical signal, the priority is going to be to move that asset forward and develop as quickly as possible supporting package to move into, you know, a registration program ending towards an approval.

So we'll do whatever it takes to pull that off.

But I also think a fair point is that amongst these three initial RAS(ON) inhibitors that are going into the clinic, while they do cover the vast majority of RAS-addicted cancers in aggregate, there is also real opportunity for specialized additional, you know, inhibitors that are targeting specific mutants beyond those.

And you mentioned G13C, we've talked about and included in our pipeline, reference to other mutants that are of interest to us. So those are important, too. I don't think they'll really compete for resources at that stage.

You know, we're continued company growth, I think this decision to be very focused, you know, to be honest, is to be very focused on five assets in the clinic. It's not as if we paired that to a small program.

You know, there's a lot going on, but we know that all eyes are on, you know, these first three RAS(ON) inhibitors, and also to see the best companion inhibitors mature. And so we just want to make sure that we are sufficiently focused.

I think it's less about resources and more about concentrating our intellectual bandwidth and effort around those things at this stage..

Okay. That's helpful. And then can you just remind us what you can view as gating from these initial trials with 636 and 691 before you might work on 691 - before you might bring in the ship to inhibitor and start dosing the combination..

Okay. Yes, maybe that's a question Steve Kelsey wants to comment on it. I think the question is, what would trigger expansion into combinations which, you know, Margaret mentioned, but I think we've had to improve both RMC-4630 and RMC-5552, and also, of course, Anti-PD1, immunologic checkpoint inhibitors..

Yes, it's a great question. The - I think the current strategy is to start the combination programs as soon as we can. And that, of course, then begs the question, what do we need to know before we can.

And I think the very basics there are, we really need to have just about enough information to believe we have a drug, there's not much point in combining with something that's inactive.

And then another sort of tactical level, we really need to have a very good sense of what the schedule is because it's very difficult to do combinations that is if you're trying to assess more than one variable, and we really don't want to be testing the schedule, different schedules in combination.

So I think those are the two fundamental things that we really have to understand. But the reality is, you know, all along even though we have expectations with RAS, and RAS having been validated as a target for single agent therapy, all along, I think we believe that combinations was going to ultimately have the biggest impact.

So starting those as soon as we can, hopefully we'll give us a head start when we start looking at the optimal treatment regimens for getting into pivotal trials and particularly into the first slide space for any -- any RAS mutations which is you know, there are really, really three major epithelial malignancies, all trying out for the best treatments..

Okay. Thank you. Very helpful..

Thanks Marc..

Your next question comes from the line of Alec Stranahan with Bank of America. Your line is open..

Hi, thank you, guys. Thanks for taking the question. Just a couple from us.

The combo data looks quite good from CodeBreaK 101 and tolerability, dose escalation, no grade for adverse events? I guess, could you give us a sense of what dose of RMC-4630 is being taken forward in this context, but I imagine your own study could help further inform this, but it sounds like perhaps the highest 200 mig dose could be the one you ultimately go with.

And as a follow up to that, is your expectation that response rates could even improve, say, beyond 50% in the G12C inhibitor naive patients at sort of the set dose and the expansion phase? And then my second question, you know, with your fifth RAS(ON) asset nominated later this year, how are you guys approaching which RAS(ON) to prioritize.

To precise of end markets, unmet need, drug ability of the target, potential for combos, I guess, what's sort of leading your decision making here? Thanks..

Alec, thanks very much. I think maybe Steve can address the first two questions, the two part question, and maybe then I'll comment on the RAS(ON)..

Yes. Nothing has really changed from the last earnings call. The study design for the RMC-4630-03 study, which is the one that we are sponsoring, which is a global Phase 2 study and it's completely restricted to patients who have not previously received the KRAS inhibitor.

The plan all along was to do a safety running of the 140-milligram dose level and then dose escalate to 200 and keep expanding at the 200 dose level until we either got a very clear RAS signal or that we ran into issues with tolerability at that dose level. And that's still the plan, and we're still enrolling. That study is moving along.

