On November 2, 2022 DURECT Corporation (Nasdaq: DRRX) reported financial results for the three months ended September 30, 2022 and provided a corporate update (Press release, DURECT, NOV 2, 2022, View Source [SID1234622800]).

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"We are excited that we are now on track to complete enrollment of our pivotal AHFIRM trial in the second quarter of 2023, earlier than we previously estimated. We continue to make excellent progress toward our goal of bringing larsucosterol to market as the first FDA-approved treatment for alcohol-associated hepatitis," stated James E. Brown, D.V.M., President and CEO of DURECT. "In addition, we earned $10 million in total milestone payments from our Innocoll collaboration. We are pleased that Innocoll has launched POSIMIR and look forward to following their launch progress."

Third Quarter and Recent Business Highlights:

Continued progress in AHFIRM enrollment – DURECT has enrolled more than 200 patients in the AHFIRM trial to date, which exceeds two-thirds of the target enrollment for the 300-patient trial. We have over 60 AHFIRM study sites open at leading hospitals in the U.S., Australia, E.U. and U.K. and are continuing to open new sites, including prominent transplant centers. We currently expect to complete enrollment in the AHFIRM trial in the second quarter of 2023, which should enable top-line results to be reported in the second half of 2023.
Commercial launch of POSIMIR – In September 2022, Innocoll Pharmaceuticals Limited (Innocoll) commercially launched and achieved the first sales of POSIMIR in the United States, triggering a $2 million milestone for DURECT. In August 2022, DURECT was issued a new patent by the US Patent Office, extending US patent coverage for POSIMIR to at least 2041. This event triggered an $8 million milestone payment which was received by DURECT during the third quarter.
Financial Highlights for Q3 2022:

Total revenues were $12.0 million and net loss was $2.5 million for the three months ended September 30, 2022 compared to total revenues of $2.2 million and net loss of $10.0 million for the three months ended September 30, 2021.
At September 30, 2022, cash and investments were $52.0 million, compared to cash and investments of $70.0 million at December 31, 2021. Total debt at September 30, 2022 was $21.0 million, compared to $20.6 million at December 31, 2021.
Earnings Conference Call

We will host a conference call today at 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss third quarter 2022 results and provide a corporate update:

Wednesday, November 2 @ 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Toll Free:

1-877-869-3847

International:

201-689-8261

Conference ID:

13733742

Webcast:

View Source

A live audio webcast of the presentation will be also available by accessing DURECT’s homepage at www.durect.com and clicking "Investors." If you are unable to participate during the live webcast, the call will be archived on DURECT’s website under "Event Calendar" in the "Investors" section.

About the AHFIRM Trial
Enrollment is ongoing in our Phase 2b randomized, double-blind, placebo-controlled, international, multi-center study in subjects with severe acute alcohol-associated hepatitis (AH) to evaluate saFety and effIcacy of laRsucosterol (DUR-928) treatMent (AHFIRM). The study is comprised of three arms targeting enrollment of 300 total patients, with approximately 100 patients in each arm: (1) Placebo plus supportive care, with or without methylprednisolone capsules at the investigators’ discretion; (2) larsucosterol (30 mg); and (3) larsucosterol (90 mg). Patients in the larsucosterol arms receive the same supportive care without steroids. In order to maintain blinding, patients in the two active arms receive matching placebo capsules if the investigator prescribes steroids. The primary outcome measure will be the 90-Day incidence of mortality or liver transplantation for patients treated with larsucosterol compared to those treated with placebo. The Company is enrolling patients at more than 60 clinical trial sites across the U.S., EU, U.K., and Australia. Reflecting the life-threatening nature of AH and the lack of therapeutic options, the U.S. Food and Drug Administration (FDA) has granted larsucosterol Fast Track Designation for the treatment of AH. We believe a positive outcome in the AHFIRM trial could support a New Drug Application filing. For more information, refer to ClinicalTrials.gov Identifier: NCT04563026.

