Arcus Biosciences, Inc.
For the period ended Sep 30, 2025. Filed Oct 28, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 28, 2025
RCUS$18.28+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001724521-25-000101
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-28.
0001724521-25-000116
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 112 current paragraphs.
74 unchanged; 21 reworded; 16 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Corporate Developments
Current report
•In October 2025, Taiho exercised its option for an exclusive license to casdatifan, an investigational small molecule HIF-2α inhibitor, in Japan and certain other territories in Asia (excluding mainland China). In exchange, Taiho will make an option exercise payment to us along with milestone payments upon the achievement of clinical, regulatory and commercialization milestones, and, additionally pay royalties on net sales.
Current report
•In October 2025, we presented new data for our HIF-2α inhibitor, casdatifan, across all four monotherapy cohorts (n=121) of the Phase 1/1b ARC-20 study in late-line metastatic kidney cancer, most of whom had progressed on at least two prior lines of therapy, including both an anti-PD-1 and a VEGFR tyrosine kinase inhibitor ("TKI"). At the time of data cut-off (August 15, 2025):
Current report
◦For the pooled analysis of all four monotherapy cohorts, with 15.2 months of median follow-up: median progression-free survival ("mPFS") was 12.2 months, the 18-month landmark PFS was 43%, the 12-month landmark PFS was 50% and the confirmed overall response rate ("cORR") was 31%.
Current report
◦For the 100mg QD cohort (the Phase 3 PEAK-1 dose and formulation), with 12.4 months of median follow-up: mPFS was not reached, the 18-month landmark PFS was not reached; the 12-month landmark PFS was 60% and the cORR was 35%.
Current report
◦No unexpected safety signals were observed at the time of DCO, and casdatifan had an acceptable and manageable safety profile across all doses. Across all four cohorts, one patient discontinued treatment due to anemia, and four patients (3%) discontinued due to hypoxia.
Current report
◦The Phase 1b portion of the study has recruited rapidly and in the context of this rapid enrollment, following observations of potentially immune-mediated adverse events ("AEs"), none of which exceeded Grade 3, a decision was made to temporarily pause recruitment, while continuing to treat participants already enrolled into the study. No grade 4 or 5 events were observed and the majority of AEs were grade 1 or 2.
Current report
◦We and AstraZeneca will continue to monitor these participants to further characterize the safety profile of the combination with longer follow-up. These data, along with any discussions with health authorities, will inform next steps for the study.
Current report
TIGIT Program (domvanalimab)
Current report
•In October 2025, we presented the first overall survival results from Arm A1 of the Phase 2 EDGE-Gastric study in patients with locally advanced unresectable or metastatic gastric, gastroesophageal junction or esophageal adenocarcinoma. At data cutoff (March 3, 2025), safety and efficacy were evaluated in all patients enrolled and treated (n=41) and median study follow-up was 26.4 months.
Current report
◦Median overall survival ("mOS") was 26.7 months in the overall patient population, 26.7 months in patients with PD-L1 expression ≥1% as measured by TAP scoring (SP263 assay) and not reached in patients with PD-L1 expression ≥5%.
Current report
◦No unexpected safety signals were observed at the time of data cut off. The safety profile of domvanalimab plus zimberelimab and chemotherapy was generally well tolerated and is consistent with that of anti-PD-1 plus chemotherapy.
Current report
•Concurrent with our first presentation of this data at European Society for Medical Oncology ("ESMO") congress in October 2025, these data were published in Nature Medicine.
Current report
Adenosine-Pathway Program (quemliclustat)
Current report
•In October 2025, we announced that we completed enrollment of PRISM-1, a Phase 3 trial of quemliclustat combined with gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in first-line metastatic pancreatic ductal adenocarcinoma, within 12 months of study initiation.
Current report
The decrease in Total revenues for the three months ended September 30, 2025 was primarily driven by the prior year license revenue of $15 million as a result of Taiho's exercise of its option forquemliclustat in the third quarter 2024 and lower development service revenues from the Gilead Collaboration.
Removed paragraphs (10)
Previous report
•In June 2025, we presented initial data from the ARC-20 study evaluating casdatifan plus cabozantinib that showed that nearly half of patients with metastatic cancer had a confirmed response:
Previous report
◦Treatment with casdatifan, a HIF-2a inhibitor, plus cabozantinib, a tyrosine kinase inhibitor, showed a confirmed overall response rate of 46% in patients who reached a minimum of 12 weeks (two scans) of follow-up,
Previous report
◦The combination had a manageable safety profile, and there was no meaningful overlapping toxicity for the two drugs.
