Core Viewpoint - Arvinas and Pfizer have decided to license the commercialization rights of their innovative drug vepdegestrant, a targeted estrogen receptor degrader for breast cancer, to a third party to maximize its value and ensure timely market supply upon regulatory approval [1][3]. Group 1: Company Overview - Arvinas is a clinical-stage biotechnology company based in the U.S., listed on NASDAQ under the ticker ARVN, focusing on targeted protein degradation (TPD) using its proprietary PROTAC platform [2]. - The company has three important candidates in phase I clinical trials: ARV-102 for progressive supranuclear palsy and Parkinson's disease, ARV-393 for non-Hodgkin lymphoma, and ARV-806 for solid tumor malignancies [2]. Group 2: Drug Development and Commercialization - Vepdegestrant (ARV-471) is an oral PROTAC estrogen receptor degrader designed for ER+/HER2- locally advanced or metastatic breast cancer, which works by recruiting E3 ubiquitin ligases to induce degradation of the estrogen receptor [2][3]. - The drug has received FDA Fast Track designation, and its New Drug Application (NDA) was submitted and accepted by the FDA in August 2023, currently under review [3]. - The decision to license the commercialization rights is a common practice in the global pharmaceutical industry, allowing third parties to advance the development and commercialization of the drug [1]. Group 3: Strategic Changes - Following the significant change in the vepdegestrant project, Arvinas plans to reduce its workforce by 15% to seek greater strategic business development opportunities and identify more efficiency improvements [1].

Group 1 - The company Arvinas announced it will grant commercialization rights of an experimental breast cancer treatment to a third party [1]

Core Viewpoint - Arvinas and Pfizer are collaborating to out-license the commercialization rights of vepdegestrant to a third party, aiming to maximize its commercial potential for treating advanced or metastatic breast cancer [2][3] Company Actions - The company plans to implement additional cost optimization measures expected to achieve total annual savings of over $100 million compared to FY 2024 [1][7] - A stock repurchase program has been authorized for up to $100 million, reflecting the company's confidence in its long-term growth prospects [1][8][10] - The company reaffirms its cash runway guidance through the second half of 2028, indicating sufficient funds to support ongoing clinical programs [1][11] Product Development - Vepdegestrant is under FDA review as a monotherapy for ER+/HER2- advanced or metastatic breast cancer, with a PDUFA action date set for June 5, 2026 [3][14] - The drug is being developed as a potential best-in-class therapeutic option for patients with ESR1 mutations [3][12] Strategic Review - Following the decision to out-license vepdegestrant, Arvinas conducted a strategic review of its business, reaffirming the potential of its pipeline of PROTAC degraders [4][5] - The company has three investigational PROTAC degraders currently in Phase 1 trials targeting various cancers and neurodegenerative diseases [4][15] Workforce and Cost Management - The company will reduce its workforce by an additional 15% to streamline operations, particularly in roles related to vepdegestrant commercialization [6] - Additional measures will be taken to limit expenditures on the vepdegestrant program while preparing for commercialization [5][6]

Overview - The company is experiencing a significant year of change and transition, with a focus on pivotal data for a PROTAC, specifically vepdegestrant [1]. Company Developments - The first pivotal data for vepdegestrant was positive, marking a milestone for the company [1]. - Despite the positive data, the market reaction was disappointing, particularly from Pfizer, indicating that the results were not positive enough to meet expectations [1][2]. - The decline in stock price following the data release has prompted the company to consider several next steps in response to the market's reaction [2].

Question-and-Answer SessionSo yes, maybe to start off, kind of set us the -- give us a 1,000-foot view in terms of like what's going on at Arvinas right now and ultimately, what we should be paying attention to for the next 12 months?John HoustonChairperson, CEO & President Absolutely. I mean it's certainly been a significant year of change and transition. Leading into it, we're very excited by the fact that we're going to have the first pivotal data for a PROTAC ever with vepdegestrant. And we had that dat ...

