Revolution Medicines, Inc. (NASDAQ:RVMD) Q4 2022 Earnings Call Transcript
Revolution Medicines, Inc. (NASDAQ:RVMD) Q4 2022 Earnings Call Transcript February 27, 2023
Operator: Good day, and thank you for standing by. Welcome to the Revolution Medicines Q4 Year-End 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peg Horn, Chief Operating Officer. Please go ahead.
Margaret Horn: Thank you, and welcome, everyone, to the fourth quarter and full-year 2022 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 of Research and Development; and Jack Anders, our Chief Financial 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 constitutes 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. During this presentation, we will be referring to a number of slides from our corporate presentation. The entire presentation was posted to our website immediately prior to this call. With that, I will turn the call over to Dr. Mark Goldsmith, Revolution Medicines Chairman and Chief Executive Officer. Mark?
Mark Goldsmith: Good afternoon, and thank you for joining us. Today I'll provide an update on our company progress. Steve Kelsey will provide additional information about our RMC-6236 clinical program, and Jack Anders will provide highlights of our financial results. Revolution Medicines is advancing our pipeline of groundbreaking RAS(ON) Inhibitors and RAS Companion Inhibitors on behalf of patients with a wide range of RAS-addicted cancers, setting up an exciting and data rich year. We have advanced into clinical development, the first two drug candidates from this highly innovative RAS(ON) inhibitor portfolio. RMC-6236 is a groundbreaking RAS inhibitor with a potential to treat all or nearly all RAS cancer patients due to its highly differentiated mechanism of action facilitating broad activity across major RAS variants.
RMC-6291 is the vanguard of our mutant selective RAS(ON) inhibitor portfolio, which also includes our oral and covalent KRASG12D inhibitor expected to enter the clinic mid-year and a second wave of inhibitors designed to treat a range of RAS-mutant cancers. Together, the two Phase I programs will provide key insights into the potential of each exciting drug candidate and initial information to validate our tri-complex RAS(ON) inhibitor platform as a whole. RMC-6236 and 6291 have been well-behaved so far in the dose escalation portions of the RMC-6236-001 and RMC-6291-001 clinical studies respectively. Both compounds have exhibited oral bioavailability, leading to increasing exposure levels with increasing dose consistent with our preclinical projections.
They have both been generally well tolerated. We've cleared several dose levels for each compound with a once daily dosing schedule and we have not yet reached a maximal tolerated dose or defined a recommended Phase II dose for either compound. Today, we will expand further on the findings related to RMC-6236 in particularly. Momentarily, Steve Kelsey will share with you additional information coming from the RMC-6236-001 trial. You will hear about initial pharmacokinetics, molecular and radiographic findings from the early stages of this study, supporting our belief that we are dosing this compound in a pharmacologically active range and observing anti-tumor activity consistent with clinical benefit, with acceptable safety and tolerability.
Although the data Steve will describe today are early, we believe these findings are quite encouraging for RMC-6236 itself as a drug candidate. They are insufficient to define the full profile and potential of 6236, including response rates or long-term durability in any tumor type, which will require more data and time. Nevertheless, we feel these data are important as they significantly de-risk key aspects of our broad portfolio of multiple clinical and preclinical RAS(ON) inhibitors that all share a number of fundamental properties. Let me offer additional context by reminding you of some key elements regarding the compound RMC-6236. Our description of 6236 as a RASMULTI(ON) inhibitor has three components. It is designed to bind selectively to RAS proteins.
It binds two and inhibits all or nearly all forms of RAS, including every known oncogenic mutant and wild-type form we've tested and it binds RAS exclusively in the (ON) or activated state in contrast to first-generation KRASG12C inhibitors that bind RAS in the (OFF) state. 6236 shows high potency in cellular assays inhibiting RAS signaling typically at low nanomolar to sub-nanomolar concentrations and frequently driving deep and sustained RAS pathway suppression in RAS dependent tumor cells, and we have shown extensive preclinical evidence that 6236 induces deep and sustained regressions in diverse in vivo cancer models representing multiple tumor types and multiple RAS-mutant genotypes, especially KRASG12X mutants, a RAS inhibitor profile that is, to our knowledge, unprecedented.
