RCUS

Image source: The Motley Fool. Wed., Aug. 5, 2026 at 4:30 p.m. ET Vice President of Investor Relations - Pia Eaves Chief Executive Officer - Terry Rosen Chief Medical Officer - Richard Markus President - Juan Jaen Chief Financial Officer - Bob Goeltz Operator: Hello, everyone. Thank you for joining us and welcome to the Arcus' Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. [Operator Instructions] I will now hand the conference over to Pia Eaves, Vice President of Investor Relations. Pia, please go ahead. Pia Eaves: Good afternoon, and thank you for joining us on today's conference call to discuss Arcus' second quarter 2026 financial results and pipeline updates. I'd like to remind you that on this call, management will make forward-looking statements, including statements about our development strategies and our expectations regarding advantages and opportunities afforded by our investigational products, our clinical development milestones and timelines, our projected cash runway, and our financial outlook. 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 has been filed with the SEC. For today's call, please refer to our latest corporate presentation posted in the Investors section of our website. This afternoon, you'll hear from our CEO, Terry Rosen, CMO, Richard Markus, President Juan Jaen, and CFO, Bob Goeltz. With that, I'll turn the call over to Terry. Terry Rosen: Thank you very much, Pia, and thanks so much, everyone, for joining us this afternoon. We continue to make substantial progress in advancing our portfolio of oncology and immunology programs. Execution throughout the first half of the year has been tremendous, and this tangible productivity will be a focus of today's discussion. Our highest priority, no surprise, continues to be the advancement of casdatifan, which we believe has clear potential to be a $5 to $10 billion drug. The remainder of our pipeline has also been advancing quite well, and we're beginning to share the details and breadth of our other programs. These create a steady and sustainable stream of additional opportunities, as well as strategic optionality. So starting with casdatifan, our next-generation HIF-2-alpha inhibitor. The advancement of cas has driven reflection and value for Arcus, and we expect further data this year to accelerate this reflection. Our first Phase III trial, PEAK-1, evaluating cas plus cabozantinib, the gold standard of care in second-line clear cell RCC, has tremendous investigator enthusiasm, and we remain on track to complete enrollment by the end of this year. Last year, we presented a wealth of data that demonstrated clearly casdatifan's efficacy advantages over belzutifan. Over the next 6 months, we will share new data that will provide clear line of sight to casdatifan's full market potential. Based upon casdatifan's superior profile, as well as our development strategy, we expect cas to become the backbone therapy for all patients in all lines of treatment in clear cell RCC, and we're maximizing that opportunity by rapidly expanding our development program. With the recent failure of Merck's LITESPARK-012 study, cas now has no competition in the frontline space. And our development plan, already ongoing, creates a clear path for cas to consolidate what's currently a fragmented frontline market as the first and only HIF-2-alpha inhibitor in this setting. We're leveraging our platform study ARC-20 in addition to collaboration studies to support the key combination regimens we'll pursue for first-line treatments. We had our meeting with the FDA to discuss our first frontline Phase III study in the setting. We're calling that PEAK-20, and we remain on track to start this registrational trial by the end of 2026. Across the development program, casdatifan is being evaluated in several different combinations across all lines of therapy. We're doing this in both a capital and resource-efficient manner by securing partnerships, more specifically clinical collaborations, and these all allow us to retain the full rights to the casdatifan program. We believe that we are the partner of choice for collaborations involving a HIF-2-alpha inhibitor. This is enabling investigation of the smartest mechanistic combinations and settings. Keep in mind, belzutifan is readily available to anyone. We do not believe it's an accident that others want to combine with casdatifan. We've initiated multiple new clinical trial collaborations in the last 2 months. In June, we announced the collaboration with BMS to evaluate cas in combination with pumita, their bispecific anti-PD-L1/VEGF antibody in the first-line setting. In July, we announced the collaboration with Summit Therapeutics to evaluate cas in combination with ivo, their bispecific anti-PD-1/VEGF antibody. Arcus will be conducting this study in a first-line cohort as part of ARC-20. This is the second of three collaborations we've executed to evaluate cas with an anti-PD-1/VEGF bispecific in the first line. So just to emphasize, we have three collaborations with anti-PD-1/VEGF antibodies. In addition, in July, we also announced the collaboration with AVEO, in which we'll be combining cas with tivo in advanced belzutifan-experienced patients. This study will also enable our planned late-line registrational study that will evaluate cas-tivo in both HIF-2 inhibitor-experienced as well as HIF-2 inhibitor-naive patients. So now, let me spend a few minutes describing our holistic development strategy for casdatifan. Let me emphasize an important point in introducing this topic. While we believe that casdatifan will completely transform the clear cell RCC treatment paradigm, our strategy is totally consistent with the current treatment paradigm. We're simply creating a framework that will provide HIF-2-alpha inhibitor enhanced options that only casdatifan with its unique profile can offer, basically adding on top of the best current regimens that are favored by both physicians and patients. So in the first line, we plan to develop multiple options that will make cas the foundational medicine regardless of the selected combination partner. Our strategy is designed to provide flexibility to physicians with a HIF-2-alpha inhibitor enhanced regimen corresponding to their preferred treatment approach for all types of clear cell RCC patients. With belzutifan's recent frontline setback, casdatifan has clear paths to become the common denominator in what's currently a fragmented frontline setting as the first HIF-2-alpha inhibitor available to these patients. A casdatifan-based TKI-sparing IO/IO regimen is the bedrock of our first-line strategy. It's intended to address the key limitation of ipi plus nivo, which is an approximately 20% rate of primary progression. Currently, ipi-nivo represents the most commonly used frontline regimen, with a market share of about 30%. And we believe cas has the potential to increase that to 50% or more. We also plan to develop a cas-based TKI-inclusive first-line regimen for that segment of physicians who are always going to prefer to reach for a TKI, especially for patients with fast-growing bulky tumors. Our partner TKI in the setting will be axitinib, well established as an effective frontline TKI, and very importantly, aligning well with subsequent regimens, including cabo and tivo, over the long-term treatment strategy. You have to remember that when making prescribing decisions, physicians are considering how they will sequence multiple TKIs to potentially give patients 10 or more years of survival. So combination choices are not selected in a vacuum. Lastly, in the first line, as I mentioned earlier, we're leveraging our partnerships, including with BMS and Summit, to evaluate casdatifan in combination with three different novel anti-PD-1/VEGF antibodies. We believe anti-PD-1/VEGF bispecifics may play an increasingly important role in the treatment of kidney cancer going forward. Both the PD-1 and VEGF pathways are factors in disease progression, and there's strong biologic rationale for pairing them with a hard-hitting HIF-2-alpha inhibitor like casdatifan to deliver both an early treatment effect and sustained tumor suppression. The rationale for this class of bispecific utility in clear cell RCC is as strong as in any setting. And the combination could provide a TKI-sparing regimen that still incorporates the essential biology of the TKI, but without the baggage that's associated with the poor selectivity of the TKI class. In the second line, cas plus cabo is intended to build on the current second-line standard of care. This combination is now in registrational testing with our Phase III PEAK-1 trial. Cabo is the most commonly prescribed TKI monotherapy in the setting. It's the TKI that physicians prefer and have greatest experience in managing AEs with the recognition of a better toxicity profile relative to that of the belzutifan combination partner, also sold by Merck, lenvatinib. Lenva's toxicity profile is well documented with greater rates of cardiovascular toxicities. Notably, in LITESPARK-011, all-grade cardiac dysfunction was 7% for belz-lenva versus just 1% for cabo. Grade 3 or higher cardiac dysfunction was 5% for belz-lenva versus 0.5% for cabo. That's a big deal. That's a tenfold difference. Keep in mind, these data are a direct comparison from a randomized study. With cas's superior efficacy profile versus belz, and cabo's tolerability advantages versus lenva, we expect cas plus cabo to be the preferred HIF-2-alpha combination in the second line based on both efficacy and safety. Finally, with the announcement of our collaboration with AVEO, we're developing casdatifan plus tivo in second-line plus clear cell RCC, including in belzutifan-experienced patients. As I mentioned, this will precede a registrational trial in both HIF-2-alpha inhibitor-experienced and naive patients. In an upcoming investor event in October, we'll be sharing key ARC-20 data readouts for casdatifan. These will be in the first, in the second, and late-line settings. These data will provide a holistic picture that will demonstrate the potential for cas to benefit patients across the treatment paradigm. This will be a large and comprehensive data set, including data from over 200 patients. Richard will go into more detail on the specific readouts, but I'd like to take a moment to provide some scientific context and a framework for thinking about patient outcomes with casdatifan in the various settings. In this context, in parallel to executing on our holistic development strategy for cas, we've been committed to the advancement of the highest quality research in the HIF-2-alpha space, particularly on translational studies that have a direct impact on the development program. I want to emphasize that this work, a hallmark of the casdatifan program on all fronts, is not esoteric, but in fact provides the basis for the quality and profile of the molecule, as well as the foundation for our development strategy. Our initial work on casdatifan and HIF-2-alpha biology was published recently in Nature last month. The manuscript describes exceptional scientific research carried out across our drug discovery, bioinformatics, translational and clinical teams, and includes a number of our clinical collaborators from the academic community. This is the first study to comprehensively connect clinical outcomes from patients receiving a HIF-2-alpha inhibitor with peripheral biomarker changes in associated tumor biology. The research showed that HIF-2-alpha inhibition with casdatifan monotherapy in clear cell RCC patients resulted in deep and sustained suppression of erythropoietin, and that the depth of that suppression correlated with higher response rates and longer progression-free survival. Suppression of erythropoietin, or EPO, production is good. It correlates with positive outcomes. This is just one example of the strides our research team has made towards developing a thorough understanding of HIF-2-alpha biology and its linkage to patient outcomes in kidney cancer. Okay. Now, the important piece, thinking prospectively. We've also been investigating how exposure to prior therapies may impact clinical outcomes. For example -- let me tie this all together. For example, it's known that, not surprisingly, prior TKI exposure in RCC leads to poorer outcomes for patients who are treated with a TKI in subsequent lines of therapy. So therefore, patients who receive a TKI in the first line are currently underserved by the most commonly prescribed TKI monotherapies in the second line and beyond. At the same time, however, TKI exposure has been shown to result in an upregulation of HIF-2-alpha activity. We've illustrated this on Slide 31 of our corporate deck. So let me repeat that. Greater TKI exposure has been shown to result in upregulation of HIF-2-alpha activity. One point I'd like to link back to now. In our Nature paper, we elucidated that high HIF-2-alpha activity is correlated with improved PFS in patients treated with casdatifan. However, interestingly, subgroup patient analyses reported by Merck showed that patients treated with belzutifan in LITESPARK-005 or LITESPARK-013 had an inverse correlation of efficacy outcome with number of prior TKI therapies. That is, more prior TKI therapies led to worse outcomes with belzutifan. By contrast, what I can tell you is that in our analyses of our late-line casdatifan monotherapy cohort, that's 120 patients, we do not show this inverse correlation. We therefore believe that more robust and in fact more durable HIF-2-alpha inhibition with casdatifan may provide better outcomes for patients with prior TKI exposure. And this will be one of the parameters that we analyze across our datasets, and we'll be speaking more about our analysis on this topic at the investor event in the fall. A little bit of a transition now. Our commitment to research has been at the core of the company since our founding, and despite relatively minimal capital investment, our parallel work in immunology has enabled us to build a rich portfolio of programs. Perhaps one of the broadest and deepest earlier portfolios of high-quality molecules in the industry. These programs were all created in-house over the last several years and are now approaching clinical development. Our portfolio addresses a number of validated and emerging targets, including MRGPRX2, the TNF receptor 1, CCR6, CD89, STAT6, and CD40 ligand. We expect to initiate human dosing of AB102, an oral small molecule MRGPRX2 antagonist, this month. It will be followed shortly thereafter by our oral and selective TNF receptor 1 inhibitor in early 2027. Overall, the portfolio has the potential to generate a steady flow of INDs between now and the end of 2027. These programs afford us great strategic optionality in disease areas with high unmet need and also with extremely large markets. Finally, in addition to cas and our immunology programs, we also have an ongoing Phase III study in pancreatic cancer. So coming out of ASCO, there's been increasing focus and excitement in this space. We're preparing for initial data from our Phase III PRISM-1 study of quemliclustat and chemotherapy in the frontline setting. We expect this to read out in the first half of next year. We actually see a major opportunity for quemli as an all-comer, first-line, and importantly, a very well-tolerated option for treatment of this devastating disease. With that, I'll turn the call over to Richard to discuss the status of our clinical programs and upcoming data readouts. Richard Markus: Thanks, Terry. As Terry described, our strategy is to establish casdatifan as a foundational standard of care across every line of therapy in clear cell RCC. We're currently pursuing multiple different combination studies for casdatifan across the first, second, and late lines. In order to conduct this work in a capital and resource-efficient manner, we have been leveraging our ARC-20 platform study and generating data through partner platform studies to support and enable our ongoing and planned registrational studies. We will have multiple important data readouts from ARC-20 later this year, and there will be a lot of data. So I'll walk through each study, its rationale, and the nature of the near-term readouts. Starting with the first-line clear cell RCC, we are pursuing a TKI-free approach as the foundation of our strategy, while also developing a TKI-inclusive option. The current TKI-free standard of care is the IO doublet, ipi-nivo. And let me remind you exactly what this regimen is. It's a maximum of 4 cycles, or 12 weeks, of ipi plus nivo, followed by nivo for the duration of the treatment. This therapy is highly valued for the overall survival benefit it provides and would be used more if the rate of primary progression, which is roughly 20%, were lower. We believe a combination with casdatifan can improve upon that rate of primary progression in addition to improving progression-free survival and ultimately, overall survival. To support the TKI-free approach, there are two key cohorts in ARC-20. First, casdatifan plus zimberelimab, our anti-PD-1, plus ipi, an anti-CTLA-4. This cohort has enrolled well, and we expect enrollment to complete very soon. We're also evaluating a cas plus zim first-line cohort in ARC-20, which completed enrollment at the beginning of this year, for which we've already described a very low rate of primary progression of 7%. That's just 2 of 30 patients. Keep in mind that anti-PD-1 monotherapy was previously reported to show a 30% rate of primary progression in this frontline setting. Now, for the TKI-inclusive approach, we'll be developing casdatifan in combination with axitinib, a well established TKI in the frontline that will sequence well with cas plus cabo as a subsequent regimen. We expect a new cohort in ARC-20 evaluating this combination to initiate in the fourth quarter this year. In collaborations with BMS and Summit, we are also evaluating novel TKI-free VEGF targeting combinations with anti-PD-1/VEGF bispecific antibodies in the first-line setting. BMS will be evaluating two cas plus pumita-based combinations in its platform study, ROSETTA RCC-208. In collaboration with Summit, we'll be adding a new cohort to ARC-20 to evaluate cas plus ivo in first-line clear cell RCC. Both of these studies are expected to begin by the end of this year. Now in the second line, the current standard of care is cabozantinib monotherapy, representing roughly 40% of the second-line market. PEAK-1, which is evaluating cas plus cabo versus cabo, is our first registrational study for casdatifan. Site activation and enrollment have been going quite well, and we expect to complete enrollment by the end of this year. We also have an ongoing cohort in ARC-20, evaluating cas plus cabo in a second-line, IO-experienced setting. We shared initial efficacy data for this cohort last year at ASCO. And finally, in late-line clear cell RCC, where the current standard of care is belzutifan or TKI monotherapy, we're adding a new randomized cohort in ARC-20 to evaluate casdatifan plus tivo versus tivo alone in patients that have received prior belzutifan. This cohort will generate data to support a registrational strategy combining cas with tivo by clarifying casdatifan's benefit specifically in HIF-2-alpha inhibitor-experienced patients. We expect enrollment to begin later this year. Now, let me briefly summarize the readouts coming from ARC-20 this year. In the first line, initial safety data from the ARC-20 cohort evaluating cas plus zim plus ipi. We've already met with the FDA and EMA to discuss how these data will support the start of our registrational trial evaluating cas plus nivo plus ipi as the bedrock of our frontline strategy. We will also be able to share preliminary data on primary progression. Also in the first line, we'll have ORR data with approximately 11 months of follow-up from the cohort evaluating cas plus zim. We will share waterfall and spider plots for that cohort. And given that the median progression-free survival for ipi-nivo from CheckMate 214 in this first line is just 12.4 months, we expect the spider plots for this cohort to be informative since they may impart an early look at how PFS will unfold for this cohort. In the second line, we'll have more mature ORR and PFS data for cas plus cabo in approximately 45 patients with at least 18 months of follow-up, and we may have an early read on OS. And in our late-line monotherapy cohorts, we'll be able to share an early look at overall survival with approximately 28 months median follow-up from the approximately 120 late-line monotherapy patients. While OS is not required for approval and registration of trials for clear cell RCC, it could impact access in ex-U.S. regions and is recognized as another potential