Revolution Medicines Announces Pricing of Upsized $750.0 Million Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

Revolution Medicines (RVMD) has announced the pricing of an upsized public offering totaling $750.0 million. The offering consists of 14,130,436 shares of common stock priced at $46.00 per share, and pre-funded warrants to purchase 2,173,917 shares at $45.9999 per warrant. The company has granted underwriters a 30-day option to purchase up to an additional 2,445,652 shares. The offering, expected to close on December 5, 2024, is being 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

• Substantial capital raise of $750.0 million strengthens company's financial position
• Successful pricing at $46.00 per share indicates strong market interest
• Additional 30-day option for underwriters could increase total proceeds

Negative

• Significant shareholder dilution due to issuance of 14.1M new shares plus warrants
• Additional potential dilution from underwriters' option of 2.4M shares
• Further dilution possible from future exercise of pre-funded warrants

Insights

Financial Analyst

This $750 million upsized public offering represents a significant capital raise for Revolution Medicines, pricing 14.13M shares at $46.00 per share and 2.17M pre-funded warrants at $45.9999. The deal structure, including the 30-day option for underwriters to purchase additional shares, demonstrates strong institutional interest and market confidence in RVMD's oncology pipeline.

The timing and size of this offering are strategic, coming after positive clinical data and amid favorable market conditions. With a market cap of $9.7 billion, this raise represents approximately 7.7% dilution to existing shareholders. The strong syndicate of investment banks, led by J.P. Morgan, adds credibility to the offering. The capital infusion will significantly strengthen RVMD's balance sheet, providing runway for their RAS-addicted cancer programs development.

Market Research Analyst

The successful pricing of this substantial offering indicates robust institutional demand for RVMD shares in the competitive oncology space. The inclusion of pre-funded warrants provides flexibility for certain investors while minimizing immediate dilution impacts. The pricing at $46.00 reflects market confidence in RVMD's clinical programs and business strategy.

The participation of top-tier investment banks suggests strong institutional backing and potential long-term support. This capital raise positions RVMD competitively in the targeted oncology market, particularly in the RAS inhibitor space where significant opportunities exist. The company's ability to secure this level of funding demonstrates investor confidence in their clinical development pipeline and market potential.

REDWOOD CITY, Calif., Dec. 03, 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 pricing of 14,130,436 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. All of the shares and pre-funded warrants in the offering are to be sold by Revolution Medicines. In addition, Revolution Medicines has granted the underwriters a 30-day option to purchase up to an additional 2,445,652 shares of common stock at the public offering price, less underwriting discounts and commissions. The gross proceeds from the offering are expected to be approximately $750.0 million before deducting underwriting discounts and commissions and other offering expenses, excluding any exercise of the underwriters’ option to purchase additional shares and excluding the exercise of any pre-funded warrants. The offering is expected to close on December 5, 2024, subject to customary closing conditions.

J.P. Morgan, TD Cowen, Goldman Sachs & Co. LLC and Guggenheim Securities are acting as joint book-running managers for the offering. UBS Investment Bank is acting 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 is being 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.

Forward Looking Statements

To the extent that statements contained in this press release are not descriptions of historical facts regarding Revolution Medicines, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected completion and timing of closing of the public offering. Such forward-looking statements involve risks and uncertainties, including, without limitation, risks and uncertainties related to market conditions and the satisfaction of closing conditions related to the public offering. Such forward-looking statements involve substantial risks and uncertainties that relate to future events, and the actual results could differ significantly from those expressed or implied by the forward-looking statements. Revolution Medicines undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties relating to Revolution Medicines’ business in general, see the prospectus supplement related to the public offering and Revolution Medicines’ current and future reports filed with the SEC, including Revolution Medicines’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the SEC on November 6, 2024.

FAQ

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

Revolution Medicines raised $750.0 million through a 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.

How many shares did Revolution Medicines (RVMD) offer in December 2024?

Revolution Medicines offered 14,130,436 shares of common stock and pre-funded warrants for 2,173,917 additional shares.

When is RVMD's December 2024 public offering expected to close?

The offering is expected to close on December 5, 2024, subject to customary closing conditions.