I don't - we haven't disclosed any data as to where we are, but it's rolling along very nicely right now. Your question about whether or not the response rate is more than 50%. Well, I think we would say, there are two things, I think, that we would say. One is, of course, it's possible that the response rate for the combination will be 100%.

The initial signals that were presented at the World Lung Congress even though the number of patients was very small, if you actually just look at the four patients who were treated at the 140 and 200-milligram dose level, which are the two doses being tested in the 03 study, there were only four patients who with lung cancer that were G12C naive and were treated with either of those two dose levels and three of them responded.

So that gives you a 75% response rate, even though that the denominator is only four. So the confidence is around that 75% extremely wide, of course.

The other thing to bear in mind is, of course, that just increasing the response rate is probably insufficient, partly because really what patients and investigators want is durability and partly because any pivotal trial that we would do with that combination, response rate wouldn't be the primary endpoint, it would be progression-free survival.

So we have to keep a very close eye, not just on the percentage of patients with - who have tumors that shrink but also on the temporal endpoints as well. The number of patients with stable disease and the durability of that stable disease is just as important as the number of patients who have a resist PR..

And this is Mark. I'll comment on your second question, which was how will we choose which additional inhibitors who would advance or how will we prioritize them. It's a very complicated question - or it's a simple question with a complicated answer. There are a lot of different dimensions to consider.

The real strategy here, which I hope we conveyed but it's worth reiterating is that we're not taking the foot off the accelerator of creating these new assets. That work is still very vigorous. And essentially, what we're doing is creating a basket of additional development candidates.

The first one in the basket is, of course, 8839 on G13C, but there are others that will come behind that, as you pointed out, our next one this year, and one would imagine there will be more to come after that. And so with that basket, we'll get to choose and we'll prioritize.

One of the important considerations here is we're going to learn a lot from 6236, 6291and 9805. And the - those are three very distinct molecules with very distinct features, and we will run a great deal from the early clinical experience with those.

And I think that may guide us as to genotypes where the unmet need remains the highest after we see something from these three. It may guide us to which genotypes are most sensitive to RAS inhibitors. It may guide us to covalence versus non-covalence selectivity versus multiple targets, et cetera.

So there are a lot of really important scientific and clinical questions buried into the signals that we'll get from these. And I'm sure that, that will significantly impact us probably more so than, let's say, market size or something like that, but I would roll that out as some consideration.

But I think the main thing we focus on tends to be probability, what's the likelihood that a given asset will actually provide clinical benefit in a given situation. And that's the kind of information we'll learn from the first three RAS(ON) inhibitors..

Thank you..

Thank you..

Your next question comes from the line of Jonathan Chang with SVB Securities. Your line is open..

Hi guys. Thanks for taking my questions. First question, can you provide any color around the progress of the Phase 2 RMC-4630-03 study? Earlier in the year, the guidance was for top line data in the second half versus 2023 now.

Also, can you help set expectations for how much and what kind of data could be available on the top line disclosure?.

Yes. Maybe I'll answer this. At least take the first crack at it, which has to do with our notation that we will provide the next data readout will be the top line data set and that we won't provide an interim readout at the end of this year.

That was really driven primarily by the fact that the CodeBreaK 101c data, we're going to be and now have been disclosed.

And so in essence, one's already gotten a glimpse of what things can look like on an interim basis, and it didn't seem to us and to a number of investors speaking to us that anybody would really care about another interim update and that what was really needed is a more definitive answer, does RMC-4630 provide additive value to sotorasib in second-line non-small cell lung cancer.

And we think that this study will do that, but we just didn't see any value in giving another sort of drip of data on it. I think that's the main issue. A secondary factor or second factor is the enrollment pace wasn't quite on with what we expected initially. And so we will continue enroll in some patients into the first part of 2023.

And so again, not having every patient enrolled and having just a partial benefit to us didn't seem like it was meritorious.

Your second question?.

What readouts will we provide?.

Perfect. Dr. Kelsey just provided the question, and he can provide the answer..