Overall, the design of RMC-6236 as a RASMULTI(ON) inhibitor, not only chemically and pharmacologically breaks new ground in the field, but also serves the bold biological goal of leveraging its ability to inhibit all or nearly all forms of RAS, including both the primary mutant RAS driver and normal or wild-type RAS forms to maximally suppress RAS signaling overall in cancer cells that are addicted to RAS. A fundamental question being evaluated in the RMC-6236-001 clinical trial is whether 6236 with this biological profile can be dosed in patients at levels that deliver clinical anti-tumor impact without causing also causing unacceptable effects on normal tissues due to the compounds intentional activity against wild-type forms of RAS that would also be anticipated in normal cells.
The extensive preclinical evidence of dramatic anti-tumor activity in multiple animal models came from studies at dose levels that did not induce concomitant intolerability and the RMC-6236-001 clinical study is a first test of these aspirations for this drug candidate in patients. Steve Kelsey, our President of R&D will present our first report of clinical experience with a RAS(ON) inhibitor RMC-6236. Steve?
Steve Kelsey: Thank you, Mark. As we have stated previously based on extensive preclinical studies of RMC-6236, our working assumption is that the on-target effects of inhibiting wild-type RAS in normal tissues will ultimately determine the maximum tolerated dose in people. We have consistently represented that we believe RAS mediated toxicities will be predictable, manageable, monitorable, and reversible. We have also presented preclinical data suggesting that the slower clearance of RMC-6236 from tumors compared with normal tissues may enhance the therapeutic index for RMC-6236 and contribute to achieving meaningful anti-tumor activity for tolerated exposures. Meaningful clinical activity includes both reduction in tumor size and durable inhibition of tumor growth, represented most frequently as progression-free survival in clinical trials.
In the clinical program to date, patients have been treated in five dose cohorts ranging from 10 milligrams daily to 120 milligrams daily. To calibrate you, based on measured drug exposures in these patients, the 10 and 20 milligram doses fall at the lowest end of exposures we evaluated pre-clinically and were associated with some degree of tumor growth inhibition in xenograft models. Drug exposures seen in patients treated at 40, 80 and 120 milligrams daily are similar to those associated with more significant anti-tumor effects in preclinical studies. These included dose-dependent tumor regressions and delay in time to tumor growth in in vivo studies of several RAS-mutant cancer models. But with these doses in patients, we haven't yet reached the exposure levels achieved at the dose we studied the most pre-clinically, that is 25 milligrams per kilogram daily.
36 patients have been evaluated for initial safety and tolerability in the clinical trial so far. As shown in the table of drug-related adverse events on Slide 11, treatment across all dose cohorts has been generally well-tolerated. Some patients have exhibited predicted on-target normal tissue effects, presumably due to inhibition of wild-type RAS. These are primarily grade one or two skin rashes similar to those observed with EGFR inhibitors and the range of mild to moderate severity gastrointestinal toxicities usually nausea or diarrhea. The frequency and severity seem to be dose-dependent and thus far have been manageable with standard supported care. One patient required a brief dose hold for skin rash and resume dosing at reduced dose.
Skin rash and gastrointestinal toxicity are recognized consequences of suppressing RAS signaling in normal tissues based on a wide experience in the field with other drugs and drug candidates, including EGFR, MEK, ERK and SHP2 inhibitors. Skin rash has been historically viewed as a biomarker of pharmacologic activity by some of these drugs. Therefore, the clinical findings further support our belief based on PK data that we are achieving exposures of RMC-6236 in patients that are in an active range without inducing unacceptable toxicity. Among all 36 patients evaluated so far, one related serious adverse event has been observed. This patient with metastatic pancreatic cancer and a KRASG12D mutation entered the study with extensive abdominal disease, including a large and deeply invasive tumor implant in the serosal wall of the large intestine.
About one week into treatment at 80 milligrams daily, the patient experienced an unfortunate bowel perforation that occurred at the invasive tumor site, accompanied by radiographic evidence of tumor reduction at that location and other metastatic sites. No evidence or clinical symptoms of colitis or colonic ulceration were seen preceding the event or observed on subsequent imaging. Based on abdominal CT scans and the opinions of the clinical investigators, we believe that this event is likely attributable to shrinkage of the tumor by RMC-6236 in the heavily infiltrated bowel wall even within the short treatment period rather than to a direct toxic effect of RMC-6236 on the normal bowel wall. Similar events attributed to tumor shrinkage in the bowel wall have been occasionally described on treatment with BRAF inhibitors and with chemotherapy.
