Arcus Biosciences Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2024

There are 14 speakers on the call.

Operator

Good afternoon. Thank you for attending today's Arcus Biosciences Third Quarter 20 24 Earnings Call. My name is Tamia, and I will be your moderator for today's call. All lines will be muted during I would now like to pass the conference over to your host, Tia Eaves, Vice President of Investor Relations. You may proceed.

Operator

Hello, everyone, and thank you for joining us on today's conference call to discuss Arcus' Q3 2024 financial results and pipeline update, including our upcoming presentation of ARC-ten data at SITC. I'd like to remind you that on this call management will make forward looking statements including statements about our cash runway and our expected clinical development milestones and timelines. All statements other than historical facts reflect the current beliefs and expectations of management and involve risks and uncertainties that may cause our actual results to differ from those expressed. Those risks and uncertainties are described in our most recent quarterly report on Form 10 Q that has been filed with the SEC. Today, you'll hear from our CEO, Terry Rosen CMO, Dimitri Nauten COO, Jennifer Jarrett and CFO, Bob Galtz.

Operator

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

Speaker 1

Thank you very much, Piyot and thank you all for joining us today. As we head into 2025, our highest priority is to launch our late stage development program for our HIF-two alpha inhibitor, castatopan. As you know, just 2 weeks ago, we presented initial data from our ARP-twenty study evaluating cats in late line clear cell RCC in an oral plenary session at the ENA meeting. These data clearly validates our conviction that cats will be a best in class HIF-two alpha inhibitor demonstrating improvement in every key efficacy measure that we analyze versus belzutafan. As you know, belzutafan is the only HIF2 alpha inhibitor on the market today.

Speaker 1

So let's go to Slide 5 and I'll recap the highlights from our dataset. First off, the rate of primary progression in the 100 milligram daily expansion cohort was only 19% and it was similarly low in the 50 milligram daily expansion cohort. In fact, the rate of primary progression for the combined 60 patients in the 50 milligram and 100 milligram expansion cohorts was approximately half of what was observed in LightSpark O5. Keep in mind that the primary progression rate and disease control rate, DCR are the only data points that are fully mature and will not change. So this is really a huge difference for the molecule.

Speaker 1

2nd, we reported a 34% ORR and 25% confirmed ORR for the 100 milligram cohort with 2 to 3 unconfirmed responses pending confirmation and also multiple stable disease patients still on therapy. As of the data cutoff, every responder across both cohorts remained on treatment with the exception of that one patient whose response did not confirm. The belazutafam data actually provide good precedent for the kinetics of response with HIF2 alpha inhibition. So this is important. Approximately 60% of responses occurred within 6 months of treatment and additional 20% occurred in each of the ensuing 6 month periods.

Speaker 1

So that goes out to 18 months. These data illustrate why our ORR could in reality more likely should further improve across both cohorts. Keep in mind, those follow-up times are 8 months 11 months respectively for 50 100 milligrams. The ARP-twenty data also demonstrated that the activity of cast is extremely durable. As of the data cutoff, a median PFS had not been reached even with that 11 months median follow-up.

Speaker 1

Recall that belzutifan was approved based upon its PFS of 5.6 months. And our median PFS, which we expect to report in early 2025 should easily exceed that benchmark. Given that PFS is the registrational endpoint, this will be another important source of differentiation. Our spider plot show multiple patients either past or approaching the 52 week duration of treatment and you also see deepening of responses with time. I want to emphasize these data were generated in a heavily pretreated patient population relative to that of LightSpark 5.

Speaker 1

Specifically, approximately 25% of the patients enrolled in ARK20 when eligible for the LightSpark 5. For the 50 milligram cohort, despite only 8 months median follow-up at the data cutoff, we reported a 14% primary progression rate, a 25% ORR and just over 21% confirmed ORR with the one unconfirmed responder pending confirmation and a very impressive, almost remarkable DCR of 86%. One of the confirmed responders was a complete response. Beyond the responders and again, another important point, nearly 40% of patients still continued on therapy with stable disease, including a few whom are extremely close already to the 30% response threshold. And you can see that in the spider plots.

Speaker 1

While this data set is still evolving and will continue to improve, we now have 2 different cohorts that are demonstrating clear efficacy differentiation relative to that of belzutifan. And there's a lot more data to come. On Slide 6, we show the data that we expect to share from ARQ 'twenty throughout 2025. We plan to present additional data from the 100 milligram and 50 milligram cohorts of ARQ 'twenty, including more mature ORR and median PFS that'll be early next year. Later in the year, we plan to present initial data from the 150 milligram and the 100 milligram once daily tablet expansion cohorts.

Speaker 1

So that's another 60 patients worth of data. We also plan to present initial safety data from our CAS plus cabo expansion cohort. To date, the safety data from this cohort, which we already shared with the FDA as part of our pre Phase 3 meeting are consistent with the profiles of the individual drugs and the dose intensity of 100 milligrams of CASK and 60 milligrams of cabo has been maintained. Given the importance of the ARP-twenty data and that's important to us, it's important to you, it's important to investigators, the ongoing evolution of the data sets and the multiple cohorts that we've enrolled, we're considering additional opportunities to provide updates from this study in the more near term. We remain full steam ahead towards the initiation of our first Phase 2 study PEAK 1.