About Alcohol-associated Hepatitis (AH)
AH is a life-threatening acute alcohol-associated liver disease (ALD) often caused by chronic heavy alcohol use and a recent period of increased alcohol consumption (i.e., a binge). It is characterized by severe inflammation and destruction of liver tissue (i.e., necrosis), potentially leading to life-threatening complications including liver failure, acute renal injury and multi-organ failure. There are no FDA approved therapies for AH and a retrospective analysis of 77 studies published between 1971 and 2016, which included data from a total of 8,184 patients, showed the overall mortality from AH was 26% at 28 days, 29% at 90 days and 44% at 180 days. A subsequent global study published in December 2021, which included 85 tertiary centers in 11 countries across 3 continents, prospectively enrolled 2,581 AH patients with a median Model of End-Stage Liver Disease (MELD) score of 23.5, reported mortality at 28 and 90 days of 20% and 31%, respectively. Stopping alcohol consumption is not sufficient for recovery in many moderate (defined as MELD scores of 11-20) and severe (defined as MELD scores >20) patients and the use of treatments to reduce liver inflammation, such as corticosteroids, are limited by contraindications and have been shown to provide no survival benefit at 90 days or 1 year. While liver transplantation is becoming more common for ALD patients, including AH patients, the procedure often involves a long waiting period, a burdensome selection process, costs exceeding $875,000 on average, and patients requiring lifelong immunosuppressive therapy to prevent organ rejection.

About Larsucosterol (DUR-928)
Larsucosterol is an endogenous sulfated oxysterol and an epigenetic regulator. Epigenetic regulators are compounds that regulate patterns of gene expression without modifying the DNA sequence. DNA hypermethylation, an example of epigenetic dysregulation, results in transcriptomic reprogramming and cellular dysfunction, and has been found to be associated with many acute (e.g., AH) or chronic diseases (e.g., NASH). As an inhibitor of DNA methyltransferases (DNMT1, DNMT3a and 3b), larsucosterol inhibits DNA methylation, which subsequently regulates expression of genes that are involved in cell signaling pathways associated with stress responses, cell death and survival, and lipid biosynthesis. This may ultimately lead to improved cell survival, reduced inflammation, and decreased lipotoxicity. As an epigenetic regulator, the proposed mechanism of action provides further scientific rationale for developing larsucosterol for the treatment of acute organ injury and certain chronic diseases.

On November 2, 2022 CytomX Therapeutics, Inc. (Nasdaq: CTMX), a leader in the field of conditionally activated oncology therapeutics, reported that Sean McCarthy, D.Phil., chief executive officer and chairman, will participate in the following investor conferences in November (Press release, CytomX Therapeutics, NOV 2, 2022, View Source [SID1234622799]).

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BMO Biopharma Spotlight Series: Oncology Day
Date: Wednesday, November 9, 2022
Fireside Chat: 11:30 a.m. ET
Location: Virtual

Piper Sandler 34th Annual Healthcare Conference
Date: Tuesday, November 29, 2022
Fireside Chat: 8:30 a.m. ET
Location: New York, NY

A live webcast of the Piper Sandler fireside chat will be available on the Events and Presentations page of CytomX’s website at www.cytomx.com. In addition, management will be available for one-on-one meetings with investors who are registered to attend the conferences.

On November 2, 2022 Aligos Therapeutics, Inc. (Nasdaq: ALGS), a clinical stage biopharmaceutical company focused on developing novel therapeutics to address unmet medical needs in viral and liver diseases, reported recent business progress and financial results for the third quarter, September 30, 2022 (Press release, Aligos Therapeutics, NOV 2, 2022, View Source [SID1234622798]).