I mean, I think the answer I gave to the last question probably sums it up as best as I can, really. The most obvious readout will be overall response rate because that is actually price endpoint of the study. But as I said, it's becoming increasingly important to us not just to look at response rate, but look at durability.

I think given that the study started enrolling last September, by the time we get the response rate data on the sort of the last patient in of the progression-free survival, the duration of progression-free survival data for the first transformation relatively mature.

So I think you can expect to see both absolute response rate data, durability of response and progression-free survival from the cohort. And hopefully, we will be able to make a meaningful comparison to the CodeBreaK 100 study, which was the pivotal trial of single-agent sotorasib.

We try to, wherever possible, match the CodeBreaK 100 study in the design of our study so that we - specifically so that we can draw those comparisons. And I think that's hopefully what we'll be able to provide.

Obviously, the other thing you'll see is the tolerability profile as well because there's been a snapshot of that provided from CodeBreaK 101c, but the heterogeneity of the patient population that was presented are weakened, doesn't really give you a robust assessment of the tolerability in that exclusively defined G12C naive non-small cell lung cancer population..

Got it. Thanks for taking my questions..

Thank you..

Your next question comes from the line of Benjamin Burnett was Stifel. Your line is open..

Hi, good afternoon. This Neil Carnahan on for Ben, thanks for taking our question. For the Phase 1, RMC-6291.

Can you characterize enrollment criteria a bit? More specifically, will patients have been previously treated with a KRAS inhibitor? Or will you be mainly pursuing patients that are KRAS inhibitor naive?.

Yes, it'll be some components of both I'm sure. But maybe Steve can lay that out for you..

Yes, the answer is that the eligibility criteria for study right now are very similar to the CodeBreaK 101. So, in the initial phases of the study, pretty much anyone with any tumor harboring the future seeing the patient is eligible irrespective of whether they've received the previous KRAS inhibitors or not.

As we get into the later the higher level dose escalations and certainly at the recommended dose-to-dose and schedule, we will be deliberately enrolling defined cohorts with defined - based on criteria defined by tumor histotype and whether or not they have or have not received the KRASG12C inhibitor.

The primary population of, interest for the study ultimately are obviously patients with lung cancer who have not received the G12C inhibitor because that way you can make a comparison against the G12C often mutant stuff. There is some reason to believe that 691 might have activity in patients who have been introduced by G12C inhibitor.

That's not our primary focus as a single agent. It may become a very important focus when we start combining RMC 691 with other drugs in our portfolio, particularly RMC-6236..

Great, thank you..

Thank you..

Your next question comes from the line of Noah Eisenberg with JPMorgan Chase. Your line is open..

Hi guys, this is Noah on for Eric, thanks for taking our question.

We're just wondering, given some of the data along this past weekend, do you think the observed tolerability profile of combining care as inhibitors and PD-1s, Could be a class effect or specific to individual molecule?.

Yes, hi Noah thanks for your question.

Of course, it's a little bit hard to tell right now, but there have been a number of compounds G12C inhibitors that have shown a liver signal which one would not be surprised and that that would be exacerbated when it's combined with a checkpoint inhibitor that has it can cause inflammation in liver and we celebrated LT.

So that additivity I think isn't surprising if you have monotherapy LSBF analogies. Your question though is that due to a biological interaction between the G12C inhibitor and the PD-1 inhibitor is it due to chemical features and we don't know.

But given that many of the first generation G12C inhibitors share either an entire chemical scaffold or chemical moieties related to one another, it's not too surprising if those compounds all have a similar effect within the liver.

Now, from our point of view, a big question is, does that lead through to our compounds, which is of course, what we're focused on developing.

And there really isn't chemical similarity we started from a completely different chemical starting point, binding to a completely different site on RAS, and binding to a completely different state of RAS on versus RAS off.

So there really isn't any obvious read through and since we don't have a good hypothesis as to why a generic G12C inhibitor biologically should cause LCM maladies [ph] to full stop. We don't have any hypothesis around that. We don't see any reason why that ought to lead through to the RVMD RAS(ON) inhibitor collection..