Speaker 1

The investigator enthusiasm for the study is incredibly high, which we believe will support rapid enrollment. Now let me switch gears to dom vanilumab, our Fccellin anti TIGIT antibody. Just yesterday, the SITC abstract was released with data from part 1 of our ARP-ten study, which evaluated domplazimborelimab, that's our anti PD-one antibody versus ZIM versus chemotherapy in first line PD L1 high non small cell lung cancer. As a reminder, we terminated the study for strategic reasons to focus on STAR-one hundred and twenty one, our chemo combination study, but the early termination gave us both an opportunity to generate and now present a dataset from a study that was conducted under Phase 3 conditions. On Slide 27, we summarize the abstract.

Speaker 1

We show that Dom plus ZYN exceeded ZYN monotherapy on ORR, PFS and OS. For both PFS and OS, we achieved the hazard ratio below 0.65, which is far better than the threshold considered clinically meaningful in the setting. With median PFS of 11.5 months and median OS not reached for damsim, these results are meaningfully above contemporary benchmark studies for anti PD-one monotherapy. Dmitry is going to discuss these data in detail, but I want to make 2 important points. First off, these data reaffirm the growing recognition that Fc silent anti TIGIT antibodies have a differentiated safety profile relative to that of Fc enabled antibodies.

Speaker 1

There are only 2 Fc silent digit antibodies in late stage clinical development today, DOM and AstraZeneca's anti PD-one anti digit bispecific antibody. In the last few months, AstraZeneca presented 2 datasets for their antibody in first line non small cell lung cancer and first line gastric cancer. Interestingly, both datasets look very similar to our own, specifically similar efficacy as well as AE rates that are in line with anti PD-one therapy alone. That's an important component of the profile. In contrast, for the Fc enabled anti TIGIT antibodies, we continue to see reports of higher rates of immune related adverse events and treatment related discontinuations.

Speaker 1

Combining the Fc enabled antibodies with chemotherapy absolutely seems to exacerbate these issues. The second point that I want to make is that with this ARP-ten dataset, which will be presented in more detail at SITC, the ARP-seven results in PD L1 high non small cell lung cancer that we shared last year and the EDGE gastric data that we presented earlier in this year at ASCO, we now have 3 compelling datasets supporting the potential of Domzen in both lung and gastric cancers. For our EDGE gastric study, we showed a median PFS of 13 months for Domzim in first line gastric cancer, which meaningfully surpassed the PFS of 7 to 8 months seen in benchmark studies. And in the first half of next year, we expect to present mature overall survival from the study. Meanwhile, we continue to execute on our 3 Phase III trials for Domzant.

Speaker 1

In first line gastric cancer with our STAR-two twenty one study, we have the potential to be first to market with an anti TG antibody in this setting. With this study fully enrolled, we're actively preparing for readout and potential submission to health authorities. We believe this setting alone is a $3,000,000,000 plus opportunity. In lung cancer with our STAR-one hundred and twenty one and PACIFICATE studies, the latter in partnership with AstraZeneca, we have a potentially differentiated anti digit combination in the 2 settings we're pursuing, first line and stage 3 non small cell lung cancer. We continue to evaluate our statistical analysis plans for all our domzim studies to ensure that they're optimized for probability of success, but also while addressing the largest number of patients.

Speaker 1

We also continue to advance the other programs in our pipeline. We've initiated PRISM-one, our Phase 3 study evaluating quemly plus chemo that's quemly is our CD73 inhibitor and first line metastatic pancreatic cancer. And with Taiho's opt into this program, they're executing the study in Japan. We believe this could be a transformative first line therapy in a disease sure where with dismal outcomes for patients. Early next year, we expect to advance AB-eight zero one, a highly selective axon inhibitor into expansion cohorts in non small cell lung cancer.

Speaker 1

Our relationships with Gilead, AstraZeneca and Tycho are strong and they've enabled us to aggressively advance all of our programs in a highly resource efficient manner. With $1,100,000,000 in cash and investments and runway into mid-twenty 27, we're comfortably funded through multiple clinical readouts. Before we go to the ARC-ten results, I'd like to turn it over to Jen to discuss our development plans and the market opportunity for CAS.

Speaker 2

Thanks, Terry. Starting with PEAK1, our first Phase 3 trial for CAS in clear cell RCC, we expect to begin this study in the first half of next year. The design is shown on Slide 23 of our deck. The study will enroll approximately 700 patients and will compare CAF plus cabozantinib to cabo monotherapy in IO experienced clear cell RCC. CABO is the standard of care in this setting, so clinicians are extremely comfortable administering cabo and adjusting its dosing to optimize both cabo's efficacy and safety.