major differentiator relative to belzutifan, which has now failed to show statistically significant benefit in OS in 3 out of 3 registrational trials. So this first look at OS for casdatifan will provide important comparative data. Taken together, these data readouts will create a holistic picture of casdatifan's efficacy across all lines of therapy and should generate strong conviction in its potential as the new backbone of kidney cancer treatment. As Terry mentioned, we expect to share the totality of these data together in an investor forum in October prior to ESMO. And with that, I'll turn the call over to Juan to discuss our immunology portfolio. Juan Jaen: Thanks, Richard. Over the past few years, the same discovery team that created casdatifan has been working on creating a broad portfolio of programs that span the whole spectrum of autoimmune and allergic diseases. While we haven't said much about this effort until now, we are very proud of its quality and scope. The overarching strategy has been to design molecules that might provide safe treatments for important patient segments across the immunology landscape. We have also prioritized approaches that leverage our demonstrated expertise in designing potent and selective molecules that work in the real world under physiological stress rather than just in a culture dish. Further, we have looked for ways to minimize the inherent biological risk associated with novel mechanisms of action. You may notice a couple of recurring themes in the mechanisms of action that we have chosen to pursue in implementing our portfolio strategy, including the development of oral small molecule alternatives to established biologics and an emphasis on targeting immune cell populations that have generally been understudied. We expect a steady cadence of molecules advancing into the clinic, beginning with our MRGPRX2 antagonist and followed by our TNF receptor 1, CCR6, STAT6, CD89, and CD40 ligand programs, all of which are positioned to deliver IND-ready candidates between now and the end of 2027. Our first program, AB102, an oral MRGPRX2 antagonist being developed for chronic spontaneous urticaria or CSU and atopic dermatitis, is wholly owned by Arcus. Available biologics have meaningfully advanced the treatment of allergic conditions, but substantial clinical need remains. X2 is a key regulator of mast cell activation in these diseases, releasing inflammatory signals that drive swelling and itch, making this a promising target for conditions like CSU and atopic dermatitis. At the Society for Investigative Dermatology annual meeting earlier this year, we presented preclinical data on an oral X2 approach showing full blockade of X2-dependent mast cell degranulation and inhibition of all common human X2 variants. This data supports the potential for a potent selective once-daily oral X2 antagonist to impact key disease outcomes in conditions driven by aberrant mast cell activity. AB102 is entering the clinic imminently, with PK profile data expected in the fourth quarter from the first cohorts of our first-in-human healthy volunteer study. We expect to follow with a proof-of-concept study in CSU in mid-2027. Unlike other recent clinical failures in the X2 space, we believe that the excellent potency of AB102, optimized to be efficacious under physiological conditions, provides the best opportunity to run the definitive proof-of-concept study with an X2 antagonist in CSU. We also are developing an oral small molecule TNF inhibitor as a potential treatment for conditions such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease. Our TNF inhibitor is designed to selectively block TNF receptor 1, which we believe could translate into better safety and efficacy relative to approved anti-TNF biologics, which block both TNF receptors 1 and 2. As you may know, blocking TNF receptor 2 can paradoxically lead to an inflammatory response in some patients. We expect this program to enter the clinic in early 2027. Behind AB102 and our TNF programs, we have a portfolio of earlier-stage immunology programs for which we will share more details as they approach entry into the clinic. I'll now hand it over to Bob to discuss the market opportunity for casdatifan as well as our financial results. Robert Goeltz: Thanks, Juan. Before I get into the quarter's financials, I want to spend a few minutes on the multi-billion-dollar market opportunity for casdatifan. Sales for RCC drugs in just the major markets are expected to grow to roughly $13 billion by 2030. Historically, this market has been fragmented, primarily split across the IO and TKI classes. With only two HIF-2-alpha inhibitors on the horizon and clear advantages for casdatifan, we believe Arcus has a path to become a common denominator across lines of kidney cancer treatment. Casdatifan is targeting lines of therapy with large patient populations and long treatment durations. PEAK-1 addresses approximately 20,000 IO-experienced patients in the major markets, representing an opportunity of more than $2 billion. And the first-line opportunity is even larger, exceeding $4 billion. All told, we see a total peak sales opportunity for casdatifan of $5 to $10 billion, driven in part by duration of therapy from a long-term tail effect. This is something we've seen consistently in our late-line monotherapy data, where approximately 25% of patients remain on treatment beyond 2 years. As a reminder, Arcus owns all commercial rights to casdatifan outside of Japan and certain other Asian territories where rights are held by our partner, Taiho. Turning to quemli, we continue preparations for the readout from PRISM-1. While there's been exciting progress made in the treatment of later-line pancreatic cancer, quemli has the opportunity to be the first meaningful advancement in the frontline in decades. We believe this is a multi-billion-dollar commercial opportunity. Further, we believe quemli's well-tolerated profile as well as its promise to substantially enhance the benefit of immunogenic chemotherapy would make it attractive as a combination partner if PRISM-1 is successful. I also want to touch on capital efficiency. Full ownership of casdatifan gives us significant strategic optionality and supports a capital-efficient collaboration strategy. Our new agreements with BMS, Summit, and AVEO are structured to advance casdatifan combinations without placing outside demands on our own resources. The same is true of our wholly owned immunology portfolio where the TNF program is the only one carrying an option held by Gilead. Turning to our financial results for the quarter, our cash and investments as of June 30th, 2026 were $775 million, as compared to $876 million at the end of the first quarter. We continue to expect to end 2026 with approximately $600 million in cash and investments and expect these resources to provide runway into at least the second half of 2028. We recognized GAAP revenue for the second quarter of $41 million and now expect full year 2026 GAAP revenue of $65 to $75 million. Revenue continues to be driven primarily by our collaboration agreements. Future operating results are expected to reflect lower collaboration revenue due to reduced activity under the Gilead collaboration, driven by the wind-down of the domvanalimab program. Our R&D expenses for the second quarter were $113 million net of reimbursements, and we continue to expect a meaningful decrease in overall R&D spend in 2026 and 2027 relative to 2025 as a result of the wind-down of the dom Phase III trials and reduced spend on quemli, together with broader spend management. By 2027, we expect more than 80% of our portfolio spend to be directed toward casdatifan development. G&A expenses were $24 million for the second quarter, and total non-cash stock-based compensation was $15 million. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10-Q filing. I'll now turn it back to Terry for closing remarks. Terry Rosen: Thanks very much, Bob. So let me close by summarizing our priorities for the remainder of 2026. No surprise, casdatifan remains our number one priority. We're working aggressively, both independently and with clinical collaborators, to expand the development program with the goal of positioning cas to be the [ CAG all-cas ] backbone of kidney cancer treatment across all lines of therapy. In the coming months, we'll share data for casdatifan as monotherapy and in combination in first, second, and late-line settings. We expect these to further reinforce casdatifan's best-in-class profile and drive conviction in its potential as a transformative therapy. These studies will support a broad registrational strategy, bringing both the qualitative and quantitative advances that HIF-2-alpha inhibition offers for the clear cell RCC treatment paradigm, starting with the ongoing PEAK-1 study, which is on track for full enrollment by year-end, as well as a Phase III trial, again that's called PEAK-20, that's evaluating cas plus ipi plus nivo in first line to be initiated by year-end. For clarity, I want to confirm that we will be using ipi-nivo as the combination partner for casdatifan in this registrational study. And for non-casdatifan, our PRISM-1 Phase III trial for quemliclustat in pancreatic cancer remains on track for a readout next year. And Juan walked you through the exciting progress across our immunology portfolio, with AB102 advancing into the clinic, followed by our TNF inhibitor shortly thereafter, and other immunology programs over the next 18 months. With $775 million in cash and investments, and runway into at least the second half of 2028, we're well positioned to execute on all of these priorities. We see a clear opportunity for value creation for patients and shareholders to accelerate, perhaps dramatically, over the coming months. Thank you for joining us today. We appreciate your interest and continued support of Arcus, and we'll now open the call for questions. Operator: We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Salim Syed with Mizuho. Salim Syed: Just one kind of going into all the October data, obviously a lot of data that we'll be getting, is there a bogey or measure of success that you're looking at in each of these lines that you would care to elucidate here for folks? And also, while we're there, are there any particular parts of the dataset that you would like to place a little bit more prominence on where you want people to anchor to? Terry Rosen: Thanks, Salim. Great question, and I'll address all that. I'll start at a very high level, and then I'll get increasingly granular. So I think you can walk away with some very clear expectations as to how we're looking at things. So at the highest level, I think we want people to walk away and believe they will walk away knowing that casdatifan is going to become the backbone standard in RCC across all lines of therapy. So I think one of the ways to frame this is put it in the context of value and value creation and looking at it through an investor standpoint. I think it's very clear that last year we received an inflection in value that was due to recognition in the investor community, that there was really a very substantial differentiation between casdatifan and belzutifan. And what we've heard from a lot of investors is that led sort of to a recognition, a value that was reflected in our second-line strategy that we were given value for an expectation that cas plus cabo is going to beat cabo and that's going to look good. I think the other piece, though, was that with that differentiation, there still remain questions as to whether that differentiation, which is clearly there, how will that translate more broadly and particularly in the frontline. And I think a couple of things have happened. First, you had the failure of LITESPARK-012, but then we've also had another year's worth of follow-up clinical data. So I think what's going to happen as we come into this readout is that we'll be able to give very strong conviction across all lines of therapy, including the frontline. And the frontline is huge because that's the $5 billion-plus part of the market opportunity. So keep in mind, we have no competition in the frontline without belzutifan. There, the competition is the standard of care. So in that context, let me go down another layer and talk about the frontline and build on a couple of things that Richard pointed out. So our foundational registrational study there will be cas plus ipi plus nivo versus ipi-nivo. And what we're going to have, we'll have at least 20 patients' worth of data from that cas anti-PD-1 ipi cohort that we're running as part of ARC-20. Keep in mind, this is exactly what we've agreed upon with the FDA in terms of safety. So we'll have a safety profile with that 12 or more weeks. And we'll also have a look at the rate of primary progression. So I think the thing that might surprise people as they're thinking about this now, and we get more granular, is that the cas-zim dataset is actually going to be relatively mature despite being an early data set. Because if you contextualize a PFS for ipi-nivo that's just over 12 months, as well as a well-done study with pembro alone where you have a PFS on the 7 to 8 months, you'll be able to get a feel from our curve as to how our PFS is looking compared to those regimens. Also, with over 18 months of median follow-up, I think we'll have a good look potentially at OS, as we move into the second line, is playing out, and some of these things will start to go across studies. So let me now talk about the second line and build on what I just said there. So in the second line, our cas-cabo data will really support that we will have what will look like a better PFS than what was seen with belz-lenva. And I think given the safety, and we talked a little bit earlier about what's been associated with lenva and lenva-belz, that we think we'll have advantages that read on both the safety and efficacy. The other thing to look at is that given that maturity, as I was saying of over 18 months, I think the shape of our curve will give you a sense that we could have a very dramatically different hazard ratio when we compare it to cabo versus the hazard ratio of 0.7 that was seen for belz-lenva. I think the more important piece, though, is that given that the -- given what's known for the OS of cabo, which is just over 21 months, given that we'll have that 18 months of follow-up, we may see, in fact, what appears to be an OS advantage for the casdatifan regimen. Keep in mind, our OS is only going to be based upon how we look relative to direct comparison to cabo, and that'll be defined by its hazard ratio. As Richard mentioned, thus far, belzutifan has been [ 0.43 ]. So we're pretty excited about having those first data that read on OS. And that brings me to the late line. So the late line, we've clearly shown, as a single agent, a very dramatic difference compared to the data that have been generated with belzutifan, but we'll have 28 months of follow-up. And again, given that the OS for belzutifan is just over 20 months, I think it gives us an opportunity. You'll see the Kaplan-Meier curves. We don't know how it's going to play out, but I think with the very robust durable HIF-2 inhibitor, this will start to perhaps show us the -- how important HIF-2 really is as a target in clear cell RCC. And you'll clearly have some sense, we all will, of how OS will look in that setting. And I think the nice thing there, since it's single agent, that will give read-through. And you were asking about what things are important. I think that'll read through to the mechanism across lines of therapy. So just to summarize, I think overall success will be that you come away knowing that not only do we have a plan for casdatifan to win. I think we've laid that out pretty clearly, we're executing on it, but those data will have enough data now that you'll see we actually will win and that casdatifan really will look like it's going to become the common denominator for all clear cell RCC treatments. Operator: Your next question comes from the line of Daina Graybosch with Leerink Partners. Daina Graybosch: Looking forward to another fall event. I wonder if you can talk about LITESPARK-012, which we'll see at ESMO after that event, and your expectations for PFS and OS in that study. And is there a specific signal that would give you confidence or increase your confidence that cas can exceed there with axi and a PD-1 where belz, lenva, and pembro failed? Terry Rosen: Thanks, Daina. So this is going to be a theme we come back to. People ask a lot of times about read-through from trials and talk about there's read-through from things where we have the data, LITESPARK-012. We don't have the data, but I think the most important thing is go to Slide 5. You can say like elections have consequences, biomarker data have consequences. And when you look at the comparative durability of the ability to suppress erythropoietin, so the ability to inhibit HIF-2, I think that's the thing that tells 90-plus percent of the story. So people speculated about safety issues of the triplet, et cetera. I think everything comes down to a dramatic differentiation of the molecules. And I think what you're starting to see now is data where that'll play out. So I think the biggest problem that belzutifan probably had is the durability and the decrease with time and ability to inhibit HIF-2 where their own papers talk about effect on the biomarker looking very nominal at just 12 weeks. Keep in mind the PFS for the control arm there is 24 months. So the fact that you're not inhibiting strongly for that durability, I think that's the issue. And then the thing that gives us confidence is we know that casdatifan is inhibiting not only robustly on day 1, but out past the year, and in fact, as long as you're on treatment. So you do not run into those issues. Keep in mind, one last piece that, again, however that affects things. As we've talked about, treatment with TKI does induce the increased activity of HIF-2-alpha. So you get more HIF-2-alpha activity. So essentially, what you have in that study is the treatment with the TKI, this is not a discontinuous event that happens in a continuous way. So you've got increasing levels of HIF-2 activity and you've got a HIF-2 inhibitor that is measured by that biomarker work is clearly not inhibiting HIF-2 as strongly with time. So less activity of the molecule, more activity coming from the TKI-induced HIF-2 activity. So I think that's a recipe for difficulty. Whereas the Arcus molecule, you're talking about a paradigm of a tumor where 85 to 90-plus percent of the patients have HIF-2 as a driver. And you're going to put a HIF-2 inhibitor, which only brings anemia on top of a good regimen of a TKI and an anti-PD-1, and we feel super excited about it. And we can't even imagine something that would come out of LITESPARK-012 that will cause us to think differently. And I'll remind you, our number one focus there is on top of ipi-nivo, and you'll see a really strong dataset, I think, as we go into fall. So we'll feel really great about the frontline. Operator: Your next question comes from the line of Jonathan Miller with Evercore ISI. Jonathan Miller: A couple more about what we're expecting in October. In the second-line cohort, can you remind us how much prior LENVIMA those patients have gotten? Terry, to your point, not all TKIs are created equal and we know that sequencing has effects. I think we've seen prior TKI treatment numbers, but how many patients got LENVIMA prior? And secondly, in first line, I'm a little surprised that you're so hesitant about giving ORR or broader efficacy readouts for the triplet in first line. You'll have two scans or more for most patients. What do you expect to see for time to response in first line versus second line? Why are you so hesitant to give ORR and why do you think that there won't be enough to at least start directionally talking about that? Terry Rosen: Okay, so remind me the first question and then I'll get to the ORR. Jonathan Miller: That's prior LENVIMA. Terry Rosen: By the way, we're not hesitant. Prior lenva. So we'll give you specific numbers at the time. Let me remind everyone else as well. It's probably when people talk about differences between the ARC-20 cas-cabo as well as our registrational study versus the LITESPARK-011 study, because in that study, Merck had cabo in the control arm and a lenva in the study arm, really the only TKIs of probably substantial number that they saw were patients on axi, so it was probably a mix of axi and ipi-nivo. We'll give specific numbers at that time, but what I'd say is our lenva patients are very representative of what you would normally see in the first line. So we'll have a substantial number