Arcus Biosciences Reports Fourth Quarter and Full-Year 2021 Financial Results and Provides Corporate Update
Arcus Biosciences reported strong financial results for the fourth quarter and full year 2021, highlighting a net income of $279.4 million for Q4 compared to a net loss of $51.9 million in the previous year. Revenues surged to $354.5 million, significantly up from $9.5 million year-over-year, mainly due to Gilead's collaboration. The company holds approximately $1.4 billion in cash, ensuring funding into 2026. Arcus has multiple Phase 3 studies underway for its lead drug, domvanalimab, in various cancers, indicating robust pipeline growth.
- Net income for Q4 2021 was $279.4 million, up from a net loss of $51.9 million in Q4 2020.
- Collaboration revenues for Q4 2021 totaled $354.5 million, compared to $9.5 million for Q4 2020.
- $1.4 billion in cash on hand projected to fund operations into 2026.
- Multiple registrational Phase 3 studies planned for domvanalimab across lung and gastrointestinal cancers.
- Research and development expenses for Q4 2021 were $49.9 million, slightly up from $48.7 million in Q4 2020.
- General and administrative expenses rose to $23.3 million for Q4 2021, compared to $12.8 million in Q4 2020.
- Presentations of randomized data for domvanalimab and etrumadenant in 1L PD-L1 high non-small cell lung cancer (NSCLC; ARC-7) and quemliclustat in pancreatic cancer (ARC-8) are planned for 2H:22
- Initial pharmacokinetic (PK)/pharmacodynamic (PD) data for AB521, Arcus’s HIF-2a inhibitor, in healthy volunteers confirm its potential to have an improved clinical profile compared to the approved HIF-2a inhibitor; data to be presented at a conference this March
- First patient dosed in PACIFIC-8, a registrational, Phase 3 study evaluating domvanalimab plus durvalumab in unresectable, Stage 3 NSCLC with AstraZeneca; this represents the second Phase 3 study to be initiated for domvanalimab in NSCLC
- Two additional Phase 3 studies for domvanalimab are planned for this year in lung and gastrointestinal cancers with Gilead
-
Arcus is well positioned to advance its programs with
in cash and cash equivalents following receipt of option payments from Gilead Sciences in$1.4 billion January 2022 , which is expected to provide Arcus with funding into 2026
“Arcus is starting 2022 with a strong cash position and late-stage pipeline that includes two ongoing, and soon to be four, registrational Phase 3 studies for the anti-TIGIT antibody, domvanalimab,” said
Anti-TIGIT program (domvanalimab and AB308)
Recent Updates:
- First patient was dosed in PACIFIC-8, a registrational Phase 3 study being conducted in collaboration with AstraZeneca. PACIFIC-8 is the second Phase 3 study for domvanalimab and is evaluating domvanalimab plus durvalumab, an anti-PD-L1 antibody, in unresectable Stage 3 NSCLC with curative intent, where durvalumab is standard of care.
2022 Milestones:
-
Data from ARC-7, an ongoing randomized 150-patient three-arm study in first-line PD-L1≥
50% NSCLC, including progression-free survival data for all three arms, are expected to be presented in 2H22. - Arcus and Gilead plan to initiate two new Phase 3 studies for domvanalimab and zimberelimab in lung and gastrointestinal (GI) cancers, as well as additional clinical studies of domvanalimab-based combinations, in 2022.
- Presentation of initial data from the Phase 1/1b ARC-12 study evaluating AB308, an Fc-enabled anti-TIGIT antibody, in combination with zimberelimab in advanced malignancies.
Etrumadenant (A2a/A2b adenosine receptor antagonist)
2022 Milestones:
- Data from the etrumadenant-containing arm of ARC-7 are anticipated to be presented in 2H22.
- Data from the randomized cohort of ARC-6 evaluating etrumadenant plus zimberelimab and docetaxel versus docetaxel in second-line metastatic castrate-resistant prostate cancer (CRPC) are anticipated in 2H22.
- Additional clinical studies for etrumadenant, including combinations with domvanalimab, are being planned with Gilead.
Quemliclustat (small molecule CD73 inhibitor)
2022 Milestones:
- Results from the randomized portion of ARC-8, including data on progression-free survival, are expected to be presented in 2H22.
- Full enrollment of the ARC-8 cohort in 2L pancreatic cancer, an area of high unmet need, is on track to be completed in 1H22.
- Additional clinical studies for quemliclustat are being planned with Gilead.
AB521 (HIF-2a inhibitor)
Recent Updates:
- Initiated a Phase 1 study (ARC-14) in healthy volunteers to confirm Arcus’s PK/PD and tolerability expectations for AB521 and support rapid advancement into cancer patients.
2022 Milestones:
-
Preclinical data for AB521, alone and in combination with cabozantinib, as well as initial PK/PD data from the evaluation of AB521 in healthy volunteers, will be presented at the
ESMO Targeted Anticancer Therapies Congress onMarch 7, 2022 . - A Phase 1/1b study to explore AB521 in clear-cell renal cell carcinoma, alone and in combination with other molecules, including those targeting the CD73-adenosine axis, is anticipated to be initiated in mid-2022.