Speaker 2

We believe that the vast majority of the second line patient population, approximately 80% will be eligible for PEQ1, given this study only includes patients who received prior treatment with cabo in the first line setting. You can see on Slide 24 that this study targets an approximately 11,000 patient population in the U. S. Assuming a treatment time in excess of 15 months, this is a $2,000,000,000 plus market opportunity in the G7 countries alone. We're also excited to move into the IO naive setting with our collaboration with AstraZeneca to combine CAST with their anti PD-one CTLA-four bispecific, voristemix.

Speaker 2

The anti CTLA-four PD-one combination, ipnivo, currently has about onethree market share in the first line setting and that share is growing given the preferable safety and tolerability profile of IO based regimens relative to those of TKIs. By combining cats with voleru, we have the potential to develop a 1st and best in class TKI sparing regimen. This represents a patient population of approximately 12,000 in the U. S. Alone.

Speaker 2

And assuming a potential median treatment duration of 20 months, the total addressable market would exceed $3,000,000,000 across the G7 countries. Additionally, we are working to further expand the development program of CAS into other RCC subpopulations, and you'll see us add additional cohorts to ARP-twenty in the coming months. We remain confident in CAS' ability to play a very meaningful role in the RCC market. Today, patients cycle through different treatment options for years, receiving multiple different TKIs with 7 different TKIs on the market. But today, in the HIF-two alpha field, it is just CAS and beltedefan.

Speaker 2

I'd now like to turn the call over to Dmitry to discuss our newly released data for Donsim and lung cancer.

Speaker 3

Thanks, Dan. Our abstract for our ARCTAN was released yesterday morning and data will be presented in a late breaker poster session this Friday at SITC. ARCTAN was originally a global Phase 3 study evaluating dominZim, VersaZim, 1st chemotherapy in patients with PD L1 high non small cell lung cancer. This is important since the trial conduct with the same rigor as would be expected from a registrational Phase 3. Though our 10 was discontinued for strategic reasons, we continue to follow patients and now with over 2 years of median follow-up, we are presenting our 1st overall survival data for Dom and ZYN in any setting.

Speaker 3

As you will see, the results are supportive of Dom's ability to meaningfully extend survival in patients. Starting with the design on Slide 30, the trial was randomized 2 to 2 to 1. So there were 38 patients in the Dom and ZYN arm, 40 patients in the ZIM monotherapy arm and 17 patients in the chemotherapy arm. Baseline characteristics were generally well balanced across the arms with some prognostic imbalances favoring the chemotherapy arm. The data cut off for this analysis was May 17, 2024 and the median follow-up was 24.5 months.

Speaker 3

On Slide 31, we show the Kaplan Meier curve for overall survival. These results are quite impressive. In fact, even with 2 years of median follow-up, the median OS has not been reached for dominance. The headwind ratio for overall survival was 0.64, a result that is very clinically meaningful. Additionally, the CIM control arm performed right in line with the benchmark studies of pembrolizumab in this setting with a median overall survival of 24.4 months.

Speaker 3

When compared to chemotherapy, ZYN demonstrated a hazard ratio of 0.63 for overall survival. Again, this is right in line with KEYNOTE-forty two and other benchmark studies. The poster presentation will also highlight additional data, including progression free survival and overall response rates, which also showed a clear benefit for DOM and ZYN, OverZYN and PUDZYN performance in line with the benchmark studies for pembrolizumab. The safety profile was also consistent with prior observations for DOM and ZYN. Immune mediated adverse events were similar for dominosim relative to those for Zim alone at 23.7% 20%, respectively.

Speaker 3

These results are substantially different from data reported from studies with the Fc enabled anti TIGIT antibodies where immune mediated adverse events and treatment interruptions and discontinuations have been meaningfully higher than the anti PD-one or PD L1 alone on. In fact, it has been cited as the cause of trial failures. The compelling data from our R10, both for efficacy and safety, increases our confidence that combining dominance in chemotherapy and STAR-one hundred and twenty one will further improve outcome and provide non cancer patients with the best chance of success in their first line of treatment. Now I'd like to turn the call over to Bob to cover our financials.

Speaker 4

Thanks, Dimitry. Our cash as of the end of the Q3 was $1,100,000,000 as compared to $1,000,000,000 as of the end of the second quarter. Our cash position was bolstered by $100,000,000 collaboration continuation payment from Gilead. Turning to our P and L, we recognized GAAP revenue for the Q3 of $48,000,000 which compares to $39,000,000 for the Q2 of this year. Our revenue is primarily driven by collaborations with Gilead and Tayo and in the Q3 included $15,000,000 resulting from the Tayo opt in for Quemly in July.

Speaker 4

We continue to expect to recognize GAAP revenue of approximately $30,000,000 for the Q4 of 2024. Our R and D expenses for the Q3 are stated net of reimbursements from Gilead and were $123,000,000 as compared to $115,000,000 in the Q2 of this year. We continue to expect modest increases in R and D expenses for the Q4 of 2024. G and A expenses were $30,000,000 for the Q3 and were flat compared to the Q2 of this year. We expect G and A expenses to remain stable for the Q4.