We have treated patients with RMC-6236 in a higher-dose cohort, 120 milligrams, without observing additional serious adverse events so far and expect to continue dose escalating even further towards a recommended Phase II dose. Let me provide some information on the anti-tumor activity we have seen in the study. Consistent with study eligibility criteria, patients with a range of tumor types in which KRASG12X mutations are common have been enrolled, including major epithelial cancers, such as non-small cell lung cancer, pancreatic, colorectal and other tumors, including ovarian cancer, appendiceal and bile duct cancers. The KRAS mutations in those tumors cover the range of KRASG12 mutations: G12(D,V,A, S, R) with D being the most heavily represented so far.
And this is consistent with the epidemiology of RAS mutations in human cancers. Patients enrolled in this study have been previously treated with the standard of care and/or other regimens with an overall median of three prior therapies as is typical for an oncology dose escalation Phase I study. At the 10-milligram and 20-milligram dose levels, radiographic imaging showed either stable disease with some tumor reduction or disease progression as the best response. Interestingly, in several patients at these lower dose levels, we have measured significant reductions in tumor variant alleles in ctDNA. For instance, in one patient with a KRASG12V non-small cell lung cancer treatment at 20 milligrams daily was associated with initial stable disease and 100% clearance of all RAS-mutant alleles and all other concurrent tumor variant alleles.
These earliest signs were consistent with our expectations at these low dose levels and were encouraging. We would like to show you more detail regarding early and preliminary treatment-related activity at the 40, 80 and 120-milligram dose levels. We are focusing on non-small cell lung cancer and pancreatic cancer since those are the two histologies most likely to be sensitive to a RAS inhibitor monotherapy based on the G12C experience. We will report on other tumor types, including colorectal cancer, in future updates. The waterfall plot of tumor volumes on Slide 12 shows our experience so far with the nine pancreatic cancer patients and three non-small cell lung cancer patients that have been treated at 40 milligrams daily or higher and are efficacy-evaluable.
All 12 of these patients have exhibited stable disease or better as their best response and remain on study from approximately 1.5 to 4.5 months as of the data cutoff date. 10 of 12 patients have shown some degree of tumor volume reduction by RECIST. One patient with a KRASG12D non-small cell lung cancer achieved a partial response on first restaging scan and was subsequently confirmed with a follow-up scan. One pancreatic cancer patient with a KRASG12D mutation also achieved a thus far unconfirmed partial response, a case study I will describe more fully in a moment. Even at this early stage with short follow-up, small patient numbers and doses below the anticipated recommended Phase II dose, we believe that these data compare favorably with chemotherapy regimens for advanced pancreatic cancer, where disease control rates rarely exceed 60% and the response rates are low.
The durability of disease control is of high importance for conferring clinical benefits and ultimately regulatory approval, particularly in advanced pancreatic cancer. Follow-up continues on all of these patients, as we've noted. In some cases, tumors continue to reduce in size beyond the first response evaluation. Let me now describe to you a particular case that is still ongoing and requires further data collection while the patient's treatment continues, but even at this stage, provides a view into the therapeutic potential of RMC-6236. As described on Slide 13, this patient is a 76-year-old male with metastatic pancreatic cancer harboring the KRASG12D allele and associated gene copy number loss in tumor suppressor genes CDKN2A and N2B as well as the associated putative tumor suppressor MTAP.
After both neoadjuvant and postsurgical adjuvant chemotherapy, he developed metastatic disease in the lungs and progressed following the third course of chemotherapy. He received RMC-6236 at 80 milligrams daily, which as noted earlier, we project to be in the midrange for anti-tumor activity and is below the anticipated recommended Phase II dose. The patient is tolerating the drug well. At baseline, the patient had three distinct lesions: one in the right lung and two in the left lung that are being followed radiographically. These lesions are identified on the upper row of the three CT images on Slide 14. All three lesions underwent significant reduction over 12 weeks of therapy. At six weeks, all three tumor lesions were reduced in size with an overall 17% reduction in tumor size by RECIST.