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"We continue to make important progress in advancing our portfolio of drug candidates targeting chronic hepatitis B (CHB), COVID-19, and NASH," said Lawrence Blatt, PhD, MBA, Chairman and CEO of the Board at Aligos. "For our capsid assembly modulator (CAM), ALG-000184, we have observed a favorable safety and antiviral activity profile after 28 days of dosing and, as a result, have recently initiated longer term dosing cohorts. These cohorts will evaluate up to 48 weeks of treatment with ALG-000184 and will further define the potential role of this drug candidate in achieving chronic suppression and functional cure in CHB. We also recently began clinical evaluation in healthy volunteers of ALG-125755, our siRNA targeting HBsAg production. We anticipate evaluating this drug in CHB subjects in Q1 2023."

"For our NASH thyroid hormone receptor beta agonist program, we will be sharing new safety and pharmacodynamic data after multiple doses of ALG-055009 in subjects with hyperlipidemia at The Liver Meeting (AASLD). The emerging safety and anti-lipid activity data appear favorable and support advancing this drug into phase 2 development."

"As with our development programs, our discovery projects are also making important progress," said Leonid Beigelman, PhD, President of Aligos. "ALG-097558, our potent, pan-coronavirus protease inhibitor that doesn’t require boosting with ritonavir is currently undergoing Phase 1 enabling non-clinical studies and we plan to initiate clinical evaluation of this important drug candidate in Q2 2023."

Recent Business Progress

Aligos Portfolio of Drug Candidates

HBV Programs

ALG-000184 (CAM) – Evaluation of a range of doses given over 28 days to both HBeAg positive and HBeAg negative CHB subjects is largely complete. New data from cohorts evaluating 100 and 300 mg in HBeAg positive CHB subjects will be presented at The Liver Meeting (AASLD) in November. Based on the favorable safety and antiviral activity profile from these cohorts, the Study Review Committee (SRC) recommended the evaluation of 100 mg and 300 mg in HBeAg positive CHB subjects for up to 48 weeks. We anticipate sharing antiviral activity data from these new cohorts throughout 2023.
ALG-125755 (siRNA) – Single ascending doses (SAD) of ALG-125755 are currently being evaluated in healthy volunteers in New Zealand. If the safety profile is favorable, we anticipate initiating cohorts evaluating SAD in CHB subjects in Q1 2023 and sharing data at scientific conferences throughout 2023.
NASH Program

ALG-055009 – Evaluation of single and multiple ascending doses (SAD, MAD) in healthy volunteers and subjects with hyperlipidemia is complete and MAD data will be presented in November at The Liver Meeting (AASLD). Data from this Phase 1 study continue to be favorable.
COVID-19

ALG-097558 – First in human enabling nonclinical studies are ongoing. We anticipate initiating the clinical evaluation of single and multiple ascending doses of this drug candidate in healthy volunteers in Q2 2023.
Financial Results for the Third Quarter 2022

Cash, cash equivalents, and investments totaled $142.3 million as of September 30, 2022, compared with $205.8 million as of December 31, 2021. We continue to believe our cash balance provides sufficient cash to fund planned operations into the first half of 2024.

Net losses for the three months ended September 30, 2022, were $18.6 million or basic and diluted net loss per common share of $(0.44), compared to net losses of $33.1 million or basic and diluted net loss per common share of $(0.78) for the three months ended September 30, 2021.

Research and development (R&D) expenses for the three months ended September 30, 2022, were $17.8 million compared with $28.1 million for the same period of 2021. The decrease in R&D expenses for this comparative period is primarily attributable to a decrease in third-party expenses due primarily to our continued winddown related to the discontinuation of our STOPS and ASO programs, and the manufacturing of drug supply in advance of our clinical trial activity for our CAM and siRNA programs. Total R&D stock-based compensation expense incurred for the three months ended September 30, 2022, was $1.9 million compared with $1.9 million for the same period of 2021.

General and administrative (G&A) expenses for the three months ended September 30, 2022, were $5.3 million compared with $6.5 million for the same period of 2021. The decrease in G&A expenses for this comparative period is primarily attributable to facility costs and updated expense allocations. Total G&A stock-based compensation expense incurred for the three months ended September 30, 2022, was $1.5 million compared with $1.7 million for the same period of 2021.