Speaker 4

Finally, we expect our cash and investments balance at the end of 2024 to be between $950,000,000 $985,000,000 as compared to our prior guidance of $885,000,000 to $925,000,000 We expect these resources to fund operations into mid-twenty 20 7. Our guidance excludes additional potential opt in payments and milestones from our partners. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10 Q. I'll now turn it back to Terry for concluding remarks.

Speaker 1

So thank you all again for joining us this afternoon. As I mentioned earlier on the call, we have a lot coming and that starts with our SITC presentation for Domzim on Friday and followed by additional presentations from our 20 and the initiation of our 1st Phase 3 study for cats over the coming months. As we head into 2025, we'll be approaching our 1st Phase 3 dataset for STAR-two twenty one in first line gastric cancer. We appreciate your interest and support of Argus and I'll now open the call for questions.

Operator

Thank you. We will now begin the Q and A session. The first comes from Yigal Nochomovitz with Citi. You may proceed.

Speaker 5

Hi, Terry and team. Thanks for taking the question. I'm getting a lot of interest in CAS and people are asking about the potential for Gilead's opt in. Can you provide any more color there as far as whether they're specified windows? Obviously, you mentioned that you need a qualifying data package.

Speaker 5

Does that mean it could be the monotherapy or is Gilead interested in seeing some of the combo data with VALRU or the initial combo data with CAS plus cabo coming up soon? That's the first question. Thanks.

Speaker 2

Yes. So, we have aligned with Gilead on what data is needed for the qualifying data package. We're very close to meeting that data requirement. So we will be delivering a package to them relatively soon. And as we've been saying, we expect a decision to be made late this year or early next year.

Speaker 5

Okay. Thank you. And then, I'm just curious, was there any preclinical work done with Folaru and CAS to sort of just do a quick validation of the combo safety in NHPs or something before going into this collaboration with AZ?

Speaker 1

No, there was no preclinical work done. It was very typical sort of situation where you have 2 molecules well defined profiles that we simply taking into those studies initially in human.

Speaker 5

Okay. And then last one is, I'm curious about etruvadant. Obviously, you had the data, I believe, at ASCO for the ARC9. What are you thinking there in terms of the later development? There is the other cohort, which is the 2nd line cohort, cohort A.

Speaker 5

Is that what you're waiting for before you decide with a registrational study, given the obviously very, very strong OS that you saw in the 3rd line?

Speaker 1

No, to be honest, it's just a matter of us moving. So we're extremely excited about the dataset and we're just working through with Gilead. You can see obviously we're starting a number of later stage trials and we still have the full portfolio going. So we're working through what our next steps will be and we'll share them once they're defined together with Gilead.

Speaker 5

Okay. Thank you, Terry.

Speaker 1

Thanks, Yigal. Appreciate it.

Operator

Thank you. The next question comes from Lee Watsik with Cantor Fitzgerald. You may proceed.

Speaker 6

Hey guys. Thank you very much for taking my questions. I guess one in the IO naive renal cell cancer setting, I understand AZ is running the study, but I guess what can you say about what the next step might be and the timing of a potential pivotal trial?

Speaker 1

Yes. So I'll comment there. We've agreed with AstraZeneca to not comment anything further than those initial plans and we'll say more once the study shows up on clinicaltrials.gov.

Speaker 6

Okay, understood. And I know you mentioned on the call, it sounds like you're looking to optimize the step plan for the Phase III non small cell lung for DARM. Can you expand a little bit on that? What does that entail?

Speaker 1

Yes. So my comment was more general than that. We make that point for all of our studies that we're continuously looking at the stat plans for all of our programs. Obviously, in the anti TIGIT field, there's been changes made by others. There's been some comments or statements put forward from the ODAC with the FDA.

Speaker 1

So at this point, we're not making any changes, but we just wanted to acknowledge that we're always considering that possibility.

Speaker 6

Okay, got it. And maybe just the last question. I wonder if you can talk a little bit about the clinical benefits that you're seeing for stable disease patients from the CAT study and it seems like you got a decent number of them still on study. So I guess how clinically relevant is disease control for these patients?

Speaker 3

Yes. So this is Dimitry. I'll take the question. So it's very, very relevant for patients. Just imagine RECIST was determined based on life's data sets mostly for chemotherapy.

Speaker 3

There had been an effort to standardize assessments of treatment and based on reproducibility, interobserved variability, a threshold of 30% was set. I think everybody would agree whether or not you're at 25% or 35% depending on the tumor volume that is not really relevant. Having tumor that doesn't grow and that has gone down in tumor volume is very important. And then the other point that is more, let's say, from a regulatory perspective, response rate is never ever a registrational endpoint beyond accelerated approval. In this case, in kidney cancer, progression free survival is the relevant endpoint and everybody who does not progress contributes to that.

Speaker 3

And in a Kaplan Meier estimate, the longer you are free of progression, meaning the longer your response is lasting or the longer your stable disease is lasting, contributes equally for each patient to the Kaplan Meier estimate for progression free survival. So both from a clinical perspective for patients and from a regulatory registrational perspective, they're very important. And from a registrational perspective, it is equally important as a response.