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Core Viewpoint - The FDA has accepted the New Drug Application (NDA) for vepdegestrant, a novel treatment for advanced or metastatic breast cancer, with a PDUFA action date set for June 5, 2026 [1][5]. Company Overview - Arvinas, Inc. is a clinical-stage biotechnology company focused on developing therapies for life-threatening diseases using its PROTAC protein degrader platform [8]. - The company is collaborating with Pfizer for the co-development and commercialization of vepdegestrant, sharing development costs and profits [4]. Product Details - Vepdegestrant is an investigational oral PROTAC estrogen receptor degrader aimed at treating ER+/HER2- advanced or metastatic breast cancer with ESR1 mutations [3][5]. - The drug has shown statistically significant improvement in median progression-free survival compared to fulvestrant in the Phase 3 VERITAC-2 clinical trial [1][2]. Clinical Trial Information - The VERITAC-2 trial enrolled 624 patients across 213 sites in 25 countries, with 270 patients having ESR1 mutations [6][7]. - The primary endpoint of the trial was progression-free survival, with overall survival as a key secondary endpoint [7]. Regulatory Status - Vepdegestrant has been granted Fast Track designation by the FDA, highlighting the unmet medical need in the target patient population [5].

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the unaudited condensed consolidated financial statements and management's discussion for the six months ended June 30, 2025 [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents unaudited condensed consolidated financial statements for H1 2025, showing a net income turnaround and shifts in assets and equity [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$909.3 million** from **$1,091.4 million** at year-end 2024, while equity increased to **$609.3 million** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $114.9 | $100.5 | | Marketable securities | $746.3 | $938.9 | | Total current assets | $889.5 | $1,067.3 | | **Total assets** | **$909.3** | **$1,091.4** | | **Liabilities & Equity** | | | | Deferred revenue (Current & Long-term) | $237.0 | $448.2 | | Total liabilities | $300.0 | $529.7 | | Total stockholders' equity | $609.3 | $561.7 | | **Total liabilities and stockholders' equity** | **$909.3** | **$1,091.4** | [Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) Reports **$21.7 million** net income for H1 2025, a significant improvement from a **$104.6 million** net loss in H1 2024 Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $22.4 | $76.5 | $211.2 | $101.8 | | Research and development | $68.6 | $93.7 | $159.4 | $178.0 | | General and administrative | $25.3 | $31.3 | $51.9 | $55.6 | | Loss from operations | $(71.5) | $(48.5) | $(0.1) | $(131.8) | | Net (loss) income | $(61.2) | $(35.2) | $21.7 | $(104.6) | | Diluted (Loss) earnings per share | $(0.84) | $(0.49) | $0.30 | $(1.46) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities increased to **$184.3 million** in H1 2025, offset by **$198.3 million** from investing activities Cash Flow Summary for the Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(184.3) | $(47.2) | | Net cash provided by (used in) investing activities | $198.3 | $(114.7) | | Net cash provided by financing activities | $0.4 | $5.0 | | Net increase (decrease) in cash | $14.4 | $(156.9) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policy changes, collaboration impacts, and a Q2 2025 restructuring plan reducing workforce by **33%** - A change in accounting estimate for the Vepdegestrant (ARV-471) Collaboration Agreement with Pfizer, due to removing two Phase 3 trials from the development plan, resulted in a **$147.6 million** increase in net income for the six months ended June 30, 2025[53](index=53&type=chunk) - In Q2 2025, the company implemented a restructuring plan, reducing its workforce by approximately **33%**, resulting in a net charge of **$1.0 million**, comprising **$7.4 million** in cash severance offset by a **$6.4 million** reversal of non-cash stock compensation and bonus expenses[97](index=97&type=chunk)[98](index=98&type=chunk) R&D Expenses by Program (in millions) | Program | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Vepdegestrant (ARV-471) | $15.1 | $25.1 | $39.2 | $44.1 | | ARV-102 | $3.8 | $1.7 | $10.3 | $3.0 | | ARV-393 | $2.5 | $1.7 | $5.1 | $2.9 | | ARV-806 | $1.7 | $0.2 | $2.6 | $0.3 | | Luxdegalutamide (ARV-766) | $0.0 | $9.5 | $0.0 | $13.2 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses business strategy, clinical pipeline progress, financial results, and liquidity, projecting capital sufficiency into H2 2028 [Business Overview](index=25&type=section&id=Business%20Overview) Arvinas, a clinical-stage biotech, submitted an NDA for vepdegestrant and initiated a Phase 1 trial for ARV-806, alongside a **33%** workforce reduction - Submitted a New Drug Application (NDA) to the FDA for