On November 2, 2022 Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on creating and delivering engineered cells as medicines, reported financial results and business highlights for the third quarter 2022 (Press release, Sana Biotechnology, NOV 2, 2022, View Source [SID1234622797]).

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"Our team is executing well, and 2023 is shaping up to be an important year for the company as we look forward to generating our first data in patients," said Steve Harr, Sana’s President and Chief Executive Officer. "For SC291, we expect to generate tumor response data and CAR T cell persistence data, which have the potential to highlight differentiation from current CAR T programs and provide generalizable insights on how preclinical results for our hypoimmune platform (HIP) will translate into patients. For SG295, our scientists have developed a second-generation process that is many times more potent and has the potential to lead to better efficacy, safety, and manufacturability. Given the promise and potential of this program, we will take more time to implement these changes and now expect to file the IND in 2023. Our team continues to make meaningful progress across our pipeline and platforms while maintaining a strong balance sheet to fund our lead programs through early clinical development."

Select Program Updates

SC291 (HIP-modified CD19-targeted allogeneic CAR T) – We remain on track to file an IND this year. Preclinical data continue to highlight the potential for the HIP platform to hide our allogeneic cells from immune detection, creating the potential for longer CAR T cell persistence and higher durable complete response rates in cancer patients. Additionally, our manufacturing process appears to create, in a replicable fashion, high quality T cells at a scale with the potential for hundreds of doses per batch. We intend to study this therapy in a range of B cell malignancies and report data beginning next year.

SG295 (in vivo CAR T with CD8-targeted fusogen delivery of a CD19-targeted CAR) – This program has the potential to generate CAR T cells in vivo (inside the patient), eliminating the need for conditioning chemotherapy and complex CAR T cell manufacturing. We have demonstrated the ability to safely and selectively deliver the CAR gene to T cells in vivo and to generate active CAR T cells in multiple preclinical models. Recently, our scientists have developed a second-generation manufacturing process that results in at least a 50X improvement in product potency, which we believe has the potential to translate into better efficacy, safety, and long-term manufacturability. We have decided to bring this second-generation process forward for our first-in-human studies in patients with B cell malignancies. While implementing this change will delay the IND filing until 2023, we believe the improved process has the potential to provide a better therapy for patients.

SC276 (HIP-modified, CD22/CD19-targeted allogeneic CAR T) – We remain on track for an IND in 2023. This program will incorporate the HIP platform, potentially offering greater persistence compared to other allogeneic CAR T therapies, and target CD22 and/or CD19 expressing cells. This therapy has the potential to treat patients with B cell malignancies who have either failed previous CAR T therapies or are naive to CAR T therapy.

SC451 (HIP-modified, stem-cell derived pancreatic islet cell therapy for patients with type 1 diabetes) – Preclinical data continue to highlight the potential for HIP modifications to allow these cells to evade both allogeneic and autoimmune rejection in type 1 diabetes. The goal of this therapy is to transplant hypoimmune islet cells with no immunosuppression into patients with type 1 diabetes so that these cells produce insulin in a physiologic manner in response to glucose. We now expect to file our IND in 2024, with early clinical data from this product candidate in 2024.
Third Quarter 2022 Financial Results

GAAP Results

Cash Position: Cash, cash equivalents, and marketable securities as of September 30, 2022 were $511.6 million compared to $746.9 million as of December 31, 2021. The decrease of $235.3 million was primarily driven by cash used in operations of $214.0 million and cash used for the purchase of property and equipment of $16.3 million. Cash used in operations includes $6.2 million of upfront payments related to licensing technology for the company’s CD22 and BCMA programs, $3.2 million of costs incurred related to the previously planned manufacturing facility in Fremont, CA (the Fremont facility) which will be replaced by the Bothell, WA site (the Bothell facility), as well as multiple cash payments that will not recur this year.

