On August 6, 2019 Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage biopharmaceutical company focused on creating innovative cancer therapies, reported financial results for the second quarter ended June 30, 2019 and provided corporate updates (Press release, Arcus Biosciences, AUG 6, 2019, View Source [SID1234538193]).

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"For our lead program, AB928, the first dual adenosine receptor antagonist designed for use in oncology, we have demonstrated excellent safety, maximal receptor coverage, and PK/PD correlation in three different combination regimens. This has enabled broad Phase 1b expansion across multiple tumor types, now including prostate cancer, and we look forward to reporting initial results in mid-2020," said Terry Rosen, Ph.D., Chief Executive Officer of Arcus. "Arcus’s emphasis on selecting science-driven clinical combinations, adaptive clinical design, and an early commitment to clinical and commercial integration provide a framework that enables us to be well positioned to maximize clinical and commercial value from our pioneering drug discovery efforts in the adenosine space and potentially best-in-class molecules."

Recent Corporate Highlights

In addition to the identification of the recommended dose for expansion (RDE) for AB928 in combination with AB122, identified 150 mg once a day as the RDE for two additional combination regimens:

AB928 with pegylated liposomal doxorubicin (PLD, Doxil)

AB928 with mFOLFOX

Initiated broad Phase 1b expansions for AB928 in combinations with AB122 and/or chemotherapy across multiple tumor types.

This expansion includes metastatic castration resistant prostate cancer (mCRPC) across multiple lines of therapy. The company also plans to explore additional combinations across multiple lines of therapy in mCRPC.

Received IND clearance to initiate a biomarker-selected trial of single-agent AB122 in advanced solid tumors, in collaboration with Strata Oncology, using Strata’s proprietary biomarkers which, using observational study data, have demonstrated potential predictive power for anti-PD-1 efficacy across multiple tumor types.

Reported initial PK data from the healthy volunteer Phase 1 study of AB680, the first small-molecule CD73 inhibitor to enter the clinic, which support an every-two-weeks (Q2W) dosing schedule. Received IND clearance to initiate a Phase 1/1b trial of AB680, in combination with AB122 and chemotherapy, in first-line metastatic pancreatic cancer.

Announced the appointment of Eric Hoefer to Chief Commercial Officer. During the span of Mr. Hoefer’s 20-year career in biopharma, he has been instrumental to the development and commercialization of 15 new medicines, including Avastin, Tarceva, Tecentriq, and Imfinzi. Mr. Hoefer was most recently at AstraZeneca, where he led Immuno-oncology (IO) Global Marketing.

Anticipated Upcoming (2H 2019) Milestones

AB928 (dual adenosine receptor antagonist):

Initiate Phase 1 safety dose-escalation in combination with PLD and IPI-549, a phosphoinositide-3-kinase-gamma (PI3Kg) inhibitor, in triple-negative breast cancer (TNBC) in collaboration with Infinity Pharmaceuticals.

Initiate Phase 1b expansion in combination with AB122, carboplatin and pemetrexed in EGFR-mutated non-small cell lung cancer (NSCLC) patients who have failed tyrosine kinase inhibitor (TKI) therapy.

Present additional safety, PK/PD and translational data from the Phase 1 safety dose-escalation portion of the AB928 combination trials at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Meeting at the end of September in Barcelona, Spain.

AB680 (small-molecule CD73 inhibitor):

Initiate Phase 1 safety dose-escalation in combination with AB122, gemcitabine (Gemzar) and nab-paclitaxel (Abraxane) in patients with first-line metastatic pancreatic cancer.

AB122 (anti-PD-1 antibody):

Initiate a tumor-type agnostic biomarker-selected trial of single-agent AB122 in advanced solid tumors in collaboration with Strata Oncology.

AB154 (anti-TIGIT antibody):

Report preliminary safety and PK/PD data from the Phase 1 safety dose-escalation and initiate an expansion study in combination with AB122 in NSCLC.

Discovery Programs:

Identify a potentially best-in-class clinical development candidate targeting HIF-2α.

Please refer to Arcus’s pipeline at www.arcusbio.com for the company’s most current pipeline and development plans.

Financial Results for the Second Quarter 2019

Cash, cash equivalents and investments in marketable securities were $224.4 million as of the second quarter ended June 30, 2019, compared to $243.1 million at March 31, 2019. The decrease was primarily due to the utilization of cash to fund our operations. Based on our current operating plans, we anticipate that our cash, cash equivalents and investments in marketable securities will be sufficient to fund operations into 2021.

Revenues: Collaboration and license revenue for the second quarter ended June 30, 2019 was $1.8 million, compared to $1.3 million for the same period in 2018. The increase in revenue was primarily attributable to the impact of our adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606). Under ASC 606, additional revenue was recognized from our option and license agreement with Taiho Pharmaceutical due to remeasurement of the initial transaction price upon adoption of the new standard. Collaboration and license revenue for the six months ended June 30, 2019 was $3.5 million, compared to $2.5 million for the same period in 2018.

R&D Expenses: Research and development expenses for the second quarter ended June 30, 2019 were $25.0 million, compared to $13.7 million for the same period in 2018. The increase in research and development expenses was primarily due to an increase in clinical activities for our ongoing clinical programs, an increase in R&D headcount, and includes a $7.5 million expense pertaining to the achievement of a clinical development milestone pursuant to our license agreement with WuXi Biologics. Research and development expenses for the six months ended June 30, 2019 were $40.6 million, compared to $25.4 million for the same period in 2018.

G&A Expenses: General and administrative expenses for the second quarter ended June 30, 2019 were $5.9 million, compared to $3.5 million for the same period in 2018. Higher general and administrative expenses were primarily due to an increase in G&A headcount and related costs, as well as costs related to operations as a public company. General and administrative expenses for the six months ended June 30, 2019 were $10.9 million, compared to $6.4 million for the same period in 2018.

Net Loss: Net loss for the second quarter ended June 30, 2019 was $28.1 million, compared to $13.5 million for the same period in 2018. The increase in net loss was primarily attributable to an increase in operating expenses noted above partially offset by an increase in revenues. Net loss for the six months ended June 30, 2019 was $45.8 million, compared to $26.5 million for the same period in 2018.