vepdegestrant in Q2 2025 for ER+/HER2- ESR1-mutated advanced or metastatic breast cancer, representing the first NDA for a PROTAC[118](index=118&type=chunk) - The Phase 3 VERITAC-2 trial for vepdegestrant met its primary endpoint, showing a **43%** reduction in the risk of disease progression or death compared to fulvestrant in the ESR1m patient population[122](index=122&type=chunk) - The company is in active discussions with Pfizer to revise the vepdegestrant collaboration after removing two planned Phase 3 combination trials from the joint development plan and determining it is no longer viable to build out its own commercial infrastructure[124](index=124&type=chunk)[127](index=127&type=chunk) - A Phase 1 trial for ARV-806 (KRAS G12D degrader) was initiated in Q2 2025 for patients with solid tumors harboring KRAS G12D mutations[147](index=147&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Revenue increased by **$109.4 million** to **$211.2 million** in H1 2025, resulting in **$21.7 million** net income, driven by a Pfizer collaboration accounting change Comparison of Results of Operations (in millions) | Line Item | Six Months 2025 | Six Months 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Revenue | $211.2 | $101.8 | $109.4 | | Research and development expenses | $(159.4) | $(178.0) | $18.6 | | General and administrative expenses | $(51.9) | $(55.6) | $3.7 | | Net income (loss) | $21.7 | $(104.6) | $126.3 | - The **$109.4 million** increase in revenue for H1 2025 was primarily driven by a **$161.0 million** increase from the Vepdegestrant (ARV-471) Collaboration Agreement with Pfizer due to changes in total program cost estimates[201](index=201&type=chunk) - The **$18.6 million** decrease in R&D expenses for H1 2025 was mainly due to reduced external expenses for the luxdegalutamide (ARV-766) and vepdegestrant (ARV-471) programs, and lower compensation costs[204](index=204&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds **$861.2 million** in cash and marketable securities, projected to fund operations into the second half of 2028 - The company's cash, cash equivalents, and marketable securities totaled **$861.2 million** as of June 30, 2025[219](index=219&type=chunk)[225](index=225&type=chunk) - Management projects that the current cash position will fund planned operating expenses and capital expenditure requirements into the second half of 2028[225](index=225&type=chunk) - Net cash used in operating activities for the six months ended June 30, 2025, was **$184.3 million**, an increase of **$137.1 million** from the same period in 2024, primarily due to a decrease in deferred revenue[219](index=219&type=chunk)[220](index=220&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on cash and marketable securities, with **$22.0 million** interest income in H1 2025 - The company's main market risk is interest rate sensitivity on its portfolio of cash, cash equivalents, and marketable securities, with interest income for the first six months of 2025 at **$22.0 million**[233](index=233&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[234](index=234&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[235](index=235&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides updates on legal proceedings, new and amended risk factors, and other corporate information [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material litigation or legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[238](index=238&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Introduces new risks regarding workforce reduction and regulatory delays, while amending existing risks on funding and key personnel retention - A new risk factor was added concerning the April 2025 workforce reduction of approximately **33%**, which may not result in anticipated savings and could disrupt operations or harm the ability to attract and retain talent[240](index=240&type=chunk) - A new risk factor highlights potential disruptions at the FDA and other government agencies due to funding cuts, personnel losses (RIF), and government shutdowns, which could hinder the ability to secure timely approval for product candidates[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) - An amended risk factor underscores that future success depends on retaining key employees and managing the transition to a new CEO, following the announced retirement of the current President and CEO[264](index=264&type=chunk)[265](index=265&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not issue any unregistered equity securities during the second quarter of 2025 - There were no sales of unregistered equity securities during the second quarter of 2025[274](index=274&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer trading arrangements under Rule 10b5-1 were adopted or terminated during the quarter[275](index=275&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including corporate governance documents and certifications

