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Revolution Medicines has officially transitioned from a research firm to a commercial business. The company reported $198 million in sales for its new drug, Rasonque, which treats pancreatic cancer. This far exceeded the $30 million analysts expected, even though the drug was only on the market for part of the quarter.
While the company still lost $1.90 per share, the loss was smaller than the $2.35 analysts predicted. More importantly, the drug received a positive recommendation for approval in Europe. For a company that previously had no revenue, this successful launch proves it can build its own sales force and effectively reach patients with its new class of cancer treatments.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
After Revolution Medicines reported its November results, we updated our revenue and expense projections to account for the company's first drug launch. We moved our rating from Buy to Watch. We have added the higher rate of serious side effects to the risks we track, after US prescribing data showed reactions in 30% of patients. We also added the cost of running five simultaneous late-stage trials to our projections and included early treatment use for new patients in our growth assumptions.
Revolution Medicines is set to report its latest results today. Analysts expect a loss of about $2.35 per share and very little revenue, which is normal for a company that is still testing its drugs rather than selling them.
For a business at this stage, the actual profit and loss numbers matter less than the update on its lead drug, daraxonrasib. We are watching for any new details on the timeline for FDA approval and the company's progress in building its own sales team to prepare for a market launch.
The company is expected to report a loss of about $2.35 per share on very little revenue, which is normal for a biotech firm still testing its drugs. Since the company is not yet selling a product, the most important part of the report will be updates on its Phase 3 trials and how much cash it has left to fund its move toward becoming a commercial business.
The company released a deeper look at its Phase 3 trial results for daraxonrasib, its drug for advanced pancreatic cancer. The new data shows that the survival benefits were consistent across various patient subgroups, including different ages and types of prior chemotherapy.
This is important because it suggests the drug's effectiveness isn't limited to a narrow slice of patients. For a company moving toward its first commercial launch, proving a drug works reliably across a broad population makes it more likely to become the standard treatment that doctors reach for first.
Source: GlobeNewsWire
Management has historically set bars they struggled to clear, but the first month of drug sales suggests the business is finally outrunning their cautious forecasts.
| Expectation | |
|---|---|
| EPS | $-1.22 |
| Revenue | $389M |
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