Arcus Biosciences Reports Third Quarter 2022 Financial Results and Provides a Pipeline Update
Arcus Biosciences reported its Q3 2022 financial results, revealing revenues of $33.6 million, up from $9.5 million in Q3 2021, driven by collaboration with Gilead. The company holds $1.2 billion in cash, sufficient to fund operations into 2026. Arcus is advancing its clinical pipeline, focusing on anti-TIGIT therapies with three Phase 3 trials for domvanalimab in lung cancer. A strategic amendment to the ARC-10 trial design now compares domvanalimab and zimberelimab to pembrolizumab, excluding a chemotherapy arm. The trial aims to define a new standard-of-care in NSCLC.
- Revenue increased to $33.6 million in Q3 2022, compared to $9.5 million in Q3 2021.
- Company has $1.2 billion in cash, funding operations into 2026.
- Amended ARC-10 study design simplifies and strengthens trial with an active comparator.
- Net loss for Q3 was $64.9 million, though improved from $78.0 million year-over-year.
- R&D expenses rose to $76.7 million in Q3 2022, up from $71.3 million in Q3 2021.
-
Arcus and Gilead Sciences are pursuing a broad development strategy for their anti-TIGIT antibody domvanalimab in lung cancer, which now includes three ongoing registrational Phase 3 trials in multiple non-small cell lung cancer (NSCLC) settings; as part of this strategy, the companies have amended the study design of ARC-10, a registrational Phase 3 trial evaluating domvanalimab plus zimberelimab in first-line (1L) PD-L1≥
50% NSCLC.
- Topline data disclosure for the ongoing ARC-7 trial in NSCLC is on track for this quarter with a planned presentation of the data at a medical conference in 2023.
- Arcus initiated ARC-20, a Phase 1/1b study of HIF-2a inhibitor AB521 in cancer patients; data from the healthy volunteer study enable Arcus to start dose escalation in patients at 25 mg once-daily, a pharmacologically active dose.
-
With
in cash, cash equivalents, and marketable securities and funding into 2026, Arcus is well-positioned to advance its extensive pipeline.$1.2 billion
“Arcus continues to execute on its strategy to be a leader in the TIGIT field and to advance our clinical pipeline, including our adenosine pathway modulators etrumadenant and quemliclustat,” said
ARC-10 Strategic Amendment
ARC-10 is a randomized Phase 3 study evaluating the efficacy of domvanalimab plus zimberelimab in 1L PD-L1≥
The strategic amendment revises the design to compare the combination of domvanalimab plus zimberelimab to SOC pembrolizumab, enabling an expanded geographic footprint for the trial. In addition, this amendment addresses the importance, both clinically and commercially, of using an accepted
The key components of the protocol amendment for ARC-10, following proactive discussions with the FDA, are as follows:
-
ARC-10 will now compare domvanalimab plus zimberelimab to SOC pembrolizumab for 1L PD-L1≥
50% metastatic NSCLC and will no longer contain a chemotherapy arm.- The prior study design included three arms and compared domvanalimab plus zimberelimab to zimberelimab, and zimberelimab to chemotherapy.
- The amendment significantly simplifies the study design and reduces the number of arms from three to two; the total trial size remains approximately the same (n=600).
-
Elimination of the chemotherapy arm and inclusion of the pembrolizumab arm as the active comparator will enable site activation in the
U.S. and other countries that were previously excluded from the study based on SOC.
- Based on FDA feedback on the primary endpoint for immuno-oncology therapies in 1L NSCLC, overall survival (OS) will be the primary endpoint.
Additional Pipeline Highlights:
Domvanalimab (Fc-silent anti-TIGIT monoclonal antibody)
Domvanalimab Updates:
-
In the third quarter, Arcus and Gilead initiated three new domvanalimab-based combination studies, including two registrational Phase 3 trials:
- STAR-121, being operationalized by Gilead, is a registrational Phase 3 study to evaluate domvanalimab plus zimberelimab and chemotherapy versus SOC pembrolizumab plus chemotherapy in 1L PD-L1 all-comer NSCLC;
- STAR-221 is a registrational Phase 3 study to evaluate domvanalimab plus zimberelimab and chemotherapy versus SOC nivolumab plus chemotherapy in 1L locally advanced unresectable or metastatic gastric, esophageal and gastro-esophageal junction adenocarcinomas;
- ARC-21 is a Phase 2 study to evaluate domvanalimab plus zimberelimab-based combinations in upper gastrointestinal (GI) cancers.
