Arcus Biosciences Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 6, 2025

There are 14 speakers on the call.

Operator

Hello, everyone, and welcome to Arcus Biosciences First Quarter twenty twenty five Earnings and Financial Results Call. My name is Lydia, and I'll be your operator today. After the prepared remarks, there'll be an opportunity to ask questions. I'll now hand you over to Pia Eaves, Vice President of Investor Relations to begin. Please go ahead.

Speaker 1

Good afternoon and thank you for joining us on today's conference call to discuss Arcus' first quarter twenty twenty five financial results and pipeline update. I'd like to remind you that on this call, management will make forward looking statements, including statements about our cash runway, our projected 2025 revenue and our expected clinical development milestones and timelines. All statements other than historical facts reflect the current beliefs and expectations of management and involve risks and uncertainties that may cause our actual results to differ from those expressed. Those risks and uncertainties are described in our most recent quarterly report on Form 10 Q that is filed with the SEC. Today, you'll hear from our CEO, Terry Rosen CMO, Richard Marcus COO, Jennifer Jarrett and CFO, Bob Gelz.

Speaker 1

We'll also be joined by our President, Juan Hynan, for questions after the prepared remarks. With that, I'll turn it over to Terry.

Speaker 2

Thanks very much, Pia, and thanks to all of you for listening in today. While the world around us has been somewhat or maybe definitely tumultuous, at Arcus, we've really remained focused on execution, and that execution goes with speed, efficiency, and most importantly, rigor. And so before we get into the details, I want to emphasize three points that will be apparent in our discussion today. So first off, our late stage portfolio is rich, but our number one priority is unequivocally castadefan. So far, the more data that we generate, the better it looks.

Speaker 2

So our goal is simple, to bring cast to market and to patients as quickly as possible and create maximal value for this program. Second, we are well capitalized and our long term strategy has positioned us well to advance Dom, Quemle and Cass through their respective initial Phase three readouts. Nonetheless, we're always cognizant of the macro environment and we're committed to ensuring our resource deployment reflects our ongoing assessment of priorities so that our cash runway extends as long as possible. Third, we expect to have a steady flow of data for Casdadafen over the next couple of years that will reinforce its advantages relative to both bezetophan and TKI monotherapy. In that vein, we're thrilled that our abstract describing initial data from the CAS plus CABO cohort of ARK20 was accepted for an oral presentation at ASCO.

Speaker 2

This is the same combination we're evaluating in our first quarter. And these data should provide further support for the study. This will also be the third oral presentation of Capstadafen data at a major medical conference in just seven months. There are a lot more to come. Okay, now some important granularity around the caspaglifam program.

Speaker 2

In our Phase 1b ARC20 study, we now have eight cohorts evaluating different dosing regimens, combinations, and settings for cast and clear cell RCC. This is why ARC-twenty will generate meaningful data over the next two years that will serve several important purposes. First, continued elucidation of cascadatifan's differentiated efficacy profile relative to Databell's Azudafan and derisking of our first Phase III study, PEEK-one. Second, continuing to drive the already extraordinary investigator enthusiasm for PEEK-one to support its rapid enrollment and third, demonstrating the opportunity for caspadefin in earlier line settings where CAS has the potential to ultimately displace TKIs. Before I turn the call over to Richard, I'd like to touch on a few additional topics, starting with our development plan and our long term vision for casdadofan.

Speaker 2

Our Phase III trial, PEEK-one, will evaluate CAS plus cabo versus cabo in clear cell RCC patients who have received prior immunotherapy. For our first registrational trial, we chose to combine CAS with cabo because cabo is the gold standard and most widely used TKI in the setting. In fact, in our ARK20 monotherapy cohorts, seventy eight percent of patients received prior cabo. That's greater than three times more than any other TKI. Clinicians are extremely comfortable administering and managing the toxicities of cabo, and because of this, there's an extraordinary amount of interest in PEEK-one.

Speaker 2

Also, because HIF2 alpha inhibition affords a relatively benign safety profile with the primary AEs being on target anemia and hypoxia, we do not believe CAS will have meaningful overlapping toxicities with cabo. As such, the key objectives of our upcoming ASCO presentation are to clearly demonstrate that these two molecules can be safely combined and that we can add efficacy to that of cabo monotherapy. We expect the data shared at ASCO will demonstrate exactly this. Longer term, given the strength of CAS' efficacy and safety profile, our vision is to develop CAS in TKI free regimens and even to displace TKIs in earlier lines of RCC treatment. TKIs have been very effective in treating RCC.

Speaker 2

Almost every RCC patient receives a TKI during the course of their treatment. But TKIs come with debilitating side effects that meaningfully impact quality of life. This cannot be overstated. So we believe there's a huge opportunity to develop CAS in earlier lines, driving a long sought paradigm shift enabling patients to avoid TKI therapy for as long as possible. This in fact reflects a core element of Arcus' high level strategy in oncology, driven by the advances in the understanding of tumor biology in the last decade, being a leader in the development of innovative cancer therapeutics with improved efficacy that preserve quality of life during treatment.

Speaker 2

Specifically, we're collaborating with AstraZeneca to combine CAS with their anti PD-one anti CTLA-four bispecific antibody for Rustomig to create the first TKI free HIF2 alpha combination option for first line RCC. I want to repeat that this will be the first TKI free HIF2 alpha combination option looked at in first line RCC. Anti PD-one, anti CTLA-four is one of the most commonly and widely used first line regimens, particularly in academic centers because it is TKI free and can meaningfully prolong survival. AstraZeneca will operationalize the study as part of their EVOLVE portfolio, so this collaboration enables us to develop CAS in the first line setting in an extremely cost and resource efficient manner and with a world class drug developer in oncology. The study is designed to demonstrate the safety of the combination to support late stage development.