of lenva patients out of that 40-some-odd patients who looks relatively like the distribution. In terms of your other question, we will share those information. There's no hesitancy. I think just on expectations, given that, keep in mind that study's enrolled very quickly, that triplet. We think the most important part of those data will be, first, the safety and second, the rate of primary progression, because that's really what you're addressing. And we think even what you'll see from just our anti-PD-1 plus cas, that'll give you warm feelings about efficacy, given we'll have that 11 months of median follow-up, and that still may improve. But we'll see -- we'll share what the early responses looked like. I think the thing to think about is that the timing of an IO plus a casdatifan regimen may look a little bit more like IO alone or HIF-2 inhibitor alone where responses, that did you cross 30% or not, when that happens may be more prolonged. The thing is when you combine with the TKI, as you know, you're really affecting the vascular system, and it's a very -- or a very sort of response fast type of phenomena, but then obviously it doesn't give you the durability. So we'll share those data, but I think the more important things that you'll get out of it are the safety of the triplet, the rate of primary progression, the rate of primary progression from any of the studies we've done that don't include a TKI, particularly those in the earlier lines as well as a few other monotherapy datasets. And then the cas plus zim simply because you will have a longer period of treatment. And so not only will you see ORR there, but I think the shape of the curve, particularly knowing that if you look at actually ipi-nivo out at 12 months, you're getting in that 50-ish percent plus or minus place. It will just be a very clear comparison. But you shouldn't think we have any hesitancy sharing those data, it's just that time will probably affect more of the response rate. I think one other thing that is worth -- I'll just use this as an opportunity to highlight this. I think it's probably not fully appreciated because of the totality of the belzutifan data, how profound the ability to inhibit HIF-2 is on durability. But I'll just use actually belzutifan data. People ask for read-through, we get asked about read-through from LITESPARK-012 where we haven't seen the data, but the places where we've seen a lot of data, for example, LITESPARK-005, and we've seen a monotherapy data. Now, interestingly enough, if you go back and look at those data, median PFS for belzutifan in that late-line setting was about 5.6 months, which is about the same as the median PFS for everolimus. Similarly, the rate of primary progressions for the two were very much the same. We think those sort of relate to the ability to hit the target hard. However, they still won. The drug got approval and that's because so much of the manifestation of hitting HIF-2 is coming from what that does to the tumor and how it plays out on the other side of the median. So we think HIF-2 is going to turn out, and I think our data will certainly give the opportunity to assess that, that HIF-2 is going to turn out to be something that affects everything on those durability measures. And I think that the belzutifan data have foreshadowed that because despite what's probably a marginal ability to really hit HIF-2 hard and hit it long, they still had very good effects. So I think the first place where you saw the manifestation of that less than optimal durability of hitting HIF-2 hard for a long period of time came in their frontline study. And that's probably not surprising because it's comparing versus the longest PFS in the control arm. So the percentage of time that it's bringing value is smaller compared to whether it's the LITESPARK-005 or LITESPARK-011, where it's fighting a shorter battle compared to the standard of care. Operator: Your next question comes from the line of Li Watsek with Cantor. Li Wang Watsek: Congrats on the progress. I have two questions. Maybe first, follow up on the lenva question for the second-line, cas plus cabo cohort. How should we think about the impact of prior lenva exposure on the types of patients enrolled into the study relative to the LITESPARK-011 trial? Just trying to understand the right PFS benchmark, given there's some differences in the patient population. And then second, Terry, you mentioned prior TKI exposure increases the HIF-2 levels. Just trying to clarify if you're implying cas PFS has a positive relationship with prior lines of TKI. Terry Rosen: Okay. So thanks on both of those. So the first thing we would say is we actually feel quite good. And I mentioned what we saw in the late line, that we did not see a degradation in the monotherapy, 120 patients prior TKI and we'll share very specific data in the fall, but we did not see a falloff in efficacy associated with those patients that had seen more TKIs versus the trend that was seen in LITESPARK-005 and LITESPARK-013. So going in, we're feeling really confident that despite the fact that we'll have those TKI-experienced patients and lenva patients, we feel very optimistic about the benefit that those patients will receive. So sort of across the frontline strategies, we feel good that the benefit that HIF-2 will bring on top of cabo will be advantageous. In terms of comparisons, to your point, one of the things that gives me an opportunity to talk about how we'll present the data. So I'll even use the word that Jonathan used a second ago about hesitancy. We're going to be effusive with the data. And when we share our data, you can assume we've squeezed all the water out of the sponge of what we know at the time. And you'll have complete knowledge of what we have. And one of the things we're going to do is we're going to use every comparative data set that we can to illustrate what the advantages of casdatifan are. We feel like it's a great opportunity because casdatifan is going to bring a lot to the table. And one of the tools that we'll have is the study CaboPoint. And CaboPoint, if you go back and read what the intent was, it really was designed where it looked in two separate groups, randomized, where you had patients that were treated with TKIs and patients that were treated with IO/IO. And then how did those different groups look when they then received cabo. So it's a perfect comparison. Yes, we'll compare to belz-lenva. Yes, we'll compare to any other registrational data with cabo alone. But we also have those nice data sets that were really, if you look at the genesis of that study, the intent was that for future combinations, you'd be able to have a clean dataset to see how anything new -- what it was bringing to the table. So it's a perfect dataset. So we will do subpatient analyses since we'll be forced to go cross-trial comparison, as much as everybody doesn't like it, actually everybody loves it, and so we'll look at how we compare to both of the segments of the population from the CaboPoint study to see how the advantages we're bringing to cabo, whether it's from prior TKI treatment or prior IO/IO treatment. And keep in mind, we're going to have curves. So those curves will not only give you a sense of static differences, but I think they'll give you a sense of how the hazard ratios are going to play out because with that 18 months of follow-up and all the landmark data that comes with that, knowing that the tails are a big deal, you'll see how those tails are corresponding both to what you would see with cabo and what you saw with belz-lenva. Nicely, both of our programs are run against the same control. And so you'll get a sense of both our hazard ratio versus cabo as well as how you might think that'll compare to a hazard ratio of what you saw for belz-lenva. Operator: This brings us to the end of the Q&A session. I will now turn the call back to Terry Rosen, CEO, for closing remarks. Terry Rosen: So I want to thank everybody. We're looking forward to speaking more. A couple of you asked some really great questions, and I think not only will we have a lot of clinical data but we'll have a lot of science and translational work much like we had in the Nature paper. So I think we're going to have a lot of great discussions about the future of casdatifan-based therapy. So thanks for joining and we look forward to speaking to you over the coming months. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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Interested in Arcus Biosciences, Inc.? Here are five stocks we like better. Casdatifan is Arcus’ top priority: The company is expanding the HIF-2 alpha inhibitor’s development across first-, second- and later-line clear cell renal cell carcinoma, with data from more than 200 patients expected at an October investor event. The Phase III PEAK-1 trial remains on track to complete enrollment by the end of 2026. Arcus is advancing additional pipeline programs, including the Phase III PRISM-1 pancreatic cancer study, which is expected to produce initial data in the first half of 2027, and AB102, an oral immunology candidate slated to begin human dosing this month. Second-quarter cash totaled $775 million, while revenue reached $41 million, primarily from collaborations. Management expects to end 2026 with about $600 million in cash and investments, providing runway into at least the second half of 2028. From laggards to leaders: Small caps on the rise Arcus Biosciences (NYSE:RCUS) outlined plans to expand development of its casdatifan cancer program across multiple lines of clear cell renal cell carcinoma, or ccRCC, while reporting second-quarter financial results and updates on its pancreatic cancer and immunology pipelines. Chief Executive Officer Terry Rosen said casdatifan, an investigational HIF-2 alpha inhibitor, remains the company’s top priority. Arcus is pursuing combinations designed to position the drug as a treatment option in first-line, second-line and later-line ccRCC. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling MarketBeat Week in Review – 7/10 - 7/14 The company expects to present data from more than 200 patients across its casdatifan program at an investor event in October, ahead of the European Society for Medical Oncology meeting. The planned disclosures are expected to include results from first-line, second-line and late-line cohorts in Arcus’ ARC-20 platform study. Arcus’ first registrational casdatifan study, the Phase III PEAK-1 trial, is evaluating casdatifan plus cabozantinib against cabozantinib in patients with previously treated ccRCC. Rosen said enrollment remains on track to finish by the end of 2026. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Gilead Boosts Biotech Footprint With Stakes In AlloVir And Arcus Chief Medical Officer Richard Markus said Arcus expects to disclose more mature objective response rate and progression-free survival data from approximately 45 second-line patients receiving casdatifan plus cabozantinib, with at least 18 months of follow-up. The company may also have an early look at overall survival, he said. In the first-line setting, Arcus plans to initiate PEAK-20, a registrational Phase III trial of casdatifan combined with ipilimumab and nivolumab, by the end of 2026. Rosen said the company has discussed the study with the FDA. → No Hangover: Revisiting Microsoft One Week After Earnings ARC-20 also includes a cohort evaluating casdatifan with zimberelimab, Arcus’ anti-PD-1 antibody. Markus said enrollment in that cohort was completed early this year and that the company previously reported a 7% primary-progression rate, representing two of 30 patients. Arcus expects to report objective response rate data, waterfall plots and spider plots with approximately 11 months of follow-up. Another ARC-20 cohort is evaluating casdatifan, zimberelimab and ipilimumab. Arcus expects enrollment to complete soon and plans to share initial safety data and preliminary primary-progression data later this year. The company also plans a first-line cohort evaluating casdatifan plus axitinib, with initiation expected in the fourth quarter. In addition, Arcus has established collaborations with Bristol Myers Squibb and Summit Therapeutics to study casdatifan with anti-PD-1/VEGF bispecific antibodies in first-line ccRCC. BMS will study casdatifan-containing regimens in its ROSETTA RCC-208 platform trial, while Arcus plans to add a casdatifan-plus-ivo cohort to ARC-20 through its Summit collaboration. For later-line disease, Arcus is working with AVEO Oncology on casdatifan plus tivozanib. A randomized ARC-20 cohort will compare the combination with tivozanib alone in patients previously treated with belzutifan. Enrollment is expected to begin later this year and is intended to support a planned registrational strategy in HIF-2 inhibitor-experienced and HIF-2 inhibitor-naive patients. Rosen pointed to recently published research in Nature examining casdatifan’s effects on erythropoietin, or EPO, and HIF-2 alpha biology. According to Rosen, the research found that deeper and sustained EPO suppression in clear cell RCC patients receiving casdatifan monotherapy correlated with higher response rates and longer progression-free survival. Management also discussed the potential effect of previous tyrosine kinase inhibitor, or TKI, treatment. Rosen said Arcus’ analysis of approximately 120 patients in its late-line casdatifan monotherapy cohort did not show the inverse relationship between prior TKI exposure and efficacy that had been reported in certain belzutifan analyses. Chief Financial Officer Bob Goeltz said sales of renal cell carcinoma drugs in major markets are projected to reach roughly $13 billion by 2030. Arcus estimates the second-line opportunity addressed by PEAK-1 represents more than $2 billion, while the first-line opportunity exceeds $4 billion. The company estimates total peak sales potential for casdatifan at $5 billion to $10 billion. Arcus retains commercial rights to casdatifan outside Japan and certain other Asian territories, where Taiho holds rights. Beyond casdatifan, Arcus said its Phase III PRISM-1 study of quemliclustat plus chemotherapy in first-line pancreatic cancer remains on track for an initial readout in the first half of 2027. The company is also advancing an immunology portfolio. President Juan Jaen said Arcus expects to begin human dosing this month for AB102, an oral MRGPRX2 antagonist being developed for chronic spontaneous urticaria and atopic dermatitis. Pharmacokinetic data from the first healthy-volunteer cohorts are expected in the fourth quarter, followed by a planned proof-of-concept study in chronic spontaneous urticaria in mid-2027. Arcus expects its oral, selective TNF receptor 1 inhibitor to enter the clinic in early 2027. Additional programs targeting CCR6, STAT6, CD89 and CD40 ligand are positioned to deliver IND-ready candidates through the end of 2027, according to management. Cash and investments totaled $775 million as of June 30, down from $876 million at the end of the first quarter. GAAP revenue was $41 million in the second quarter, primarily driven by collaboration agreements. Arcus expects full-year 2026 GAAP revenue of $65 million to $75 million. Research and development expense was $113 million, net of reimbursements, while general and administrative expense was $24 million. Non-cash stock-based compensation totaled $15 million. Goeltz said Arcus expects to end 2026 with approximately $600 million in cash and investments, providing runway into at least the second half of 2028. The company expects research and development spending to decline meaningfully in 2026 and 2027 compared with 2025, reflecting the wind-down of domvanalimab Phase III trials, lower quemliclustat spending and broader expense management. By 2027, Arcus expects more than 80% of its portfolio spending to be directed toward casdatifan development. Arcus Biosciences is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel cancer immunotherapies. The company's research platform centers on modulating tumor microenvironments and immune checkpoints through both small-molecule and antibody-based candidates. Arcus aims to enhance antitumor immune responses by targeting pathways such as the adenosine axis and inhibitory receptors on immune cells. The company's lead clinical programs include etrumadenant, an orally administered A2A adenosine receptor antagonist being evaluated in combination with anti-PD-1 therapy, and domvanalimab, an anti-TIGIT monoclonal antibody. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Arcus Biosciences Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management believes casdatifan has potential to become the 'common denominator' across all lines of clear cell RCC treatment, targeting a $5 to $10 billion peak sales opportunity. The failure of Merck's LITESPARK-012 study is viewed as a strategic opening, leaving casdatifan with no direct HIF-2-alpha inhibitor competition in the frontline setting. Performance attribution for casdatifan's perceived superiority is linked to more robust and durable HIF-2-alpha inhibition, evidenced by deep and sustained erythropoietin suppression. Strategic differentiation in the second line focuses on combining casdatifan with cabozantinib, which management claims has a superior safety profile compared to the belzutifan-lenvatinib combination. Management highlighted that while prior TKI exposure typically degrades outcomes for subsequent TKI therapies, it upregulates HIF-2-alpha activity, potentially making these patients more responsive to casdatifan. The company is utilizing a capital-efficient collaboration model with BMS, Summit, and AVEO to evaluate casdatifan in novel combinations while retaining full program rights. Beyond oncology, Arcus is advancing a parallel portfolio of immunology programs that have been part of the company's core research since its founding., leveraging internal discovery expertise to target validated and emerging pathways like MRGPRX2 and TNF receptor 1. Arcus expects to initiate the Phase III PEAK-20 registrational trial evaluating a casdatifan-based triplet in the frontline setting by the end of 2026. Management anticipates completing enrollment for the Phase III PEAK-1 study in second-line RCC by year-end 2026, supported by high investigator enthusiasm. Financial guidance assumes a year-end cash balance of approximately $600 million, providing a projected operational runway into at least the second half of 2028. A major data event is scheduled for October 2026, which will include holistic readouts from over 200 patients across first, second, and late-line settings. The company expects a steady cadence of immunology INDs through 2027, with 80% of total portfolio spend directed toward casdatifan development by that year. Revenue is expected to decline in future periods due to reduced activity under the Gilead collaboration following the wind-down of the domvanalimab program. Management flagged the 20% primary progression rate of current frontline standard-of-care (ipi-nivo) as a key hurdle they aim to address with casdatifan combinations. The company noted that while overall survival (OS) is not required for U.S. registration, it remains a critical factor for ex-U.S. market access and a key point of differentiation against belzutifan. R&D expenses are projected to decrease in 2026 and 2027 relative to 2025 as legacy Phase III trials wind down and spend management initiatives take effect. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management aims to demonstrate that casdatifan's differentiation from belzutifan translates into superior clinical outcomes, particularly in the $5 billion frontline market. Key metrics will include safety data for the frontline triplet and a look at primary progression rates, which management expects to be lower than historical IO-monotherapy norms. For the second line, management expects the data to suggest a better hazard ratio and potentially a more favorable OS trend compared to the 0.7 HR seen with belzutifan-lenvatinib. Terry Rosen attributed competitor failures to a lack of durable target inhibition, noting that HIF-2-alpha activity increases with TKI treatment while competitor molecules show nominal biomarker effects by 12 weeks. Arcus claims casdatifan maintains robust inhibition beyond one year, which they believe is essential for success in frontline settings where control arm PFS is long (approx. 24 months). Management stated that their late-line monotherapy data did not show the inverse correlation between prior TKI lines and efficacy that was observed with belzutifan. They intend to use the 'CaboPoint' study as a benchmark to illustrate the additive benefit casdatifan provides to cabozantinib across different prior-treatment segments.

