Antifungal out, cancer in: Revolution scores $500M Sanofi deal on first oncology program

Less than a year ago, Third Rock startup Revolution Medicines shed its antifungal ambitions and remade itself as an oncology company. Now, the Redwood City-based biotech has apparently wooed Sanofi $SNY into a bang up deal on its first cancer program.

Mark Goldsmith

The company said Wednesday that Sanofi will be picking up the check for its lead program’s R&D, while offering a $50 million upfront payment and up to $500 million in gated milestones. The two companies are also sharing US profits (and losses) in a 50/50 split — an unusually balanced deal for an early-stage biotech like Revolution to finagle.

What’s Revolution got? Its lead program is a preclinical-stage small molecule that might fight cancer in two separate ways. The drug inhibits SHP2, a cellular enzyme in the protein tyrosine phosphatase family that plays a key role in several types of cancer. Revolution’s president and CEO Mark Goldsmith tells me the drug, coined RMC-4630, can both “suppress cell growth signaling and overcome suppressive activities in the immune system” in certain cancers. In other words, it has the potential to stall — or even shrink — the tumor itself, and also neutralize the immune-suppressing environment in which the tumor thrives.

The lead drug will move into human trials during the second half of this year, Goldsmith says, testing the compound against non-small cell lung cancer (NSCLC). When asked if NSCLC was getting crowded, Goldsmith emphatically defended the continuing need for new therapies in the field.

“There seems to be an emerging view that non-small cell lung cancer has been taken care of with the use of chemo plus checkpoint inhibitors, but I believe that’s a vastly overstated posture and a little regrettable,” Goldsmith said. “Lung cancer remains a serious scourge in the US with a high fatality rate and only a subset of patients benefit from the current targeted therapies, chemo, or checkpoint inhibitors. Even those patients who do receive targeted therapy often — and quickly — develop resistance to the targeted therapies.”

But it’s not just NSCLC Revolution is taking on. The company thinks its tech can also tackle colon cancer and some melanomas. The Sanofi deal gets the pharma giant exclusive worldwide rights to commercialize any approved products targeting SHP2, although there’s a US-only co-promote option written in for Revolution.

Revolution was courting suitors for months after it notified several big pharmas that it was looking for partners last year. They got to term sheets with a few, but ultimately were smitten with what Sanofi could bring to the table. Sanofi is a commercialization powerhouse, they were excited about the science and willing to let it remain in Revolution’s hands until later stages of development. Plus, they were covering the costs of R&D (freeing up Revolution to expand discovery-stage projects), and perhaps most importantly — Sanofi agreed that they would split US profits and losses 50/50.

“The foundational feature of this business deal is that 50/50 profit and loss share arrangement in the US,” Goldsmith said. “This is really important to us. When creating successful biotech companies, you cannot abandon real commercial opportunity — in the US especially. And frankly, we decided if we couldn’t find a partner that would share US profits then we wouldn’t sign a partner at all.”

Luckily, Sanofi was amenable. Now, Goldsmith said, the company has the resources to focus on building its pipeline. With a recent $56 million fundraising round just four months ago — plus this new $50 million upfront payment — the company is well capitalized to go about discovering. Revolution has some ongoing projects in mTORC1 and SHP1 that will be the focus moving forward.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
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Catalytic Data Science Charleston, SC
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Flatiron Health New York City or San Francisco

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