Arcus Biosciences(RCUS) - 2023 Q4 - Annual Results

Arcus Biosciences Fourth-Quarter and Full-Year 2023 Results Corporate and Strategic Updates Arcus strengthened its financial position and strategic partnership with Gilead, extending its cash runway into 2027 - Gilead made an additional equity investment of $320 million, increasing its ownership stake in Arcus to 33%[5][6] - As part of the expanded collaboration, Gilead's Chief Commercial Officer, Johanna Mercier, joined the Arcus board of directors[6] - The company's pro forma cash position is $1.2 billion, providing a cash runway into 2027 to support multiple Phase 3 trials and launch preparations[3][5][11] - A new clinical trial collaboration was announced with Exelixis for STELLAR-009, a Phase 1b/2 trial evaluating casdatifan with zanzalintinib in advanced solid tumors[6] Pipeline Highlights and Clinical Updates Arcus is advancing its late-stage pipeline with six Phase 3 trials expected by early 2025 and key data readouts anticipated in 2024 - By early 2025, Arcus expects to have six ongoing Phase 3 trials for three distinct programs: domvanalimab plus zimberelimab, casdatifan (HIF-2a inhibitor), and quemliclustat (CD73 inhibitor)[3] - Two Phase 3 trials for the domvanalimab combination, STAR-121 (NSCLC) and STAR-221 (Upper GI), are expected to complete enrollment in 2024[3][9] - Multiple datasets are expected in H1 2024, including EDGE-Gastric data at ASCO and two randomized datasets for etrumadenant[5] Domvanalimab (anti-TIGIT) plus Zimberelimab (anti-PD-1) The domvanalimab clinical program was strategically modified to focus on high unmet medical needs, including a new registrational Phase 3 study - The clinical program was strategically modified to focus on areas of high unmet medical need, with enrollment in the Phase 3 ARC-10 study (1L PD-L1-high NSCLC) discontinued to potentially accelerate the Phase 3 STAR-121 study in all-comer 1L NSCLC[6] - A new registrational Phase 3 study, STAR-131, is planned for perioperative NSCLC[9] - Updated Progression-Free Survival (PFS) and Overall Response Rate (ORR) data from the Phase 2 EDGE-Gastric trial will be presented at the ASCO Annual Meeting in June 2024[9] Casdatifan (AB521, HIF-2a inhibitor) Casdatifan shows potential for greater HIF-2a inhibition with a consistent safety profile, with a Phase 3 combination study planned for early 2025 - Pharmacokinetic (PK) and pharmacodynamic (PD) data suggest casdatifan has the potential to achieve substantially greater HIF-2a inhibition than the approved competitor, belzutifan[9] - The safety profile appears consistent with historical trials of belzutifan, with no dose-limiting toxicities observed to date in the ARC-20 study[9] - Efficacy data from the 100 mg dose-expansion cohort of the ARC-20 study are expected to be presented at a medical conference in the second half of 2024[9] - A Phase 3 combination study in clear cell renal cell carcinoma (ccRCC) is planned to start in early 2025[9] Quemliclustat (CD73 inhibitor) Quemliclustat-based regimens demonstrated improved median Overall Survival in metastatic pancreatic cancer, with a Phase 3 trial expected by early 2025 - In the ARC-8 trial for metastatic pancreatic cancer (mPDAC), quemliclustat-based regimens showed a median Overall Survival (mOS) of 15.7 months, exceeding historical benchmarks for chemotherapy alone[9] - A post hoc analysis showed a 37% reduction in the risk of death compared to a matched Synthetic Control Arm[11] - Initiation of a Phase 3 trial in pancreatic cancer is expected by early 2025[11] Etrumadenant (A2a/A2b adenosine receptor antagonist) Randomized data from two Phase 1b/2 studies for etrumadenant in mCRC and mPDAC are expected in the first half of 2024 - Data from the randomized Phase 1b/2 ARC-9 study in third-line metastatic colorectal cancer (mCRC) are expected in the first half of 2024[11] - Data from the Roche-operationalized MORPHEUS-PDAC randomized Phase 2 study in first-line mPDAC are also expected in the first half of 2024[11] Early Clinical and Preclinical Programs Arcus has initiated a Phase 1 study for AB801, an AXL inhibitor, and is conducting preclinical toxicity studies for KIT-targeting candidates - A Phase 1 study (ARC-27) of AB801, a potent and highly selective AXL inhibitor, has been initiated in patients with advanced cancer[11] - The company is conducting preclinical toxicity studies for multiple development candidates targeting KIT for allergic and immune-mediated diseases[11] Summary of Ongoing and Announced Clinical Studies The company maintains a broad clinical pipeline with multiple ongoing and planned studies, including registrational Phase 3 trials across various cancer types - The company has a broad clinical pipeline with multiple ongoing and planned studies across various cancers, including registrational Phase 3 trials in Lung Cancer (PACIFIC-8, STAR-121, STAR-131) and Gastrointestinal Cancers (STAR-221)[13] Financial Results Arcus reported full-year 2023 revenues of $117 million and a net loss of $307 million, maintaining a strong cash position with a runway into 2027 Financial Position and Liquidity Arcus maintains a robust financial position with $866 million in cash as of December 31, 2023, and a pro forma cash balance of $1.2 billion extending its runway - Cash, cash equivalents, and marketable securities were $866 million as of December 31, 2023[11] - Pro forma cash balance is $1.2 billion following the January 2024 equity investment from Gilead, which is expected to fund planned operations into 2027[11] - The company projects a year-end 2024 cash balance of between $870 million and $920 million[11] Statement of Operations Analysis (Q4 & Full-Year 2023) Full-year 2023 revenues increased to $117 million, while R&D expenses rose to $340 million due to increased late-stage development activities Consolidated Statements of Operations (in millions, except per share data) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $31 | $34 | $117 | $112 | | R&D Expenses | $93 | $80 | $340 | $288 | | G&A Expenses | $29 | $28 | $117 | $104 | | Loss from Operations | ($91) | ($74) | ($340) | ($280) | | Net Loss | ($81) | ($67) | ($307) | ($267) | | Net Loss Per Share | ($1.08) | ($0.93) | ($4.15) | ($3.71) | - Full-year 2023 revenues increased to $117 million from $112 million in 2022[11][20] - The increase in full-year R&D expenses to $340 million was primarily driven by higher costs to support late-stage development program activities[11] Balance Sheet Highlights The balance sheet reflects $866 million in cash, cash equivalents, and marketable securities as of December 31, 2023, with total assets at $1,095 million Selected Consolidated Balance Sheet Data (in millions) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $866 | $1,138 | | Total Assets | $1,095 | $1,345 | | Total Liabilities | $633 | $688 | | Total Stockholders' Equity | $462 | $657 | About Arcus Biosciences and Collaborations Arcus Biosciences is a clinical-stage biopharmaceutical company focused on cancer therapies, underpinned by a 10-year co-development collaboration with Gilead - Arcus is a clinical-stage biopharmaceutical company developing molecules and combination medicines for cancer, founded in 2015[15] - The company has a 10-year collaboration with Gilead, established in May 2020, to strategically advance its portfolio[14] - Arcus and Gilead are co-developing four investigational products: zimberelimab (anti-PD-1), domvanalimab (anti-TIGIT), etrumadenant (adenosine receptor antagonist), and quemliclustat (CD73 inhibitor)[14]