On the 12-week scans shown in the second row of CT scans, target lesion one has disappeared and target lesion two is considerably reduced. The single non-target lesion is barely detectable. In addition, the density of the residual tumor has changed. RECIST quantifies response by measuring only the unidimensional longest axis for each target lesion and does not consider density or three-dimensional volume. As the first target lesion has been assigned a minimum measurement of 5 millimeters, this patient has formally achieved a 70% tumor reduction and a clear partial response by RECIST, even though volumetrically the reduction in tumor burden appears greater. He continues on study, and the partial response needs to be confirmed with a follow-up scan.
We must emphasize that it is too early to project the frequency or durability of responses or comparative results across tumor types and genotypes. The numbers are small, the dose levels are likely to be below the recommended Phase II dose, and follow-up is short. Nevertheless, the totality of data across these 12 patients reinforces our growing conviction about the potential for RMC-6236 to exhibit promising clinical anti-tumor activity in patients with advanced RAS-mutant tumors at doses that are well tolerated. And now I will turn the call back to Mark.
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Mark Goldsmith: Thank you, Steve. The collection of data just presented is, to our knowledge, the first-ever clinical data to be presented on any inhibitor designed to target the (ON) state of RAS, any RAS-targeted therapy used to treat a patient with a tumor bearing the KRASG12D mutation or any oral RAS(ON) inhibitor used to treat a patient with lung or pancreatic cancer bearing KRASG12D or various other non-G12C mutations. While initial data from the patients described today are quite encouraging overall in terms of tolerability and anti-tumor activity in multiple tumor types with multiple RAS genotypes and the case report shows a dramatic effect in KRASG12D pancreatic cancer at a tolerated dose, we will need additional data to project response rates or durability in pancreatic, lung or other cancers and across different RAS mutations at the recommended Phase II dose and schedule.
We show these early data today to illustrate what maybe possible with a RAS(ON) inhibitor as represented by the boldest compound in our collection with arguably the greatest priority therapeutic index risk profile, and we will continue to develop more clinical information. These findings are quite encouraging about the ability of a rationally designed tri-complex RAS(ON) inhibitor to be taken orally, for it to exhibit drug-like pharmacokinetics and for the tri-complex mechanism of action to drive inhibition of RAS(ON) proteins and confer promising anti-tumor benefit in patients without being accompanied by extraordinary toxicities. We confirm our intention to provide a more detailed public update on 6236 midyear, including further follow-up from patients described today and information we expect to collect from additional patients in the dose escalation phase of the study.
Let's briefly touch on RMC-6291, our mutant-selective KRASG12C(ON) inhibitor, for which we also have some early experience that allows us to build on the earlier comments about general drug-like behavior and tolerability. Based on initial PK molecular data that is ctDNA and radiographic imaging data that is serial CT scans, we believe that we are also dosing this compound in a pharmacologically active range and so far, with acceptable safety tolerability. We plan to provide a more substantive update in the second half of this year. Based on the aggregate early evidence from the 6236 program as updated here and initial experience with 6291 I summarized briefly, we believe these findings serve as growing validation of the distinctive chemistry, pharmacology and biology and therapeutic vision for our RAS(ON) inhibitors more broadly.
Of course, much more information is needed for more definitive conclusions to be drawn about each individual drug candidate, which we expect will be forthcoming over time, but we believe the information we've shared intended to represent our experience with two RAS(ON) inhibitors so far increases the probability of success for these two assets and may well read through to other assets we are developing. Next up in our RAS(ON) inhibitor collection is our mutant selective inhibitor of KRASG12D, the most common RAS variant causing human cancer RMC-9805. This compound that we introduced last year is administered orally, engages the ON form of KRASG12D and executes a covalent attachment selectively to the oncogenic aspartic acid. IND-enabling work remains on track toward our goal of beginning clinical evaluation of this exciting compound in mid-2023.
Last month, we also introduced a new RAS(ON) inhibitor drug candidate. RMC-0708 is an oral, mutant-selective non-covalent inhibitor of KRASQ61H. It has now entered development to prepare it for clinical evaluation after the first wave of RAS(ON) inhibitor drug candidates that is 6236, 6291 and 9805. It represents the fifth drug candidate we've disclosed in our portfolio of RAS(ON) inhibitors. We have now described both RASMULTI and mutant-selective drug candidates directed to each of the three common mutation hotspots in RAS proteins. Finally, let me provide brief updates on two clinical stage RAS companion inhibitors in our portfolio. RMC-4630, our SHP2 inhibitor, continues under study in patients with KRASG12C non-small cell lung cancer in combination with sotorasib in our global Phase II trial, RMC-4630-03.