Previous report
•The data supported the initiation of two studies:
Previous report
◦PEAK-1, a Phase 3 study evaluating casdatifan plus cabozantinib versus cabozantinib in immunotherapy-experienced clear cell renal cell carcinoma ("ccRCC"), that has been initiated; and
Previous report
CD73 Program (quemliclustat)
Previous report
•In July 2025, we announced that quemliclustat, an investigational small molecule CD73 inhibitor, was granted Orphan Drug Designation by the FDA for the treatment of pancreatic cancer.
Previous report
Adenosine Receptor Antagonist Program (etrumadenant)
Previous report
•In the first quarter 2025, based on our strategic priorities, we decided to pause future development of etrumadenant and in June 2025, Gilead returned its license to the adenosine receptor antagonist program, which includes etrumadenant.
Previous report
The One Big Beautiful Bill Act ("OBBBA") was enacted on July 4, 2025. The OBBBA contains several changes to corporate taxation, including permanent repeal of the requirement to capitalize domestic research and experimental expenditures for federal income tax purposes for taxable years beginning after December 31, 2024. The OBBBA is not currently expected to materially impact the Company’s effective tax rate or cash flows in the current fiscal year.
Reworded paragraphs (21)
Previous wording
cabo: cabozantinib; cas: casdatifan; chemo: chemotherapy; dom: domvanalimab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; IO: immuno-oncology; ipi: ipilimumab nivo: nivolumab; pembro: pembrolizumab; quemli: quemliclustat; rego: regorafenib; volru: volrustomig; zanza: zanzalintinib; zim: zimberelimab.
Current wording
cabo: cabozantinib; cas: casdatifan; chemo: chemotherapy; dom: domvanalimab; gem/nab-pac: gemcitabine/nab-paclitaxel; IO: immuno-oncology; ipi: ipilimumab; nivo: nivolumab; pembro: pembrolizumab; quemli: quemliclustat; rego: regorafenib; volru: volrustomig; zanza: zanzalintinib; zim: zimberelimab.
Previous wording
◦eVOLVE-RCC02, a Phase 1b/3 study sponsored and operationalized by AstraZeneca, evaluating casdatifan plus volrustomig, an investigational anti-PD-1/CTLA-4 bispecific antibody, in first-line, metastatic ccRCC, that has also been initiated.
Current wording
•In October 2025, we announced eVOLVE-RCC02, a Phase 1b/3 study sponsored and operationalized by AstraZeneca, evaluating casdatifan plus volrustomig, AstraZeneca's investigational anti-PD-1/CTLA-4 bispecific antibody, in first-line, metastatic clear cell renal cell carcinoma ("ccRCC"), has paused recruitment.
Previous wording
The increase in Total revenues for the six months ended June 30, 2025 was primarily driven by the cumulative catch-up from license and development services revenue of $143 million relating to pausing future development of etrumadenant and Gilead's related return of its license to the program, partially offset by the cumulative catch-up of $107 million in the prior year as a result of the Third Gilead Collaboration Agreement Amendment in the first quarter 2024.
Current wording
The decrease in Total revenues for the nine months ended September 30, 2025 was primarily driven by lower development services revenue from the Gilead Collaboration and the prior year $15 million license revenue as a result of Taiho's exercise of its option forquemliclustat in the third quarter 2024. The overall decrease was partially offsetby thecumulative catch-up of $143 million in the second quarter 2025 relating to pausing future development of etrumadenant and Gilead's related return of its license to the program, compared to the prior year cumulative catch-up of $107 million as a result of the Third Gilead Collaboration Agreement Amendment in the first quarter 2024.
Previous wording
** Quemliclustat moved from early-stage development and preclinical program to a late-stage development program in the third quarter 2024
Current wording
** Quemliclustat moved from early-stage development and preclinical program to a late-stage development program in the third quarter 2024. Casdatifan moved from early stage development and preclinical to a late-stage development program in the third quarter 2025.
Previous wording
The increase in R&D expenses for the six months ended June 30, 2025 was primarily driven by higher costs in our early-stage development activities, driven by Phase 2 activities for casdatifan. Increases in compensation and personnel costs were partially offset by a $4 million decrease in non-cash stock-based compensation.
Current wording
The increase in R&D expenses for the three months ended September 30, 2025 was primarily due to costs incurred for our late-stage programs, resulting from increased enrollment and start-up activities for PRISM-1 and PEAK-1 and partially offset by lower costs from STAR-221. Increases in compensation and personnel costs were partially offset by a $2 million decrease in non-cash stock-based compensation.