Company Performance - Arvinas, Inc. reported a quarterly loss of $0.84 per share, which was better than the Zacks Consensus Estimate of a loss of $0.87, but worse than a loss of $0.49 per share a year ago, indicating an earnings surprise of +3.45% [1] - The company posted revenues of $22.4 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 53.28%, and a significant decline from year-ago revenues of $76.5 million [2] - Over the last four quarters, Arvinas has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Outlook - Arvinas shares have declined approximately 60.3% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.75 on revenues of $41.04 million, and for the current fiscal year, it is -$1.50 on revenues of $294.99 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Arvinas belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - The company reported a revenue of $22.4 million for the second quarter of 2025, a decrease of $54.1 million compared to $76.5 million in the same period of 2024, primarily due to reduced revenue from the Novartis license agreement and the VetDeg collaboration with Pfizer [31][32] - Cash, cash equivalents, and marketable securities at the end of the second quarter were approximately $861.2 million, down from $1.04 billion as of December 31, 2024 [31] - General and administrative expenses decreased to $25.3 million from $31.3 million year-over-year, while research and development expenses fell to $68.6 million from $93.7 million [32] Business Line Data and Key Metrics Changes - The company is focusing on three Phase I trials in its neuro and oncology portfolio, including the recently initiated trial with the KRAS G12D degrader, ARV-806 [3][4] - Significant clinical progress was made with ARV-102, the LAR2 degrader, and ARV-393, the BCL6 degrader, with compelling preclinical data supporting their advancement [4][21] - The restructuring included a reprioritization of the research pipeline, cutting several programs while continuing investment in high-potential assets [5][28] Market Data and Key Metrics Changes - The collaboration with Pfizer for VetDeg is being reworked due to the removal of combination pivotal trials, which has led to a reassessment of the co-commercialization agreement [10][30] - The company is actively seeking a new partner for VetDeg should negotiations with Pfizer not yield favorable terms [10][30] Company Strategy and Development Direction - The company aims to advance VetDeg towards commercial launch, achieve critical data milestones from its pipeline, and allocate capital efficiently [9][35] - The long-term strategy includes focusing on differentiated PROTAC technology in both neuroscience and oncology, with an emphasis on maximizing shareholder value [11][28] - The company is conducting a CEO search process to ensure leadership continuity and strategic direction [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position and the potential of its clinical pipeline to drive future value [11][28] - The company anticipates multiple near-term milestones across its clinical development and regulatory efforts, including potential approval of a PROTAC [34][35] - Management highlighted the importance of achieving critical data milestones in the next twelve months to support the company's growth trajectory [11][35] Other Important Information - The company has extended its cash runway into 2028 following the restructuring and cost-reduction measures [28][33] - The NDA for VetDeg has been submitted, marking a significant milestone as the first PROTAC degrader to enter clinical trials and submit for approval [19][31] Q&A Session Summary Question: Can you provide more details on the expected data from ARV-102 this year? - Management indicated that they expect to present data from healthy volunteers and initial data from Parkinson's patients in upcoming conferences [40][41] Question: What are the expectations for the BCL6 program and potential combination therapies? - Management emphasized the importance of establishing a monotherapy dose before exploring combination therapies, particularly with bispecifics in DLBCL [51][52] Question: How does the company plan to handle the potential return of VetDeg rights from Pfizer? - The company is negotiating with Pfizer to rework the collaboration and is prepared to seek a new partner if necessary, aiming to minimize any gaps in commercialization [68][70] Question: What is the company's outlook on the recent Phase III trial results in breast cancer? - Management stated that the results would have little impact on their modeling and confirmed they would not pursue further development with the drug in question [77][78] Question: Can you comment on the interactions with the FDA regarding the NDA submission? - Management reported that interactions with the FDA have been smooth and timely, with no current delays affecting their submission process [94][96]