Arcus executes on strategy to establish casdatifan as a backbone therapy across each line of treatment for clear cell renal cell carcinoma (ccRCC), including three new clinical trial collaborations that advance distinct casdatifan-based combinations New research published in Nature, evaluating patients with advanced ccRCC who were treated with casdatifan, provided the first data that comprehensively connect clinical outcomes for patients receiving a HIF-2α inhibitor with peripheral biomarker changes and associated tumor biology Multiple ARC-20 data readouts for casdatifan across lines of therapy are expected in the second half of 2026, including initial efficacy data for casdatifan plus zimberelimab in first-line, progression-free survival (PFS) data for casdatifan plus cabozantinib in second-line and overall survival data for casdatifan monotherapy in late-line ccRCC With $775 million in cash, cash equivalents and marketable securities at quarter-end, Arcus is well positioned to advance casdatifan aggressively, with cash runway until at least the second half of 2028 HAYWARD, Calif., August 05, 2026--(BUSINESS WIRE)--Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer and inflammatory and autoimmune diseases, today reported financial results for the second quarter ended June 30, 2026, and provided a pipeline update on its clinical-stage investigational molecules and discovery programs. "Our recent publication in Nature demonstrated our commitment to being the scientific leader in HIF-2α biology and translational medicine. We are leveraging these insights and the differentiated profile of casdatifan compared to that of the competition to ensure that casdatifan becomes the backbone of treatment across every line of therapy in kidney cancer. In the front-line setting especially, we see a clear path to be first-to-market and to provide the best options for physicians and patients," said Terry Rosen, Ph.D., chief executive officer of Arcus. "The ARC-20 platform study and strategic clinical collaborations are enabling us to efficiently pursue an integrated approach across multiple lines of therapy, and we expect this year’s upcoming ARC-20 data readouts in first-, second- and late-line settings to clarify casdatifan’s potential to transform the treatment paradigm for kidney cancer." Casdatifan (HIF-2α inhibitor) Development Strategy: Arcus's development strategy is designed to generate evidence to secure casdatifan as a backbone therapy in ccRCC so that every patient has the opportunity to benefit from casdatifan across each line of therapy over the course of their care. Arcus is executing on this strategy, including embedding casdatifan into the treatment paradigm in combination with the most commonly used dual-immunotherapy regimen in the first-line setting, nivolumab (an anti-PD-1) plus ipilimumab (an anti-CTLA-4) and the standard of care in the second-line setting, cabozantinib. Arcus’s combinations were selected to complement these two core regimens. The holistic strategy, which has the opportunity to provide the first and only HIF-2α inhibitor-based TKI-sparing first-line therapy, provides consecutive casdatifan-containing regimens in the first-, second- and third-line-plus settings highly aligned with a new treatment paradigm offered by the robust HIF-2α inhibitory profile of casdatifan. In this context, Arcus will also begin to evaluate casdatifan plus TKI-containing regimens in first-line and late-line settings, the latter in belzutifan-experienced patients. Arcus’s newly announced clinical collaborations described below support these efforts, enabling the company to evaluate numerous casdatifan-based combinations in parallel. Casdatifan Partnership Updates: Arcus will receive a $15 million milestone payment from Taiho Pharmaceutical in the third quarter, triggered by PEAK-1 enrollment in Japan, under the parties’ option and license agreement. Taiho holds rights to casdatifan in Japan and certain territories in Asia. New Clinical Collaborations: Arcus announced three new clinical collaborations to evaluate casdatifan-based combinations in first-line and late-line ccRCC: Bristol Myers Squibb (BMS): Casdatifan combinations will be added as two new arms of the BMS-sponsored Phase 1/2 ROSETTA RCC-208 study in advanced RCC, evaluating casdatifan in combination with the anti-PD-L1/VEGF-A bispecific antibody pumitamig, which is being jointly developed by BioNTech and BMS. Summit Therapeutics: A new cohort in the ARC-20 platform study in ccRCC will evaluate casdatifan with the PD-1/VEGF bispecific antibody ivonescimab in the first-line setting. AVEO Oncology: A new ARC-20 cohort will evaluate casdatifan with the VEGFR TKI tivozanib in patients previously treated with belzutifan. Arcus has also executed one additional clinical collaboration agreement to evaluate a casdatifan combination with another anti-PD-x/VEGF bispecific antibody in first-line ccRCC, which is expected to initiate in the fourth quarter of 2026. Development Program: First-Line ccRCC: The first-line setting today is divided into immunotherapy (IO/IO) regimens, representing roughly one-third of the market, and IO/TKI regimens, representing roughly two-thirds of the market. Arcus’s casdatifan strategy encompasses both, plus another novel TKI-free combination approach: IO-Experienced (second-line) ccRCC: Enrollment in PEAK-1, the global Phase 3 study evaluating casdatifan plus cabozantinib versus cabozantinib alone in IO-experienced metastatic ccRCC, is accelerating, and Arcus remains on track to complete enrollment by year-end 2026. Arcus is confident PEAK-1 will establish casdatifan plus cabozantinib as the new standard of care in the IO-experienced setting. Late-Line ccRCC: A new randomized ARC-20 cohort will evaluate casdatifan plus tivozanib versus tivozanib alone in patients who received two or more lines of prior therapy, including a belzutifan-containing regimen, which will elucidate the impact of prior HIF-2α inhibitor treatment on casdatifan’s activity. Enrollment in this new ARC-20 cohort is expected to begin in the fourth quarter of 2026. Casdatifan Research Published in Nature: In July, Arcus announced that results from the ARC-20 study evaluating casdatifan monotherapy were published in Nature. This is the first study to comprehensively connect clinical outcomes in patients treated with a HIF-2α inhibitor with peripheral biomarker changes and associated tumor biology. HIF-2α inhibition with casdatifan resulted in deep and sustained suppression of the hormone erythropoietin in blood (serum EPO), which correlated with higher response rates and longer PFS. Planned Data Readouts: Arcus expects multiple data readouts for casdatifan in 2026: In first-line ccRCC, initial data from the ARC-20 cohorts evaluating casdatifan in early-line settings, including early efficacy data for the cohort evaluating casdatifan plus zimberelimab and early safety data for the cohort evaluating casdatifan plus zimberelimab plus ipilimumab in first-line ccRCC. In second-line IO-experienced ccRCC, more mature overall response rate data and initial PFS data, including Kaplan-Meier curve(s), for approximately 45 patients treated in the ARC-20 cohort evaluating casdatifan plus cabozantinib. All patients will have had at least 18 months of follow-up. In late-line ccRCC, updated data from the ARC-20 monotherapy cohorts, including overall survival data. Quemliclustat (small-molecule CD73 inhibitor) The European Medicines Agency granted orphan drug designation in May 2026 to quemliclustat for the treatment of pancreatic cancer, adding to the orphan drug designation received from the U.S. Food and Drug Administration in June 2025. Enrollment was completed in September 2025 for PRISM-1, a Phase 3 trial of quemliclustat combined with gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in first-line metastatic pancreatic ductal adenocarcinoma. Results from this study are expected in the first half of 2027. Immunology Portfolio Arcus is applying its proven expertise developing potent and selective small-molecule drugs to address large markets in immunology, pursuing mechanisms that regulate key cytokines validated by existing biologics and targeting immune cell types that are central to disease but historically understudied. A steady cadence of immunology molecules will be ready for advancement into the clinic, with multiple new clinical candidates expected between 2026 and 2028. AB102 (oral MRGPRX2 antagonist): This month, Arcus expects to initiate a first-in-human healthy volunteer study of AB102, a highly selective oral MRGPRX2 antagonist and potential treatment for atopic dermatitis and chronic spontaneous urticaria. TNF Inhibitor: Arcus has selected a development candidate as an oral small-molecule TNF inhibitor, a potential treatment for rheumatoid arthritis, psoriasis and inflammatory bowel disease, which is expected to enter the clinic in early 2027. Additional Targets: Arcus is advancing additional programs across its immunology portfolio. Arcus’s programs for a small-molecule CCR6 antagonist for psoriasis and inflammatory bowel disease, a STAT6 small molecule program for atopic dermatitis and asthma, a CD89 monoclonal antibody program for the treatment of rheumatoid arthritis, and a CD40L small molecule program for the treatment of multiple sclerosis and systemic lupus erythematosus, are each expected to deliver IND-ready candidates by the end of 2027. Anti-TIGIT Program and Related Partnerships Following the discontinuations of the Arcus and Gilead STAR-221 and STAR-121 studies in upper gastrointestinal cancer and non-small cell lung cancer (NSCLC), respectively, Arcus and AstraZeneca will discontinue the Phase 3 PACIFIC-8 study, evaluating domvanalimab in combination with durvalumab versus durvalumab alone in patients with PD-L1 positive, Stage III unresectable NSCLC. In connection with the wind-down of these Phase 3 trials and resulting streamlined operational relationship with Arcus, Gilead has relinquished its three seats on Arcus’s Board of Directors, effective as of August 5, 2026. Financial Results for Second Quarter 2026: Cash, Cash Equivalents and Marketable Securities were $775 million as of June 30, 2026, compared to $1.0 billion as of December 31, 2025. The decrease during the period is primarily due to the use of cash in our research and development activities. Arcus expects to end 2026 with approximately $600 million in cash. Based on the existing business plan, Arcus believes that its cash, cash equivalents and marketable securities will be sufficient to fund its planned level of operations until at least the second half of 2028. Revenues were $41 million for the second quarter 2026, compared to $160 million for the same period in 2025. The decrease in revenue was primarily driven by the cumulative catch-up from license and development services revenue of $143 million in 2025 relating to pausing future development of etrumadenant and Gilead's related return of its license to the program, partially offset by an increase in access rights revenues recognized in June 2026 related to the expiration of Gilead's option rights and increased revenues related to programs optioned under the Taiho Collaboration Agreement. Arcus expects to recognize GAAP revenue of between $65 million and $75 million for the full year 2026. Research and Development (R&D) Expenses were $113 million for the second quarter 2026, compared to $139 million for the same period in 2025. The decrease was due to (i) late-stage development activities decreasing primarily due to the wind down of the domvanalimab program and the completion of enrollment of PRISM-1, partially offset by increasing activities in our Phase 3 studies for casdatifan; (ii) early-stage development activities decreasing primarily due to the wind down of Phase 2 studies related to domvanalimab and lower Phase 2 study costs for casdatifan; partially offset by (iii) partnership reimbursements decreasing, primarily due to Gilead-led activities representing a larger share of total joint development costs and a shift towards programs fully funded by us. Non-cash stock-based compensation expense was $9 million for the second quarter 2026, compared to $8 million for the same period in 2025. For the second quarters 2026 and 2025, Arcus recognized gross reimbursements of $17 million and $33 million, respectively, for shared expenses from its collaborations. R&D expenses by quarter may fluctuate due to the timing of clinical manufacturing and standard-of-care therapeutic purchases with a corresponding impact on reimbursements.Arcus expects R&D expenses to continue to decline in the near-term relative to what we have incurred as we wind down studies for domvanalimab. Streamlining initiatives Arcus has undertaken across its R&D operations in connection with this wind-down, together with efficiencies the company is pursuing across its programs outside the Gilead collaboration, are expected to further reduce costs. These decreases will be partially offset by increased investment in the development of casdatifan and advancement of our small-molecule immunology programs. General and Administrative (G&A) Expenses were $24 million for the second quarter 2026, compared to $29 million for the same period in 2025. The decrease was primarily due to streamlining initiatives Arcus has undertaken across its operations. Non-cash stock-based compensation expense was $6 million for the second quarter 2026, compared to $7 million for the same period in 2025. Net Income (Loss) was $91 million net loss for the second quarter 2026, compared to $— million for the same period in 2025. Conference Call Information Arcus will host a conference call and webcast today, August 5, 2026, at 1:30 PM PT/4:30 PM ET to discuss its second-quarter 2026 financial results and pipeline updates. To access the call, please dial +1 (585) 542-9983 (local) or +1 (833) 461-5787 (toll-free), using Meeting ID: 156828313. Participants may also register for the call online using the following link: https://events.q4inc.com/attendee/156828313. To access the live webcast and accompanying slide presentation, please visit the "Investors & Media" section of the Arcus Biosciences website at www.arcusbio.com. A replay of the webcast will be available following the live event. About Arcus Biosciences Arcus Biosciences is a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules for the treatment of cancer and inflammatory and autoimmune diseases. In partnership with industry collaborators, patients and physicians around the world, Arcus is expediting the development of its late-stage portfolio of first- and/or best-in-class medicines against well-characterized biological targets and pathways and studying novel, biology-driven combinations that have the potential to help people with cancer live longer. Founded in 2015, the company has advanced multiple investigational medicines into registrational clinical trials including casdatifan, a HIF-2α inhibitor for clear cell renal cell carcinoma, and quemliclustat, a small-molecule CD73 inhibitor for pancreatic cancer. For more information about Arcus Biosciences’ clinical and preclinical programs, please visit www.arcusbio.com. Forward-Looking Statements This press release contains forward-looking statements. All statements regarding events or results to occur in the future contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Arcus’s development strategies and opportunities, including the potential for casdatifan to become the backbone of treatment across every line of therapy in kidney cancer; the timing and achievement of milestones, including the completion of enrollment in PEAK-1, the initiation of PEAK-20, and the progress and cadence of additional molecules from Arcus’s immunology programs to IND-readiness; the timing of future data readouts and presentations; and expectations regarding the decline in its operating expenses, year-end cash balance and its anticipated cash runway. All forward-looking statements involve known and unknown risks and uncertainties and other important factors that may cause Arcus’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, risks associated with: Arcus’s ability to manage the breadth and pace of its development plans for casdatifan; the unexpected emergence of adverse events or other undesirable side effects with casdatifan, alone or in combination with other agents; difficulties or delays in initiating, enrolling and completing clinical trials, including due to regulatory review, site activation, patient identification or enrollment, or manufacturing and supply constraints of investigational or standard-of-care products for such clinical trials; interim data not being guarantees of future data or replicated in other studies evaluating casdatifan, including the Phase 3 PEAK-1 study; adverse data from toxicology studies that affect Arcus’s ability to advance development candidates from its immunology programs; the risk that the preclinical profiles of Arcus’s development candidates may not translate in clinical trials; changes in the competitive landscape for Arcus’s programs; the inherent uncertainty associated with pharmaceutical product development and clinical trials; and risks associated with Arcus’s ability to accurately forecast financial results and changes in Arcus’s operating plans. Risks and uncertainties facing Arcus are described more fully in the "Risk Factors" section of Arcus’s most recent periodic report filed with the U.S. Securities and Exchange Commission (SEC) and in other filings that Arcus makes with the SEC from time to time, which are available at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Arcus disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this press release, except to the extent required by law. The Arcus name and logo are trademarks of Arcus Biosciences, Inc. All other trademarks belong to their respective owners. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805395862/en/ Contacts Investor Inquiries: Pia EavesVP of Investor Relations & Strategy(617) [email protected] Media Inquiries: Holli KolkeyVP of Corporate Affairs(650) [email protected] Maryam BassiriDirector of Corporate Affairs(510) [email protected]