Research and Development Expenses: For the three and nine months ended September 30, 2022, research and development expenses, inclusive of non-cash expenses, were $76.7 million and $222.0 million, respectively, compared to $53.2 million and $140.1 million for the same periods in 2021. The increases of $23.5 million and $81.9 million, respectively, were largely due to increases in personnel-related expenses increased headcount to expand Sana’s research and development capabilities, increased third-party manufacturing costs, facility and other allocated costs, and research and laboratory costs. For the nine months ended September 30, 2022, the increase was also due to costs to acquire technology. Research and development expenses for the three and nine months ended September 30, 2022 include non-cash stock-based compensation of $7.4 million and $20.6 million, respectively, and $4.1 million and $9.9 million, respectively, for the same periods in 2021.

Research and Development Related Success Payments and Contingent Consideration: For the three and nine months ended September 30, 2022, Sana recognized non-cash gains of $6.1 million and $79.4 million, respectively, in connection with the change in the estimated fair value of the success payment liabilities and contingent consideration in aggregate, compared to expenses of $16.8 million and $67.8 million, respectively, for the same periods in 2021. The value of these potential liabilities may fluctuate significantly with changes in Sana’s market capitalization and stock price.

General and Administrative Expenses: General and administrative expenses for the three months ended September 30, 2022, inclusive of non-cash expenses, were $15.5 million compared to $13.4 million for the same period in 2021. The increase of $2.1 million was primarily due to operating costs associated with the Fremont facility and stock-based compensation expense. General and administrative expenses for the nine months ended September 30, 2022 were $48.2 million compared to $37.7 million for the same period in 2021. The increase of $10.5 million was primarily due to personnel-related expenses attributable to an increase in headcount to support Sana’s continued research and development activities, the write-off of construction in progress costs incurred in connection with the Fremont facility, and operating costs associated with the Fremont facility. These increases were partially offset by a decrease in legal fees. General and administrative expenses for the three and nine months ended September 30, 2022 include stock-based compensation of $2.6 million and $7.2 million, respectively, and $1.9 million and $5.2 million, respectively, for the same periods in 2021.

Net Loss: Net loss for the three and nine months ended September 30, 2022 was $85.1 million, or $0.45 per share, and $189.0 million, or $1.01 per share, respectively, compared to $83.3 million, or $0.46 per share, and $245.2 million, or $1.53 per share, respectively, for the same periods in 2021.
Non-GAAP Measures

Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the nine months ended September 30, 2022 was $219.8 million compared to $146.4 million for the same period in 2021. Non-GAAP operating cash burn is the decrease in cash, cash equivalents, and marketable securities, excluding cash inflows from financing activities, cash outflows from business development activities, and the purchase of property and equipment.

Non-GAAP General and Administrative Expense: Non-GAAP general and administrative expense for the three and nine months ended September 30, 2022 was $15.5 million and $43.8 million, respectively, compared to $13.4 million and $37.7 million, respectively, for the same periods in 2021. Non-GAAP general and administrative expense excludes the write-off of construction in progress costs incurred in connection with the Fremont facility.

Non-GAAP Net Loss: Non-GAAP net loss for the three and nine months ended September 30, 2022 was $91.2 million, or $0.48 per share, and $264.0 million, or $1.42 per share, respectively, compared to $66.5 million, or $0.37 per share, and $177.4 million, or $1.18 per share, respectively, for the same periods in 2021. Non-GAAP net loss excludes certain one-time costs to acquire technology, non-cash expenses related to the change in the estimated fair value of contingent consideration and success payment liabilities, and the write-off of construction in progress costs incurred in connection with the Fremont facility.
A discussion of non-GAAP measures, including a reconciliation of GAAP and non-GAAP measures, is presented below under "Non-GAAP Financial Measures."

