Arcus Biosciences, Inc.

Good afternoon. Thank you for attending today's Arcus Biosciences second quarter 2024 earnings call. My name is Tamia and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to your host, Pia Ease, Vice President of Investor Relations and Strategy. You may proceed.

Hello everyone and thank you for joining us on today's conference call to discuss ARCIS' second quarter 2024 financial results and pipeline updates. I'd like to remind you that on this call, management will make forward-looking statements, including statements about our 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 annual report on Form 10-K and quarterly report on Form 10-Q that have been filed with the SEC. We strongly encourage you to review our filings. Today, you'll hear from our CEO, Terry Rosen, COO, Jennifer Jarrett, and CFO, Bob Gels. We'll also be joined by our CMO, Dimitri Naughton, and President, Juan Jaen, for questions after the prepared remarks. With that, I'll turn the call over to Terry.

Thanks very much, Pia, and thank you all for joining us this afternoon. 2024 has already been a very exciting year for us and also very consequential. We completed an enrollment of our first Phase III trial, STAR-221, 1,000-plus patient study in first-line upper GI adenocarcinomas. And we're on the brink of advancing two additional molecules into Phase III studies, both of which are supported by strong data and targeting huge unmet needs and market opportunities. Casdatafan, or Cas, our HIF-2-alpha inhibitor, will be our newest Phase III entrant. We're going to share a lot of information about this program today and, in fact, throughout the rest of the year. The HIF-2-alpha inhibition mechanism has been clinically validated by the approval of Merck's Belzudafan, which has been shown to have robust single-agent activity in clear cell renal cell carcinoma or Clear Cell RCC, as we'll call it throughout the call. Belzudafan is already generating over $500 million in the annualized run rate sales just six months after approval in Clear Cell RCC. This clearly demonstrates the unmet need in this indication, the excitement around the mechanism, and the significant opportunity which we intend to capitalize upon. In addition to Belzudafan monotherapy achieving a response rate of roughly 20%, and meaningful tumor reduction in a much higher percentage of the late-line patient study population. Probably one of the most exciting aspects of the HIF-2-alpha mechanism is its durability. In the Phase 1-2 study for Belzudafan, over 20% of patients had not progressed and remained on treatment beyond two years. And several of these patients, in fact, are now approaching four years on treatment. And in the Phase 3 Registrational LightSpark-005 trial, at the time of the first data presentation, four times as many patients were still on treatment with Belzodifan than with the comparator Everolimus. This is pretty remarkable for the third-line plus setting, and it contrasts with the many TKI therapies where patients may respond quickly, but then they rapidly progress. The tolerability of Belzodifan, with on-mechanism anemia and hypoxia being the only meaningful treatment emergent adverse events, enables patients to remain on treatment for long periods. And we've consistently heard from clinicians how well-tolerated Belzutifan has been for patients, particularly relative to the TKIs. While Belzutifan is a good molecule, with Cas, we have a potentially best-in-class molecule due to its excellent pharmacodynamic and dose-proportional pharmacokinetic profile. It's really a great molecule. Cas's PKPD profile enables us to deliver five or more times the PD equivalent of the approved dose of Belzodifan, which may result in more rapid onset and greater clinical efficacy relative to those of Belzodifan. And in fact, in our ARC-20 study, we're already seeing this differentiation play out in the data, which we look forward to sharing later this year. The further leverage casts improved profile We're pursuing differentiated combinations relative to those being investigated with dozodifant. You're going to hear more about this today from Jen when we disclose for the first time the design of our first Phase III study for Cas, PEEK1. We have some other exciting studies in the works that we're going to talk more about in the near future. Moving on to our FC silent antitigin antibody, Dom-vanillamab, and STAR-221, our Phase III trial evaluating Dom plus our anti-PD-1 Zim, plus chemo and first-line upper GI cancers. In June, we completed enrollment of STAR-221, enrolling over 1,000 patients in just 18 months. And we expect STAR-121 to complete enrollment later this year. So we're now turning our focus towards data readouts. While we recognize, you know, the anti-tigit program and DOM is a show-me story for many of you, Our confidence is actually stronger than ever, data-driven, and we remain convinced that the FC silent configuration has significant advantages over the FC active antibodies. This is because the FC anti-tigit antibodies substantially deplete peripheral regulatory T cells and correspondingly increase immune-related AEs. While increasing the incidence of AEs is obviously intrinsically undesirable, Perhaps more detrimental is the need to withhold or discontinue drug to manage these AEs, which may negatively impact efficacy. We've now seen two Merck studies where they explicitly called out greater rates of immune AEs, leading to treatment continuation as the primary reason for trial failure. Recall also that Merck is using a co-formulation strategy, necessitating simultaneous discontinuation both components of their anti-PD-1, anti-TIGIT therapy. Additionally, because TIGIT is expressed on several other types of immune cells, depleting TIGIT-bearing immune cells can be counterproductive for any therapeutic strategy that's designed to stimulate the immune system to eliminate cancer cells. We have two impactful datasets coming that we're going to talk about a bit later. both of which we believe will not only restore but enhance confidence in the potential of the TIGIT pathway, so TIGIT pathway in general. But in particular, INDOM is an FC-saline anti-TIGIT antibody. I want to briefly comment on our CD73 and adenosine receptor programs, QEMLI and eTRUMA, respectively. For eTRUMA, at ASCO, we presented data from our randomized ARC9 study which showed unprecedented median overall survival of over 20 months for an intramural-based combination of third-line colorectal cancer. These results surpass any survival results reported for clinical trials in third-line colorectal cancer. In the second half of the year, we also plan to present biomarker data from this study that describe the ability of a tumor to block the effects of adenosine in tumors, as well as the relationship between CD73 expression, and patient survival. So we're going to link mechanism to clinical outcomes. Both we and our clinical advisors are eager to advance eTRUMA and colorectal cancer. We're going to update you once we finalize next steps for this program. For QEMLI, we expect to start our Phase III study in pancreatic cancer, which we're now calling PRISM-1, by early next year. We're extremely excited that Taiho decided last month to exercise its option to the QEMLI program. Taiho will make a payment for the option exercise, and they're also obliged to pay us development milestones, which are expected to be triggered next year. In return, Taiho received development and commercialization rights to QEMLI in Japan, as well as other countries in Asia, but excluding mainland China. They'll now operationalize and be responsible for the costs of PRISM-1 in Japan. Their exercise of this option further illustrates the potential for Coimbra and pancreatic cancer. We expect TAIO to play a valuable role in the successful execution of the PRISM-1 study. Finally, we're well-enabled to continue to advance our large portfolio with a billion dollars in cash and investments on hand plus the $100 million continuation payment due from Gilead, as well as the multiple partnerships that provide significant funding for programs. So let me summarize where we are today. We are extremely well positioned due to the investment that we've made in DOM, including our three phase three studies, one of which was to complete an enrollment and the second that is expected to complete enrollment this year. As such, we anticipate 2024 will represent the peak of our R&D investment in DOM. With enrollment of STAR 221 behind us, we're now preparing for data and potential registration. The timing of this is perfect. We're now able to shift resources and investment to our next strategic priority, CAS Data Fan. CAS represents a very rare opportunity. We have a validated target in HIF-2-alpha. Belzutifan has been embraced by physicians and patients as an important new standard of care, despite what are very clear limitations. CAST has an improved profile, and this program is now central to our development focus. Our emphasis is on creating a comprehensive development program that fully leverages everything that we have been able to learn from Belzutifan and our growing CAST dataset. We expect to share a continuous flow of data and plans over the next year. Our initial phase three trial, peak one, is the start of this transition and commitment. I'd like to now turn things over to Jen to speak a bit about CAS in greater detail.