Sign in

You're signed outSign in or to get full access.

AB

Arcus Biosciences, Inc. (RCUS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $26.0M, down 46% y/y, but above S&P Global consensus ($20.25M); EPS was ($1.27), modestly better than consensus ([$1.29]); Arcus maintained FY25 GAAP revenue guidance of $225–$235M . Revenues: $26.0M vs $20.25M; EPS: ($1.27) vs ($1.29)*.
  • Casdatifan Phase 1/1b ARC‑20 pooled monotherapy data showed mPFS of 12.2 months and 18‑month landmark PFS of 43%, with 35% confirmed ORR at the Phase 3 dose; PEAK‑1 (Phase 3) is enrolling, and early‑line strategies advance into 2026 .
  • Domvanalimab + zimberelimab + chemo achieved 26.7 months median OS in 1L upper GI adenocarcinomas (EDGE‑Gastric, Arm A1), presented at ESMO and published in Nature Medicine; STAR‑221 Phase 3 OS readout expected in 2026 .
  • Cash and investments were $841M at quarter‑end, with management reiterating runway through initial pivotal readouts (domvanalimab, quemliclustat, casdatifan, including PEAK‑1); R&D expected to decline starting Q4 2025 as TIGIT Phase 3 costs taper .
  • Catalysts: casdatifan ARC‑20 maturation (1H/Mid/2H 2026), STAR‑221 Phase 3 OS, PRISM‑1 completion, AstraZeneca eVOLVE‑RCC02 Phase 1b data and go/no‑go for Phase 3 in 2H 2026 .

What Went Well and What Went Wrong

What Went Well

  • “Casdatifan has a best‑in‑class profile, based on a meaningfully higher response rate and longer PFS relative to the only marketed HIF‑2α inhibitor,” with pooled ARC‑20 mPFS of 12.2 months, 18‑month PFS landmark of 43%, and 35% confirmed ORR at 100mg QD; 74% of responders remained on treatment .
  • Domvanalimab + zimberelimab + chemo showed 26.7 months median OS in 1L upper GI adenocarcinoma, supporting the STAR‑221 Phase 3 registrational path (OS expected in 2026) .
  • Funding strength: $841M cash/equivalents/marketable securities and reiterated runway through PEAK‑1 and initial pivotal readouts; Taiho’s option exercise for casdatifan in Japan/Asia adds optionality .

What Went Wrong

  • Revenue fell y/y to $26M due to absence of prior‑year license revenue and lower Gilead collaboration revenues; net loss widened to ($135M) as late‑stage programs ramped (PRISM‑1, PEAK‑1) despite G&A decreases .
  • AstraZeneca’s eVOLVE‑RCC02 Phase 1b temporarily paused new recruitment due to immune‑mediated AEs (≤ Grade 3); ongoing participant monitoring will inform next steps .
  • R&D reimbursements declined y/y ($28M vs $37M), and expense volatility tied to manufacturing and standard‑of‑care therapeutic purchases continues; R&D downshift guided to start Q4 2025 .

Financial Results

Income Statement and EPS vs Prior Periods and Estimates

MetricQ3 2024Q2 2025Q3 2025Vs. Estimates
Total Revenues ($USD Millions)$48 $160 $26 $26 vs $20.25* → bold beat
License & Dev. Services Rev. ($M)$41 $152 $20 —
Other Collaboration Rev. ($M)$7 $8 $6 —
Loss from Operations ($M)($105) ($8) ($142) —
Net Income (Loss) ($M)($92) $0 ($135) —
EPS Basic & Diluted ($)($1.00) $— ($1.27) ($1.27) vs ($1.29)* → bold beat

Values marked with * are retrieved from S&P Global.

Balance Sheet Highlights

MetricDec 31, 2024Sep 30, 2025
Cash, Cash Equivalents & Marketable Securities ($M)$992 $841
Total Assets ($M)$1,150 $974
Total Liabilities ($M)$665 $538
Total Stockholders’ Equity ($M)$485 $436

Clinical/Operating KPIs

KPIValueContext
Casdatifan ARC‑20 pooled mPFS (monotherapy, late‑line ccRCC)12.2 months Pooled analysis of 121 patients
18‑month landmark PFS (pooled)43% Sustained benefit
100mg QD cohort confirmed ORR35%; mPFS not reached (>12 months median follow‑up) PEAK‑1 dose/formulation
Responders remaining on treatment74% (28 of 38 confirmed responders) Durability
Domvanalimab + zimberelimab + chemo median OS26.7 months (EDGE‑Gastric Arm A1) ESMO presentation, Nature Medicine
FY25 GAAP Revenue Guidance$225–$235M Maintained

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP RevenueFY 2025$225–$235M (Aug 6) $225–$235M (Oct 28) Maintained
R&D Expense Trajectory2H 2025Elevated CMC costs through Q3; decline commencing Q4 (Aug 6) Decline commencing Q4 reaffirmed (Oct 28) Maintained
Cash RunwayThrough pivotal readouts incl. PEAK‑1Sufficient (Aug 6) Sufficient (Oct 28) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Casdatifan strategy (PEAK‑1, early‑line)Initiation of PEAK‑1; plan for ARC‑20 monotherapy data in fall; AstraZeneca eVOLVE‑RCC02 initiated ARC‑20 pooled mPFS 12.2 months; 18‑month PFS 43%; Taiho exercises option in Asia; multiple 2026 readouts; PEAK‑1 enrolling Strengthening efficacy signal; expanded regional licensing
TIGIT (domvanalimab + zimberelimab)Phase 3 STAR‑221 OS expected 2026 26.7‑month OS in Phase 2 EDGE‑Gastric; STAR‑221 timing unchanged Positive validation; on track
CD73 (quemliclustat)FDA Orphan Drug Designation; PRISM‑1 enrollment expected complete by Q3‑2025 PRISM‑1 enrollment completed within 12 months Execution ahead of plan
R&D execution/costsElevated CMC costs through Q3; expected R&D decline in Q4 R&D up y/y to $141M but decline guided from Q4 Peak past; normalized decline ahead
I&I portfolioEarly discovery emphasis Five new programs disclosed; MRGPRX2 small molecule entering clinic in 2026 New pipeline leg introduced

Management Commentary

  • “Casdatifan has a best‑in‑class profile, based on a meaningfully higher response rate and longer PFS… We remain well capitalized and funded through readout of multiple Phase 3 trials…” — Terry Rosen, Ph.D., CEO .
  • On durability and dose: “With the 100mg tablet, we have a median time on treatment of over 12 months… we are quite confident the median PFS is going to be over 12 months for that tablet.” — Terry Rosen, Investor Event (Oct 6) .
  • On combination strategy: “We expect this [castadafen + cabozantinib] to be a long‑lasting and durable story… no overlapping toxicity; no patients discontinued both products.” — Richard Markus, CMO .
  • On market sizing and approach: “We should get well more than 50% share of the HIF‑2α market… it’s only us and Merck.” — Jennifer Jarrett, COO .

Q&A Highlights

  • Best‑in‑class profile versus belzutifan: management emphasized faster time to response, higher ORR, lower primary progression, and longer PFS without added safety burden, supported by translational EPO suppression correlations .
  • Development path clarity: PEAK‑1 uses PFS as primary endpoint for full approval; OS is key secondary with expected adequacy at submission, distinguishing from dual‑endpoint designs in competitor trials .
  • Frontline strategy: preference for TKI‑free PD‑1/CTLA‑4 + HIF‑2α (eVOLVE‑RCC02), citing overlapping IO/TKI toxicities that can hamper triple regimens; AstraZeneca operating and cost‑sharing .
  • Pricing approach: intend to price near belzutifan with flat pricing across doses; potential flexibility as cabozantinib generics emerge .
  • Operational execution: strong enrollment track record (e.g., >1,000 patients in STAR‑221 in 18 months; PRISM‑1 fully enrolled in ~9–12 months) to support rapid PEAK‑1 timelines .

Estimates Context

MetricConsensus (S&P Global)ActualSurprise
Revenue ($M)$20.25*$26.00 +$5.75 → bold beat
EPS ($)($1.29)*($1.27) +$0.02 → bold beat
EPS – # of Estimates3*——
Revenue – # of Estimates7*——

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Arcus delivered a clean top‑line beat on both revenue and EPS while maintaining FY25 revenue guidance ($225–$235M), supported by license/collaboration streams and robust cash runway through multiple Phase 3 readouts .
  • Casdatifan’s late‑line ARC‑20 data continue to strengthen the best‑in‑class narrative versus belzutifan, with superior durability and response metrics likely to drive PEAK‑1 success and frontline momentum via eVOLVE‑RCC02 .
  • Near‑term operating leverage should improve as TIGIT Phase 3 expenses taper from Q4 2025, moderating R&D intensity against growing clinical validation cycles .
  • The 26.7‑month OS in EDGE‑Gastric materially de‑risks the domvanalimab + zimberelimab program ahead of STAR‑221 OS in 2026, creating a second potential value pillar .
  • Taiho’s option exercise for casdatifan in Japan/Asia enhances ex‑US strategic optionality without sacrificing Arcus’s core economic control elsewhere .
  • Trading implications: incremental estimate revisions should skew positive on casdatifan durability assumptions; watch for PEAK‑1 enrollment updates, AstraZeneca eVOLVE‑RCC02 pace post temporary pause, and PRISM‑1 milestone timing .
  • Medium‑term thesis: dual oncology pillars (HIF‑2α and TIGIT) plus new I&I portfolio provide diversified catalysts through 2026–2027; execution track record and capital position reduce financing risk across pivotal events .

Notes:

  • No Q3 2025 earnings call transcript was available in our catalog; analysis leverages the Oct 6, 2025 Investor/R&D Day transcript for management commentary and Q&A –.
  • All document claims are cited from Arcus filings/releases; estimate comparisons use S&P Global data where marked with *.