Discovery Programs:
Recent Updates:
- In January, Arcus met the first milestone under an agreement with BVF, which is focused on the discovery and development of a potentially first-in-class small molecule designed to treat a wide range of inflammatory conditions.
- Arcus recently selected AB598 (CD39 antibody) as a development candidate, which is advancing into IND-enabling studies; several other oncology discovery programs continue to progress.
Financial Results for the Fourth Quarter and Full Year Ended
-
Cash, cash equivalents and investments were
as of$681.3 million December 31, 2021 , compared to as of$735.1 million December 31, 2020 . The decrease was primarily due to cash used in operations and purchases of property and equipment totaling , partially offset by gross proceeds of$26.1 million received under the Amended and Restated Stock Purchase Agreement with Gilead in$220.4 million February 2021 . Upon the receipt of in option exercise payments from Gilead in$725 million January 2022 , Arcus’s cash and cash equivalents and investments totaled approximately . Arcus expects cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations into 2026.$1.4 billion -
Revenues: Collaboration and license revenues were
for the three months ended$354.5 million December 31, 2021 , compared to for the same period in 2020. The increase was primarily driven by license revenue recognized upon closing of Gilead's exercise of its options. Collaboration and license revenues were$9.5 million for the full year ended$382.9 million December 31, 2021 , compared to for the same period in 2020.$77.5 million -
R&D Expenses: Research and development expenses were
for the three months ended$49.9 million December 31, 2021 , compared to for the same period in 2020. The increase was primarily driven by costs incurred to support Arcus’s expanded clinical and development activities including increased compensation costs related to a larger employee base, increased clinical trial costs, and increased early-stage research costs. Approximately$48.7 million of the increase in compensation costs is related to non-cash stock-based compensation. Research and development expenses were$3.2 million for the full year ended$256.3 million December 31, 2021 , compared to for the same period in 2020.$159.3 million -
G&A Expenses: General and administrative expenses were
for the three months ended$23.3 million December 31, 2021 , compared to for the same period in 2020. The increase was driven by the increased complexity of supporting Arcus’s expanding clinical pipeline and collaboration obligations, as well as compliance costs associated with Arcus’s growth. Arcus’s growing employee base and 2021 stock awards drove an increase in employee compensation costs, including approximately$12.8 million of increased non-cash stock-based compensation. General and administrative expenses were$2.7 million for the full year ended$72.3 million December 31, 2021 , compared to for the same period in 2020.$42.4 million -
Net Income: Net income was
for the three months ended$279.4 million December 31, 2021 , compared to net loss of for the same period in the prior year. Net income was primarily due to license revenue recognized upon closing of Gilead's exercise in$51.9 million December 2021 of its options. Net income was for the full year ended$52.8 million December 31, 2021 , compared to net loss of for the same period in 2020.$122.9 million
Arcus Clinical Study Overview
Trial
|
Arms |
Setting |
Status |
NCT No. |
|
||||
ARC-7 |
zim vs. zim + dom vs. zim + dom + etruma |
1L NSCLC (PD-L1 ≥ |
Ongoing
|
|
PACIFIC-8 |
durva ± dom |
Curative-Intent Stage 3 NSCLC |
Ongoing
|
|
ARC-10 |
chemo vs. zim vs. zim + dom |
1L NSCLC (PD-L1 ≥ |
Ongoing
|
|
|
||||
ARC-9 |
etruma + zim + mFOLFOX vs. SOC |
2L/3L/3L+ CRC |
Ongoing
|
|
Pancreatic Cancer |
||||
ARC-8 |
quemli + zim + gem/nab-pac vs. quemli + gem/nab-pac |
1L, 2L PDAC |
Ongoing
|
|
Prostate Cancer |
||||
ARC-6 |
etruma + zim + SOC vs. SOC |
2L/3L CRPC |
Ongoing
|
|
Various |
||||
ARC-12 |
AB308 + zim |
Advanced Malignancies |
Ongoing
|
|
ARC-14 |
AB521 |
Healthy Volunteer |
Ongoing |
Carbo/pem: carboplatin/pemetrexed; dom: domvanalimab; durva: durvalumab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; quemli: quemliclustat; R/R: relapsed/refractory; SOC: standard of care; zim: zimberelimab CRC: colorectal cancer; CRPC: castrate-resistant prostate cancer; NSCLC: non-small cell lung cancer; PDAC: pancreatic ductal adenocarcinoma
About
Forward-Looking Statements