Previous wording
The increase in R&D expenses for the three months ended June 30, 2025 was primarily due to increased CMC costs. We expect to incur elevated costs related to this activity through the third quarter 2025. Otherwise, clinical costs for our late-stage programs were flat, as increased enrollment and start-up activities for PRISM-1 and PEAK-1 were largely offset by lower costs for STAR-221. Other increases in expense resulted from an increase in early-stage development activities, driven by Phase 2 activities for casdatifan. Increases in compensation and personnel costs were partially offset by a $2 million decrease in non-cash stock-based compensation.
Current wording
The increase in R&D expenses for the nine months ended September 30, 2025 was primarily driven by higher costs in our early-stage development activities, driven by Phase 2 activities for casdatifan, and clinical and manufacturing costs incurred for our late-stage programs, resulting from increased enrollment and start-up activities for PRISM-1 and PEAK-1 and partially offset by lower costs for STAR-221. Increases in compensation and personnel costs were partially offset by a $6 million decrease in non-cash stock-based compensation.
Previous wording
The decrease in G&A expenses for the three months ended June 30, 2025 was primarily driven by a decrease in compensation and personnel costs driven by a $3 million decrease in non-cash stock-based compensation, partially offset by increased costs recognized in the quarter in connection with the Gilead Agreement.
Current wording
The decrease in G&A expenses for the three months ended September 30, 2025 was primarily driven by a decrease in compensation and personnel costs driven by a $3 million decrease in non-cash stock-based compensation, partially offset by an increase in expenses shared under the Gilead Collaboration.
Previous wording
The decrease in G&A expenses for the six months ended June 30, 2025 was primarily driven by costs recognized in the prior year in connection with the Third Gilead Agreement Amendment, as well as a decrease in compensation and personnel costs driven by a $5 million decrease in non-cash stock-based compensation.
Current wording
The decrease in G&A expenses for the nine months ended September 30, 2025 was primarily driven by a decrease in compensation and personnel costs driven by a $8 million decrease in non-cash stock-based compensation, partially offset by an increase in expenses shared under the Gilead Collaboration.
Previous wording
The impairment expense for the six months ended June 30, 2024 was due to our 2024 evaluation and sublease of a portion of our office space, resulting in an impairment charge of $20 million.
Current wording
The impairment expense for the nine months ended September 30, 2024 was due to our 2024 evaluation and sublease of a portion of our office space, resulting in an impairment charge of $20 million.
Previous wording
The decrease in Non-operating income, net for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, was primarily due to lower investment yields and lower average portfolio balances, and the interest expense on our long-term debt agreement which we entered into in the third quarter 2024.
Current wording
The decrease in Non-operating income, net for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, was primarily due to lower investment yields due to a smaller portfolio of investments and interest expense on our long-term debt agreement which we entered into in the third quarter 2024, with an additional draw in June 2025.
Previous wording
The decrease in Non-operating income, net for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, was primarily due to lower investment yields and the interest expense on our long-term debt agreement which we entered into in the third quarter 2024.
Current wording
The decrease in Non-operating income, net for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, was primarily due to lower yields due to a smaller portfolio of investments and the interest expense on our long-term debt agreement which we entered into in the third quarter 2024, with an additional draw in June 2025.
Previous wording
There was no Income tax expense for the three and six months ended June 30, 2025 or 2024 due to forecasted full year net operating losses.
Current wording
There was no Income tax expense for the three and nine months ended September 30, 2025 or 2024 due to forecasted full year net operating losses.
Previous wording
Our cash and investments are held in a variety of interest-bearing instruments, including money market funds, U.S. government treasury and agency obligations, investments in corporate securities and certificates of deposit. Based on our existing business plan, we believe that our cash, cash equivalents, marketable securities and existing facilities as of June 30, 2025 will be sufficient to fund our planned level of operations for a period of at least twelve months following the date of filing of this report and provide funding through our initial pivotal read-outs for domvanalimab, quemliclustat and casdatifan, which include PEAK-1.
Current wording
Our cash and investments are held in a variety of interest-bearing instruments, including money market funds, U.S. government treasury and agency obligations, investments in corporate securities and certificates of deposit. Based on our existing business plan, we believe that our cash, cash equivalents, marketable securities and existing facilities as of
Previous wording
In 2023, we entered into an equity distribution agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200 million. During the six months ended June 30, 2025 and 2024, there were no sales of our common stock under this agreement.
Current wording
In 2023, we entered into an equity distribution agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200 million. See Note 13, Stockholders' equity, in Part I, Item 1, to our Condensed Consolidated Financial Statements for further discussion.
Previous wording
In the first quarter 2024, we amended and restated the Stock Purchase Agreement and sold 15.2 million shares of our common stock to Gilead at a purchase price of $21.00 per share for total gross proceeds of $320 million. Of the $320 million equity investment, $87 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment. Gilead acquired an additional 1.4 million shares of our common stock in the February 2025 underwritten offering and subsequently held approximately 29.5% of our outstanding common stock as of June 30, 2025.