This article first appeared on GuruFocus. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Summit Therapeutics Inc (NASDAQ:SMMT) reported a strong cash position of approximately $690.7 million at the end of Q2 2026, an increase from the previous quarter. Ivanizumab, the company's lead investigational asset, has shown positive data in four Phase III clinical studies, leading to two approvals in China and a pending BLA with the U.S. FDA. The HARMONY trial demonstrated a consistent overall survival benefit across different geographic regions, indicating the potential for global applicability. Summit Therapeutics Inc (NASDAQ:SMMT) has established collaborations with major pharmaceutical companies like GSK and Arcus Biosciences to explore novel combinations with Ivanizumab. The company has initiated over 50 clinical trials for Ivanizumab, covering a wide range of solid tumors, indicating a robust and diverse pipeline. The company reported an increase in GAAP operating expenses to $220.5 million in Q2 2026, primarily due to higher R&D expenses. Despite positive trial results, Ivanizumab has not yet achieved statistically significant overall survival benefits in some settings, which is necessary for FDA approval. The enrollment for some trials, such as HARMONY 3, was back-end loaded, potentially affecting the follow-up time and interim analysis results. There is a risk of competition from other emerging therapies like amivantamab and Trope 2 ADCs, which could impact Ivanizumab's market positioning. The company has no debt, but it relies heavily on ATM facilities for financing, which could pose risks if market conditions change. Warning! GuruFocus has detected 2 Warning Signs with SMMT. Is SMMT fairly valued? Test your thesis with our free DCF calculator. Q: Could you speak to the translatability of the recent overall survival results from the second-line EGFR study to other larger markets, specifically frontline non-small cell lung cancer? A: Dave Yankars, Chief Business and Strategy Officer, explained that maturity in follow-up time is critical for ivanescimab, a next-generation immunotherapy. The consistent magnitude of benefit observed with meaningful follow-up time in the recent study suggests that similar clinically meaningful results could be achieved in other frontline studies with appropriate follow-up times. Q: Can you provide more granularity on the timing for the final PFS and early interim OS look for Harmony 3 in the second half of this year? A: Dave Yankars noted that event rates have slowed down, and while they still expect to reach the number of events needed for the PFS analysis in the second half of this year, it is likely towards the middle to back end of 2026. The disclosure plan is not yet determined, but they expect to see a meaningful overall survival trend. Q: With the Harmony 3 survival analysis, will we get an overall survival hazard ratio at the interim analysis in the first half of next year? A: Dave Yankars confirmed that the first half of 2027 will be the first analysis independent of any pre-planned PFS analysis. The median follow-up is expected to be consistent with previous studies, providing a meaningful look at overall survival. Q: How do you think about the level of follow-up in the context of the interim OS readout for Harmony 3, given the separate squamous and non-squamous cohorts? A: Dave Yankars explained that the interim OS analysis in the second half of this year will support the PFS analysis. The first half of 2027 will provide a powered interim look at OS, with median follow-up time consistent with previous studies, allowing for a clearer picture of overall survival. Q: Could the updated Harmony data result in a major amendment and potential delay of the PDUFA date? How do you view the competitive positioning of ivanescimab? A: Dave Yankars stated that while the updated data has been submitted to the FDA, any decision on the PDUFA date or an ODAC panel is up to the agency. Regarding competitive positioning, ivanescimab offers a manageable safety profile and provides a different mechanism of action compared to other agents, offering physicians and patients more treatment options. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

As you might know, Arcus Biosciences, Inc. (NYSE:RCUS) last week released its latest quarterly, and things did not turn out so great for shareholders. It was not a great result overall, as revenues of US$17m fell 42% short of analyst expectations. Unsurprisingly, statutory losses ended up being15% larger than the analysts expected, at US$1.02 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Taking into account the latest results, the eleven analysts covering Arcus Biosciences provided consensus estimates of US$87.6m revenue in 2026, which would reflect a sizeable 63% decline over the past 12 months. Per-share losses are expected to explode, reaching US$3.54 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$91.2m and losses of US$3.84 per share in 2026. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year. See our latest analysis for Arcus Biosciences The consensus price target was broadly unchanged at US$34.30, implying that the business is performing roughly in line with expectations, despite adjustments to both revenue and earnings estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Arcus Biosciences, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$20.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business. Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 73% annualised decline to the end of 2026. That is a notable change from historical growth of 3.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 21% per year. It's pretty clear that Arcus Biosciences' revenues are expected to perform substantially worse than the wider industry. The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Arcus Biosciences going out to 2028, and you can see them free on our platform here.. We don't want to rain on the parade too much, but we did also find 3 warning signs for Arcus Biosciences (1 is concerning!) that you need to be mindful of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Management is transitioning Arcus into a 'new era' characterized by full ownership of the lead asset, cascadifan, and a strategic pivot toward wholly owned immunology and inflammation (I&I) programs. The company attributes cascadifan's superior clinical performance to better molecular properties and a more robust pharmacodynamic profile compared to the competitor belzutafan, specifically citing sustained target inhibition. Management believes the recent failure of Merck's LITESPARK-012 study validates their thesis that belzutafan's efficacy diminishes over time, creating a clear opening for cascadifan to become the first-line standard of care. Strategic positioning is focused on establishing cascadifan as a 'backbone therapy' across all lines of renal cell carcinoma (RCC) to maximize patient lifetime value and duration of treatment. The company is leveraging its small-molecule discovery engine to develop a pipeline of I&I candidates (CCR6, CD89, CD40L) that offer high strategic optionality and capital-efficient proof-of-concept opportunities. Operational efficiency has been prioritized through a 10% headcount reduction and a reduction in domvanalimab-related investment following the discontinuation of the STAR-121 study. The company expects to complete enrollment for the Phase 3 PEEK-1 study in second-line RCC by year-end 2026, targeting a $2 billion-plus market opportunity. Management plans to initiate a Phase 3 frontline RCC study by late 2026, assuming that a cascadifan plus IO/IO regimen can capture over 50% of the market share. Financial guidance assumes a cash runway into 2028, with R&D spend expected to decline in 2026 and 2027 as legacy oncology programs wind down and focus shifts to cascadifan. By 2027, management anticipates that more than 80% of portfolio spend will be dedicated to cascadifan development, reflecting a concentrated capital allocation strategy. The I&I portfolio is expected to reach clinical milestones rapidly, with AB-102 entering the clinic in 2026 and PK data anticipated shortly thereafter. The Phase 3 STAR-121 study for domvanalimab was discontinued due to futility, though management noted zimberelimab's performance was consistent with other anti-PD-1 therapies. Management highlighted a $5 billion to $10 billion peak sales opportunity for cascadifan, predicated on its potential to extend the duration of treatment beyond current standards. The company recorded nonrecurring workforce costs in Q1 2026 related to the 10% headcount reduction aimed at lowering the ongoing cost structure. Arcus retains full commercial rights to cascadifan in all major markets except Japan and certain Southeast Asian territories held by Taiho. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management argues that competitor failures resulted from a 'diminishing effect' of their HIF-2 inhibitor over time combined with high toxicity from specific TKI partners. Arcus intends to use a TKI with a more favorable safety profile and believes cascadifan's durable pharmacodynamic effect will maintain a positive hazard ratio. Management is deprioritizing the adjuvant setting because the market opportunity is smaller and the clinical bar to add therapy on top of standard care is perceived as too high. Resources are being diverted to first-, second-, and third-line settings where the duration of therapy and patient need are greater. Management believes they can overcome the preference for TKIs by proving that cascadifan plus IO/IO can match TKI primary progression rates (currently 7% in early data). The strategy relies on convincing clinicians that they can achieve rapid tumor control without the long-term toxicity associated with TKIs. The plan involves an accelerated healthy volunteer study to establish PK, followed by rapid mechanistic confirmation and a Phase 2 study in chronic spontaneous urticaria. Management is also exploring allergic asthma as a secondary indication to demonstrate the broad value of the MRGPRX2 mechanism. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Arcus outlines development strategy to establish casdatifan as a backbone therapy across each line of treatment for clear cell renal cell carcinoma (ccRCC), including the potential to become the first HIF-2a inhibitor-based tyrosine kinase inhibitor (TKI)-free regimen in the first-line (1L) setting Phase 3 PEAK-1 study is enrolling in immunotherapy (IO)-experienced patients with ccRCC, with enrollment completion and the initiation of a 1L Phase 3 study both expected by year-end 2026 Arcus selected its first inflammation program clinical candidate AB102, an MRGPRX2 antagonist, which is expected to enter the clinic in the third quarter of 2026; its preclinical profile will be presented in an oral presentation at the Society for Investigative Dermatology Annual Meeting in May With $876 million in cash, cash equivalents and marketable securities at quarter-end, Arcus is well positioned to advance casdatifan aggressively, with cash runway until at least the second half of 2028 HAYWARD, Calif., May 05, 2026--(BUSINESS WIRE)--Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer and inflammatory and autoimmune diseases, today reported financial results for the first quarter ended March 31, 2026 and provided a pipeline update on its clinical-stage investigational molecules and discovery programs. "Arcus is entering a new era, with a clear path for casdatifan to be both first and best in the first-line setting, and a portfolio of wholly owned molecules for inflammation and immunology that provide a new strategic optionality as they move into and through development," said Terry Rosen, Ph.D., chief executive officer of Arcus. "Our highest priority is to establish casdatifan as a foundational standard of care in kidney cancer so that patients have the opportunity to benefit from casdatifan-based regimens across lines of treatment." Arcus is focused on completing enrollment for PEAK-1 and initiating a Phase 3 study in the 1L setting, where casdatifan has the potential to become the first HIF-2a inhibitor-based, TKI-free option, by year-end 2026. Casdatifan (HIF-2a inhibitor) Casdatifan Development Program: Arcus’s development strategy is designed to generate evidence to secure casdatifan as a backbone therapy in ccRCC so that every patient has the opportunity to benefit from casdatifan across each line of therapy over the course of their care. The company is aggressively executing on a holistic strategy to embed casdatifan into the treatment paradigm, including in combination with the most commonly used regimen in the 1L setting, anti-PD-1 plus anti-CTLA-4. Arcus is now enrolling a cohort in the Phase 1/1b ARC-20 study to generate the dataset that will support the initiation of the corresponding Phase 3 study at year-end 2026. Arcus’s choice of combination partners has been designed to complement this casdatifan-IO regimen, which has the opportunity to be the first and only such HIF-2a inhibitor-based TKI-sparing 1L therapy, with consecutive treatments with casdatifan-containing regimens in first-, second- and third-line-plus settings. In this context, Arcus will also begin to evaluate casdatifan plus TKI-containing regimens in 1L and late-line settings, the latter in both HIF-2a inhibitor-experienced and HIF-2a inhibitor-naive patients. IO-experienced ccRCC: Enrollment in PEAK-1, the global Phase 3 study evaluating casdatifan plus cabozantinib versus cabozantinib in IO-experienced metastatic ccRCC, is accelerating, and Arcus is on track to complete enrollment by year-end 2026. 1L ccRCC: Arcus has been focused on the evaluation of casdatifan-based TKI-free regimens, which have demonstrated a consistently low rate of primary progression across all cohorts and settings evaluated to date. Most notably, casdatifan plus zimberelimab (anti-PD-1) showed a primary progression rate of 7% (2 of 30 patients), comparing quite favorably to published rates observed with anti-PD-1 monotherapy or ipilimumab (anti-CTLA-4) plus nivolumab (anti-PD-1) in the 1L setting. This ARC-20 cohort is fully enrolled. A cohort evaluating casdatifan plus zimberelimab and ipilimumab in ARC-20 is currently enrolling, with the purpose of supporting Arcus’s first Phase 3 study in the 1L setting. Planned Data Readouts: Arcus expects to have multiple data readouts for casdatifan in 2026: More mature overall response rate data and initial progression-free survival data for approximately 45 patients treated in the ARC-20 cohort evaluating casdatifan plus cabozantinib in the IO-experienced setting will be presented at an investor event or at a medical conference. All patients will have had at least 12 months of follow-up. Initial data from the ARC-20 cohorts evaluating casdatifan in early-line settings, including the cohort evaluating casdatifan plus zimberelimab in 1L ccRCC. Updated data from ARC-20 late-line monotherapy cohorts including overall survival (OS) data. Quemliclustat (small-molecule CD73 inhibitor) Enrollment was completed for PRISM-1, a Phase 3 trial of quemliclustat combined with gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in 1L metastatic pancreatic ductal adenocarcinoma, in September 2025. Results from this study are expected in the first half of 2027. Domvanalimab (Fc-silent anti-TIGIT antibody) plus Zimberelimab (anti-PD-1 antibody) Status Update: In April 2026, Arcus announced the discontinuation of the Phase 3 STAR-121 study evaluating domvanalimab plus zimberelimab and chemotherapy versus pembrolizumab plus chemotherapy as a 1L treatment for metastatic non-small cell lung cancer (NSCLC), based on the recommendation from the Independent Data Monitoring Committee following its review of data from a pre-planned futility analysis. At the futility analysis, the domvanalimab-based combination did not improve OS relative to that observed with pembrolizumab plus chemotherapy. STAR-121, along with the Phase 2 EDGE-Lung study, will be discontinued. STAR-121 also evaluated zimberelimab plus chemotherapy as an exploratory endpoint. Zimberelimab plus chemotherapy performed consistently with respect to OS as compared to pembrolizumab plus chemotherapy. Emerging I&I Portfolio AB102, a highly selective, oral MRGPRX2 antagonist and potential best-in-class treatment for atopic dermatitis and chronic spontaneous urticaria, is expected to enter the clinic in the third quarter of 2026. In May, Arcus will present the preclinical profile for AB102 in an oral presentation at the Society for Investigative Dermatology Annual Meeting, highlighting its ability to fully block MRGPRX2-dependent degranulation and transcriptional activation in LAD2 and primary skin mast cells and its inhibition of all common human MRGPRX2 variants. Clinical development will begin with a first-in-human healthy volunteer study followed by a proof-of-concept study, with potential for proof-of-concept data in early 2027. Arcus has selected a development candidate for an oral small-molecule TNF inhibitor, a potential treatment for rheumatoid arthritis, psoriasis and inflammatory bowel disease, and expects it to enter the clinic in early 2027. The molecule is designed to selectively block TNFR1 signaling. It is believed that this could lead to better safety and efficacy than those of approved anti-TNF antibodies that block both TNFR1 and TNFR2 signaling, the latter of which can paradoxically lead to an inflammatory response in some patients. Arcus has also selected an orally active small-molecule antagonist of CCR6 as a development candidate for potential treatment of psoriasis and expects it to enter the clinic in the first half of 2027. Financial Results for First Quarter 2026: Cash, Cash Equivalents and Marketable Securities were $876 million as of March 31, 2026, compared to $1.0 billion as of December 31, 2025. The decrease during the period is primarily due to the use of cash in our research and development activities. Based on our existing business plan, we believe that our cash, cash equivalents and marketable securities will be sufficient to fund our planned level of operations until at least the second half of 2028. We also expect to end 2026 with approximately $600 million in cash. Revenues were $17 million for the first quarter 2026, compared to $28 million for the same period in 2025. The decrease in revenue was primarily driven by lower development services revenue from the Gilead collaboration. Revenues reflect the recognition of payments previously received from our collaboration partners as we satisfy underlying performance obligations over time, and fluctuate each period based on our estimated progress toward completing those obligations rather than on the timing of cash receipts. Arcus expects to recognize GAAP revenue of between $50 million and $65 million for the full year 2026. Research and Development (R&D) Expenses were flat for the first quarter 2026, with (i) late-stage development programs increasing due to our investment in casdatifan and our Phase 3 PRISM-1 study for quemliclustat, partially offset by the wind-down of studies related to domvanalimab, (ii) early-stage development activities decreasing primarily due to the absence of prior-year Phase 2 study costs for domvanalimab, and (iii) partnership reimbursements decreasing, primarily due to Gilead-led activities representing a larger share of total joint development costs and a shift towards programs fully funded by us. Non-cash stock-based compensation expense was $9 million for the first quarter 2026, compared to $8 million for the same period in 2025. For the first quarters 2026 and 2025, Arcus recognized gross reimbursements of $19 million and $38 million, respectively, for shared expenses from its collaborations. R&D expenses by quarter may fluctuate due to the timing of clinical manufacturing and standard-of-care therapeutic purchases with a corresponding impact on reimbursements. We expect R&D expenses to decline in the near term relative to what we have incurred as we wind down studies for domvanalimab. Streamlining initiatives we have undertaken across our R&D operations in connection with this wind-down, together with efficiencies we are pursuing across our programs outside the Gilead collaboration, are expected to further reduce costs. These decreases will be partially offset by our increased investment in the development of casdatifan and advancement of our small-molecule inflammation and immunology programs. General and Administrative (G&A) Expenses were $29 million for the first quarter 2026, compared to $28 million for the same period in 2025. The increase was primarily due to an increase in non-cash stock-based compensation, which was primarily attributable to a separation agreement with an officer. Non-cash stock-based compensation expense was $10 million for the first quarter 2026, compared to $8 million for the same period in 2025. Net Loss was $128 million for the first quarter 2026, compared to $112 million for the same period in 2025. Conference Call Information: Arcus will host a conference call and webcast today, May 5, 2026, at 1:30 PM PT/4:30 PM ET to discuss its first-quarter 2026 financial results and pipeline updates. To access the call, please dial +1 (585) 542-9983 (local) or +1 (833) 461-5787 (toll-free), using Meeting ID: 304747896. Participants may also register for the call online using the following link: https://events.q4inc.com/attendee/304747896. To access the live webcast and accompanying slide presentation, please visit the "Investors & Media" section of the Arcus Biosciences website at www.arcusbio.com. A replay of the webcast will be available following the live event. About Arcus Biosciences Arcus Biosciences is a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules for the treatment of cancer and inflammatory and autoimmune diseases. In partnership with industry collaborators, patients and physicians around the world, Arcus is expediting the development of its late-stage portfolio of first- and/or best-in-class medicines against well-characterized biological targets and pathways and studying novel, biology-driven combinations that have the potential to help people with cancer live longer. Founded in 2015, the company has advanced multiple investigational medicines into registrational clinical trials including casdatifan, a HIF-2a inhibitor for clear cell renal cell carcinoma, and quemliclustat, a small-molecule CD73 inhibitor for pancreatic cancer. For more information about Arcus Biosciences’ clinical and preclinical programs, please visit www.arcusbio.com. Forward-Looking Statements This press release contains forward-looking statements. All statements regarding events or results to occur in the future contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Arcus’s development strategies and opportunities, including the potential for casdatifan to become the first and only HIF-2a inhibitor-based TKI-free regimen in the first line setting and plans to secure casdatifan as the backbone therapy in ccRCC; the timing and achievement of milestones, including the completion of enrollment in PEAK-1, the initiation of the next Phase 3 study for casdatifan, and the advancement of AB102 into the clinic; the progression into the clinic of additional molecules from Arcus’s inflammation and immunology programs; the timing of future data presentations; and expectations regarding the decline in its operating expenses, year-end cash balance and its anticipated cash runway. All forward-looking statements involve known and unknown risks and uncertainties and other important factors that may cause Arcus’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, risks associated with: Arcus’s ability to manage the breadth and pace of its development plans for casdatifan; the unexpected emergence of adverse events or other undesirable side effects with casdatifan; difficulties or delays in initiating, enrolling and completing clinical trials, including due to regulatory review, site activation, patient identification or enrollment, or manufacturing and supply constraints of investigational or standard-of-care products for such clinical trials; interim data not being guarantees of future data or replicated in other studies evaluating casdatifan, including the Phase 3 PEAK-1 study; adverse data from toxicology studies that affect Arcus’s ability to advance development candidates from its immunology and inflammation programs; the risk that the preclinical profiles of Arcus’s development candidates may not translate in clinical trials; changes in the competitive landscape for Arcus’s programs; the inherent uncertainty associated with pharmaceutical product development and clinical trials; and risks associated with Arcus’s ability to accurately forecast financial results and changes in Arcus’s operating plans. Risks and uncertainties facing Arcus are described more fully in the "Risk Factors" section of Arcus’s most recent periodic report filed with the U.S. Securities and Exchange Commission (SEC) and in other filings that Arcus makes with the SEC from time to time, which are available at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Arcus disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this press release, except to the extent required by law. The Arcus name and logo are trademarks of Arcus Biosciences, Inc. All other trademarks belong to their respective owners. View source version on businesswire.com: https://www.businesswire.com/news/home/20260505861210/en/ Contacts Investor & Media Inquiries: Holli Kolkey VP of Corporate Affairs (650) 922-1269 [email protected] Maryam Bassiri Director of Corporate Affairs (510) 406-8520 [email protected]

Image source: The Motley Fool. Tuesday, May 5, 2026 at 4:30 p.m. ET Chief Executive Officer — Terry Rosen President — Juan Jaen Chief Financial Officer — Robert Goeltz Chief Medical Officer — Richard Markus Terry Rosen: Thanks very much, Holli, and thanks, everyone, for joining us this afternoon. We are starting a new era for Arcus Biosciences, Inc., with full ownership of our lead program, casdatafan, our Phase 3 kidney cancer study, PEEK-1, enrolling rapidly, a clear path to win in the frontline, and the next generation of molecules for inflammation and immunology that can be advanced rapidly through development, with strategic optionality imparted by a rich portfolio of wholly owned molecules and programs. We are at an inflection in value creation for patients and shareholders that will continue to accelerate over the next 12 to 18 months. Arcus Biosciences, Inc. has proven to be a highly productive company creating and advancing a steady stream of potential best-in-class molecules for patients with cancer and inflammatory and autoimmune diseases. We believe that discovery is not a commodity, and we have built exceptional small-molecule medicinal chemistry and drug discovery capabilities. Our scientists utilize proven biology to create unmatched medicines designed to raise the standard of care. Since its inception, Arcus Biosciences, Inc. has advanced molecules from program initiation to IND filing in as short as 18 months, and through an accelerated platform and signal-seeking study, moved from proof-of-concept Phase 1 studies to randomized Phase 2 and registrational Phase 3 trials in just a few years. Today, the company is laser focused on cascadifan, which represents a market opportunity of more than $5 billion in kidney cancer alone. I want to stress that cascadifan’s efficacy advantages are underpinned by much better molecular properties and a superior pharmacodynamic profile. This profile reflects the key capabilities in Arcus Biosciences, Inc. that I described earlier. The simple fact is that cascadifan hits its target much harder in a more robust and sustained way than belzutafan, as illustrated on slide 6. This is a point we have emphasized since the data first emerged. These data are clear and they are striking. We believe this fundamental differentiation between cascadifan and belzutafan, and the limitations of belzutafan’s pharmacodynamic profile and durability of effect, are undoubtedly contributors to, if not the principal driver of, the outcome of LITESPARK-012. And the pharmacodynamic advantages of cascadifan will continue to result in improved clinical outcomes across the lines of therapy; I want to emphasize this point. This dramatic difference in profile has been evidenced since late last year. It is not at all opaque. Its manifestations in clinical outcomes are dramatic and are at the core of our differentiation. No results to date are surprising. Our top priorities for 2026 are clear. One, complete enrollment for PEEK-1, our second-line Phase 3 study, and two, initiate a Phase 3 study in the frontline patient population. With the recent outcome of LITESPARK-012, cascadifan has a clear path to consolidate a fragmented frontline setting as the first HIF-2α inhibitor in this setting. Let me spend a moment on why cascadifan is at the center of everything we do. We believe cascadifan can transform the treatment paradigm in clear cell renal cell carcinoma, and our development strategy is designed to generate evidence to secure cascadifan as a backbone therapy so that every patient has the opportunity to benefit from cascadifan across each line of therapy. PEEK-1 represents our fast-to-market strategy. This is designed to build on the clinician enthusiasm we have seen for cascadifan as an investigational agent and to generate the data to support the approval of a foundational treatment for clear cell RCC as rapidly as possible. Enrollment in PEEK-1 is accelerating, and we are on track to complete enrollment by year-end 2026. We are confident that PEEK-1 will establish cascadifan plus cabo as the new standard of care in the IO-experienced setting. The peak sales opportunity for cascadifan in this setting alone is more than $2 billion. At the same time, we are aggressively building a holistic strategy to embed cascadifan across the treatment paradigm. We have been making tremendous progress in the frontline setting with multiple IO combinations now enrolling in ARC-20 and generating data in support of our first-line strategy. These approaches offer the greatest potential for long-term survival for patients. One of our key objectives today is to make very clear our integrated development strategy for cascadifan. It is actually quite straightforward, and here is how we believe things will play out. In the first line, our bedrock therapy will be cascadifan, ipi, and anti-PD-1. We believe that we can drive the approximately 35% share of ipi/nivo to a regimen with greater than 50% of the important first-line market. While the IO regimen of ipi/nivo is the dominant therapy today, there is a segment of physicians that is always going to want to reach for a TKI, particularly for patients with a fast-growing, bulky tumor. Therefore, we will also be developing a cascadifan combination inclusive of a TKI, a TKI with a well-established track record of both efficacy and safety that will allow the patient to have cascadifan plus cabo as a subsequent regimen. Our second-line treatment, now enrolling as the registrational trial PEEK-1, will be cascadifan plus cabo, building on the standard of care in this line, cabozantinib monotherapy. Finally, we will have a third-line-plus regimen, cascadifan with another well-established TKI, and we will be investigating this regimen in both belzutafan-naive and belzutafan-experienced patients. We think this is a very important and, frankly, very cool study. We also plan to explore novel cascadifan combinations in HCC, liver cancer. I would like to emphasize that all of the clinical development plans discussed today are accounted for within our existing budget and have no impact on the guidance and runway that we have provided. We now control, in all respects, our early-stage pipeline, including our CCR6, CD89, and CD40 ligand programs, all of which are expected to report IND candidates in the next 6 to 18 months. So, while we focus our resources—capital, human, and otherwise—on the late-stage development of cascadifan, the follow-on programs in our pipeline are early but also with clear, early, and capital-efficient clinical proof-of-concept opportunity and huge commercial potential. Therefore, we anticipate low spend and short timelines to get to proof of concept that will drive disproportionate value creation. Juan will discuss these programs in more detail later on in this call. If you want to walk away with just one thing from today, it is that Arcus Biosciences, Inc. has complete control of its destiny. The core asset of the company is cascadifan. We have the strategy, data, and resources to transform the treatment of clear cell RCC and create the $5 billion-plus drug. Robert will further elaborate on the enormous commercial opportunity here. We also continue to leverage our demonstrated competitive advantage in small-molecule drug discovery—an increasingly scarce capability—to generate wholly owned and unique development candidates, advancement of which further enhances our strategic optionality. With that, I would like to turn the call over to Richard to discuss our clinical programs. Thanks, Terry. I would like to start with cascadifan. Richard Markus: As Terry described, our development plan is designed to establish cascadifan as a foundational standard of care in clear cell RCC so that all patients have the opportunity to benefit from treatment with a cascadifan-based regimen across multiple lines of therapy. At ASCO GU this year, we presented updated ORR and PFS from our four late-line monotherapy cohorts of ARC-20. As you can see here, the efficacy data continued to improve with longer follow-up at each data presentation. Moving to slide 12, we show the ORRs for the 100 mg QD cohort, which is the dose and formulation being used in our Phase 3 studies; the confirmed ORR increased from 35% at the August data cut to 45%. A 45% ORR in this late-line patient population is rather remarkable. It is twice that observed with belzutafan in LITESPARK-005, or any study in this patient population. Similarly, the confirmed ORR in the pooled analysis improved from 31% to 35%, well above the range of ORRs that have been observed with belzutafan. On slide 13, we show the Kaplan-Meier curve for the 100 mg cohort. As you can see here, the 100 mg cohort shows an impressive median PFS of 15.1 months after 17.9 months of median follow-up. On the next slide, we show the latest Kaplan-Meier curve for the pooled analysis. The median PFS remained at 12.2 months. Overall, we are seeing PFS that is two to three times longer with cascadifan monotherapy than the 5.6 months observed with belzutafan in the same setting. And, as is often discussed, while the median is an important benchmark, it is not the only metric that is important. As you can see here, and perhaps more impressive, is the number of patients still on treatment beyond 18 months and even beyond 24 months. These data clearly support the proposition that cascadifan is the best-in-class HIF-2α inhibitor, and our highest priority now is to maximize the potential of this molecule in ccRCC. Our first registrational trial, which is in the second-line setting, is well underway. Enrollment in the ongoing Phase 3 study, PEEK-1, is accelerating, and we are on track to complete enrollment by year-end. We are confident that PEEK-1 will establish cascadifan plus cabo as the new standard of care in the IO-experienced setting. With a sole primary endpoint of PFS and a 2:1 randomization favoring the experimental arm, and cabo as the control arm, we believe PEEK-1 is optimized for both probability of success and speed to data. I would like to spend some time now on the frontline setting. With the outcome of Merck’s LITESPARK-012 last