Revolution Medicines barely had time to celebrate the landmark approval of its pancreatic cancer pill before Wall Street demanded to know what's next.

Late last month, regulators approved daraxonrasib for patients with metastatic pancreatic adenocarcinoma. Marketed under the brand name Rasonque, a nod to its mechanism of action, the drug stops molecular switches called RAS proteins from signaling cancer cells to grow and multiply.

For decades, scientists considered RAS proteins "undruggable," but Rasonque blocks both normal and mutated RAS proteins from sending growth signals. The company is developing a handful of other assets that work similarly.

As Morgan Stanley analyst Sean Laaman sees it, Revolution is building the leading RAS-targeted cancer franchise in a market where RAS mutations drive roughly 30% of all cancers. This translates to an addressable pool of around 100,000 patients annually with pancreatic, lung, and colorectal tumors.

Consequently, Revolution is poised to become a dominant force in the multi-billion-dollar oncology market, with peak risk-adjusted portfolio sales projected to reach $12 billion by 2036. Laaman estimates that capturing that entire 100,000-patient pool at Rasonque's price point would represent a roughly $40 billion opportunity.

The analyst initiated coverage of Revolution Medicines on Thursday with an Overweight rating and $255 price target. That suggests shares could rise 25% from current levels, as they fell 1.9% to $203.65 on Thursday.

The company spent a decade quietly developing oncology assets before investor enthusiasm took hold. A 160% surge in the stock price this year has pushed its market value near $45 billion, despite a trail of continuous operational losses and no commercial revenue.

One catalyst was a high-profile endorsement from former Sen. Ben Sasse (R., Neb.) late last year. After being diagnosed with late-stage metastatic pancreatic cancer, Sasse enrolled in a clinical trial for daraxonrasib and went on to call it a "miracle drug."

The approval of Rasonque provided massive validation for the drug, capping off months of investor excitement and media buzz. Yet the market reaction at the time was muted, underplaying the drug's tremendous impact on both the medical community as well as Revolution's broader commercial potential.

While Rasonque is currently the company's only commercial drug, its pipeline includes RAS inhibitors zoldonrasib and elironrasib, both of which have shown promise in clinical trials.

Zoldonrasib, which has advanced to late-stage testing for a type of metastatic pancreatic cancer is poised to become "the most important next value driver," Laaman said. Collectively, the assets reduce reliance on any single drug and support the development of a multi-product oncology franchise.

Combination therapies, in which Revolution's drugs are used alongside chemotherapy and other treatments, could become another major long-term growth driver. Early data suggest these therapies could be even more effective than single-drug treatments, positioning the company's RAS inhibitors as the standard foundation for treating various cancers.

Moreover, collaborations with partners like Bristol Myers Squibb present additional opportunities to broaden the franchise while reducing capital requirements.

Daraxonrasib still faces a high bar. Elevated market expectations explain why the stock barely budged at approval. With Wall Street targeting roughly $22 billion in revenue by 2036, meeting expectations during launch might not be enough to drive the stock higher, while sluggish uptake would directly hurt shares.

Revolution may have passed a milestone by bringing its first commercial drug to market, but it seems more obstacles await further down the road.