Revolution Medicines Announces Closing of Upsized Public Offering of Common Stock and Pre-Funded Warrants and Full Exercise of Underwriters' Option to Purchase Additional Shares

Rhea-AI Summary

Revolution Medicines (RVMD) has successfully closed its upsized public offering, raising $862.5 million in gross proceeds. The offering consisted of 16,576,088 shares of common stock at $46.00 per share and pre-funded warrants to purchase 2,173,917 shares at $45.9999 per share. The total includes 2,445,652 additional shares from the full exercise of the underwriters' option.

The offering was managed by J.P. Morgan, TD Cowen, Goldman Sachs & Co. , and Guggenheim Securities as joint book-running managers, with UBS Investment Bank acting as lead manager.

Positive

• Successful raise of $862.5 million in gross proceeds strengthening the company's financial position
• Full exercise of underwriters' option indicates strong market demand
• Strategic financing through both common stock and pre-funded warrants provides flexibility

Negative

• Significant shareholder dilution due to the issuance of 16.6M new shares plus 2.2M warrant shares
• Additional expenses related to underwriting discounts and offering costs will reduce net proceeds

Insights

Financial Analyst

The $862.5 million capital raise through this upsized public offering significantly strengthens Revolution Medicines' balance sheet, providing substantial runway for their clinical programs targeting RAS-addicted cancers. The strong demand, evidenced by the full exercise of underwriters' option and participation of major investment banks like J.P. Morgan and Goldman Sachs, indicates robust institutional investor confidence. At $46.00 per share, the offering price represents market confidence in RVMD's pipeline and strategy. The inclusion of pre-funded warrants adds flexibility for certain investors while minimizing immediate dilution. This substantial cash injection should adequately fund the company's clinical development programs and operations for an extended period, reducing near-term financing risk.

Market Research Analyst

The successful completion of this large offering demonstrates strong market appetite for oncology-focused biotechnology companies, particularly those targeting the challenging RAS pathway. The participation of multiple tier-1 investment banks and the full exercise of the overallotment option signals institutional backing. The size of the raise relative to RVMD's $8.1 billion market cap is significant but well-absorbed by the market. The structure, including both common stock and pre-funded warrants, shows sophisticated financial engineering to accommodate different investor preferences. This fundraising positions RVMD competitively in the oncology space, where substantial capital is required for clinical development and potential commercialization efforts.

Underwriters’ full exercise of option brings gross proceeds to $862.5 million

REDWOOD CITY, Calif., Dec. 05, 2024 (GLOBE NEWSWIRE) -- Revolution Medicines, Inc. (Nasdaq: RVMD), a clinical-stage oncology company developing targeted therapies for patients with RAS-addicted cancers, today announced the closing of its underwritten public offering of 16,576,088 shares of its common stock at a public offering price of $46.00 per share, before underwriting discounts and commissions, and, in lieu of shares of common stock, to certain investors, pre-funded warrants to purchase 2,173,917 shares of common stock at a public offering price of $45.9999, which represents the per share public offering price for the common stock less the $0.0001 per share exercise price for each pre-funded warrant. The shares of common stock issued and sold in the offering include 2,445,652 shares issued upon exercise in full by the underwriters of their option to purchase additional shares of common stock at the public offering price, less underwriting discounts and commissions. The gross proceeds from the offering, before deducting underwriting discounts and commissions and other offering expenses payable by Revolution Medicines, were $862.5 million. All shares and pre-funded warrants in the offering were offered by Revolution Medicines.

J.P. Morgan, TD Cowen, Goldman Sachs & Co. LLC and Guggenheim Securities acted as joint book-running managers for the offering. UBS Investment Bank acted as lead manager.

A shelf registration statement relating to these securities was filed with the U.S. Securities and Exchange Commission (SEC) on March 4, 2024, and automatically became effective upon filing. This offering was made solely by means of a prospectus. A copy of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, a copy of the final prospectus supplement and the accompanying prospectus relating to this offering may be obtained by contacting: J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, New York 10017, by telephone at (855) 495-9846 or by email at TD.ECM_Prospectus@tdsecurities.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526 or by email at prospectus-ny@ny.email.gs.com; and Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, 8th Floor, New York, New York 10017, by telephone at (212) 518-9544 or by email at GSEquityProspectusDelivery@guggenheimpartners.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Revolution Medicines, Inc.

Revolution Medicines is a clinical-stage oncology company developing novel targeted therapies for RAS-addicted cancers. The company’s R&D pipeline comprises RAS(ON) inhibitors designed to suppress diverse oncogenic variants of RAS proteins. The company’s RAS(ON) inhibitors RMC-6236, a RAS(ON) multi-selective inhibitor, RMC-6291, a RAS(ON) G12C-selective inhibitor, and RMC-9805, a RAS(ON) G12D-selective inhibitor, are currently in clinical development. Additional development opportunities in the company’s pipeline focus on RAS(ON) mutant-selective inhibitors, including RMC-5127 (G12V), RMC-0708 (Q61H) and RMC-8839 (G13C), in addition to RAS companion inhibitors RMC-4630 and RMC-5552.

Revolution Medicines Investors & Media Contacts: investors@revmed.com; media@revmed.com

FAQ

How much did Revolution Medicines (RVMD) raise in their December 2024 public offering?

Revolution Medicines raised $862.5 million in gross proceeds through their public offering of common stock and pre-funded warrants.

What was the share price for RVMD's December 2024 public offering?

The public offering price was $46.00 per share of common stock, and $45.9999 for pre-funded warrants.

How many shares did Revolution Medicines (RVMD) issue in their December 2024 offering?

Revolution Medicines issued 16,576,088 shares of common stock and pre-funded warrants to purchase 2,173,917 shares.

Did the underwriters exercise their option in RVMD's December 2024 offering?

Yes, the underwriters fully exercised their option to purchase an additional 2,445,652 shares at the public offering price.