Great, thank you very helpful..

Thank you..

[Operator Instructions] Your next question comes from the line of Michael Schmidt with Guggenheim..

Hi, this is [Ede] on for Michael. Thanks for taking our questions and congrats on the progress with the first two KRAS inhibitors. Starting off question on RMC-6236. You previously mentioned some preclinical rationale that 6236 can be used as a targeted inhibitor for certain G12C Newton G12 mutants and also with a potential RAS companioning inhibitor.

Now that the compound is in the clinic, how would you prioritize the two strategies or are you going to evaluate them properly? You know, after 6291 enters the clinic? And then a second quick question on 6291. Looks like you're evaluating both once and twice daily in upcoming phase one.

So just what are some of the considerations to test both schedules in? Does the preclinical PK data provides any rationale that one could be better than the other? Thank you..

Okay, thanks for your questions. The first question, which is what's the priority with RMC-6236 to test it as monotherapy or tested as a companion inhibitor? Well, that's pretty straightforward for us, yes to evaluate it as monotherapy and demonstrate that it's tolerated and active before you really qualify it to be used as a companion inhibitor.

With that said, though, you don't necessarily require a complete data package to convince that you have a path forward registration as a monotherapy, before you start the RAS companion combinations.

So in other words, I think we'd start that fairly soon after we have some confidence around this anti-tumor activity and how well tolerated and safe it is. I think we would look very much towards combinations with selected other RAS(ON) inhibitors. But the clearly phase in that way, the monotherapy is the thing to keep one's eyes on initially.

And the second question was….

The scheduling system of 6291 daily versus the IV dosing..

I don't think we've ever talked much about PID dosing is there something? Is there something behind that question that you're that you're alluding to?.

Yes, it's just based on, you know, information on ct.gov. It looks like you know both schedules are going to be evaluated.

So sort just wanted to get?.

Yes so I think the question there is really just about how much continuous exposure one gets from daily versus twice daily dosing.

There is a really great visibility around this topic with regard to the first generation inhibitors RAS(OFF) inhibitors, because if you're not covering them and keeping them trapped in the grass or form, you have a really easy escape mechanism, which is for the sale simply to shift the RAS(OFF) pool over the RAS(ON).

And so, as a result, the general feeling in the field is that you need to continuously cover the entire RAS(OFF) pool and try to keep it from converting the RAS(ON) at any point in time.

And of course, [indiscernible] made a point of that, both with regards to the long half-life of an autograph with Ann Then subsequently to be ID dosing with the [indiscernible] of products. It's not entirely clear that that concept applies equally well to RAS(ON) on inhibitors, it's really a little bit of a different mechanism.

And it's a dramatically different mechanism, but different dynamic. And so it's not really clear that that level of continuity is necessary. And secondly, it's not clear that RMC 691, one given daily, wouldn't provide that sort of continuous coverage, it may well in fact enough that it covers a very, very well. So I think that's really in the protocol.

So you can comment on this. But I think it's in the protocol simply acknowledging that continuous coverage is something we want to make sure we understand whether that's needed. And make sure that we have those schedules, dosing schedule that could provide - if daily dosing is not sufficient.

We quite often - write into our protocols, the option to evaluate alternative schedules right up front, because it's easier to write and amendment if you find out that PK is not tracking with your predictions, and you have to go back and test another schedule.

But I think, you know, as Mark's point up our preclinical data suggests that we can cover the target in mice is once daily dosing and so whether or not we'll ever have to test them a different scheduling the clinic remains to be seen, I think need some clinical PK data first before we can decide, but it's definitely not a done deal.

We're not we're not necessarily going to test another schedule and even if we do is not necessarily going to be twice a day dosing..

Yes got it, yes very helpful. Thank you..

Thank you..

As there are no more questions in the queue, I will turn the call back over to Dr. Goldsmith for his closing remarks..

Well, thank you, operator and thank you to everyone for participating today and for your continued support of Revolution Medicines, have a good day..

This concludes today's conference call. You may now disconnect..