Arcus Biosciences Reports First Quarter 2023 Financial Results and Provides a Pipeline Update

On May 9, 2023 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 first quarter ended March 31, 2023, and provided a pipeline update on its clinical-stage investigational molecules – targeting TIGIT, the adenosine axis (CD73 and A2a/A2b receptors), HIF-2a and PD-1 – across multiple common cancers (Press release, Arcus Biosciences, MAY 9, 2023, View Source [SID1234631269]).

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"Together with our partner Gilead, we continue to execute on our four Phase 3 studies evaluating domvanalimab-based combinations versus standard of care in lung and gastrointestinal cancers. We are also making great progress on our earlier-stage pipeline. Specifically, we plan to initiate a Phase 2 combination study for AB521, our potential best-in-class HIF-2a inhibitor, in the second half of this year, while also advancing two additional molecules into the clinic in 2023," said Terry Rosen, Ph.D., chief executive officer of Arcus. "Meanwhile, we are leveraging our deep immunology and small-molecule expertise to diversify our portfolio into inflammatory disease with the advancement of our KIT inhibitor program. With $1.0 billion in cash and investments and runway into 2026, we are in an extremely strong position to advance our diverse portfolio of innovative therapies."

Pipeline Highlights:

Domvanalimab (Fc-silent anti-TIGIT monoclonal antibody)


Data from the ARC-7 study will be presented during the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June 2023, which will include updated data for all 150 patients in the trial.

Initial ORR data from the ongoing EDGE-Gastric (ARC-21) Phase 2 study of domvanalimab plus zimberelimab in first- and second-line upper GI cancers are expected in the second half of 2023. These data will be from the cohort that reflects the same patient population and dosing regimen as the ongoing Phase 3 study, STAR-221.
AB521 (HIF-2a inhibitor)


Arcus is enrolling the third dose-escalation cohort of ARC-20, a Phase 1/1b study of AB521 in cancer patients, evaluating a 100-mg daily dose, which Arcus believes has the potential to achieve at least 3 times greater HIF-2a inhibition than that of the approved dose of the marketed competitor.
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Upon completion of this cohort, Arcus expects to advance ARC-20 into the dose-expansion stage of the study.
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Initial pharmacokinetic (PK), pharmacodynamic (PD) and safety data, along with any preliminary signs of anti-tumor activity from the dose-escalation phase of ARC-20, are anticipated in late 2023 or early 2024.

A Phase 2 study evaluating AB521 in combination with other agents is anticipated to begin in the third quarter of 2023.

Quemliclustat (small-molecule CD73 inhibitor)


Arcus and Gilead expect mature overall survival (OS) data from the ongoing Phase 1/1b ARC-8 trial evaluating quemliclustat plus chemotherapy with or without zimberelimab in first-line pancreatic cancer in the second half of 2023; these data will inform next steps for quemliclustat in pancreatic cancer.
Etrumadenant (A2a/A2b adenosine receptor antagonist)


Updated analysis from the ARC-7 study will be presented at the ASCO (Free ASCO Whitepaper) Annual Meeting in June 2023, including more mature data for the etrumadenant plus domvanalimab plus zimberelimab arm.

Data from the randomized cohort of ARC-6, a Phase 1b/2 study evaluating etrumadenant plus zimberelimab and docetaxel versus docetaxel in metastatic castrate-resistant prostate cancer (mCRPCs), are expected in the second half of 2023.

Data from ARC-9, a Phase 1b/2 study evaluating etrumadenant plus zimberelimab plus chemotherapy in second-line and third-line metastatic colorectal cancer (mCRC), are expected in the second half of 2023.

Preclinical Programs


The IND for AB598, Arcus’s anti-CD39 antibody, has been cleared by the FDA, and Arcus is on track to initiate a Phase 1 trial in cancer patients in the second quarter of 2023.

Arcus expects to initiate a Phase 1 study for AB801, a potent and highly selective Axl inhibitor, in the second half of 2023.
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Arcus presented data at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2023 demonstrating high potency and selectivity of AB801 for Axl over other kinases in multiple assays; the data also showed that AB801 significantly decreased tumor volume and increased survival in mouse tumor models.
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The early development plan is expected to focus on treatment-resistant tumor types, such as STK11-mutant NSCLC.

Arcus expects to advance its first candidate against an inflammation target, AB375, a highly selective KIT inhibitor, into the clinic in early 2024.