On November 2, 2022 Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer, reported financial results for the third quarter ended September 30, 2022 and provided a pipeline update on its six clinical-stage molecules – targeting TIGIT, the adenosine axis (CD73 and A2a/A2b), HIF-2a and PD-1 – across multiple common cancers (Press release, Arcus Biosciences, NOV 2, 2022, View Source [SID1234622796]). As part of its pipeline update, the company is announcing a strategic protocol amendment to the ARC-10 registrational Phase 3 study following proactive discussions with the U.S. Food and Drug Administration (FDA). The new, amended ARC-10 study design will compare domvanalimab and zimberelimab to pembrolizumab, a global standard-of-care (SOC) in PD-L1-high NSCLC, the target indication for ARC-10; the study will no longer include a chemotherapy arm.

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"Arcus continues to execute on its strategy to be a leader in the TIGIT field and to advance our clinical pipeline, including our adenosine pathway modulators etrumadenant and quemliclustat," said Terry Rosen, Ph.D., chief executive officer of Arcus. "The optimization of our Phase 3 ARC-10 study design and the initiation of the fourth Phase 3 registrational study for domvanalimab position Arcus to leverage the full potential of domvanalimab. We continue to have strong conviction that domvanalimab plus zimberelimab has the potential to be a best-in-class anti-TIGIT / anti-PD-(L)1 regimen and to create a new standard-of-care in multiple settings. With $1.2 billion and a deep pipeline of six, soon to be eight, clinical-stage molecules, we are poised to be a leader in the development of innovative therapies for cancer patients in need."

ARC-10 Strategic Amendment

ARC-10 is a randomized Phase 3 study evaluating the efficacy of domvanalimab plus zimberelimab in 1L PD-L1≥50% locally advanced or metastatic NSCLC.

The strategic amendment revises the design to compare the combination of domvanalimab plus zimberelimab to SOC pembrolizumab, enabling an expanded geographic footprint for the trial. In addition, this amendment addresses the importance, both clinically and commercially, of using an accepted U.S. SOC as an active comparator for the trial, in the context of a potentially shifting U.S. regulatory landscape for oncology agents. The re-design of the ARC-10 study complements the ongoing STAR-121 study, comparing domvanalimab plus zimberelimab and chemotherapy versus SOC pembrolizumab plus chemotherapy, in 1L PD-L1 all-comer NSCLC. Together with the PACIFIC-8 study in Stage III NSCLC, these three registrational Phase 3 trials will establish the potential benefit of domvanalimab in a broad spectrum of NSCLC settings.

The key components of the protocol amendment for ARC-10, following proactive discussions with the FDA, are as follows:

ARC-10 will now compare domvanalimab plus zimberelimab to SOC pembrolizumab for 1L PD-L1≥50% metastatic NSCLC and will no longer contain a chemotherapy arm.
The prior study design included three arms and compared domvanalimab plus zimberelimab to zimberelimab, and zimberelimab to chemotherapy.
The amendment significantly simplifies the study design and reduces the number of arms from three to two; the total trial size remains approximately the same (n=600).
Elimination of the chemotherapy arm and inclusion of the pembrolizumab arm as the active comparator will enable site activation in the U.S. and other countries that were previously excluded from the study based on SOC.
Based on FDA feedback on the primary endpoint for immuno-oncology therapies in 1L NSCLC, overall survival (OS) will be the primary endpoint.
Additional Pipeline Highlights:

Domvanalimab (Fc-silent anti-TIGIT monoclonal antibody)

Domvanalimab Updates:

In the third quarter, Arcus and Gilead initiated three new domvanalimab-based combination studies, including two registrational Phase 3 trials:
STAR-121, being operationalized by Gilead, is a registrational Phase 3 study to evaluate domvanalimab plus zimberelimab and chemotherapy versus SOC pembrolizumab plus chemotherapy in 1L PD-L1 all-comer NSCLC;
STAR-221 is a registrational Phase 3 study to evaluate domvanalimab plus zimberelimab and chemotherapy versus SOC nivolumab plus chemotherapy in 1L locally advanced unresectable or metastatic gastric, esophageal and gastro-esophageal junction adenocarcinomas;
ARC-21 is a Phase 2 study to evaluate domvanalimab plus zimberelimab-based combinations in upper gastrointestinal (GI) cancers.
In the third quarter, Arcus completed enrollment of ARC-7, a 150-patient, randomized Phase 2 study evaluating the safety and efficacy of zimberelimab alone vs. domvanalimab plus zimberelimab vs. domvanalimab plus zimberelimab and etrumadenant in 1L PD-L1≥50% metastatic NSCLC.
Upcoming Domvanalimab Milestones:

The fourth interim analysis and topline data disclosure for ARC-7 is on track for this quarter, with a planned presentation of data at a medical conference in 2023.
EDGE-Lung, a Phase 2 platform study to evaluate domvanalimab-, quemliclustat-, and zimberelimab-based combinations in advanced NSCLC, is expected to be initiated by the end of 2022.
Etrumadenant (A2a/A2b adenosine receptor antagonist)

Upcoming Etrumadenant Milestones:

Data from the randomized cohort of ARC-6 evaluating etrumadenant plus zimberelimab and docetaxel versus docetaxel in second-line (2L) metastatic castrate-resistant prostate cancer (CRPC) are expected in-house by year-end, with a data presentation planned for 2023.
Data from ARC-9, a Phase 1b/2 study evaluating etrumadenant-based combinations in 2L and third-line (3L) metastatic colorectal cancer (mCRC), are expected in the first half of 2023.
Quemliclustat (small-molecule CD73 inhibitor)

Upcoming Quemliclustat Milestones:

In the first half of 2023, Arcus expects PFS and OS data from all 90 patients in its ongoing ARC-8 trial evaluating quemliclustat plus chemotherapy with or without zimberelimab in first-line pancreatic cancer.
EDGE-Lung, a Phase 2 platform study to evaluate domvanalimab-, quemliclustat-, and zimberelimab-based combinations in advanced NSCLC, is expected to be initiated by the end of 2022.
Arcus expects to initiate one or more cohorts with quemliclustat-based combinations in GI cancers in the ongoing ARC-21 study.
AB521 (HIF-2a inhibitor)

AB521 Update:

In the third quarter, Arcus initiated ARC-20, a Phase 1/1b study exploring the safety and clinical activity of AB521 in cancer patients.
In October, Arcus presented data at the EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) Molecular Targets and Cancer Therapeutics Symposium from the fourth cohort of ARC-14, a healthy volunteer study of AB521. The pharmacokinetic (PK) and pharmacodynamic (PD) data in healthy volunteers continue to support a potentially improved clinical profile compared to that of the approved HIF-2a inhibitor.
Discovery Programs:

Arcus remains on track to initiate a Phase 1 trial in cancer patients for AB598, its anti-CD39 antibody, in the first half of 2023.
Arcus expects to initiate a Phase 1 trial in 2023 for its next small molecule program, AB801, a potent and highly selective Axl inhibitor. The early development plan is expected to focus on treatment-resistant tumor types, such as STK11-mutant NSCLC.
Arcus expects to file an IND for its first candidate for the treatment of inflammatory disease in 2023. In October, as part of their research collaboration, Arcus received the third milestone payment of $5 million under its funding agreement with BVF Partners, L.P.
Financial Results for the Third Quarter 2022