The study is fully enrolled now, and we continue to expect to read out topline results in the second half of 2023. And RMC-5552, our mTORC1-selective inhibitor, continues under study as monotherapy in patients with tumors carrying mutations associated with hyperactivation of mTORC1 signaling. We expect to provide a more detailed update from this study later this year, and our aim is to bring it together with one or more RAS(ON) inhibitors to test as combination treatment in patients with tumors harboring both RAS mutations and mTORC1 pathway activation. Now I'll shift to our corporate progress and comment on our priorities for 2023. With a strong balance sheet, we entered this year with an excellent an explicit focus on the timely execution of the multiple development-stage activities currently underway with our highest priority being to deliver on important clinical milestones in the year.
We continue deploying our development resources primarily to ensure we meet the goals of our first three most advanced RAS(ON) inhibitors, RMC-6236, 6291 and 9805; and two clinical stage RAS companion inhibitors, RMC-4630 and 5552. While interim in nature, we at RevMed view the information shared today as quite important and impactful on our own assessments of technical probabilities of success with greater confidence that our innovation engine is delivering assets that deserve to be progressed and can earn the right to be deployed on behalf of patients. Part of management's bandwidth is now directed toward defining the paths and steps we need to take now and over the next several years to ensure that we can maximize the value of these exciting product candidates and others in our growing portfolio.
Building on this momentum, I'll now turn to Jack Anders, our Chief Financial Officer, to provide a financial update. Jack?
Jack Anders: Thank you, Mark. As shown on Slide 34, we ended the year with $645 million in cash and investments, which is expected to fund planned operations through 2024 based on our current operating plan. Revenue from our collaboration agreement on SHP2 inhibitors with Sanofi was $15.3 million in the fourth quarter of 2022 compared to $9.5 million in the fourth quarter of 2021. The increase in revenue was due to a $7.6 million non-cash adjustment related to the acceleration of revenue resulting from the termination of the Sanofi agreement, which has an effective date in June 2023. As a result of the termination of the agreement, we adjusted our estimates of the accounting transaction price an estimated percentage of completion of work performed to date, which resulted in a cumulative catch-up adjustment that increased collaboration revenue in the quarter.
Collaboration revenue for full-year 2022 was $35.4 million. Total operating expenses for the fourth quarter of 2022 increased to $77 million largely driven by R&D expenses, which totaled $66.1 million. Total operating expenses for full-year 2022 increased to $293.7 million with R&D expenses increasing to $253.1 million. The increase in total operating expenses in 2022 was primarily due to the advancement of RMC-6236 and RMC-6291 in two clinical trials as well as an increase in personnel-related expenses related to additional headcount, an increase in research expenses associated with the company's preclinical research portfolio and an increase in stock-based compensation. Net loss for the fourth quarter of 2022 was $56.5 million or $0.63 per share.
For full-year 2022, net loss was $248.7 million or $3.08 per share. Turning to financial guidance for 2023. We expect full-year GAAP net loss to be between $335 million and $365 million, which includes estimated non-cash stock-based compensation expense of $40 million to $50 million. The increase in expected GAAP net loss for 2023 is a result of increased expenses associated with the advancement of our RAS(ON) portfolio and a decrease in expected collaboration revenue. And with that, I'll now turn the call back over to Mark.
Mark Goldsmith: Thank you, Jack. We are highly encouraged with the progress of our rich development pipeline, particularly by the body of clinical evidence developed so far that provides initial validation of our RAS(ON) inhibitor platform and as described here, promising early evidence that RMC-6236 can be dosed in patients to induce significant anti-tumor activity without unacceptable side effects. We look forward to sharing further information on our collection of exciting clinical and preclinical assets throughout the year. We deeply appreciate the support of our patients, clinical investigators, scientific and business collaborators, advisers and shareholders and, of course, the tireless efforts of RevMed employees in pursuit of our mission to outsmart RAS-addicted cancer. This concludes our prepared remarks for today. And I'll now turn the call over to the operator for the question-and-answer session.
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