On August 5, 2021 Arcus Biosciences, Inc. (NYSE:RCUS), an oncology-focused biopharmaceutical company working to create best-in-class cancer therapies, reported financial results for the second quarter ended June 30, 2021 and provided operational highlights (Press release, Arcus Biosciences, AUG 5, 2021, View Source [SID1234585952]). Management will host a conference call today, August 5, 2021 beginning at 1:30 pm PT/ 4:30 pm ET.
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"We have made significant progress advancing our portfolio and partnerships in the first half of 2021," said Terry Rosen, Ph.D., CEO. "We generated additional clinical data for four of our clinical-stage molecules, across trials in lung, colon, prostate, and pancreatic cancers, that continue to support our ongoing randomized studies. We also advanced our Fc-enabled anti-TIGIT antibody into a Phase 1 study and selected our HIF-2α small molecule to be our sixth clinical-stage molecule, anticipated to enter the clinic by the end of the year. With over $800 million of cash and investments as of the end of the second quarter, and our partnership with Gilead, we are confident we can address and pursue the immense need in these patient populations and the corresponding magnitude of the market opportunities."
Anti-TIGIT Program
Domvanalimab (Fc-silent anti-TIGIT antibody)
Recent Highlights:
Arcus continues to enroll our ARC-7 study and ARC-10 Phase 3 registrational study as planned, based on encouraging results from the first interim analysis from ARC-7, a randomized, three-arm Phase 2 trial evaluating domvanalimab (dom) + zimberelimab (zim) vs. zim vs. dom + zim + etrumadenant (etruma) in first-line PD-L1≥50%, metastatic non-small cell lung cancer (NSCLC).
Data from the zim arm demonstrated activity similar to that of other marketed anti-PD-1 antibodies in the setting.
Data from the doublet and triplet arms demonstrated promising antitumor activity, and the triplet arm performed particularly well across multiple measures, including objective response rate (ORR) and depth of response. More mature data will enable us to better assess the contributions of each molecule, dom and etruma.
At the time of data cut off, no unexpected safety signals were observed.
Based on this dataset, Arcus and Gilead will continue preparations for additional Phase 3 studies of dom-based combinations. We will also explore other development opportunities for the triplet.
Upcoming Milestones:
Results from the interim analysis for ARC-7 are expected to be submitted later this year for a presentation in 4Q21 or in 1H22.
We anticipate an opt-in trigger decision by Gilead for our anti-TIGIT program by year-end 2021.
Initiation of PACIFIC-8, in collaboration with AstraZeneca, anticipated to start in 4Q21. PACIFIC-8 is a registrational trial designed to evaluate dom and durvalumab in Stage 3 NSCLC.
AB308 (Fc-enabled anti-TIGIT antibody)
Recent Highlights:
Recommended dose for expansion (RDE) selected in the Phase 1/1b ARC-12 study evaluating AB308 plus zim in advanced malignancies. This study is designed to efficiently establish the safety, tolerability, pharmacokinetic, pharmacodynamic, and clinical activity of AB308 + zim to facilitate advancement into a late-stage trial.
Upcoming Milestones:
Initiation of five expansion cohorts in the Phase 1b portion of the study is expected in the third quarter.
Quemliclustat (also referred to as AB680; CD73 inhibitor)
Recent Highlights:
Completed enrollment in the expansion cohort of our Phase 1/1b ARC-8 study of quemliclustat (quemli) plus chemotherapy and zim in patients with first-line metastatic pancreatic ductal adenocarcinoma. The data continue to look promising, particularly the safety profile of the combination and the high percentage of patients that experienced tumor shrinkage.
Currently enrolling the randomized portion of this study which is comparing quemli + zim + gemcitabine (G)/nab-paclitaxel (NP) vs. quemli + G/NP to inform our Phase 3 registrational design.
Upcoming Milestones:
Opening of a new arm to evaluate quemli in second-line pancreatic cancer is expected in 3Q21 based on encouraging first-line results and high interest from investigators.
Updated data from the dose-escalation and dose-expansion cohorts of ARC-8 study are expected to be released in the Fall.
Completion of enrollment of the 90-patient randomized portion of the ARC-8 study is expected by year-end 2021. We expect to present initial randomized data in mid-2022 and anticipate utilizing data from the randomization portion of the study combined with data from the dose escalation and expansion cohorts to discuss the path to registration with health authorities.
Etrumadenant (A2a/A2b adenosine receptor antagonist)
Recent Highlights:
Presented initial Phase 1b data in metastatic castrate-resistant prostate cancer (mCRPC) from ARC-6 at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting. The data from the Stage 1 portion of the etruma + zim + docetaxel cohort in patients with 2L+ mCRPC showed the etruma-based combination was well tolerated and demonstrated promising clinical activity in patients with advanced disease who had progressed on prior treatments.
Demonstrated preliminary activity with etruma in combination with dom plus zim (triplet arm) in ARC-7. The clinical activity in the triplet arm is the first reported on for an anti-TIGIT and adenosine receptor antagonist combination and potentially provides a novel and differentiated therapy for this patient population.
