Revolution Medicines Has a $40 Billion Market Cap and Generates No Revenue. Here's Why That's Not Absurd.

Most clinical-stage biotechs are small-cap companies. That makes sense. Not only can it take years -- sometimes over a decade -- to develop novel medicines, but it is also a very risky endeavor. Companies that don't have a single product on the market and generate little to no revenue are very risky. However, several clinical-stage drugmakers have impressive market values compared to their peers. Take Revolution Medicines (NASDAQ: RVMD), a biotech focused on developing cancer therapies. Its current market cap is about $40 billion. That may seem absurd, but there is a good reason Revolution Medicines is worth what it is. Image source: Getty Images.Cancer is one of the leading causes of death, and there are still many forms of the disease for which there is a need for new treatment options. Even within market niches with plenty of options, there is always room for improvement. Given all that, it's not surprising that oncology is by far the largest area in the pharmaceutical industry in terms of annual sales. Medicines that dominate the cancer market make billions, sometimes tens of billions, in revenue every year. Revolution Medicines is looking to tap into this large opportunity. It isn't the only one: Many smaller drugmakers are actively developing cancer drugs. The difference is that Revolution Medicines' leading candidates look incredibly promising.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool