On Tuesday, JPMorgan (NYSE:JPM) updated its outlook on Revolution Medicines (NASDAQ:RVMD) shares, increasing the price target to $55 from the previous $42, while maintaining an Overweight rating on the stock. The revision follows new phase 1 results for RMC-6236 in second-line or later pancreatic ductal adenocarcinoma (PDAC).
The updated December 2025 price target reflects key adjustments in JPMorgan's model, including an accelerated launch timeline for RMC-6236, now expected in 2028 rather than 2029. This change is based on the development timelines for the RASolute phase 3 study.
Additionally, the firm has moderately increased its market penetration assumptions in PDAC and raised the probability of success in both PDAC and non-small cell lung cancer (NSCLC).
Investor focus for Revolution Medicines is expected to transition to the upcoming RMC-6236 phase 1 update in NSCLC in the second half of the year. However, attention will also remain on PDAC due to potential follow-up data. The firm acknowledges limited visibility on the timing and patient metrics for the NSCLC update but expects a readout following regulatory discussions for a pivotal phase 3 trial in the second-line setting.
The earliest indication of more detailed information may come with the company's second-quarter earnings. Additionally, management has indicated a strong interest from investigators in presenting the PDAC study results at a medical congress.
Although the exact venue is not specified, JPMorgan anticipates a presentation that will include a more mature progression-free survival/overall survival data cut, possibly with an additional 2-3 months of follow-up if presented at the European Society for Medical Oncology (ESMO) 2024, along with response rate and progression-free survival analyses by dosage and drug exposure.
In conclusion, JPMorgan views the broad commercial potential of RMC-6236 in PDAC and NSCLC as not fully reflected in the current stock levels of Revolution Medicines. The firm recommends buying shares ahead of multiple second-half 2024 clinical readouts that could potentially enhance the drug's value.
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