Upcoming Milestones:
Initial randomized data, including ORR and PFS, from our ARC-4 study in EGFR+ NSCLC cancer is expected to be presented in 1H22. ARC-4 is a randomized Phase 1b study evaluating etruma + zim + chemotherapy vs. zim + chemotherapy in EGFRmut tyrosine kinase inhibitor (TKI)-relapsed and refractory NSCLC.
Initial randomized data from our ARC-6 study in prostate cancer is expected to be presented in 2022. ARC-6 is a Phase 1b/2 randomized study evaluating the efficacy and safety of etruma-based treatment combinations.
HIF-2α inhibitor Program
Recent Highlights:
Selected AB521 as the lead clinical candidate for our HIF-2α inhibitor program. AB521 has demonstrated excellent potency, selectivity, biological activity and pharmacokinetic properties in preclinical studies.
Upcoming Milestones:
Initiation of clinical development for our HIF-2α inhibitor, AB521, is anticipated to occur in 4Q21. This first study is expected to be in healthy volunteers to expeditiously characterize the pharmacokinetic and safety profile of AB521 and to identify the starting dose for the Phase 1/1b study in oncology indications, which is anticipated to begin in 1H22.
Corporate
Recent Highlights:
Appointed Nicole Lambert to our Board of Directors. Ms. Lambert is currently President of Myriad Genetic Laboratories and has extensive experience in the healthcare industry spanning more than 20 years, including expertise successfully growing and leading global commercial organizations. She will be a great asset to Arcus, and we are thrilled to welcome her to our team, as we continue to advance our registrational programs.
Upcoming Milestones:
Initiation of a Phase 1 platform study, by partner Taiho, is expected in 3Q21. Taiho filed an IND in Japan in 2Q21 to evaluate zim in intra-portfolio combinations targeting oncology indications.
Financial Results for the Second Quarter 2021
Cash, cash equivalents and investments were $805.1 million as of June 30, 2021, compared to $735.1 million as of December 31, 2020. The increase was primarily due to gross proceeds of $220.4 million received upon the closing of the private placement of common stock under the Amended and Restated Stock Purchase Agreement with Gilead in February 2021, partially offset by cash utilized for our operations. We expect cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations at least through 2023.
Revenues: Collaboration and license revenues were $9.5 million for the three months ended June 30, 2021, compared to $1.8 million for the same period in 2020. In the three months ended June 30, 2021, we recognized $7.7 million in collaboration revenues related to Gilead’s ongoing rights to access our research and development pipeline in accordance with the Gilead Collaboration Agreement, as well as $1.8 million under the Taiho Agreement. In the three months ended June 30, 2020, we recognized $1.8 million under the Taiho Agreement. Collaboration and license revenues were $18.9 million for the six months ended June 30, 2021, compared to $3.5 million for the same period in 2020.
R&D Expenses: Research and development expenses were $68.8 million for the three months ended June 30, 2021, compared to $35.7 million for the same period in 2020. The increase was primarily due to increases in employee compensation costs driven by increasing headcount and 2021 stock awards. Of the total change in employee compensation costs, approximately $4.6 million consists of increased non-cash stock-based compensation. Clinical and manufacturing costs increased as well due to the increased number of clinical programs and studies compared to the same quarter in the prior year. Lab supplies and equipment, clinical consulting, and office and facilities expense all increased as we continued to grow. The overall increase in research and development expenses is partially offset by a decrease in milestone expense incurred and an increase in reimbursements from collaboration partners. Research and development expenses were $135.2 million for the six months ended June 30, 2021, compared to $58.8 million for the same period in 2020.
G&A Expenses: General and administrative expenses were $16.8 million for the three months ended June 30, 2021, compared to $11.4 million for the same period in 2020. The increase in expense was due to increases in employee compensation costs driven by increasing headcount and 2021 stock awards. Of the total change in employee compensation costs, approximately $4.3 million consists of increased non-cash stock-based compensation. We also incurred additional facilities expense due to our expanding headcount and office space. The overall increase was partially offset by decreases in legal, accounting and other consulting expenses. In 2020, we incurred significant costs related to our transaction with Gilead and other corporate development activities. General and administrative expenses were $32.6 million for the six months ended June 30, 2021, compared to $18.4 million for the same period in 2020.
Net Loss: Net loss was $76.0 million for the three months ended June 30, 2021, compared to a net loss of $45.1 million for the same period in the prior year. Net loss was $148.6 million for the six months ended June 30, 2021, compared to $72.8 million for the same period in 2020.
Conference Call
Management will host a conference call today, August 5, 2021 to discuss second quarter 2021 financial results and recent corporate highlights. The call will begin at 1:30 pm PT/ 4:30 pm ET. Investors interested in listening to the conference call may do so by dialing (844) 200-6205 in the U.S. or +44 208 0682 558 internationally, using Conference ID: 152804. In addition, the live webcast and any accompanying slides will be available on the "Investors" section of the Arcus website at www.arcusbio.com. Following the live webcast, a replay will be available on the Company’s website for at least two weeks following the live event.