Speaker 2

This provides another opportunity to generate confidence enhancing data for castatophan based regimens over the next eighteen to twenty four months. Beyond EVOLVE, we've added three cohorts to ARC-twenty to evaluate CAS and other early line TKI free settings. These are Cas plus ZIM, our anti PD-one antibody, in first line all comer clear cell RCC, Cas monotherapy in first line favorable risk patients, and Cas monotherapy in patients that have received prior IO but have not yet received a TKI. All three cohorts recently opened for enrollment and have generated significant interest in the investigator community, demonstrating and building on the robust interest in CAS and in TKI free regimens. As a result, these cohorts should enroll quickly and generate efficacy data over the next couple of years informing future development opportunities.

Speaker 2

While CAS has moved front and center in our portfolio, our two other registrational programs, which are targeting massive patient populations with substantial unmet need, continue to advance towards data. For our Fc silent anti TIGIT antibody, domvanilumab, the first Phase III study readout will be START-two 20 one, for which we have guided to 2026. This study is evaluating DomZim plus chemo versus Nivo plus chemo, the standard of care in first line gastric cancer. Later this year, we'll be sharing overall survival data, OS data, from the corresponding phase two study at gastric. This is evaluating the same regimen and the same setting as STAR-two twenty one.

Speaker 2

We expect these data to reinforce confidence in STAR-two twenty one, which has an overall survival primary endpoint. The competitive landscape in this field has seen a dramatic shift over the last six months with the Fc silent anti TIGIT antibodies, specifically ours and AstraZeneca's anti TIGIT anti PD-one bispecific antibody now dominating the Phase III landscape. These two molecules have generated similar positive data in Phase II studies in both lung and GI cancers. AstraZeneca is now enrolling 10 different Phase three studies for its hepcidylin antitigen antibody. In addition, PRISM-one, our Phase three trial of QEMLi, our small molecule CD73 inhibitor, in combination with chemotherapy in first line pancreatic cancer is enrolling rapidly.

Speaker 2

There's been a tremendous enthusiasm for PRISM-one and as a result, we anticipate the study will now be fully enrolled by the end of twenty twenty five, less than twelve months after initiation. This is our second global Phase III study that will complete enrollment well ahead of initial expectations, and our goal is to replicate the success with the enrollment of peak one. This brings me to my final key point. Today, we have a strong balance sheet with $1,000,000,000 in cash and investments. This is not an accident.

Speaker 2

While there has been a dramatic shift in the macroeconomic environment, we are always scrutinizing our capital allocation, prioritizing our molecules and programs and leveraging strategic collaborations. For example, those with Gilead, Tahoe and AstraZeneca to maintain a strong balance sheet. This will be particularly true going forward to ensure that our capital stretches as long as possible and to enable us to continue funding our small molecule research programs. The discovery of Casdadafan, an exceptionally high quality molecule against an extremely intractable target, is a reflection of the secret sauce of ARCIS, which is our research organization and small molecule drug discovery capability. Our next INDs are likely to come from our inflammation and immunology programs, which have been quietly but rapidly advancing in our focus on the creation of potential first and best in class small molecule drug candidates against validated targets.

Speaker 2

We're going to share more about these programs later in this year. With that, I'd like to turn the call over to Richard to speak about casstadafen in greater detail.

Speaker 3

Thanks, Terry. I'll first recap the highlights of our recent ASCO GU presentation for CAS monotherapy in late line clear cell renal cell carcinoma. After that, I'll speak about our upcoming data presentations and near term development plans for CAS. I'll start with a reminder of the study design of ARC-twenty on Slide nine. ARC-twenty now includes eight cohorts evaluating CAS monotherapy or CAS combinations in clear cell RCC.

Speaker 3

As a reminder, our ASCO GU presentation included data from three of the monotherapy cohorts in late line clear cell RCC. I also want to highlight here the cohort evaluating one hundred milligrams of CAS plus sixty milligrams of cabozantinib. And this is the same combination and dosing regimen we will evaluate in peak one and the cohort that is subject of the data presentation at this year's ASCO. Patients in this cohort are all previously treated and have received one or two prior lines of therapy with their most recent prior line being an anti PD-one. And patients did not need to have received prior TKI therapy, so this is a very similar population to that of PEEK-one.

Speaker 3

On slide 14, we compare the efficacy assessments for the monotherapy cohorts relative to data from LIGHTSPARK V, the phase three study of beltsutefen. Importantly, we enrolled a more advanced patient population than that of LIFEPART V. In fact, approximately one third of our patients would not have been eligible for LIFEPART V. Though we recognize the limitations of cross trial comparisons, CASP performed better on every efficacy measure in every cohort despite this more advanced patient population. Rates of primary progressive disease were close to half sat of beldesutafen.

Speaker 3

Confirmed ORR was consistently higher than that of beldsutafen, and two cohorts achieved confirmed ORRs greater than thirty percent. The ORRs for beldsutafen monotherapy studies have ranged from eighteen twenty one point nine percent. So the castadepam ORR is trending about fifty percent higher. For disease control rate, or DCR, over eighty percent of patients should benefit from castadepam versus just sixty one percent for belzutafan. Lastly, the median PFS of nine point seven months for the fifty milligram BID cohort was meaningfully longer than the five point six months for belzutafan, and the median PFS had not even been reached for the fifty milligram QD and one hundred milligram QD cohorts.

