Arcus Biosciences, Inc. Q4 FY2023 earnings call

• Arcus has evolved into an integrated biopharmaceutical company with seven molecules in clinical development, a broad late-stage portfolio, and multiple mid-stage trials. They have $1.2 billion in cash and equivalents with runway into 2027.
• Started three new registrational trials, continue to invest in early-stage programs, and have partnerships with Gilead, Taiho, Exelixis, and AstraZeneca.
• Discussed dom/zim: in Phase 3 with three trials enrolling, STAR-221 expected to read out first with first-to-market advantage. Casdatifan: presented PK/PD data showing best-in-class profile, on track to initiate Phase 3 early next year. Quemli: presented OS data in pancreatic cancer, on track to initiate Phase 3 early next year.
• Strategic portfolio changes: closed ARC-10 for dom/zim, operationalizing and funding Phase 3 for quemli in pancreatic cancer.

No specific product segments with detailed financial performance and revenue contribution % provided. The company has multiple clinical development programs including anti-TIGIT (dom/zim), HIF-2alpha inhibitor (Casdatifan/AB521), and CD73 inhibitor (quemli).

• Cash balance at end of 2024 expected between $870 million and $920 million, funding operations into 2027.
• Revenue impacted by collaboration with Gilead and milestone payments from Taiho. R&D expenses expected to modestly increase with Phase 3 studies. G&A expenses expected to remain stable.
• Expect to initiate Phase 3 studies for Cas and quemli early next year, and present more data for Cas later in the year.

Q: On Cas, can you confirm ORR and number of confirmed vs unconfirmed responses, and mechanics of Gilead opt-in on the program?

A: On ORR, didn't share specific number as 70% of patients have only had one or two scans; will share later. For Gilead opt-in, defined criteria with Gilead, opt-in occurs when proof-of-concept data generated, and company has inbound interests from other companies.

Q: On Cas, ability to reduce fast progresses and recruiting patients for HIF-2alpha plus Zanza?

A: Primary progression rate in Cas is lower than in Belzutifan's Phase 3 study. Expect rapid enrollment for Cas as enthusiasm for HIF-2 mechanism is high among investigators.

Q: On MORPHEUS-PDAC study, expectations on efficacy, especially OS, and impact on Quemli's Phase 3 plans?

A: OS data from MORPHEUS-PDAC will be similar to ARC-8. Outcomes from this trial don't change Quemli's Phase 3 plans; both studies indicate adenosine modulation has profound effect on OS.

Q: On Cas, doses for RCC patients showing tumor reductions, base case for Phase 3, and Phase 3 design?

A: One patient with tumor reduction was on 100 mg, another on 20 or 50 mg. Base case for Phase 3 is 100 mg; other arms being evaluated for regulatory support. 50 mg cohort almost fully enrolled, and higher doses being considered but 100 mg is current focus.

Q: On Cas, PK/PD data, correlation of PD readouts to efficacy, and expected efficacy improvement vs belzutifan?

A: Cas has a better PK/PD profile with 5x higher exposure at 100 mg vs approved dose of belzutifan. EPO change is a key PD readout correlated to efficacy; while hemoglobin changes are manageable, EPO change is more directly related to HIF-2alpha inhibition. Expect greater efficacy due to better PK/PD profile hitting the target harder.

Q: On Cas, dose response and safety profile, and color on ARC-10 trial data?

A: No meaningful differences in toxicity seen across doses; anemia is manageable. ARC-10 data not yet decided, but if presented, mature PFS data would be shared and wouldn't affect ongoing trials.