Cash, cash equivalents and marketable securities: were $1,191.9 million as of September 30, 2022, compared to $681.3 million as of December 31, 2021. The increase was primarily due to the receipt of $725 million from Gilead in January 2022. Arcus expects cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations into 2026.
Revenues: Revenues were $33.6 million for the three months ended September 30, 2022, compared to $9.5 million for the same period in 2021. In the three months ended September 30, 2022, Arcus recognized $23.7 million in license and development service revenues for all programs optioned by Gilead, including $8.9 million in revenues due to changes in the total estimated effort to be incurred in the future to satisfy the performance obligations, primarily driven by zimberelimab. Arcus further recognized $8.3 million in collaboration revenue related to Gilead’s ongoing rights to access Arcus’s research and development pipeline in accordance with the Gilead collaboration agreement, as well as $1.5 million related to the collaboration agreement with Taiho. In the three months ended September 30, 2021, Arcus recognized $7.7 million in other collaboration revenue related to Gilead’s access to Arcus’s research and development pipeline, as well as $1.8 million related to the Taiho collaboration agreement. Revenues were $78.3 million for the nine months ended September 30, 2022, compared to $28.4 million for the same period in 2021.
R&D Expenses: Research and development expenses were $76.7 million for the three months ended September 30, 2022, compared to $71.3 million for the same period in 2021. Arcus’s expanding clinical and development activities for domvanalimab and zimberelimab in combination studies drove increases in manufacturing and clinical costs. Arcus’s growing employee base and 2022 stock awards drove an $8.5 million increase in employee compensation costs, which includes a $0.2 million increase in non-cash stock-based compensation. The above increases in research and development costs were mostly offset by increased cost-sharing reimbursements compared to the same quarter in the prior year. The increase in cost-sharing reimbursements was driven by the four programs optioned by Gilead in the current quarter, compared to a single program in the same quarter of the prior year. Research and development expenses were $207.8 million for the nine months ended September 30, 2022, compared to $206.4 million for the same period in 2021.
G&A Expenses: General and administrative expenses were $26.3 million for the three months ended September 30, 2022, compared to $16.3 million for the same period in 2021. The increase was driven by the increased administrative costs to support the growing size and complexity of Arcus’s clinical development organization associated with Arcus’s expanding clinical pipeline and collaboration obligations. Arcus’s growing employee base and 2022 stock awards drove a $3.7 million increase in employee compensation costs, which includes a $1.6 million increase in non-cash stock-based compensation, as well as increases in office facilities and consulting expenses. General and administrative expenses were $76.1 million for the nine months ended September 30, 2022, compared to $49.0 million for the same period in 2021.
Net Loss: Net loss was $64.9 million for the three months ended September 30, 2022, compared to a net loss of $78.0 million for the same period in the prior year. Net loss was $199.5 million for the nine months ended September 30, 2022, compared to a net loss of $226.5 million for the same period in the prior year.

dom: domvanalimab; durva: durvalumab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; nivo: nivolumab; pembro: pembrolizumab; quemli: quemliclustat; SOC: standard-of-care; zim: zimberelimab

ccRCC: clear-cell renal cell carcinoma; CRC: colorectal cancer; CRPC: castrate-resistant prostate cancer; GI: gastrointestinal; NSCLC: non-small cell lung cancer; PDAC: pancreatic ductal adenocarcinoma

About the Gilead Collaboration

In May 2020, Gilead and Arcus entered into a 10-year collaboration that provided Gilead immediate rights to zimberelimab and the right to opt into all other Arcus programs arising during the collaboration term. In November 2021, Gilead and Arcus amended the collaboration in connection with Gilead’s option exercise for three of Arcus’s then-clinical stage programs. For all other programs that are in clinical development or new programs that enter clinical development thereafter, the opt-in payments are $150 million per program. Gilead’s option, on a program-by-program basis, expires after a specified period of time following the achievement of a development milestone for such program and Arcus’s delivery to Gilead of the requisite qualifying data package. Concurrent with the May 2020 collaboration agreement, Gilead and Arcus entered into a stock purchase agreement under which Gilead made a $200 million equity investment in Arcus. That stock purchase agreement was amended and restated in February 2021 in connection with Gilead’s increased equity stake in Arcus from 13% to 19.5%, with an additional $220 million investment.

Gilead and Arcus are co-developing and equally share global development costs for five clinical candidates, including domvanalimab, an Fc-silent anti-TIGIT antibody, etrumadenant, a dual adenosine A2a/A2b receptor antagonist, quemliclustat, a small molecule inhibitor of CD73, and zimberelimab, an anti-PD1 antibody.