Arcus Biosciences(RCUS) - 2024 Q1 - Quarterly Results

Overview and Key Highlights Arcus Biosciences reported Q1 2024 results, highlighting its evolution into a late-stage oncology company with multiple programs and a strong financial position into 2027 - Arcus is positioning itself as a late-stage oncology company focusing on large patient populations in lung, gastrointestinal, and kidney cancers[3] - The company anticipates having its molecules in at least 5 different Phase 3 studies by the first half of 2025[3] - Key near-term catalysts include two oral presentations at the 2024 ASCO Annual Meeting and casdatifan program data expected in the second half of 2024[6] - The company holds a strong financial position with $1.1 billion in cash, cash equivalents, and marketable securities, ensuring operational funding into 2027[6][11] Pipeline Update Arcus provided updates across its clinical pipeline, including progress in Phase 3 studies for domvanalimab/zimberelimab, casdatifan, and adenosine axis programs Domvanalimab (anti-TIGIT) plus Zimberelimab (anti-PD-1) The domvanalimab and zimberelimab combination is advancing in two pivotal Phase 3 trials, with enrollment completion expected in 2024 and new data at ASCO - Updated data from the Phase 2 EDGE-Gastric trial, including median PFS, will be presented at the ASCO Annual Meeting in June 2024[7] - Enrollment for the Phase 3 STAR-221 study in first-line metastatic upper GI cancers is expected to complete by mid-2024[7] - Enrollment for the Phase 3 STAR-121 study in first-line metastatic NSCLC is expected to complete by the second half of 2024[7] Casdatifan (HIF-2a inhibitor) The casdatifan program for ccRCC is progressing with multiple data readouts expected over the next 18 months, including a planned Phase 3 study in H1 2025 - Data from the ARC-20 study's 100 mg daily expansion cohort in 2L+ ccRCC, including ORR, are expected in the second half of 2024[7] - Enrollment is complete for the 50mg cohort and initiated for the 150mg cohort in the ARC-20 study, with data expected over the next 18 months[7] - Arcus plans to initiate a Phase 3 study of casdatifan in combination with a TKI in ccRCC in the first half of 2025[11] CD-73-Adenosine Axis: Etrumadenant and Quemliclustat Adenosine axis programs showed positive results, with ARC-9 data at ASCO, improved PFS/OS in MORPHEUS-PDAC, and a planned Phase 3 trial for quemliclustat by early 2025 - Data from the ARC-9 study in third-line metastatic colorectal cancer (mCRC) will be presented at ASCO in June[11] - In the MORPHEUS-PDAC study, the etrumadenant-containing regimen showed a median PFS of 8.2 months vs. 6.8 months and a median OS of 16.5 months vs. 12.1 months compared to chemotherapy alone[11] - A Phase 3 trial of quemliclustat combined with chemotherapy in pancreatic cancer is planned to begin by early 2025[11] Early Clinical Programs Dose escalation for AB801, a potent AXL inhibitor, is ongoing, with plans to advance into NSCLC expansion cohorts in early 2025 - Dose escalation for AB801, a small-molecule AXL inhibitor, is continuing[9] - Arcus plans to advance AB801 into expansion cohorts for NSCLC in early 2025[9] Financial Results for First Quarter 2024 Arcus reported Q1 2024 revenues of $145 million, driven by a Gilead collaboration catch-up, with operating expenses at $161 million and a net loss of $4 million Q1 2024 Financial Performance vs. Q1 2023 (in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $145 | $25 | +$120 | | R&D Expenses | $109 | $81 | +$28 | | G&A Expenses | $32 | $30 | +$2 | | Impairment of Long-lived Assets | $20 | $0 | +$20 | | Total Operating Expenses | $161 | $111 | +$50 | | Net Loss | ($4) | ($80) | +$76 | - The significant increase in revenue was primarily driven by a $107 million cumulative catch-up related to amendments in the Gilead collaboration agreement[11] - The increase in R&D expenses was mainly due to higher costs for clinical manufacturing, clinical trials, and headcount for late-stage development programs[11] - A non-cash impairment charge of $20 million was recorded due to plans to sublease a portion of the company's facilities[11] Balance Sheet Highlights (in millions) | Metric | March 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $1,095 | $866 | | Total Assets | $1,293 | $1,095 | | Total Liabilities | $586 | $633 | | Total Stockholders' Equity | $707 | $462 | - The increase in cash was primarily due to the receipt of $320 million from Gilead for an equity investment in January 2024[11] Clinical Studies Overview Arcus provided an overview of its ongoing and planned clinical studies across various cancer types, featuring multiple investigational molecules from Phase 1 to registrational Phase 3 trials - Arcus has multiple ongoing registrational Phase 3 trials, including STAR-121 and PACIFIC-8 in lung cancer, and STAR-221 in upper GI cancers[13] - The clinical pipeline addresses a wide range of cancers, with platform studies like EDGE-Lung and VELOCITY-Lung designed to evaluate various combinations efficiently[13] - The company has planned Phase 3 trials for its newer assets, including PRISM-1 for quemliclustat in pancreatic cancer and STAR-131 for domvanalimab in perioperative NSCLC[13] Corporate and Collaboration Information Arcus Biosciences is a clinical-stage biopharmaceutical company focused on cancer therapies, with a key 10-year strategic collaboration with Gilead - Arcus has a 10-year strategic collaboration with Gilead, initiated in May 2020, to advance its portfolio[14] - Arcus and Gilead are co-developing four key assets: zimberelimab (anti-PD-1), domvanalimab (anti-TIGIT), etrumadenant (adenosine receptor antagonist), and quemliclustat (CD73 inhibitor)[14] - The company's focus is on developing first- or best-in-class medicines against well-characterized biological targets such as TIGIT, PD-1, the adenosine axis, HIF-2a, and AXL[15]