Speaker 3

However, when we pool data from the fifty milligram BID and fifty milligram QD cohorts, the median PFS was thirteen months, so significantly longer than that abilbuterfen. Slide 11 shows the waterfall and spider plots for the one hundred milligram QD dose, and these data give us confidence in the selection of one hundred milligrams QD as a dose for our Phase III studies of CAS. On slide 12, we show the spider plots for the fifty milligram BID and fifty milligram QD cohorts, which highlight the durability of castadepam's efficacy. Across all three cohorts, remarkably, only two of the 26 confirmed responders have progressed. And many of the stable disease patients clearly derive benefit and will therefore contribute meaningfully to the median PFS.

Speaker 3

We have a number of upcoming data presentations for ARC20 and these are summarized here on Slide five. First up will be initial data from our CAS plus CABO cohort at ASCO. A key objective of this dataset will be to demonstrate that these molecules can be safely combined. In addition, given that we had approximately twenty five patients enrolled by the end of the year, we plan to present overall response rate for data for those patients who are eligible for two or more scans at the data cutoff. So to be clear, the ORR denominator will include all patients who were enrolled at least twelve weeks prior to the data cutoff, regardless of the number of scans actually recorded.

Speaker 3

I also want to point out that the data included in the ASCO abstract are from a prior data cut, and the ASCO oral presentation will feature data from a more recent data cut. Later in the year, we expect to present more mature data from all four monotherapy cohorts of ARCT20 in late line clear cell RCC. In 2026, we plan to share more mature data from the CAS plus cabo combination cohort as well as an initial data from the newly added cohorts evaluating the TKI free regimens in early line settings. Now onto the development plan, slide 16, which shows the design of peak one, where we are evaluating CASP plus cabo versus cabo in IO experienced patients who had one prior line of immunotherapy. Target enrollment is 700 patients, and we expect the study will enroll quickly for several reasons.

Speaker 3

First, as Terry mentioned earlier, we are using TABO, the most widely used and preferred TKI, in both arms of the study. Second, patients will be randomized two to one between the experimental arm and the control arm. And third, there's already very substantial awareness of CAS in the clinician community, and we expect to include multiple ARC twenty sites in the PEEK-one study. Merck is running a somewhat similar study called LightSPARK 11, which is evaluating belzutafen plus a TKI and is now expected to read out in 2027. However, there are some important differences I'd like to highlight.

Speaker 3

First, while PEEK1 has cabo in both study arms, LightSpark 11 has lenvatinib in the experimental arm but cabo in the control arm. And using different TKIs in the same experiment could add risk to the trial outcome for LIFEFARC 11. In addition, we are using a single primary endpoint of PFS in peak one rather than a dual endpoint of OS and PFS, which is being used in LIFEFARC 11. And given how quickly we expect PEEK-one to enroll and the anticipated timing of the PFS primary endpoint, we have significantly narrowed the gap between our readout and readout of LIGHTSPARC 11. Meanwhile, in the IO naive setting, our strategy is very different.

Speaker 3

In this setting, Merck is evaluating pildudafen in combination with pembro and lebatinib. In contrast, we are collaborating with AstraZeneca to evaluate CASP plus vorustevig, AstraZeneca's anti PD-one CTLA-four bispecific. And as Teri mentioned, this is a highly attractive TKI free combination that may enable patients to remain on therapy for several years while avoiding TKI related toxicities. We have not yet disclosed the design of the study, but we expect to share more information very soon, and we think you'll be excited about our strategy in this setting. I'd now like to turn the call over to Jen to speak about the market opportunity for castadepam.

Speaker 4

Thank you, Richard. RCC is a unique oncology market in that metastatic patients can remain on therapy for many years. In fact, five year survival is becoming the norm in this disease and patients will cycle through multiple treatments, often staying on treatment for well over a year even in the second line setting. As a result, we believe the revenue opportunity for a good RCC drug is very substantial. On Slide 17, we highlight the total market opportunity for the first two settings we are pursuing for CASP.

Speaker 4

First, we show the IO naive patient population, which we are addressing with CASP plus FOLDER. The addressable population here is about thirteen thousand patients in The U. S. And twenty thousand in other major markets. Given that most of these patients progress and go on to subsequent therapies, the addressable patient population for the IO experience setting is very similar.

Speaker 4

With a two plus year duration of therapy in IO naive patients and a twelve month plus duration of therapy in IO experience patients, we believe the total market opportunity from these two settings combined is $5,000,000,000 With a better molecule than bezlutasand and differentiated combinations and development plan, we should capture a significant share of this market. On slide 18, we show U. S. Market share by regimen. TKI based regimens dominate the clear cell RCC market with approximately 65% share in first line and 75% in the second line setting.

Speaker 4

This explains why our first Phase three study will focus on a CASP TKI combination, You can see here why we chose cabo as our combination partner. We believe there is a strong clinician preference for cabo. However, as Teri described earlier, our vision is that over time, cestatophan will move up in lines of therapy and take share from TKI based regimens either as monotherapy or in combination with IO treatments, particularly given CASPA's low rate of primary progressive disease relative to the one competitor, belzutafan. We believe selzutafant's high rate of primary progressive disease is a key reason why it's used today primarily in the third line setting. I will now turn the call over to Bob to review our financials.