Speaker 6

Okay. Thank you.

Operator

We'd like to be able to get to everybody. So if you have more than a couple of questions, can you please hop off and join the queue

Speaker 2

at a later point? That would be great. Thank you.

Operator

Thank you. Our next question comes from Jonathan Miller with Evercore ISI. You may proceed.

Speaker 7

Hi, guys. Thanks for taking my question and reminding us to limit our questions just before I got my chance in the queue. Appreciate that. Can I start with some questions about HIF-two, please? I noticed in your prepared remarks, you talk 2 unconfirmed PRs that could still confirm.

Speaker 7

I'd really like to get some detailed color on that. We hear reports, there have been papers written that suggest that one of maybe I think one of those 2 based on how I'm counting had a subsequent scan of stable disease. So can you comment of those 2 unconfirmed partial responses that you're talking about, how many of those have not had a follow-up scan yet or might be expected to confirm based on one additional follow-up scan? And maybe building off of that, given that a lot of the differentiation you're talking about compared to dasutifan is in the PD rate, I. E, at the first scan here, how well early in the curves, how well do you anticipate that to translate to a better profile versus belzutifan in a combo setting, especially combos with drugs like TKIs, which give their benefits rapidly at those first couple of scans?

Speaker 1

Go ahead, Jim.

Speaker 2

Yes. So, the first question kind of takes you to there's a lot of different questions in there. But maybe just to jump to the back part of your question as far as who has not had a follow-up scan yet that was a responder. There was one patient in the 100 mg cohort that had not had a follow-up scan yet and one patient in the 50 mg cohort. So their last scans show them as being responders for the first time and they are waiting for their confirmatory scans now.

Speaker 2

Then as we said for the 100 mg, there is one patient that did not confirm so far, only one patient. And in fact, as we mentioned in the script, out of all of the responders, every responder is still on treatment with the exception of one patient that did not have a confirmed response in the 100 mg cohort. Did that answer your question? And we can go to the second one.

Speaker 7

Yes. I was thinking specifically of that 100 mg cohort. I'm just trying to count UPRs and try to get a sense for where the ORR could realistically get to at the end of the day. And in that 100 mg cohort specifically?

Speaker 2

Yes. So, the 33 point percent plus was ORR. We said that one patient will not confirm. So that means the maximum confirmed ORR that we can get to based on the current responders. So that's excluding stable disease patients that have also seen significant tumor reduction.

Speaker 2

So there could be other stable disease patients that also contribute to the ORR. But based on the current responders, the maximum confirmed response rate we can get to is 31%. And then if just one of those pending responders confirms, then that would take the order arc to 28.3%.

Speaker 7

Great. Got it. And on

Speaker 3

Yes. I can take the second part of the question about stable disease and the combination. So a few things. So of course, in the combination, we are going against cabo and we're building on top of cabo. So everybody in the control arm would get cabo and we are doing the combination.

Speaker 3

If you think what the combination can do, it can actually help patients in different ways. On cash, we see both early responders. We have more than a few patients responding at the 1st candidate 6 weeks. We've also disclosed 2 patients now that responded respectively at 12 14 months. So that's something that goes on top of the TKI response rate.

Speaker 3

The primary progression response rate for cabozantinib is about 20% or a little bit less, and we hope to catch more patients from that 20% with a different mechanism for the combination. So of course, we can't speculate what it would be, but we would expect it to also improve on top of the TKI.

Speaker 7

Sure. I guess, but I'm asking specifically about the comparison to the other F2 here to belzutifan. If your differentiation from them is in PD rate or at least a lot of it is in PD rate, how well would you be able to observe that differentiation in a combo setting where you have the TKI to pick up the slack on the first scan a little bit?

Speaker 1

So I'll comment there. I mean, again, you're purely speculating, but as you know, greater than 90% of those patients have some sort of HIF2 driven component. And so there's absolutely still room to reduce the rate of primary progression. It puts more people into the queue, if you will. And I think that the place where you'll see that number of patients then leads into every other efficacy measure, whether it's ORR, PFS and I have to say, there's no reason to not start to think about why you may not see advantages in OS, even though that's not the approvable endpoint at this stage.

Speaker 1

There's nothing intrinsic about clear cell RCC that should suggest that you couldn't start to prolong OS as well.

Speaker 8

Thanks. Thanks, John.

Operator

Thank you. The next question comes from Peter Lawson with Barclays. You may proceed.

Speaker 8

Great. Thank you. Just a couple of follow ups on the opt in. Kind of what drives that decision for Gilead between this year and next year? Is it something from your side, their side or some different data cut?

Speaker 8

And then if Gilead doesn't obtain, what are the next steps?

Speaker 1

Yes. So I'll take that. First of all, there's nothing specifically driving it other than how long they take to make a decision. It happens to be that because of when we're delivering it, it's relatively near the end of the year. They have a certain amount of time that could in fact creep into next year.

