Arcus Revenue Tumbled as Collaboration Income Receded
The biotechnology company ended June with $775 million in cash and securities.
Arcus Biosciences (RCUS), a clinical-stage biotechnology company, posted a $91 million second-quarter net loss as revenue fell 74% from a year earlier.
Revenue declined to $41 million from $160 million, largely because the year-earlier period included a $143 million cumulative catch-up related to paused etrumadenant development and Gilead Sciences' return of its license. License and development-services revenue dropped to $16 million from $152 million, while other collaboration revenue rose to $25 million from $8 million.
The revenue drop outpaced Arcus's cost reductions. Research-and-development expense declined 19% to $113 million as domvanalimab studies wound down and enrollment in PRISM-1 was completed, partly offset by increased casdatifan Phase 3 activity. General and administrative expense fell 17% to $24 million following streamlining initiatives.
Total operating expense decreased 18% to $137 million, while the operating loss widened to $96 million from $8 million a year earlier. Arcus reported a loss of $0.72 a share after roughly breaking even in the prior-year quarter.
Arcus introduced full-year GAAP revenue guidance of $65 million to $75 million. With $58 million recognized during the first half, that range implies second-half revenue of $7 million to $17 million. The company expects near-term research-and-development expense to continue declining as domvanalimab studies wind down and streamlining takes effect, partly offset by investment in casdatifan and small-molecule immunology programs.
The company broadened its casdatifan strategy through combination collaborations involving BMS and BioNTech's pumitamig, Summit Therapeutics' ivonescimab and AVEO Oncology's tivozanib, along with an undisclosed anti-PD-x/VEGF bispecific. Arcus expects to start PEAK-20, a first-line Phase 3 trial of casdatifan with nivolumab and ipilimumab, by year-end.
The anti-TIGIT program narrowed further after Arcus and Gilead discontinued STAR-221 and STAR-121. Arcus and AstraZeneca also planned to discontinue the Phase 3 PACIFIC-8 domvanalimab study, while Gilead relinquished its three Arcus board seats.
Cash, equivalents and marketable securities declined $101 million during the quarter and $225 million from year-end, primarily reflecting research-and-development spending. Arcus expects about $600 million in cash at year-end and reiterated that its liquidity should fund operations until at least the second half of 2028. A $15 million Taiho milestone triggered by PEAK-1 enrollment in Japan is due in the third quarter.