Speaker 5

Thanks, Jen.

Speaker 3

Our cash as of the end

Speaker 6

of the first quarter was $1,000,000,000 as compared to $992,000,000 as of the end of twenty twenty four. Our cash position was bolstered by $150,000,000 equity financing, which we completed in February 2025. We expect our cash and existing facilities will enable us to fund operations through our initial pivotal readouts for DOM, Quemly and CAS, which include the PEEK-one readout. Given the faster than anticipated enrollment of our PRISM-one trial in pancreatic cancer and the completion of enrollment of STAR-two 21 last year, we expect 2025 to be a peak year for development expenses. We expect both our DOM related and aggregate development expenses to decline meaningfully in 2026 and 2027, inclusive of our investment in casdatavan.

Speaker 6

As Terry mentioned, we have also carefully scrutinized our capital allocation and have made pipeline prioritization decisions to ensure we maintain our strong financial position. Turning to our P and L, we recognized GAAP revenue for the first quarter of '20 '8 million dollars which compares to $36,000,000 for the fourth quarter of last year. Our revenue is primarily driven by our collaboration with Gilead. We expect to recognize GAAP revenue of $75,000,000 to $90,000,000 for the full year 2025. Our R and D expenses for the first quarter are stated net of reimbursements from Gilead and were 122,000,000 as compared to $111,000,000 in the fourth quarter of last year.

Speaker 6

G and A expenses were flat at $28,000,000 for the first quarter compared to the fourth quarter of last year. Total non cash stock based compensation was $16,000,000 for the first quarter compared to $17,000,000 for the fourth quarter of last year. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10 Q. I will now turn it back to Terry.

Speaker 2

Thanks everyone for joining us. We appreciate your interest and your continued support of Arcus. And we'll now open the call for questions.

Operator

Thank you. Our first question comes from Peter Lawson with Barclays. Your line is open. Please go ahead.

Speaker 5

Great. Thank you so much. I guess the first question was just off the back of your comments around pipeline reprioritization. I wonder if you could talk through that a little bit more and then whether you're exploring the adenosine inhibitor further, if that's the program ended.

Speaker 2

Thanks, Peter, and I'll answer that all together. So as I mentioned, we're always doing this and in the context of your question about the adenosine modulator, and I think you're probably speaking to the A2 receptor antagonist E truma, that's a perfect example. So we did have a meeting and quite good meeting actually with the FDA on that. There's a path forward, but our plans right now are not to move forward at this time, at least. The way I think you should look at our portfolio and how we prioritize things is we have those three late stage programs.

Speaker 2

Our number one priority, of course, is cast data fan. DomZim, as Bob articulated, is on its natural trajectory. We're excited about data coming, but spend is winding down. PRISM-one, our other adenosine related molecule, so the CD73 inhibitor will be fully enrolled this year, so that'll be heading towards data shortly. Keep in mind, the standard of care there has an OS on the order of ten months.

Speaker 2

So we're going to get to a readout pretty quick on that. And then on the other side of things, our early stage portfolio, we've been evolving that too. Still have a number of oncology targets, but we've been quietly as I described, pushing along some really great inflammation and immunology targets. And so later this year, I think we'll disclose those and you'll find those exciting as well. So the way you can kind of look at it is strong investment, biggest investment in later stage programs, nothing overly heavy on the middle and then keeping the sustainable pipeline with what's a relatively minimal investment, but with really that secret source of Arcus to generate, the next IND candidates beyond those we talked about now.

Speaker 5

Got you. And then on the oral presentation, Aska, what should we expect to see in the abstract versus oral presentation and what do you kind of press release beyond the abstract?

Speaker 2

I'm wondering if someone planted that question. It's one we think is important. So I think you should recognize, everyone should recognize the abstract is more of a placeholder abstract. And so the data cut that we'll be sharing at ASCO will be much more recent. And what it will include is, you can think about it as two populations.

Speaker 2

First, the safety population will be about 40 patients. And then, we'll also want to give you a read on efficacy. So even though, probably the median time of follow-up is barely over four months. What we've done is we've assembled all the patients who've had at least two scans. So that gives them the opportunity to potentially have had a confirmed response and we'll be sharing efficacy data for that 25 or so patients.

Speaker 2

You'll see a waterfall plot. Obviously, the data are far too mature to talk about maturity. And I think the data, you know, I think you'll find them compelling, but you should recognize given that they are early, they will likely continue to improve beyond what we shared at this conference.

Speaker 5

Great. Thank you so much.

Speaker 2

Thank you, Peter.

Operator

Our next question comes from Dana Graybosch with Leerink Partners. Your line is open.

Speaker 7

Hi, thank you. I have two really different questions. First on TIGIT. As you pointed out, the TIGIT Phase III are dominated by the Fc silent, yours and Astrid bispecific. And let's say we we assume as I think you believe that FC Silent is really the key to maximizing TIGIT benefit.

Speaker 7

Are you under investing and feeding leadership to Astra? Can you just remind us what you're learning in phase two? And is there a gate of success that you might actually ramp investment back up? And then I have one on CAS after that.

Speaker 4

Yeah. I think so first of I think we feel very, very good about the best that we've made because they're targeting some of the largest IO markets out there. So our study in lung, one is targeting all comer non sulfur lung cancer patients, obviously, the biggest market there is for anti PD-one. And then, you know, our other phase three study, Chart two twenty one, is targeting all comer gastric cancer patients, is another really, really good market. So we feel like those are two great bets to make.