-
In the third quarter, Arcus completed enrollment of ARC-7, a 150-patient, randomized Phase 2 study evaluating the safety and efficacy of zimberelimab alone vs. domvanalimab plus zimberelimab vs. domvanalimab plus zimberelimab and etrumadenant in 1L PD-L1≥
50% metastatic NSCLC.
Upcoming Domvanalimab Milestones:
- The fourth interim analysis and topline data disclosure for ARC-7 is on track for this quarter, with a planned presentation of data at a medical conference in 2023.
- EDGE-Lung, a Phase 2 platform study to evaluate domvanalimab-, quemliclustat-, and zimberelimab-based combinations in advanced NSCLC, is expected to be initiated by the end of 2022.
Etrumadenant (A2a/A2b adenosine receptor antagonist)
Upcoming Etrumadenant Milestones:
- Data from the randomized cohort of ARC-6 evaluating etrumadenant plus zimberelimab and docetaxel versus docetaxel in second-line (2L) metastatic castrate-resistant prostate cancer (CRPC) are expected in-house by year-end, with a data presentation planned for 2023.
- Data from ARC-9, a Phase 1b/2 study evaluating etrumadenant-based combinations in 2L and third-line (3L) metastatic colorectal cancer (mCRC), are expected in the first half of 2023.
Quemliclustat (small-molecule CD73 inhibitor)
Upcoming Quemliclustat Milestones:
- In the first half of 2023, Arcus expects PFS and OS data from all 90 patients in its ongoing ARC-8 trial evaluating quemliclustat plus chemotherapy with or without zimberelimab in first-line pancreatic cancer.
- EDGE-Lung, a Phase 2 platform study to evaluate domvanalimab-, quemliclustat-, and zimberelimab-based combinations in advanced NSCLC, is expected to be initiated by the end of 2022.
- Arcus expects to initiate one or more cohorts with quemliclustat-based combinations in GI cancers in the ongoing ARC-21 study.
AB521 (HIF-2a inhibitor)
AB521 Update:
- In the third quarter, Arcus initiated ARC-20, a Phase 1/1b study exploring the safety and clinical activity of AB521 in cancer patients.
- In October, Arcus presented data at the EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics Symposium from the fourth cohort of ARC-14, a healthy volunteer study of AB521. The pharmacokinetic (PK) and pharmacodynamic (PD) data in healthy volunteers continue to support a potentially improved clinical profile compared to that of the approved HIF-2a inhibitor.
Discovery Programs:
- Arcus remains on track to initiate a Phase 1 trial in cancer patients for AB598, its anti-CD39 antibody, in the first half of 2023.
- Arcus expects to initiate a Phase 1 trial in 2023 for its next small molecule program, AB801, a potent and highly selective Axl inhibitor. The early development plan is expected to focus on treatment-resistant tumor types, such as STK11-mutant NSCLC.
-
Arcus expects to file an IND for its first candidate for the treatment of inflammatory disease in 2023. In October, as part of their research collaboration, Arcus received the third milestone payment of
under its funding agreement with$5 million BVF Partners, L.P.
Financial Results for the Third Quarter 2022
-
Cash, cash equivalents and marketable securities: were
as of$1,191.9 million September 30, 2022 , compared to as of$681.3 million December 31, 2021 . The increase was primarily due to the receipt of from Gilead in$725 million January 2022 . Arcus expects cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations into 2026.
-
Revenues: Revenues were
for the three months ended$33.6 million September 30, 2022 , compared to for the same period in 2021. In the three months ended$9.5 million September 30, 2022 , Arcus recognized in license and development service revenues for all programs optioned by Gilead, including$23.7 million in revenues due to changes in the total estimated effort to be incurred in the future to satisfy the performance obligations, primarily driven by zimberelimab. Arcus further recognized$8.9 million in collaboration revenue related to Gilead’s ongoing rights to access Arcus’s research and development pipeline in accordance with the Gilead collaboration agreement, as well as$8.3 million related to the collaboration agreement with Taiho. In the three months ended$1.5 million September 30, 2021 , Arcus recognized in other collaboration revenue related to Gilead's access to Arcus’s research and development pipeline, as well as$7.7 million related to the Taiho collaboration agreement. Revenues were$1.8 million for the nine months ended$78.3 million September 30, 2022 , compared to for the same period in 2021.$28.4 million
-
R&D Expenses: Research and development expenses were
for the three months ended$76.7 million September 30, 2022 , compared to for the same period in 2021. Arcus’s expanding clinical and development activities for domvanalimab and zimberelimab in combination studies drove increases in manufacturing and clinical costs. Arcus’s growing employee base and 2022 stock awards drove an$71.3 million increase in employee compensation costs, which includes a$8.5 million increase in non-cash stock-based compensation. The above increases in research and development costs were mostly offset by increased cost-sharing reimbursements compared to the same quarter in the prior year. The increase in cost-sharing reimbursements was driven by the four programs optioned by Gilead in the current quarter, compared to a single program in the same quarter of the prior year. Research and development expenses were$0.2 million for the nine months ended$207.8 million September 30, 2022 , compared to for the same period in 2021.$206.4 million
-
G&A Expenses: General and administrative expenses were
for the three months ended$26.3 million September 30, 2022 , compared to for the same period in 2021. The increase was driven by the increased administrative costs to support the growing size and complexity of Arcus's clinical development organization associated with Arcus's expanding clinical pipeline and collaboration obligations. Arcus's growing employee base and 2022 stock awards drove a$16.3 million increase in employee compensation costs, which includes a$3.7 million increase in non-cash stock-based compensation, as well as increases in office facilities and consulting expenses. General and administrative expenses were$1.6 million for the nine months ended$76.1 million September 30, 2022 , compared to for the same period in 2021.$49.0 million
-
Net Loss: Net loss was
for the three months ended$64.9 million September 30, 2022 , compared to a net loss of for the same period in the prior year. Net loss was$78.0 million for the nine months ended$199.5 million September 30, 2022 , compared to a net loss of for the same period in the prior year.$226.5 million
Arcus Ongoing and Announced Clinical Studies
Trial |
Arms |
Setting |
Status |
NCT No. |
|
||||
ARC-7 |
zim vs. dom + zim vs. etruma + dom + zim |
1L NSCLC (PD-L1 ≥ |
Ongoing Randomized Phase 2 |
|
PACIFIC-8 (AZ) |
dom + durva vs. durva |
Curative-Intent Stage 3 NSCLC |
Ongoing Registrational Phase 3 |
|
ARC-10 |
dom + zim vs. pembro |
1L NSCLC (PD-L1 ≥ |
Ongoing Registrational Phase 3 |
|
STAR-121 (GILD) |
dom + zim + chemo vs pembro + chemo |
1L NSCLC (PD-L1 all-comers) |
Ongoing Registrational Phase 3 |
|
EDGE-Lung |
dom +/- zim +/- quemli +/- chemo |
1L/2L NSCLC (lung cancer platform study) |
Initiating Phase 2 |
TBD |
Velocity-Lung (GILD) |
dom +/- zim +/- etruma +/- sacituzumab govitecan (Trodelvy®) or other combos |
1L/2L NSCLC (lung cancer platform study) |
Initiating Phase 2 |
TBD |
Gastrointestinal Cancers |
||||
ARC-9 |
etruma + zim + mFOLFOX vs. SOC |
2L/3L/3L+ CRC |
Ongoing Randomized Phase 2 |
|
ARC-21 |
dom + zim ± chemo |
1L/2L Upper GI Malignancies |
Ongoing Phase 2 |
|
STAR-221 |
dom + zim + chemo vs. nivo + chemo |
1L Gastric, Gastroesophageal Junction (GEJ), and Esophageal Adenocarcinoma (EAC) |
Planned Registrational Phase 3 |
|
Pancreatic Cancer |
||||
ARC-8 |
quemli + zim + gem/nab-pac vs. quemli + gem/nab-pac |
1L, 2L PDAC |
Ongoing Randomized Phase 1/1b |
|
Prostate Cancer |
||||
ARC-6 |
etruma + zim + SOC vs. SOC (Adding sacituzumab govitecan (Trodelvy) combination cohorts) |
2L/3L CRPC |
Ongoing Randomized Phase 2 |
|
Various |
||||
ARC-12 |
AB308 + zim |
Advanced Malignancies |
Ongoing Phase 1/1b |
|
ARC-14 |
AB521 |
|
Ongoing |
|
ARC-20 |
AB521 |
Cancer Patients / ccRCC |
Planned Phase 1/1b |
dom: domvanalimab; durva: durvalumab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; nivo: nivolumab; pembro: pembrolizumab; quemli: quemliclustat; SOC: standard-of-care; zim: zimberelimab
ccRCC: clear-cell renal cell carcinoma; CRC: colorectal cancer; CRPC: castrate-resistant prostate cancer; GI: gastrointestinal; NSCLC: non-small cell lung cancer; PDAC: pancreatic ductal adenocarcinoma
About the Gilead Collaboration
In
Gilead and Arcus are co-developing and equally share global development costs for five clinical candidates, including domvanalimab, an Fc-silent anti-TIGIT antibody, etrumadenant, a dual adenosine A2a/A2b receptor antagonist, quemliclustat, a small molecule inhibitor of CD73, and zimberelimab, an anti-PD1 antibody.
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, the statements in Dr. Rosen’s quote, Arcus’s expectation that its cash, cash equivalents and marketable securities on-hand are sufficient to fund operations into 2026, future data disclosures and presentations, the projected achievement of clinical study milestones and their associated timing (including under the captions “Upcoming Domvanalimab Milestones,” “Upcoming Etrumadenant Milestones,” “Upcoming Quemliclustat Milestones,” and “Discovery Programs”), and additional clinical studies in planning or expected to be initiated 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: risks associated with preliminary and interim data not being guarantees that future data will be similar; the unexpected emergence of adverse events or other undesirable side effects; 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; 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; changes in the competitive landscape for Arcus’s programs; and the inherent uncertainty associated with pharmaceutical product development and clinical trials. Risks and uncertainties facing Arcus are described more fully in its Quarterly Report on Form 10-Q for the quarter ended
The Arcus name and logo are trademarks of
Consolidated Statements of Operations and Comprehensive Loss (unaudited) (In thousands, except share and per share amounts) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
License and development service revenue |
|
$ |
23,742 |
|
|
$ |
- |
|
|
$ |
48,374 |
|
|
$ |
- |
|
Other collaboration revenue |
|
|
9,839 |
|
|
|
9,461 |
|
|
|
29,971 |
|
|
|
28,383 |
|
Total revenues |
|
|
33,581 |
|
|
|
9,461 |
|
|
|
78,345 |
|
|
|
28,383 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
76,684 |
|
|
|
71,254 |
|
|
|
207,800 |
|
|
|
206,412 |
|
General and administrative |
|
|
26,294 |
|
|
|
16,343 |
|
|
|
76,104 |
|
|
|
48,990 |
|
Total operating expenses |
|
|
102,978 |
|
|
|
87,597 |
|
|
|
283,904 |
|
|
|
255,402 |
|
Loss from operations |
|
|
(69,397 |
) |
|
|
(78,136 |
) |
|
|
(205,559 |
) |
|
|
(227,019 |
) |
Non-operating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income, net |
|
|
5,013 |
|
|
|
161 |
|
|
|
8,456 |
|
|
|
481 |
|
Effective interest on liability for sale of future royalties |
|
|
(535 |
) |
|
|
- |
|
|
|
(1,437 |
) |
|
|
- |
|
Total non-operating income, net |
|
|
4,478 |
|
|
|
161 |
|
|
|
7,019 |
|
|
|
481 |
|
Net loss before income taxes |
|
|
(64,919 |
) |
|
|
(77,975 |
) |
|
|
(198,540 |
) |
|
|
(226,538 |
) |
Income tax expense |
|
|
- |
|
|
|
- |
|
|
|
(1,004 |
) |
|
|
- |
|
Net loss |
|
|
(64,919 |
) |
|
|
(77,975 |
) |
|
|
(199,544 |
) |
|
|
(226,538 |
) |
Other comprehensive loss |
|
|
(2,557 |
) |
|
|
(46 |
) |
|
|
(8,540 |
) |
|
|
(136 |
) |
Comprehensive loss |
|
$ |
(67,476 |
) |
|
$ |
(78,021 |
) |
|
$ |
(208,084 |
) |
|
$ |
(226,674 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.90 |
) |
|
$ |
(1.11 |
) |
|
$ |
(2.78 |
) |
|
$ |
(3.28 |
) |
Weighted-average number of shares used to compute basic and diluted net loss per share |
|
|
72,236,283 |
|
|
|
70,110,138 |
|
|
|
71,752,246 |
|
|
|
68,990,290 |
|
Selected Consolidated Balance Sheet Data (unaudited) (In thousands) |
|||||||||
|
|
|
|
|
|
|
|||
Cash, cash equivalents and marketable securities |
|
$ |
1,191,920 |
|
|
$ |
681,298 |
|
|
Total assets |
|
|
1,393,822 |
|
|
|
1,591,898 |
|
|
Total liabilities |
|
|
695,121 |
|
|
|
750,448 |
|
|
Total stockholders’ equity |
|
|
698,701 |
|
|
|
841,450 |
|
|
(1) |
Derived from the audited financial statements for the year ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005351/en/
Investor Inquiries:
Head of Investor Relations & Strategy
(617) 459-2006
pbanerjee@arcusbio.com
Media Inquiries:
VP of Corporate Communications
(650) 922-1269
hkolkey@arcusbio.com
Source:
FAQ
What were the financial results for Arcus Biosciences in Q3 2022?
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