Speaker 1

It doesn't necessarily creep into next year. So that's the only component why we introduced that ambiguity in laying out a timeframe. As you know, they could opt in yesterday if they wanted. So that's it sort of defines the latest point of when they can opt in. The second question, if they don't opt in, there's not necessarily anything that we would do immediately, but it could be any of the three things that you might think of.

Speaker 1

We're very comfortable continuing with this one on our own. We love the program. I think it's a great opportunity. Secondarily, we've already had plenty of inbound interest from others who recognize that there is an opt in decision. I think most other companies have expressed that the thought that they think Gilead would opt in, but we could consider partnership with another company as well.

Speaker 4

Bob? Just on the economics, Peter, so it's $150,000,000 opt in fee, should they decide to opt in and then we share costs fifty-fifty on the program going forward. And then I don't know if you were getting at this with your question, but obviously, if Gilead were to opt in, then we'd work through the details of any additional studies we might want to add to our clinical development plan together.

Speaker 8

Great. Thanks so much. Thank you.

Operator

Thank you. The next question comes from Asthika Goonewardene with Truist. You may proceed.

Speaker 9

Hey guys, thanks for taking my question. I'm going to repeat what John did and ask a multipart single question here. So on here. So on bolurosemide plus testenafan, what when you think ahead as the right comp for maybe some sort of a pivotal study down the line, what do you think the right comp is? And I asked because Nivo AP makes is there more logical comp and obviously a very high bar.

Speaker 9

And related, the durable CR rate with Nivo AP is something that's quite attractive about that combination in RCC. But how important is it for you to kind of replicate that or beat that specific endpoint adjacent to the regular primary endpoints that you would consider?

Speaker 3

Yes. So this is Dhumeet, so I can take the question. So the relevant benchmark would be the CheckMate-two fourteen study, although of course that is now somewhat outdated. But I think with the mature follow-up, that data has held up very well. We are building up on the bispecific, meaning the data for Vodu has been presented last year at ESMO in kidney cancer.

Speaker 3

And I think most people objectively would agree it looks at least as good or perhaps a little bit better than Ipinivo. Some of the toxicity is a little bit better. So we don't expect, let's say, to have to beat Ipinivo with cash alone. We know we have a solid C4PD1 backbone and then build on top of that. The CR rate indeed, the durable or you say the durable response rate is important.

Speaker 3

Obviously, we don't completely know, but I think it's reasonable to hypothesize that, let's say, one of the things for ipinivo is the primary PD rate. Investigators typically will not use ipinivo in the setting where they really need a fast response for a patient. So that's something we might be able to change. We might be able to get a lower primary PD rate when we build up on it. And every other benchmark, we expect to be able to deepen or lengthen, meaning longer duration of response because we add a mechanism that really helps out in the long term, longer progression free survival and hopefully longer overall survival as well.

Operator

Yes. And I think just to hit

Speaker 2

on the primary PD point, like that was I think what got AstraZeneca very interested is that you do have 25% of patients that just flow right through Ipi nivo. And so by adding a drug that seems to have a relatively low primary PD, we think we can especially improve that front end of the PFS curve.

Speaker 3

Yes. And then lastly, to add on top of that also the safety profile for HIF-two targeting specifically casetofan would be far more favorable than adding a TKI on top of that regimen. So that's what we refer to the TKI sparing approach because first line patients can be on treatment for a very long time, which is cumbersome and let's say a burden on patients if they have to stay on the TKI for a long time.

Speaker 9

Great. Thanks so much guys.

Speaker 1

Thank you.

Operator

Thank you. The next question comes from Dana Graybosch with Leerink Partners. You may proceed.

Speaker 6

Hi. I'm going to follow-up

Speaker 10

right along with what Asthika just asked about the trial conduct for both PEAK1, the combo with CABO and the combo with the CTLA-four bispecific and that we've seen in RCC that keeping patients on study seems to be really important that if you have any and managing those discontinuations can really drive the primary efficacy endpoints. Can you talk through your strategy in both of those trials to manage treatment exposure particularly as you started with the 60 mg dose of cabo and they haven't always done that in their combination studies? And then also what you're doing with ASTRA to manage tox with a pretty toxic anti CTLA-four as well?

Speaker 3

Yes. So I'll start with the KAOS combination. So good points. I see it as a benefit that we will be starting with 60. The trials where the TKI, in this case, cabo wasn't started at full dose was based on toxicities identified with a combination and therefore you give up on some early higher exposure for an active agent like cabo.

Speaker 3

So I think it's important for people to be able to start at full dose. That's the safety data we are generating right now. We already have generated a lot of experience with CASK by itself and how investigators manage the toxicity. I think the data that we've shown is very convincing that we have virtually no one discontinuing the drug for toxicity. We have some interruptions and people are able to manage the toxicities and then stay on.

Speaker 3

So that's the experience we'll also use for the combination. The other thing that makes it a little bit easier in giving guidance is the specific profiles for toxicity for both CAS and for cabo are, let's say, cabo, of course, very well known and CAS relatively straightforward with anemia and hypoxia, no relevant overlapping toxicity. So giving guidance on potential dose reductions will be straightforward. And to make it as clean as possible, the trial is what we call an active comparator placebo controlled trial. So people on the control arm will be getting cabo plus a placebo to take out all bias from investigator and patients on the assessment of the AE profile.