Speaker 4

You know, we do have active discussions going on all the time about other things that we would want to do if those studies read out positively. So I'd there's other things that are teed up and ready to go if our first phase would read out from positive. But we we agree with what you're saying. And then the other study to point out, Trace just reminded me, is the stage three lung cancer study that we're doing with AstraZeneca, which AstraZeneca is operationalizing pack eight. And so, you know, they've obviously seen a lot of our data because we have that partnership on PAC eight.

Speaker 4

And so we do think that that's something else that's given them even more conviction in their own PD one TIGIT program.

Speaker 7

Awesome. And then on CAST and the potential for CAST mono to replace TKI in second line, you have that ARC 20 cohort. Is there any particular bar for efficacy you're looking for that would give you conviction to go head to head versus a TKI?

Speaker 2

So I think at this point we would look at those as a little bit more exploratory. They're different. In the monotherapy, keep in mind in those favorable risk patients, basically the standard these days would be more just watch and wait. So if you see reduction, meaningful reductions in tumor, given the safety profile, we think that could encourage people to want to invest in this. Keep in mind, those patients could be a couple years.

Speaker 2

So the idea there is to get a sense how it looks in those favorable risk patients. I know that's not a patient population that's getting TKI, but that's sort of where we're you know, one of those areas where we don't necessarily have something numerically in mind, but we're looking to see if there's a signal and we think there's a really good opportunity there.

Speaker 4

Yeah. Think, you know, like, some of our sort of settings that are out there for TKI mono, you know, range anywhere from sort of high teens, 20%. It's a very high end of the range, 40%. You know? So if we could be in line with that with a better safety profile, we think that would be really exciting for clinicians.

Speaker 4

We were actually just talking to a clinician yesterday that's one of the high enrollers In our CASPCABO cohort, she just put her first patient on the cohort that you're asking about, the CASP mono and second line patients, she was very excited about how that patient was doing. So we look forward to hearing more anecdotes like that.

Speaker 2

I think the thing is, is even if you look at our late line study, it's already pointing to something that, you know, would tell you you've got a good chance to be better than TKI. And the enthusiasm there really does ramp up because of two things. The fact that it is TKI free in the safety profile, but also because of the low rate of primary progression. That's probably why you haven't seen Bells be able to go there. And that's really important as you go to the earlier lines.

Speaker 2

But we feel like we're already seeing numbers even in the later line that would encourage us for the opportunity going earlier as a mono.

Speaker 7

Great. Thank you.

Speaker 2

Thanks, Dana.

Operator

The next question comes from Yigal Nochomovitz with Citigroup. Your line is open. Please go ahead.

Speaker 8

Yes. Hi, thanks. Can you just talk about the timing for Peak one PFS primary? And then you said Light Spark is going to be dual. So which of do do we know which of these is coming first?

Speaker 8

And if LightSpark hits on OS and PFS, then what what's the plan to to answer the OS question for peak one? And then under what time frame would that happen relative to to Mark? Thanks. Yeah.

Speaker 4

So there's a lot of questions in there. So first of all, you know, it's Right. Too early for us to give. Yeah. No.

Speaker 4

No. That's true. All very good questions. So on peak one, yeah, I think it's too early given we're just about to start the study to get guidance on what we might see PFS data. You know, we've talked to some of you.

Speaker 4

You could probably do some back of the envelope math just based on, you know, how likely you think it would take to complete enrollment based on other RCC studies, you know, and then what the PFS is that you would expect to be in the control arm, and you could kinda get to when you might expect to see a readout. So it's not in the too far distance because we do think this is a study that's gonna roll quickly and because it is a PFS readout. On your question on OS and what we're doing, OS is a key secondary endpoint. To your point, yeah, we do think it's important to collect that information, and it is a key secondary endpoint in our studies. That data will be collected.

Speaker 4

You know, as far as LightSparks 11, they had it as a dual primary endpoint of OS and PFS. So if they hit on one of those, then the study would be successful. You do have to split alpha in that case because there's two different endpoints versus what we're doing, which is a full primary. You know, so that can work against you. But, you know, if they are waiting for that OS endpoint, that is what's giving us the opportunity to really catch up to them and narrow that gap between when our readout might occur versus theirs.

Speaker 2

You know, just to put something out there that is out there, you know, Merck recently pushed out that study on ClinicalTrials.gov for a second time out to 2027. So whenever you do your back of the envelope calculations, while we haven't given guidance, that even that potential delta is dramatically closed from when we first started contemplating this. We actually do feel we're going to have Jen didn't comment on this, but we've got real tailwinds as we launch this study. Investigator enthusiasm not only is very strong, but from a practical standpoint, because we've invested pretty heavily in these monotherapy cohorts, not only if we engendered a lot of enthusiasm, all kind of anecdotal studies, every one of these investigators has their own interesting story of what they've seen, so they want to jump on this. The other practical matter is that we've got 30 or 40 sites that are going to transition potentially into peak one, so think we're really gonna be hitting the ground running in an unusual way versus going from a standing start.

Speaker 4

Yeah. So having to ASCO presentation of the cabo cohort is obviously perfect timing. You know, I think I think investigators are particularly interested in seeing. Efficacy is obviously important, but I think everyone believes we're gonna add efficacy. But they really wanna see safety and just make sure there's no additional toxicities or overlapping toxicities or drug discontinuations, etcetera, to worry about.

