Revolution Medicines to acquire EQRx in deal that will add $1 billion in cash to its balance sheet to fund R&D

Revolution Medicines Inc.
RVMD,
+2.10%
said Tuesday it has reached a definitive agreement to acquire EQRx Inc.
EQRX,

in an all-cash deal that’s expected to add more than $1 billion in net cash to its balance sheet. Revolution Medicines specializes in therapies for RAS-addicted cancers, or those that are caused by mutations in RAS genes. The company is expecting to use the proceeds of the $1 billion to fund late-stage development of RAS inhibitor drug candidates. Under the terms of the board-approved deal, EQRx shareholders will receive shares to be determined closer to the shareholder vote on the deal using an exchange-ratio formula equal to about 7.7 million Revolution shares as well as shares equal to $870 million that will be discounted based on Revolution’s share price at that time. “This singular acquisition of a sizable quantum of capital signifies the growing confidence we have in our RAS-focused drug candidate pipeline, and substantially increases our capacity to continue advancing high-performing oncology assets, particularly our priority clinical-stage RAS(ON) Inhibitors, RMC-6236, RMC-6291 and RMC-9805, with the potential to create significant long-term value for our shareholders,” said REvolution’s CEO Dr. Mark A. Goldsmith in a statement. The deal is expected to close in November.