Speaker 3

When it comes to AstraZeneca, we can't comment as much on that trial. Obviously, that's currently in start up and is led by AstraZeneca. Our colleagues at AstraZeneca have generated quite a bit of safety data. Some of that is in the public domain, as I referred to, from ESMO 2023, and there's a lot more data that's not in the public domain. And with that, they've, let's say, generated a lot of experience in giving specific guidance.

Speaker 3

And the toxicities they've seen are they are seeing, of course, are not new. Ipinivo has been on the market for quite a while and kidney cancer investigators are, let's say, very well aware and very experienced with the management of the toxicity profile of Ipinivo. And again, the lack of overlapping toxicities will make it easier to give specific guidance for each agent.

Operator

Thank you. The following comes from Salveen Richter with Goldman Sachs. You may proceed.

Speaker 11

Hey, this is Mark on for Salveen. Thank you guys for taking our questions. We have a question on TIGIT and lung on the ARK10 data at SITC. It looks clear that TIGIT is adding a survival benefit, but why do you think the benefit on ORR is less clear? And also how do you expect this data to translate to the STAR-one hundred and twenty one study, where it seems like OS benefit from the domsin doublet is likely already above KEYTRUDA chemo?

Speaker 11

And when should we expect to see initial data from the STAR-one hundred and twenty one? Is it possible that we could see it in the second of 2025? Thanks.

Speaker 1

So, let me start. I think that, what your first question was about ORR, we think the ORR, there was quite reasonable improvement. Keep in mind, this is immunotherapy and it comes up time and time again, the place where you're really getting your benefit is enhancement of OS and its durability, it's the tail and that's why it's a profound signal that we're seeing. ORR is better, but what you're really should be focused on, the world uses ORR as a surrogate for PFS as a surrogate for OS and the reason we're routed 2 plus years and we have the OS data is that that's what you're really looking at. But nonetheless, we don't think there's anything unusual about the advantage on ORR.

Speaker 1

The second question that you asked was?

Speaker 9

How do you expect this

Speaker 8

to translate to stock? Start?

Speaker 1

So we think the translation, we've already seen, in EDGE Gastric an advantage on top of chemo. The thing that and this is where we think we actually have a huge advantage. When we think about the star 121 while we stopped our 10 for strategic reasons, just on an evolving market that physicians are moving more and more from just using KEYTRUDA to using KEYTRUDA plus chemo, even in high PDL-one. What's become very apparent is that the Fc enabled anti TIGIT have an issue with AEs in the context of chemo. So we feel like we're well positioned to even have a stronger advantage relative to any of the competitors at this point in that population.

Speaker 1

Now the second piece is just from a scientific standpoint, the underlying mechanism is that anti TIGIT is enhancing the activity of the anti PD-one. Same phenomena that we demonstrated in the context of GI cancers on top of chemo and we've shown the data from angi gastric and we think that same thing will hold up there. And then the particular advantage is that when you add DAM on top of the anti PD-one chemo, what we're seeing consistently again is that we're not seeing any enhanced AEs. So you really get the full advantage of what the mechanism offers with the FcSilent molecule. I think it's important stuff to realize there's enough data out there to just bucket into 2 categories, the Fc enabled and the Fcsilent.

Speaker 1

So AstraZeneca in us in all the other later stage molecules are having issues consistently with those immune associated adverse events. And then your next question was when might we see we haven't commented yet. The point that I would raise is that in the context of Edge Gastric, which was fully enrolled, I'm sorry, so our STAR-two twenty one, which is the Phase 3 correlate to that, the OS for the standard of care is about 13 months. As you know, in non small cell lung, there's going to be over 20 months. And so we'll give guidance on readout sometime next year.

Speaker 11

Sounds good. Thank you.

Speaker 1

Thank you.

Operator

Thank you. The following comes from Jason Zumansky with Bank of America. You may proceed.

Speaker 12

Good evening. Thank you so much for taking our questions and congratulations on both the quarter and the recent presentations. Had a couple of quick follow ups on the PEAK-one study. In terms of primary endpoint, you have PFS. Merck is advancing a number of similar studies with belzutafan, with elvatinib in a couple of different settings including 2nd line, where the primary endpoint is PFS and OS, just curious on kind of the decision behind making the primary endpoint PFS.

Speaker 12

And then just kind of fundamentally, what do you think you need to do to distinguish yourself from Merck's combinations, given their potential to kind of first mover advantage, particularly when if you look at, say, the first line setting, there are a range of different studies that you might not have the same sort of efficacy, but kind of that inertia there keeps them well used. Example KEYNOTE-four twenty six looks like 17%. So still use it even though it's maybe not as good, it said CheckMate 214 or CheckMate 9ER? Thanks.

Speaker 3

Yes. So when it comes to treatment preferences, that's the last part of your question. There's a lot of things that go into it. I actually referred to that earlier on. Ipinivo, for example, is very well recognized for very durable responses and long term survival benefit.