Current wording
In the first quarter 2024, we amended and restated the Stock Purchase Agreement and sold 15.2 million shares of our common stock to Gilead at a purchase price of $21.00 per share for total gross proceeds of $320 million. Of the $320 million equity investment, $87 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment. Gilead acquired an additional 1.4 million shares of our common stock in the February 2025 underwritten offering and subsequently held approximately 29.3% of our outstanding common stock as of September 30, 2025.
Previous wording
Net cash used in operating activities was $265 million for the six months ended June 30, 2025 compared to $96 million for the same period in the prior year. The change in operating cash flows is primarily due to the prior year receipt of the $87 million allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment and the timing of receipts from Taiho for development milestones for STAR-121, STAR-221, and PRISM-1.
Current wording
Net cash used in operating activities was $362 million for the nine months ended September 30, 2025 compared to $70 million for the same period in the prior year. The change in operating cash flows is primarily due to the prior year receipt of the $87 million allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment and the timing of receipts from Taiho for development milestones for STAR-121, STAR-221, and PRISM-1.
Previous wording
Cash provided by investing activities for the six months ended June 30, 2025 was primarily due to net proceeds from marketable securities of $170 million.
Current wording
Cash provided by investing activities for the nine months ended September 30, 2025 was primarily due to net proceeds from marketable securities of $249 million.
Previous wording
Cash used in investing activities for the six months ended June 30, 2024 was primarily due to net purchases of marketable securities of $102 million.
Current wording
Cash used in investing activities for the nine months ended September 30, 2024 was primarily due to net purchases of marketable securities of $130 million.
Previous wording
Cash provided by financing activities for the six months ended June 30, 2025 was due to net proceeds of $142 million from issuance of our common stock under the February 2025 underwritten offering and $49 million from our borrowings under the Hercules Agreement.
Current wording
Cash provided by financing activities for the nine months ended September 30, 2025 was due to net proceeds of $150 million from issuance of our common stock, primarily due to the February 2025 underwritten offering, and $49 million from our borrowings under the Hercules Agreement and proceeds of $3 million for stock issued under our equity award plans.
Previous wording
Cash provided by financing activities for the six months ended June 30, 2024 was due to net proceeds of $228 million from issuance of our common stock.
Current wording
Cash provided by financing activities for the nine months ended September 30, 2024 was due to net proceeds of $228 million from issuance of our common stock to Gilead under the Third Stock Purchase Agreement Amendment, $47 million from our borrowings under the Hercules Agreement, and proceeds of $6 million for stock issued under our equity award plans.
Previous wording
For example, if we are unable to advance an investigational product to regulatory approval or if we and Gilead agree to terminate joint development of an investigational product, this could result in a decrease in the estimated effort and cost of satisfying the related performance obligation as well as an increase in the estimated percentage of completion and a corresponding cumulative catch-up adjustment to revenue. In contrast, development delays or increases in the total effort required to advance an investigation product could result in a decrease in the estimated percentage of completion and a corresponding reversal of revenue. At June 30, 2025, we had $131 million in deferred revenue related to upfront cash payments for certain performance obligations related to R&D programs that are satisfied over time, of which a substantial amount would be recognized if we were unable to advance the underlying investigational product to regulatory approval or if we and Gilead were to agree to terminate development of the underlying investigational product.
Current wording
For example, if we are unable to advance an investigational product to regulatory approval or if we and Gilead agree to terminate joint development of an investigational product, this could result in a decrease in the estimated effort and cost of satisfying the related performance obligation as well as an increase in the estimated percentage of completion and a corresponding cumulative catch-up adjustment to revenue. In contrast, development delays or increases in the total effort required to advance an investigation product could result in a decrease in the estimated percentage of completion and a corresponding reversal of revenue. At September 30, 2025, we had $105 million in deferred revenue related to upfront cash payments for certain performance obligations related to R&D programs that are satisfied over time, of which a substantial amount would be recognized if we were unable to advance the underlying investigational product to regulatory approval or if we and Gilead were to agree to terminate development of the underlying investigational product.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
September 30, 2025 will be sufficient to fund our planned level of operations for a period of at least twelve months following the date of filing of this report and provide funding through our initial pivotal read-outs for domvanalimab, quemliclustat and casdatifan, which include PEAK-1.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The increase in Total revenues for the three months ended June 30, 2025 was primarily driven by the cumulative catch-up from license and development services revenue of $143 million relating to pausing future development of etrumadenant and Gilead's related return of its license to the program.