month, cascadifan has the opportunity to be the first HIF-2α inhibitor option in the frontline setting. Treatment in the frontline is generally bifurcated into IO/IO or a TKI/anti–PD-1 combination. This currently leads to the conceptual trade-off between longer time to response or higher primary progression but with the potential for durable responses and long-term survival with the IO/IO option, or a faster time to response and lower primary progression but with much more treatment-associated toxicity for the TKI/anti–PD-1 options. There is currently no treatment option that has the ability to both rapidly control disease and provide the best chance for long-term survival, while also having a favorable tolerability profile for long-term use. We believe a cascadifan plus IO/IO combination in the frontline setting has the potential to deliver on both of these fronts. We are enrolling several cohorts within the ARC-20 study evaluating cascadifan combinations in the frontline setting. While the data are maturing, primary progressive disease rates have already been shown to be low—just 7%, or 2 out of 30 patients—for the cascadifan plus zimberelimab, our anti–PD-1 cohort. This rate compares favorably to published rates for anti–PD-1 monotherapy or ipi/nivo in the first-line setting, and in fact, it is close to the rate of a TKI-containing regimen but without the need for the TKI. We are also enrolling a cohort evaluating cascadifan plus zimberelimab plus ipi. Emerging data from these cohorts of ARC-20 will inform the first-line registrational strategy, with the goal of finalizing the Phase 3 study protocol and beginning start-up activities by the end of this year. In parallel, we will shortly begin to evaluate additional cascadifan plus TKI–containing regimens in the early- and late-line settings, including in patients with prior belzutafan experience. This effort contemplates the preference and, in fact, the strategic necessity to utilize alternative TKIs as patients advance from one line of therapy to the next. Near-term, we expect to have multiple data readouts for cascadifan in 2026. First, mature ORR data and initial PFS data for approximately 45 patients treated in the ARC-20 cascadifan plus cabo cohort in the IO-experienced setting will be presented at an investor event or at a medical conference, and all patients will have had at least 12 months of follow-up. Second, we will share initial data from the ARC-20 cohorts evaluating cascadifan in early-line settings, including the cohort evaluating cascadifan plus zimberelimab in the first line. We also expect updated data from late-line monotherapy cohorts, including overall survival. Before I hand it over to Juan, I would like to quickly touch on quemliclustat, our small-molecule CD73 inhibitor. CD73 is highly expressed in pancreatic cancer, and high CD73 expression is associated with significantly poor prognosis in several tumor types. In spite of this, as we recently published in Nature Medicine, in our Phase 2 study, patients with higher CD73 or adenosine activity were the ones with longer PFS and OS in response to chemo treatment. Pancreatic cancer is one of the most aggressive cancers, with an average 5-year survival rate of just 13%. In PRISM-1, our Phase 3 study evaluating quemliclustat plus gemcitabine and nab-paclitaxel versus gemcitabine and nab-paclitaxel in the frontline pancreatic setting, we completed enrollment in September 2025. Results from this study are expected in 2027, and if positive, PRISM-1 could represent the first transformative therapy for an all-comer first-line patient population in 30 years. There is no biomarker requirement, and no known resistance mechanism, and data to date have indicated that the regimen was well tolerated. Finally, we recently announced that the Phase 3 STAR-121 study evaluating our anti-TIGIT, domvanalimab, plus zimberelimab and chemotherapy versus pembrolizumab plus chemotherapy as a first-line treatment for metastatic non-small cell lung cancer will be discontinued due to futility. While these are certainly not the results we expected, the study had one important positive outcome. In addition to the assessment of domvanalimab in this trial, STAR-121 also evaluated zimberelimab plus chemo as an exploratory endpoint. Zimberelimab plus chemo performed consistently with respect to overall survival as compared to pembro plus chemo. These data are consistent with what was observed in numerous studies with zimberelimab, and this randomized dataset provides valuable support for the utility of zimberelimab as an anti–PD-1 combination partner for Arcus Biosciences, Inc. and its collaborators. I would now like to turn the call over to Juan to discuss our immunology and inflammation programs. Juan Jaen: Thanks, Richard. Arcus Biosciences, Inc. has an exceptional small-molecule discovery team. That team has demonstrated time and time again the ability to create highly effective drug candidates against difficult targets. We have been utilizing this expertise to create and develop drugs that have the potential to address very large markets in inflammation, allergy, and autoimmune diseases. In-house expertise in immunology has been a core aspect of our discovery group since Arcus Biosciences, Inc.’s founding, having been key to many of our oncology programs. Our team is addressing well understood and validated mechanisms and has implemented a two-pronged strategy in immunology. First, we leverage medicinal chemistry capabilities to design and create small-molecule drugs that regulate key cytokines therapeutically validated by existing biologics. Secondly, we target immune cell types that play key roles in human disease and have been historically understudied, such as mast cells and neutrophils. Our first molecule in the immunology area to enter the clinic will be AB-102, a highly selective, orally bioavailable MRGPRX2 antagonist. In the coming weeks, we will be sharing its preclinical profile in an oral presentation at the Society for Investigative Dermatology. The presentation will highlight the ability of AB-102 to fully block MRGPRX2-dependent activation and degranulation of mast cells. AB-102 inhibits all common human MRGPRX2 variants. We have optimized the potency of AB-102 under physiological conditions, such as in human blood and serum. Due to its potency under these conditions, we believe that AB-102 is a potential best-in-class, once-daily oral treatment for chronic spontaneous urticaria and other atopic conditions such as atopic dermatitis and allergic asthma. It is expected to enter the clinic in 2026, with PK data available shortly thereafter and potential for proof-of-concept data in early 2027. In rapid succession, we have selected an oral, small-molecule TNF inhibitor drug candidate, which is a potential treatment for rheumatoid arthritis, psoriasis, and inflammatory bowel disease, and an orally active, small-molecule CCR6 antagonist candidate as a potential treatment for psoriasis. Both of these molecules are expected to enter the clinic in 2027. We are very excited about the potential for our I&I programs to provide improved options for patients, and we are working to advance these into the clinic as rapidly as possible. I would now like to turn the call over to Robert to discuss the market opportunity for cascadifan and our financial results. Robert Goeltz: Thanks, Juan. Before I get into the quarterly financials, I would like to spend time on the multibillion-dollar market opportunity in RCC for cascadifan. Sales for RCC drugs in just the major markets are anticipated to grow to $13 billion by 2030. Historically, the market has been dominated by two classes of therapy—IO and TKIs. There have been a number of offerings in both classes, which is why the market is fragmented. In contrast, there are only two HIF-2α inhibitors on the horizon, and we believe our data have demonstrated clear advantages over our only competitor. We have a clear path to consolidate the market and entrench cascadifan as the primary backbone therapy. The development plan that Terry and Richard described is designed to accomplish this objective. If we look at the sales for the sole marketed HIF-2α inhibitor, belzutafan, which is currently approved only in late-line clear cell RCC, it is already generating annual run-rate sales of nearly $1 billion—only scratching the surface. With cascadifan, we are also targeting earlier-line settings: the IO-experienced population with PEEK-1 and the IO-naive first-line population with our next pivotal study. These earlier-line settings have larger patient populations and longer durations of therapy, both of which contribute to a much larger market opportunity. Specifically, the PEEK-1 study targets approximately 20 thousand patients in the major markets in the IO-experienced setting. We believe our commercial opportunity here exceeds $2 billion. In the first line, the opportunity is even greater. With the lack of HIF-2α inhibitor competition in the frontline, our goal is to grow the IO/IO share from roughly a third of the market to more than half by adding cascadifan. In fact, our market research indicates that oncologists overwhelmingly prefer the promise of a cascadifan plus IO/IO over a TKI-containing regimen. As Richard mentioned, we also plan to investigate a regimen with IO and TKI in the frontline to address the remainder of the market. We believe the opportunity for cascadifan in the frontline exceeds $4 billion. One point I would really like to emphasize as we think about the commercial opportunity is duration of treatment. We have seen impressive data in late-line monotherapy, with many patients on therapy beyond 18 months. We plan to share updated data later this year. As we think about earlier lines of therapy, we believe there is the potential for meaningful upside resulting from the durability of effect. Conceptually, we think strong HIF-2α inhibition holds the promise of a long-term tail effect. All in, we think cascadifan has a peak sales opportunity of $5 billion to $10 billion. As a reminder, we own all of the commercial rights to cascadifan other than in Japan and certain other Southeast Asian countries held by our partner, Taiho. Now, let us turn to the financials. Arcus Biosciences, Inc. is well positioned to advance its full pipeline with $876 million in cash at the end of the quarter. We have cash runway until at least 2028. We expect to end 2026 with approximately $600 million in cash, indicative of the declining spend we expect over the year. As Terry outlined, Arcus Biosciences, Inc. is entering a new era with more control over our pipeline investments. While we are building a plan to take full advantage of the cascadifan opportunity, we are also sequencing these investments such that any significant growth in overall spend will be largely incurred after a PEEK-1 readout. As a result of the wind-down of domvanalimab, and reduced spend on quemliclustat, together with broader spend management, we expect to significantly reduce our overall R&D spend in 2026 and 2027 compared to 2025. For example, as our late-stage efforts have become focused on cascadifan, we have decreased our headcount by approximately 10%. Let me transition to the financials for the quarter. For our P&L, we recognized GAAP revenue for the first quarter of $17 million. Our revenue continues to be primarily driven by our collaboration agreements. We continue to expect to recognize GAAP revenue of $50 million to $65 million for the full year 2026. Our R&D expenses for the first quarter are stated net of reimbursements and were $122 million and included nonrecurring workforce costs. Our actions to reduce headcount have lowered our ongoing cost structure, which we expect will result in reduced R&D expense in future periods. The discontinuation of STAR-121 and the broader reduction in our domvanalimab-related investment will contribute to a meaningful decrease in R&D expenses as the year goes on. By 2027, we expect more than 80% of our portfolio spend will be directed toward cascadifan development. G&A expenses were $29 million for the first quarter. Total non-cash stock-based compensation was $19 million for the first quarter. 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. Terry Rosen: Thanks, Robert. That was excellent. Let me close by summarizing the key themes for the remainder of 2026. Cascadifan is our number one priority, and this year will be another transformative year for data and, importantly, development as we advance towards commercialization. We expect multiple data sets—cascadifan plus cabo data, initial first-line data, and overall survival data from late-line monotherapy cohorts—all of which will further reinforce cascadifan’s best-in-class profile and support our registrational strategy. PEEK-1 enrollment continues to accelerate, and we are targeting full enrollment by year-end. All of the clinical development plans for cascadifan that were discussed today are accounted for within our existing budgets and have no impact on our guidance or runway. Beyond cascadifan, our PRISM-1 Phase 3 trial for quemliclustat in pancreatic cancer is fully enrolled and on track for readout in 2027. Juan shared the exciting progress on our I&I portfolio, with AB-102 expected to enter the clinic in the third quarter and our TNF inhibitor and CCR6 antagonist following shortly thereafter. With $876 million in cash and investments, and runway into 2028, we are well positioned to execute on all of these priorities and create significant value for patients and shareholders. We are moving into a new era for Arcus Biosciences, Inc., with full ownership of our lead program, cascadifan, and a clear strategy to win and transform the frontline setting, while rapidly advancing the next generation of wholly owned molecules for inflammation and immunology. We have no doubt that we will be generating disproportionate value for patients and shareholders over the coming 12 to 18 months. Thank you all for joining us. We will now open the call for questions. Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Daina Graybosch with Leerink Partners. Daina, your line is now open. Unknown Speaker: David, can you try this today? Daina Graybosch: Specifically on the cascadifan plus TKI frontline combo, we all know Merck failed with that triplet mechanistically with belzutafan/lenvatinib/pembro in LITESPARK-012. We have the press release, but we do not know the detailed data. What could you see in that detailed data that would give you more confidence in cascadifan plus TKI plus IO, and what could you see in the Merck data that would give you less confidence in the TKI combo strategy? Terry Rosen: Thanks, Daina. I think we will see what their data say, but the data that are out there tell us a lot already. If you consider what we discussed at the beginning—that pharmacodynamic difference between cascadifan and belzutafan—not only the depth of response, but particularly the durability, and you think of that as a surrogate for its antitumor activity and a direct measure of its ability to inhibit HIF-2, you can reconcile very easily, even in the absence of the data from the study itself, that if you think about LITESPARK-011 versus LITESPARK-012, the duration of treatment you are talking about—if you think about PFS, roughly for the two different studies—is almost 2x. Belzutafan, as a surrogate for HIF-2 inhibition that directly relates to inhibition of the tumor, is clearly losing that effect with time, and dramatically. On erythropoietin production, on average, you have lost that effect within 9 to 13 weeks. So, in the second-line population, the percentage of time where it is bringing benefit is X, and then in the frontline, it is much less. Then, on top of that, if you think about the regimen, it is a pretty toxic regimen. Even pembro/lenva had about a 37% rate of discontinuation. We know that the triplet was, you know, pretty unfavorable from a patient perspective. So if you think about basically having a diminishing effect of the HIF-2 inhibitor on top of a much longer duration of an arm that has more AEs than the control arm, you are basically paying a price but getting less benefit. It is not surprising that you would end up with a hazard ratio that might not be too favorable. For us, we are going to select a TKI that we think has a very favorable profile relative to the TKIs out there. But the most important feature will be that we have a HIF-2 inhibitor that has its robust effect, and the durability of that effect is essentially the same on day one as it is on day 730. Daina Graybosch: Got it. Thank you very much. Terry Rosen: Thanks, Daina. Operator: Your next question comes from the line of Jonathan Miller with Evercore. Jonathan, your line is now open. Jonathan Miller: Hi, thanks for taking my question, and congrats on all the progress. Looking at a very broad cascadifan development plan with a lot of combinations across first-, second-, and third-line settings, one thing that is notably absent is any approach in the adjuvant setting, which obviously we know Merck is going after. I would love to hear your updated thoughts on adjuvant and why that is missing from the current development plan. And then, related to that, relatively recently you were talking about a more conservative approach to late-stage development for cascadifan—at least with respect to the number of Phase 3 trials you would want to start—and considering partnerships to ameliorate the cost of late-stage development. Obviously, there has been a bit of a shift there. But, Terry and Robert, I heard you say you do not expect to see any impact on runway or the ability to prosecute all these different programs. I would love to get a little bit more granularity on the sequencing that you are talking about and when you would start these TKI-containing and potential novel combo development efforts to enable you to pursue all these different approaches without running up against bandwidth limitations. Thanks. Terry Rosen: Thanks, Jonathan. I will let Robert handle