Revolution Medicines and Iambic Therapeutics have entered into a multi-year collaboration to develop innovative cancer drugs using AI models, with a financial arrangement of up to $25 million in upfront payments, milestones, and R&D reimbursements.

Both companies will share rights to certain targets and pursue additional targets independently, aligning their incentives for success, while Revolution is advancing RAS inhibitors with a pipeline including daraxonrasib, which is in phase 3 trials for lung and pancreatic cancers.

Revolution recently secured up to $2 billion in funding from Royalty Pharma to support its pipeline and ongoing development efforts.

Iambic’s NeuralPLexer features a flow matching architecture that enables fast, high-accuracy predictions of biomolecular interactions, making it versatile across various drug targets.

Iambic’s drug candidate IAM1363 progressed from discovery to first-in-human studies in less than two years, demonstrating a significantly accelerated development timeline.

Wall Street analysts project a 12-month stock target of $73.20 for Revolution, over 100% upside from Q2 2025 prices, supported by the pipeline’s potential and the collaboration, with the company holding $2.1 billion in cash and a partnership with Royalty Pharma to strengthen its financial position.

Iambic’s AI platform combines physics principles with machine learning to predict molecular structures and identify new chemical modalities efficiently, completing rapid design-make-test cycles.

In September 2024, Iambic partnered with Lundbeck to use NeuralPLexer for migraine-related small molecule discovery, showcasing its application across different therapeutic areas.

Iambic plans to report additional clinical data later in 2025 and expects its second drug candidate for chromosomally unstable tumors to enter the clinic in Q4 2025.

Founded in 2020 in San Diego, Iambic has advanced its first pipeline candidate, IAM1363, into clinical trials targeting HER2-positive solid tumors.

While there are risks such as regulatory uncertainties for RAS inhibitors, trial delays, and high valuations, AI-driven approaches could help reduce failure rates and accelerate development.

The partnership will leverage Revolution’s proprietary data to train customized versions of NeuralPLexer for protein-ligand structure prediction and will also utilize Iambic’s PropANE model for drug property analysis.

Both companies will share access and rights to certain targets, with Iambic using Revolution’s molecular libraries and structures to enhance its drug discovery efforts.

Revolution’s strategic positioning at the intersection of AI innovation and unmet oncology needs makes it a high-risk, high-reward investment, with upcoming catalysts like Phase 3 data and IND filings offering significant upside.