Revolution Medicines Took A $250 Million Royalty Pharma Loan And Passed On A Royalty Sale Worth Up To $250 Million
An 8-K shows the drugmaker drew the first loan tranche and declined a separate royalty sale, with $1 billion in options still open.
Revolution Medicines borrowed $250.0 million from Royalty Pharma's lending arm on October 8 and chose not to sell Royalty Pharma a further royalty stake worth up to $250.0 million, an 8-K filed Tuesday says. The loan was tied to FDA approval of its pancreatic cancer drug RASONQUE (daraxonrasib).
What the 8-K says
The money is the first tranche of a senior secured term loan facility of up to $750.0 million, split into three tranches of up to $250.0 million each. Revolution Medicines signed that facility on June 23, 2025, and the filing says the company was required to borrow Tranche A. It paid a $5.0 million draw fee.
The approval that triggered the draw covers adult patients with metastatic pancreatic adenocarcinoma who have had at least one prior systemic therapy or are not candidates for multiagent systemic therapy.
The loan pays a floating rate of three-month Term SOFR, with a 3.50% floor, plus 5.75%. Interest is due quarterly. The loan is interest-only, and the principal falls due on October 8, 2032.
Prepayment must cover the whole loan. Before the second anniversary, the company owes a make-whole amount (the interest that would have accrued through that date) plus a 3.0% premium. After the second anniversary and before the third, the premium is 3.0%. After the third and before maturity, it is 1.0%.
The royalty sale it declined
Under a separate purchase agreement with Royalty Pharma, the approval triggered an option, not an obligation. The company could have required Royalty Pharma to pay up to $250.0 million for an incremental revenue participation right, by sending a notice no later than October 10, 2026.
It did not send the notice. The company therefore gets no purchase price, and Royalty Pharma gets no new right.
What it changes
The company now owes $250.0 million at a floating rate, and it kept its royalty rights intact on the Tranche 3 piece. Up to $500.0 million more in loans and up to $500.0 million more in royalty purchase-price payments remain available at its election, subject to milestones and conditions in the agreements.
The filing arrives as the drug draws scrutiny. FDA review documents showed weaker tumor responses in some KRAS subgroups, Fierce Pharma reported, and shares fell about 6% that day. Analysts at Leerink Partners and Jefferies argued investors overreacted, and the company pointed to overall survival as the key endpoint.
RVMD shares closed at $188.44 in Tuesday trading, down about 3% for the session, before the filing was accepted at 4:32 p.m. ET.
The remaining $500.0 million in loans and $500.0 million in royalty payments stay open only if milestones in the agreements are met.
Sources
- 8-K Filing — Revolution Medicines, Inc. (RVMD) — SEC EDGAR
- FDA’s Rasonque review documents pressure RevMed as investors jitter over KRAS subgroup data | Fierce Pharma — fiercepharma.com
- FDA review docs spark Revolution sell-off; Zealand diabetes data underwhelm analysts | BioPharma Dive — biopharmadive.com