Speaker 3

The downside of the regimen is recognized as primary progression. So patients with bulky disease, patients who need a response immediately, they're typically not put on ipinivo. And based on early readouts, patient with favorable risk, we're also not given the opportunity. But with longer term follow-up, it's now very consistent that the IDMC risk categories are no longer considered to be predictive of ipinivo benefit. So that's one of the reasons when it comes to differentiation, it's the question I answered previously.

Speaker 3

I think in this particular setting, Merck is not doing this trial. They don't have a TKI free first line trial, which from a physician patient perspective, not having the TKI toxicity for the long duration of treatment in the first line by itself is already a very important differentiator. When it comes to the second line differentiation, PEAK1 versus LightSpark 11, having a far more preferred TKI as combination partner, cabo versus LENFA, the logical choice because Merck owns LENFA or part of it, for us is a major benefit. We consistently hear from physicians that cabo is much easier to handle than limfatinib. The dosing complexity of multiple dose levels for limfatinib, the overall less, let's say, less well perceived toxicity profile is an important differentiator.

Speaker 3

The other differentiator we have is even though Merck was earlier with the trial that comes with the downside that their experience in post adjuvant patients by definition will be very limited to almost not existing. We will be able to capture those patients. So potentially, we will get a broader label as well. And then the last part of your question about the dual primary endpoint, I cannot comment on why Merck is doing it. I can only speculate.

Speaker 3

The registrational endpoint is PFS. Whether or not OS is a well powered secondary endpoint or a primary endpoint comes a little bit down to trial size efficiency. However, the only reason to do OS as co primary or better saying dual primary endpoint is if you are not sure if you can hit PFS. So if you hit PFS as primary endpoint, all the alpha goes to the secondary endpoint and you have an adequately powered overall survival analysis. So in my let's say, from my perspective, doing it as a dual primary endpoint unnecessarily makes the trial larger, but they might have done it because they didn't know what the trial readout would be.

Speaker 3

Obviously, we will have that advantage that the trial that they are doing will have readout before we get to our analysis. And in a rare case that we would have to make updates, we can do so.

Speaker 12

Got it. So if I'm hearing you correctly, you think between PEAK1 and LightSpark eleven, you'll have a tolerability edge. Do you think you can also have an efficacy edge as well?

Speaker 3

Absolutely. If you let's say, if I just start with the low bar, if you can stay on a TKI longer because it's better tolerated, you have more benefit, then of course, we are generating the cash data that starts to look differentiated from belsutifan on efficacy, notably the primary PD rate, but also other benchmarks that start or other metrics that start to look better. So we are confident that both the combination partner, but also our HIF2 alpha inhibitor, both will be part of the story of a better efficacy and a better safety profile combined.

Speaker 12

Perfect. Thanks for the color.

Speaker 5

Thanks.

Operator

Thank you. The next question comes from Eva Forteo with Wells Fargo Securities. You may proceed. Hi, thanks for taking our

Speaker 13

question and congrats on the progress. A quick one from us. So for the Donsim combo in the Phase II edge gastric, you guided to OS data in 2025. So if I recall correctly, you've only shown data for one arm, but the study included more arms. So I was wondering if you're going to share data from the other arms together in the same update or if this might come at a later time next year?

Speaker 13

Thanks.

Speaker 3

So the guidance indeed is correct. We have committed to the OS data for gastric that's maturing right now

Speaker 5

for 2025.

Speaker 3

I think we said it before, the enrollment in arm A1, that's the arm we presented. And then A2 is the contribution of component arm for regulatory purposes was not at the same time. They were done sequentially. The data is the data are maturing. And I would say it's unlikely we will present it all at the same time because these things don't mature at the same time.

Speaker 3

But at some point, we will present the data if it's mature.

Operator

Thank you. Our final question comes from Yigal Nochomovitz with Citi. You may proceed.

Speaker 5

Yes. Hi. Thanks for the follow-up. Just very quickly. I think, Terry, you mentioned in the prepared remarks that you may be in a position to provide updates in the more near term.

Speaker 5

Does that mean that you might get some of this data that's referenced in the release in this year? Or just clarify what you meant there? Thank you.

Speaker 1

Yes. We didn't want to get too specific, but let's recognize, look at all those studies we have ongoing. So we are cohorts within the study. So we have 150 milligram cohort, we have 100 milligram tablet, we have the 50 and 100 that we've already talked about that are continuing to mature. And what we felt is for sake of transparency and the importance of these data that when we see something meaningful, we're going to look to find a way to get it out there.

Speaker 1

But right now we don't have any specific plans, but we recognize there's such a large volume of data. We see they're interesting. We want to make sure to take opportunity to update whenever it might be meaningful. All

Speaker 5

right. Thank you. Got it.

Operator

Thank you. There are currently no other questions in queue. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.

Speaker 1

Thank you.

Speaker 13

Goodbye.

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Earnings Conference Call
Arcus Biosciences Q3 2024
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