Speaker 4

And so that will be a very important part of the data presentation.

Speaker 8

Okay. Okay. Gotcha. And then, you know, post the Gilead decision on CAS, is the plan now to just fund this to completion yourselves, or would you entertain help from another partner potentially?

Speaker 2

Yeah. So the first thing I want to mention, because I think it's an important point because of a lot of the questions that were out there right at that time, these new data are new. So this will give you yet another look. The CAS CABO data are, we think, quite exciting and obviously they were not mature data when Gilead made their decision. To the specific question, we feel really confident in our abilities for some of the reasons we were just talking about.

Speaker 2

We've been working with the molecule, we've working with the sites, we've got a steering committee that couldn't be better, they're excited. We feel we're in a great position to execute this, not only from a capital position as we talked about, we have the resources, but from the people standpoint, our team has been working with this all along. So, our plans are to execute, Peak one, on our own. With that said, could there be some other collaborations? As we mentioned, we'd like to use collaborations in an efficient manner.

Speaker 2

As an example, the AstraZeneca collaboration, we might do other things like that. And of course, on an opportunistic basis, there could be other things we would do. But the base case you should be thinking about is that we feel very good about our ability to execute this trial in a very efficient and strong manner.

Speaker 8

All right. Thank you, Terry. Thanks, John.

Speaker 2

Appreciate you all.

Operator

The next question comes from Umer Raffat with Evercore. Please go ahead.

Speaker 9

Hi, guys. Thanks for taking my question. I have a few here, if I may. Perhaps first, the choice of dose being one hundred milligrams for your first Phase III, which admittedly is a cabo combo. Is there anything to read into the choice of that one hundred milligram dose relative to any early data you're seeing on the one hundred fifty and two hundred milligrams?

Speaker 9

And I have a couple of follow ups.

Speaker 2

Okay. And you can have as many questions as you like, Umer. So one hundred, nothing based upon any new data that we've seen. We had a really good discussion with the FDA in the context of Project OPTIMIZ. The one hundred milligram dose, we talked about that.

Speaker 2

We talked about potentially one hundred and fifty. We talked about potentially fifty. Safety profile of the one hundred looked great. We feel based upon all the data we've seen that the one hundred is essentially on the asymptote for efficacy. What we're seeing with the 150, I think we'll share that at the end of the year.

Speaker 2

But I would just foreshadow that you're going to see something that looks pretty similar and we'll see just how things play out. One thing that's important to note for our 5,100, we still do not have medium PFS. Maybe as we get towards the end of the year and we're sharing data, we'll be there. But obviously we'll have some sort of landmark PFS. And it may be that there's a bit of more AE creeping in on the one hundred and fifty.

Speaker 2

I couldn't even say that with certainty now. So I think the way to look at the one hundred milligram dose is everything we've seen suggests that you're essentially maxing out efficacy there and it's a very safe profile. So there's not a whole lot of rationale to even be thinking about the one hundred fifty.

Speaker 9

And what about two hundred?

Speaker 4

Yes. Same. I mean, we we only, we only looked at two hundred in the dose escalation. Didn't see any DLTs, which was good, but we haven't looked at it beyond the dose escalation. And I think, know, Terry was saying, you know, based on everything we've seen so far, so we now have 30 patients worth of fifty mg, one hundred mg, one hundred and fifty mg data.

Speaker 4

And I think that all gives us a lot of confidence that one hundred mg is the right dose.

Speaker 2

I think the other thing that we're actually thrilled about, it's not a surprise, but, and will draw your attention, when you look at the CATS CABO data is, you know, an important aspect of that is being able to keep patients on therapy. And the data look, we think, pretty compelling, even though they're early and obviously with time you might see otherwise. But I think you'll come away feeling like efficacy on those patients that have had two scans looking good, waterfall looks good and the AEs look like CABO by itself plus CASP by itself and very well tolerated combination.

Speaker 4

Yeah. I think one of the really exciting opportunities about the combination too is that if you're just getting TKI mono and you get hand foot mouth syndrome or greater hypertension, whatever it is, it would typically have to come off your TKI for a bit. In this case, even though you're coming off the TKI, you're still getting a HITSOF inhibitor. So you're still getting an active drug, and that's one of the things that I think positions the combination to perform very well relative to cabo monotherapy because throughout, know, in most cases patients are going to be getting at least one of those two drugs. So if you do get TKI related toxicity, they will stay on cast.

Speaker 9

Got it. So I guess that brings me to my sort of main question here, which is what exactly is the makeup of this post IO cohort in ARC twenty that we're gonna see at ASCO or the cohort in general? And I asked because you could have double IO experienced or you could have IO plus VEGF TKI experienced. And my understanding is ORR is a little lower when it's IO plus VEGF TKI versus dual IO. So what exactly is that?

Speaker 9

And is there any data to read into from your CAF mono arm which is also second line plus and may presumably have some of these post IO patients as well?

Speaker 4

Yes. So you're right. It's going to be a mix and we'll disclose that mix. And it's in line actually with the LightsBART three study, like the cast plus combo. You know, one thing that I would mention when you look at patients that got IO, IO versus patients that got IO plus VEGF, So far, the ORRs actually look very similar.

Speaker 4

So there's not seem to be a difference if patients had gotten prior TKI versus just prior IO. Does that make sense?