This press release contains forward-looking statements. All statements regarding events or results to occur in the future contained herein, including, but not limited to, in Dr. Rosen’s quote, upcoming data presentations, trial initiations and other milestones and the associated timing of such activities, including as set forth under the captions “2022 Milestones”, and Arcus’s future development plans are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve known and unknown risks and uncertainties and other important factors that may cause Arcus’s actual results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: Arcus’s dependence on the collaboration with Gilead for the successful development and commercialization of its optioned molecules; difficulties associated with the management of the collaboration activities or expanded clinical programs; difficulties or delays in initiating or conducting clinical trials due to difficulties or delays in the regulatory process, enrolling subjects or manufacturing or supplying product for such clinical trials, all of which may be exacerbated by the COVID-19 pandemic; the unexpected emergence of adverse events or other undesirable side effects; risks associated with preliminary and interim data; the inherent uncertainty associated with pharmaceutical product development and clinical trials; and changes in the competitive landscape for Arcus’s programs. Risks and uncertainties facing Arcus are described more fully in its Annual Report on Form 10-K for the year ended
The Arcus name and logo are trademarks of
Source:
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Consolidated Statements of Operations and Comprehensive Loss |
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(unaudited) |
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(In thousands, except share and per share amounts) |
||||||||||||||||
|
|
(Unaudited) |
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
License revenue |
|
$ |
343,838 |
|
|
$ |
- |
|
|
$ |
343,838 |
|
|
$ |
55,096 |
|
License and development services revenue |
|
|
1,135 |
|
|
|
- |
|
|
|
1,135 |
|
|
|
- |
|
Other collaboration revenue |
|
|
9,526 |
|
|
|
9,487 |
|
|
|
37,909 |
|
|
|
22,421 |
|
Total collaboration and license revenues |
|
|
354,499 |
|
|
|
9,487 |
|
|
|
382,882 |
|
|
|
77,517 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
49,936 |
|
|
|
48,712 |
|
|
|
256,348 |
|
|
|
159,348 |
|
General and administrative |
|
|
23,296 |
|
|
|
12,787 |
|
|
|
72,286 |
|
|
|
42,404 |
|
Total operating expenses |
|
|
73,232 |
|
|
|
61,499 |
|
|
|
328,634 |
|
|
|
201,752 |
|
Income (loss) from operations |
|
|
281,267 |
|
|
|
(52,012 |
) |
|
|
54,248 |
|
|
|
(124,235 |
) |
Non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income, net |
|
|
176 |
|
|
|
159 |
|
|
|
657 |
|
|
|
1,377 |
|
Effective interest on liability for sale of future royalties |
|
|
(260 |
) |
|
|
- |
|
|
|
(260 |
) |
|
|
- |
|
Gain on deemed sale from equity method investee |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
613 |
|
Share of loss from equity method investee |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(613 |
) |
Total non-operating income, net |
|
|
(84 |
) |
|
|
159 |
|
|
|
397 |
|
|
|
1,377 |
|
Income (loss) before income taxes |
|
|
281,183 |
|
|
|
(51,853 |
) |
|
|
54,645 |
|
|
|
(122,858 |
) |
Income tax expense |
|
|
(1,815 |
) |
|
|
- |
|
|
|
(1,815 |
) |
|
|
- |
|
Net income (loss) |
|
$ |
279,368 |
|
|
$ |
(51,853 |
) |
|
$ |
52,830 |
|
|
$ |
(122,858 |
) |
Other comprehensive income (loss) |
|
|
(1,169 |
) |
|
|
(37 |
) |
|
|
(1,305 |
) |
|
|
(20 |
) |
Comprehensive income (loss) |
|
$ |
278,199 |
|
|
$ |
(51,890 |
) |
|
$ |
51,525 |
|
|
$ |
(122,878 |
) |
Net income (loss) per share, basic |
|
$ |
3.97 |
|
|
$ |
(0.82 |
) |
|
|
0.76 |
|
|
|
(2.24 |
) |
Weighted-average number of shares used to compute basic net income (loss) per share |
|
|
70,399,507 |
|
|
|
63,527,932 |
|
|
|
69,345,490 |
|
|
|
54,787,118 |
|
Net income (loss) per share, diluted |
|
$ |
3.71 |
|
|
$ |
(0.82 |
) |
|
|
0.71 |
|
|
|
(2.24 |
) |
Weighted-average number of shares used to compute diluted net income (loss) per share |
|
|
75,356,832 |
|
|
|
63,527,932 |
|
|
|
73,966,267 |
|
|
|
54,787,118 |
|
Selected Consolidated Balance Sheet Data |
||||||||
(unaudited) |
||||||||
(In thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
2021 |
|
|
2020 |
|
||
Cash, cash equivalents and investments in marketable securities |
|
$ |
681,298 |
|
|
$ |
735,086 |
|
Total assets |
|
|
1,591,898 |
|
|
|
772,292 |
|
Total liabilities |
|
|
750,448 |
|
|
|
269,988 |
|
Total stockholders’ equity |
|
|
841,450 |
|
|
|
502,304 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220223006135/en/
Investor and Media Inquiries:
VP of Corporate Communications
(650) 922-1269
hkolkey@arcusbio.com
Source:
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