Revolution Medicines has signed a definitive agreement to acquire biopharmaceutical company EQRx in an all-stock transaction.

Revolution will gain additional capital of $1bn in the merger, and EQRx shareholders will receive shares of Revolution's common stock at closing.

This will include 7,692,308 Revolution shares (calculated by dividing $200m by $26.00 per share) and additional shares equivalent to $870m.

EQRx's portfolio consists of more than ten programmes, including small molecules and biologics. Five are at clinical stage and others are in the preclinical and drug engineering stages.

The company has reached multiple drug engineering collaborations with technology platform companies to develop molecules targeting critical chronic and life-threatening conditions.

EQRx president and CEO Melanie Nallicheri stated: “Today’s announcement is a result of a rigorous process run by an independent committee of directors of the EQRx board that thoroughly explored and considered strategic alternatives to maximise value to EQRx stockholders."

The proposed transaction aims to strengthen Revolution’s parallel development approach for its RAS(ON) inhibitor pipeline in a number of RAS-driven [driven by a gene mutation] cancers by improving its balance sheet and maximising financial certainty in a challenging macro-environment.

Revolution Medicines chairman and CEO Mark Goldsmith stated: "This deal marks a decisive step toward advancing Revolution Medicines’ vision as a self-sufficient organisation that discovers and develops highly innovative drug candidates to deliver high-impact targeted medicines into oncology practice on behalf of patients with RAS-addicted cancers.”

The deal will be completed in November 2023.