Speaker 9

And, okay, and, Jen, do you acknowledge about third right. And would you acknowledge from CABO point trial about low thirties in ORR is the comp for CABO monotherapy following IO therapy?

Speaker 2

Yeah. Well, go ahead. Go ahead, Richard.

Speaker 3

Yeah. I think the cabo alone, right, has test arranged ORRs depending on what study you look at and what data source you have. So kind of in the 20 to 40. So if you pick 30, you know, that's that's one of the choices I'd say, but, you know, it's quite a range across the different datasets there for cabo alone. Yeah.

Speaker 3

One

Speaker 2

relevant dataset, Umer, the one other relevant data set is there was a Bell's Cabo arm, and that, again, on the ORR front came in just over 30%, and it's PFS in that study. Obviously, we won't have PFS to compare to yet, but the PFS there was on the order of thirteen months.

Speaker 9

And again, just so I'm clear, we talked about 20 to 40 being the range, maybe 30 ish being the midpoint, which is also consistent with the CABOPOINT trial. But the critical thing is you guys are emphasizing safety, not an efficacy advantage. Is that reasonable? Or do you wanna have higher ORR as well?

Speaker 4

No. I think, well, it's absolutely that both. We're just saying both is important, and we're just trying to make the point that safety is gonna feed into efficacy because you wanna keep patients on drug. You want to avoid those reductions. So the more we think we can safely combine these two drugs, that should further enhance efficacy.

Speaker 4

So yeah, the goal is absolutely to show an improvement on both those metrics. Not sorry. On efficacy and safety that you are getting additive toxicity or even worse toxicity than what you'd expect with either agent alone.

Speaker 8

Thank you so much. Yeah.

Speaker 2

Thanks, Uber.

Operator

Next, we have Ashtika Gunawadin with Truist. Your line is open.

Speaker 10

Hi. This is Karina for Astika. Thanks for taking my question. I had a question on castadefan. So beyond the AstraZeneca study with the Bowel Stomach, are there any plans to initiate to initiate registrational studies, potentially in combinations of PD-1s or ZANZA in frontline?

Speaker 4

Yes. So nothing registrational that we've disclosed so far. So as Tray talked about on the call, we did just open a cohort in ARC20 where we're combining CAF with our anti PD-one cembrolizumab and first line patients. So that's something we could ultimately initiate a registrational study for some sort of more NCCN guideline enabling study. But that's the combination we're super excited about.

Speaker 4

Investigators are super excited about. We think that cohort is going to enroll incredibly quickly because, again, I think there's a lot of interest in just avoiding TKI's in the frontline setting when patients are still feeling really good and are relatively healthy. Yeah, so we'll see how that goes and some of these other cohorts that we started and there's going be future registrational studies for sure.

Speaker 2

I think the way you should think about our approach is that basically we're not just going to be throwing a bunch of spaghetti up on the wall where we jump, you know, we think we have a great molecule, but we're not just going to start peppering the world with Phase three studies. So we're going to do, you know, early work to ensure that any Phase three study we do really makes sense.

Speaker 10

Okay. That's helpful. Thank you.

Speaker 2

Thank you.

Operator

The next question comes from Lee Wotzek with Cantor Fitzgerald. Please go ahead.

Speaker 11

Hey, this is Dan on for Lee. I was wondering if you could kind of set expectations for your combination with Volru and what you're looking for in the IO naive setting and for a potential pivotal frontline trial. What would you be comparing your doublets to?

Speaker 4

There are a lot of good questions. And there's a lot of information that we just haven't disclosed yet for competitive reasons. And as Richard alluded to on the call, probably around mid year, which I think we're getting close to, we should be able to talk a lot more about that study. And so right now really all we can disclose is that the planar two can bypass with VULRU in the first line setting. The big issue with ipinivo and P5C2LA4s is that you do have a very high rate of primary progressive disease.

Speaker 4

So about twenty five to thirty percent of patients don't respond to ipiNivo and just flow right through therapy. So that's why today actually ipiNivo is typically used in patients that don't have really aggressive disease. So, you know, more slower growth tumors. And so one of the reasons why I think ASTRO was very excited about combining Ballroom and TAP is that opportunity to bring down the rate of primary progressive disease given we're seeing a very low rate of primary progressive disease so far with cats. And so what we will be looking for initially is obviously that you can safely combine these two mechanisms, which today we have no reason to believe you couldn't.

Speaker 4

And then we will be looking, you know, at some of these early signs of efficacy, particularly the rate of PD. And then eventually, you know, we'll be looking at ORRs, etcetera. But, you know, we do think that PD rate could be particularly interesting to look at because you do have that high rate of primary progressive disease with ipinivo. So, again, there's a huge amount of interest in that combination. Just wanna point out we talked about on the call.

Speaker 4

We just actually did some market research, and I I think we were actually even surprised about how much interest there is in the investigator community to combine these two mechanisms and to try to avoid TKIs in the front line.

Speaker 11

Okay, great. Thank you.

Operator

Our next question is from Salveen Richter with Goldman Sachs. Your line is open.

Speaker 12

Great. Thanks. This is Matt on for Salveen. Maybe first just on CAS to follow-up on a prior question. Is it fair to say you guys would consider a commercialization partnership post peak one or when you're close to reading out peak one or is that no longer of interest to you?

Speaker 12

And then on the broader portfolio, any thoughts on the newly announced Zebra Director from just kind of a portfolio risk perspective? Thank you.