Financial Results for First Quarter 2023:


Cash, cash equivalents and marketable securities were $1.0 billion as of March 31, 2023, compared to $1.1 billion as of December 31, 2022. The decrease during the period is primarily due to the use of cash in research and development activities. Cash, cash equivalents and marketable securities on-hand are expected to be sufficient to fund operations into 2026.

Revenues were $25 million for first quarter 2023, compared to $18 million for the same period in 2022. In first quarter 2023, Arcus recognized $17 million in license and development service revenues for programs optioned by Gilead. Arcus further recognized $8 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.

Research and Development (R&D) Expenses were $81 million for first quarter 2023, compared to $61 million for the same period in 2022. Arcus’s expanding clinical and development activities increased costs by $31 million, partially offset by $11 million in higher reimbursements for shared expenses from Arcus’s collaborations, primarily the Gilead collaboration, which was expanded in December 2021. The $20 million increase in R&D costs net of reimbursements was driven by Arcus’s expanding clinical and development activities as Arcus enrolled more patients in its existing and new studies. Non-cash stock-based compensation expense was $9 million for both periods. For first-quarter 2023 and 2022, Arcus recognized reimbursements of $42 million and $31 million, respectively, for shared expenses from its collaborations, primarily the Gilead collaboration.

General and Administrative (G&A) Expenses were $30 million for first quarter 2023, compared to $24 million for the same period in 2022. The increase was driven by the increased complexity of supporting Arcus’s expanding clinical pipeline and partnership obligations. Non-cash stock-based compensation expense was $10 million for first quarter 2023, compared to $8 million for the same period in 2022.


Net Loss was $80 million for first quarter 2023, compared to $68 million for the same period in 2022.
Arcus Ongoing and Announced Clinical Studies

Trial Name

Arms

Setting

Status

NCT No.

Lung Cancer

ARC-7

zim vs. dom + zim vs. etruma + dom + zim

1L NSCLC (PD-L1 ≥ 50%)

Ongoing Randomized Phase 2

NCT04262856

PACIFIC-8

(Operationalized by AZ)

dom + durva vs. durva

Curative-Intent Stage 3 NSCLC

Ongoing Registrational Phase 3

NCT05211895

ARC-10

dom + zim vs. pembro

1L NSCLC (PD-L1 ≥ 50%)

Ongoing Registrational Phase 3

NCT04736173

STAR-121

(Operationalized by Gilead)

dom + zim + chemo vs. pembro + chemo

1L NSCLC (PD-L1 all-comers)

Ongoing Registrational Phase 3

NCT05502237

EDGE-Lung

dom +/- zim +/- quemli +/- chemo

1L/2L NSCLC (lung cancer platform study)

Ongoing Randomized Phase 2

NCT05676931

VELOCITY-Lung

(Operationalized by Gilead)

dom +/- zim +/- etruma +/- sacituzumab govitecan-hziy or other combos

1L/2L NSCLC (lung cancer platform study)

Ongoing Randomized Phase 2

NCT05633667

Gastrointestinal Cancers

ARC-9

etruma + zim + mFOLFOX vs. SOC

2L/3L/3L+ CRC

Ongoing

Randomized Phase 2

NCT04660812

EDGE-Gastric

(ARC-21)

dom +/- zim +/- quemli

+/- chemo

1L/2L Upper GI Malignancies

Ongoing

Randomized Phase 2

NCT05329766

STAR-221

dom + zim + chemo vs. nivo + chemo

1L Gastric, Gastroesophageal Junction (GEJ), and Esophageal Adenocarcinoma (EAC)

Ongoing Registrational Phase 3

NCT05568095

Pancreatic Cancer

ARC-8

quemli + zim + gem/nab-pac vs. quemli + gem/nab-pac

1L, 2L PDAC

Ongoing Randomized Phase 1/1b

NCT04104672

Prostate Cancer

ARC-6

etruma + zim + SOC vs. SOC (also enrolling sacituzumab govitecan-hziy combination cohorts)

2L/3L CRPC

Ongoing Randomized Phase 2

NCT04381832

Various

ARC-12

AB308 + zim

Advanced Malignancies

Ongoing

Phase 1/1b

NCT04772989

ARC-14

AB521

Healthy Volunteers

Ongoing

NCT05117554

ARC-20

AB521

Cancer Patients / ccRCC

Ongoing Phase 1/1b

NCT05536141

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