Revolution Medicines To Acquire EQRx In All-Stock Transaction To Gain Over $1B In Additional Capital

Revolution Medicines Inc RVMD has agreed to acquire EQRx Inc EQRX in an all-stock transaction intended to add more than $1 billion in net cash to Revolution Medicines' balance sheet. 

Specifically, at closing, EQRx stockholders will receive the number of shares of Revolution Medicines common stock equal to the sum of 7,692,308 Revolution Medicines shares (determined as $200 million divided by $26.00 per share) plus some shares equal to $870 million divided by a price that is a 6% discount to the 5-day volume-weighted average Revolution Medicines share price measured close to the stockholder vote.

Certain EQRx stockholders, representing more than 40% of voting shares of EQRx, have entered into support and voting agreements to vote their shares in favor of the transaction. At the close of the transaction, one EQRx director will be designated by Revolution Medicines to serve on its board of directors.

The transaction is expected to close in November 2023.

Concurrently, Revolution Medicines has decided to concentrate its post-merger financial and human capital on its three priority RAS-focused assets (RMC-6236, RMC-6291, and RMC-9805), as well as its deep pipeline of mutant-selective RAS(ON) Inhibitors.

Revolution Medicines does not intend to advance EQRx's research and development portfolio following the transaction's closing. 

EQRx will commence a process to wind down these programs and return the associated intellectual property to its partners.

Price Action: EQRX shares are up 15.5% at $1.98, and RVMD stock is up 10.5% at $29.00 on the last check Tuesday.