Speaker 2

Yes. So on the first question, our intent is to commercialize. We want to fully leverage the opportunity. We think this is really huge for Arcus. I think we'd probably consider a partner in Europe, but we feel really good about taking this forward, commercializing it.

Speaker 2

The whole piece for us seems very manageable. I don't have any comments on the latter. I don't think anyone here does. I would just in macro, I would even elevate that our whole sense about everything happening at the FDA when it comes to what we're doing, what we're executing, you know, things have just been business as usual as far as we can go. So, you know, what's happening in the news, I have no comment.

Speaker 2

But from a practical standpoint, we're pretty comfortable with everything we're doing right now that it's proceeding just as it would have six months or one year ago.

Speaker 12

Thank you.

Speaker 2

Sure. Thanks.

Operator

Our next question is from Eva Forteo with Wells Fargo. Please go ahead.

Speaker 7

Hi. Thanks for taking our questions. A couple from us. First, on the fall twenty twenty five update forecast, can you just provide a bit more color on, like, expectations here in terms of, like, the different cohorts, number of patients, and duration of the follow-up? And the second question is you mentioned an emerging INI franchise.

Speaker 7

When should we expect to learn more about this? Would this be more towards the end of the year in an R and D day type of event? Thanks.

Speaker 3

Yeah. I I could address the first part of the question, at least, with regards to the, follow-up in the fall, and it's really looking again at the monotherapy data we had at ASCO GU. I will have more mature data coming, so we'll have another data cut there. We haven't stated, or selected, you know, if this will be at a medical conference or other ways of sharing that data, but, we will be able to provide updates to that data since it'll have matured a fair bit since the, cut at the beginning of this year.

Speaker 2

And on the immunology inflammation front, I think the way to think about that is, you know, whether it's an R and D day or part of one of our other releases, we'll find a form to describe the breadth of what we're doing and where we sit. And I think it's an exciting portfolio. It takes advantage of what we do well, and I think that'll be highlighted, you know, the small molecules for challenging targets where, you know, the targets are highly validated, but there's not a great molecule. So we've been building on that. You know, I'll remind you because we're like a real company in terms of with people and, you know, we have a biology group, we have a med chem group and all of the associated functions that there is, but our biology is actually more immunology because the roots are in immuno oncology.

Speaker 2

So even though oncology has been our clinical endpoint, you know, we have a strong immunology group and in fact, you know, have invested in that and, you know, now we're getting to the point where we can start to talk about those programs with, you know we'd like to talk about things when we've got tangible matter, not glint in the eye, and, I think that, these will be very tangible. And all done without machine learning. But we have machines.

Operator

We'll take one more question before ending. And our final question comes from Emily Bodnar with H. C. Wainwright. Please go ahead.

Speaker 13

Hi. Thanks for taking the questions. My first one for CAS, the monotherapy doses, can you comment on how the one hundred mg QD cohort is progressing relative to the fifty mg BID cohort and if you're starting to see similar results in terms of median PFS? If you could just comment on timing for the STAR-one 21 trial for Dom in lung cancer and if there's any timing updates for the top line results? Thanks.

Speaker 2

Yeah, so there's really no timing update yet on one to one study. You know, two things, it's still enrolling and then it has you know, OS for the standard of care is, over twenty months, so it's premature. It's obviously enrolled well and will continue to enroll, but we haven't said anything on timing there. Nothing to say yet really on the maturing data other than to point out that we haven't reached a median PFS. So I think as we get towards the end of the year, we don't even know for sure that we'll be there.

Speaker 2

But if we're not, we still will be sharing data and it would then undoubtedly include some sort of landmark PFS.

Speaker 10

Okay. Got it. Thank you.

Speaker 2

Thank you.

Operator

Thank you. This concludes our Q and A session today as well as the call. Thank you everyone for joining. You can now disconnect your line.

Speaker 2

Thank you.

Speaker 4

Goodbye.

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Key Takeaways

  • Casadefan is the top priority: Arcus aims to rapidly advance its HIF2α inhibitor through multiple Phase 1b cohorts and initiate the registrational Phase III PEEK-1 trial (CAS + cabo vs cabo) in IO-experienced clear cell RCC, with initial data to be presented orally at ASCO.
  • Superior monotherapy profile: In late-line clear cell RCC, caspadefan monotherapy outperformed belzutafen on all efficacy endpoints—ORR, disease control rate, and median PFS (up to 13 months vs 5.6 months)—despite a more heavily pre-treated population.
  • Diverse late-stage pipeline: Alongside caspadefan, Arcus is progressing its Fc silent anti-TIGIT antibody domvanilumab through START-2 (Phase III gastric cancer OS readout in 2026) and its CD73 inhibitor QEMLI via the PRISM-1 pancreatic cancer trial, which is set to complete enrollment by end of 2025.
  • Strong financial footing: With $1 billion in cash and investments, plus $150 million raised in February 2025, Arcus expects funding through its pivotal readouts and continues to optimize resource deployment via strategic partnerships with AstraZeneca, Gilead, and Taiho.
  • TKI-free regimens for earlier lines: Building on caspadefan’s favorable safety and low PD rates, Arcus is exploring TKI-free combinations—most notably with AstraZeneca’s anti-PD-1/CTLA-4 bispecific in first-line RCC—to displace TKIs and improve patient quality of life.
A.I. generated. May contain errors.
Earnings Conference Call
Arcus Biosciences Q1 2025
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