that, and then I may have a few comments to add. Robert Goeltz: In terms of the adjuvant setting, for us, it comes down to two simple things. One is the size of the opportunity, and probably more importantly, the need. When you think about that particular setting, we think that it is around 12 thousand patients or so that get therapy in the adjuvant setting—only the high-risk patients with resection—and their treatment is capped at a year. When you do the math, we think that the opportunity, certainly from a revenue perspective, is smaller than the second line, and probably even smaller than what could be a third-line regimen with an alternate TKI, as we described. The other important part is we have had a chance to talk to physicians after seeing the LITESPARK-012 data, and the bar to add another therapy on top of pembro is considered quite high. In fact, most physicians told us that they would not add belzutafan to the regimen even in light of the LITESPARK-012 data. So we actually think it will be a minority of patients that ultimately will receive belzutafan in that setting. It is prioritization, and frankly, the other settings—first, second, and third line—are higher on the list for us. In terms of the sequencing of the spend, as we highlighted, we have PEEK-1 up and enrolling right now. Our goal is to have the study enrolled by the end of the year. The work towards launching these additional Phase 3 studies would have us in a position to move those studies forward as early as late this year into next year, with, obviously, probably our highest priority being that frontline combination with ipi and anti–PD-1. The other studies will be shortly on the heels. But if you think about the general investment profile for the studies, we will be through the bolus of study start-up for PEEK-1, and the cost profile for PEEK-1 will be starting to decrease as we get into the second half of next year. We think there will be a nice portfolio effect, and when we think about these other studies, the spend really kicks in late 2027 and into 2028. We see a generally steady spend profile through the PEEK-1 readout as we described. Terry Rosen: And, Jonathan, Robert gave you the line of the spend along with the studies, and I will give you a bit more granularity on how we literally see the trials themselves playing out. The first study, obviously, is PEEK-1—that is enrolling. As Robert said, it will be fully enrolled by the end of this year, and then we will be waiting for readout. We are going full speed ahead and expect that ipi/anti–PD-1/cascadifan, as we have been talking about for some time, will be getting up and going by the end of this year. We will see where the TKI-inclusive regimen comes in. Without getting into all the detail now, we will be sorting through whether there are actually two registrational studies or a three-arm study is also a possibility. Finally, in the later-line study that we talk about, we will start off in ARC-20, and as you know, those are relatively small cohorts that enroll very efficiently. Another important point within those studies—and we will get the answers quickly—is that we will be looking at that combination in the third-line-plus, in belzutafan-naive as well as belzutafan-experienced patients. I think that will establish—something we think we know the answer to—but we will have those data even this year. Jonathan Miller: Excellent. Thank you so much. Terry Rosen: Thanks, Jonathan. Operator: Our next question comes from the line of an analyst. Your line is now open. Operator: Lee? Operator: Line is now open. Analyst: Hey, congrats on the progress. One question on the ARC-20 update, especially from the triplet cohort. It sounds like you are enrolling the combination with zimberelimab plus ipi. Can you clarify if we are going to see the initial data from this cohort this year? And what data points would you want to see to enable a Phase 3 frontline trial? Terry Rosen: Thanks. We do think you will get to see—probably in the fall—the initial data from that ipi/anti–PD-1/cascadifan regimen. We will get a sense of the safety data and the rate of primary progression. While there may be some early ORR data, we do not consider that critical. We are most focused on the safety. We will have an agreement with the FDA as to what safety data package they would want to see to enable us to get that Phase 3 up and going by the end of this year. Because that is the first point, but it is also an important point for that regimen, we will see the rate of primary progression. One thing to recognize about that regimen when we think about triplets, doublets, etc., is we have already talked about the rate of primary progression with cascadifan plus anti–PD-1 alone, and those initial data are quite favorable, where we saw only a 7% rate of primary progression. If you think about what the cascadifan/anti–PD-1/ipi regimen is going to look like, you basically get four cycles of ipi at the outset, of course with cascadifan and anti–PD-1, but then the duration and the bulk of your therapy is going to be anti–PD-1 plus cascadifan. So both the efficacy you are seeing with that as well as the safety of that will certainly impact the bulk of the therapy. We are excited about that regimen. We think we are well on track to be able to start the Phase 3 by the end of this year and have a good safety data package, and we do plan to share that externally this year as well. Analyst: Thank you. Robert Goeltz: Thanks, Lee. Operator: Our next question comes from the line of an analyst with Goldman Sachs. Your line is now open. Analyst: Hey, very helpful to see cascadifan’s development laid out across all the different lines of therapy. A couple of questions from me. Looking at the LITESPARK-012 failure in both triplets and the VOCAF discontinuation by AZ, and then all the frontline therapy—doublets or monotherapy—so far, what is your confidence that a cascadifan triplet of any kind, either with IO/IO or IO/TKI, could be safe enough to succeed in 1L? What do you think is the safety bar for 1L? Do those triplets have to show comparable safety profiles to IO/IO or IO/TKI for them to work? Terry Rosen: We feel very confident, based upon what we already know about our molecules, with triplets—whether it is a triplet inclusive of a TKI or a triplet with ipi and anti–PD-1. Keep in mind, while we have not analyzed in detail—and we will later this year—the zimberelimab (anti–PD-1) plus cascadifan doublet, we have not seen anything untoward with that. We know we can combine with cabo well. We believe that the ipi/nivo regimen has been extraordinarily well worked out in terms of dosing. As I mentioned in my response earlier, you are going to treat with four cycles of ipi; that is well worked out and time-tested. Most importantly, you are only going to be carrying your anti–CTLA-4 dosing for four cycles. We believe we have orthogonal AEs. We have not seen clear combination issues. With cascadifan, you are basically bringing on-target anemia and, more rarely, hypoxia. We are going to pick a good TKI. We know that cascadifan plus anti–PD-1 looks good. We think a reasonable TKI will not bring anything untoward there. Keep in mind, we have not actually seen the Merck data. Their hazard ratio must not have been good. That does not get to an intrinsic inability to have a triplet; it just says when you are bringing belzutafan on top of a pretty rough doublet, and you are treating for a long period of time, and you are undoubtedly introducing some new AEs but not having a robust long-term efficacy effect, you are probably not creating a favorable hazard ratio. We really do not know exactly how that played out, but all the data with our own molecules suggest that cascadifan is a very well tolerated and robust HIF-2 inhibitor with an orthogonal AE profile from anything that we plan to combine it with. We will have those data within the next six months or so. Analyst: Got it. And then a follow-up: Have you seen the efficacy and safety results from that VOLU/cascadifan trial before Astra discontinued it? And would that data be shared with you even if Astra does not plan to share it publicly? Terry Rosen: Thanks. We have not seen anything other than what we said at the outset. Since they did disclose, you can now know that there were nine patients. What we described was that initial safety signal that was very CTLA-4—and more specifically bolurumab—like. When they dosed down bolurumab but kept cascadifan at the same 100 mg dose, we did not see any more of it in those patients, who still continued on. In fact, the interesting thing out of that—as we have commented before—is we did not see any progression. If anything, given that it was nine patients, it is not obvious whether that was even purely bolurumab or not. What is obvious to us, as we were thinking about going forward, is that given the ipi/nivo well worked-out regimen and dose, and the fact that you are only going to be carrying your anti–CTLA-4 dosing for four cycles, it is a clear regimen for us to proceed with, all things considered, rather than running both of those activities for the duration of therapy. Analyst: Got it. Thanks. Terry Rosen: Thanks, Rich, and congrats again. Operator: Our next question comes from the line of Salim Syed with Mizuho. Analyst: This is Mike Linden on for Salim. Thanks for taking our question. Just one from us on cascadifan in frontline again. How are you thinking about patient selection for an ipi/nivo plus cascadifan combination for a Phase 3? Would these be all-comers versus poor, intermediate, favorable risk patients? And has the thinking around patient selection changed post–LITESPARK-012 failure? Thanks. Terry Rosen: Our patient selection strategy has not changed. In fact, we are thinking of all-comers, and we would also be thinking of all-comers insofar as a TKI-inclusive regimen. What we are really trying to address there is that there is clearly—based on our advisory board meetings—a strong preference for a TKI-sparing regimen. That is unequivocal, and that is the bedrock of the frontline. With that said, there is a bit of “tribalism,” as investigators would describe it. Certain investigators are very prone—particularly if there is a bulky, fast-growing tumor, but even otherwise—to want to reach for a TKI. We feel that for that overlap of a particular patient with a particular investigator, there should be a HIF-2 inhibitor–containing regimen. We think we can offer a very good one. We look at both of those to be in all-comer patient populations. The LITESPARK-012 data, for us—until we see something otherwise—simply reflect the durability of effect on HIF-2 inhibition with time, which we know is a dramatic difference between our two molecules. When we look at the choices of what to combine with, keep in mind, we have no commercial predisposition there. Essentially, the world is our oyster. In the frontline, there are a number of TKIs used; there is not one that is particularly dominant. Overall, you have probably 60% of the patients getting a TKI, but they are spread somewhat evenly. We have looked strategically at what is the smartest TKI from a safety standpoint—well used, well tested, approved, understood—that we should combine with in the frontline. We know that we are going to have cabo in the second line. We have done the same thinking about that late-line patient population with what then becomes another TKI that you would use late-line. As I said, the other important thing there is that we are going to look at that combination of cascadifan plus that TKI in belzutafan-experienced patients and establish unequivocally that you get the activity that you want to see in that HIF-2–experienced patient. Analyst: Thank you. Operator: Our next question comes from the line of Jason Zemansky with Bank of America. Jason, your line is now open. Jason Zemansky: Hi, this is Jackie on for Jason. Congrats on the progress, and thanks for taking our question. What do you think is necessary to drive broad uptake of a TKI-free regimen in first-line RCC, given how popular TKIs are overall—especially given their ability to rapidly debulk tumors—or is the goal to compete directly with dual IO therapies? Terry Rosen: We think there is strong receptivity towards this. One of the most important things we have seen to date is that cascadifan as a monotherapy, even in the late line, performs as good or better than a TKI in any line of settings. Even in the late line, cascadifan monotherapy—whether you are looking at ORR or PFS—looks quite good. The thing that is standing out, and the issue identified with belzutafan at the outset, is the rate of primary progression. That raised the question for HIF-2 inhibition: can you compete with TKI in bringing the tumor under control quickly enough that you do not have that high rate of primary progression? We believe that belzutafan was forced in the frontline to combine with a TKI to address a potential high rate of primary progression. We think that despite the fact that HIF-2 inhibition is well tolerated, it can get the tumor under control quite fast. The evidence is in combining with anti–PD-1: in 30 patients, we only saw two primary progressors—7%—very much in line with a TKI. We think there is receptivity to a TKI-sparing regimen, and the key to driving uptake will be to show that our rate of primary progression—and everything that flows from that—looks like a TKI. The last point is that TKIs are a rougher treatment; there is a linkage in people’s minds that associates “rougher” with “bringing the tumor more under control.” Keep in mind that 85% to 90%+ of clear cell RCC has HIF-2 as a key driver. You are hitting the tumor with something that really matters. With a robust inhibitor like cascadifan, you can compete with the efficacy effects of a TKI. Robert Goeltz: Just to add, the reason many clinicians prefer using ipi/nivo is it gives the patient the best chance for long-term survival. The Achilles heel, as Terry described, is the primary progression. If you could blunt that and still give patients the best chance at long-term survival—and we just saw 10-year follow-up data with 40% of patients alive 10 years later—that is a very compelling regimen, we think. Jason Zemansky: Thank you so much for the color. Operator: Our next question comes from the line of Emily Bodnar with H.C. Wainwright. Emily, your line is now open. Emily Bodnar: Hi, thanks for taking the questions. On the LITESPARK-011 data, how are you looking at your upcoming cascadifan plus cabo updated data, and what are you hoping to see to feel confident that you might have a superior profile versus what we saw in the LITESPARK-011 trial? Thank you. Terry Rosen: We already feel that confidence, and we are obviously running the Phase 3 trial. You kind of have to think of things holistically. In the end, what you are going to have is a hazard ratio, and since we are both running versus cabo, those will be directly comparable. While our data, when we share later this year, will still be early, we are going to give Kaplan-Meier curves, landmark PFS, and ORR. People will be able to extrapolate to whatever extent they want, but we will give a very holistic view. Another point we do not want lost is an interesting aspect of the data that will only be emerging as things play out by the time we have some mature data later this year. While from a regulatory standpoint PFS is what matters, we are going to have data from our monotherapy cohorts that are getting mature enough to start to get a sense of whether we bring an OS advantage there—albeit in the late line. The reason that is important is that it may give a good sense that this mechanism can not only drive enhancements in PFS, but also bring enhancements to OS. While that may not be a regulatory requirement, we certainly could see it as an important differentiation that would drive more uptake by a clinician if, in fact, we start to show OS enhancement from HIF-2 inhibition—which we believe there is no reason there should not be. Emily Bodnar: Thank you. Operator: Our last question comes from the line of Yigal Nochomovitz with Citigroup. Yigal, your line is now open. Analyst: Hi, this is Chuan Kim on for Yigal. Congrats on the progress and thanks for taking our question. A question regarding AB-102. While it is still early, is there any color you can provide on the intended proof-of-concept study design—whether you are planning on going into CSU versus AD first? Any color on primary endpoints or level of clinical signals you would need to see to give confidence to advance into a future registrational program? Terry Rosen: Juan, why do you not describe how we see ourselves going from A to B to C in the near term? Juan Jaen: At a very high level, we recognize that while we may have a better molecular profile, we have a little bit of ground to make up relative to the couple of existing clinical players. We have devised a fairly accelerated plan for establishing PK and tolerability in healthy volunteers, followed by a rapid mechanistic confirmation of biological activity, and very quickly progressing into a Phase 2 study in CSU. We think we will, in reasonable time, catch up and hopefully begin to illustrate the better profile of our drug. In parallel, we are thinking about where it might make sense—concurrently with that CSU-type Phase 2 study—to demonstrate the value of an MRGPRX2 inhibitor. Right now, our lead candidate for that additional indication seems to be allergic asthma, but that is still at a very early stage of conceptual framing. Analyst: Thanks. Operator: There are no further questions at this time. This concludes today’s call. Thank you for attending. You may now disconnect. Terry Rosen: Thanks, everybody. Goodbye. Before you buy stock in Arcus Biosciences, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arcus Biosciences wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Arcus Biosciences. The Motley Fool has a disclosure policy. Arcus (RCUS) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool