On February 23, 2022 Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer, reported financial results for the fourth quarter and year ended December 31, 2021 and provided a corporate update on its six clinical-stage molecules targeting TIGIT, the adenosine axis (CD73 and dual A2a/A2b receptor), HIF-2a and PD-1 across common cancers, including lung, colon, pancreatic and prostate (Press release, Arcus Biosciences, FEB 23, 2022, View Source [SID1234608870]).

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"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 Terry Rosen, Ph.D., Chief Executive Officer of Arcus. "Our strategy is to efficiently investigate and advance novel combinations of our six clinical-stage molecules in areas of high unmet need. We look forward to presenting, later this year, randomized datasets from our trials in lung and pancreatic cancer, both settings with large patient populations with great need for better treatment options."

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 (Free ESMO Whitepaper) Targeted Anticancer Therapies Congress on March 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 December 31, 2021

Cash, cash equivalents and investments were $681.3 million as of December 31, 2021, compared to $735.1 million as of December 31, 2020. The decrease was primarily due to cash used in operations and purchases of property and equipment totaling $26.1 million, partially offset by gross proceeds of $220.4 million received under the Amended and Restated Stock Purchase Agreement with Gilead in February 2021. Upon the receipt of $725 million in option exercise payments from Gilead in January 2022, Arcus’s cash and cash equivalents and investments totaled approximately $1.4 billion. Arcus expects cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations into 2026.
Revenues: Collaboration and license revenues were $354.5 million for the three months ended December 31, 2021, compared to $9.5 million 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 $382.9 million for the full year ended December 31, 2021, compared to $77.5 million for the same period in 2020.
R&D Expenses: Research and development expenses were $49.9 million for the three months ended December 31, 2021, compared to $48.7 million 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 $3.2 million of the increase in compensation costs is related to non-cash stock-based compensation. Research and development expenses were $256.3 million for the full year ended December 31, 2021, compared to $159.3 million for the same period in 2020.
G&A Expenses: General and administrative expenses were $23.3 million for the three months ended December 31, 2021, compared to $12.8 million 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 $2.7 million of increased non-cash stock-based compensation. General and administrative expenses were $72.3 million for the full year ended December 31, 2021, compared to $42.4 million for the same period in 2020.
Net Income: Net income was $279.4 million for the three months ended December 31, 2021, compared to net loss of $51.9 million for the same period in the prior year. Net income was primarily due to license revenue recognized upon closing of Gilead’s exercise in December 2021 of its options. Net income was $52.8 million for the full year ended December 31, 2021, compared to net loss of $122.9 million for the same period in 2020.
Arcus Clinical Study Overview

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