Arcus Biosciences, Inc.

Hello, everyone. Thank you for joining us and welcome to the Arcus Biosciences first quarter 2026 business updates and financial results. After today's prepared remarks, we will host a question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Holly Kolke. VP of Corporate Affairs. Holly, please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss Arcasys' first quarter 2026 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 development strategies and our expectations regarding the advantages and opportunities afforded by our investigational products, our clinical development milestones and timelines, our projected cash runway, and our financial outlook. 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. For today's call, please refer to our latest corporate presentation posted in the investor section of our website. This afternoon, you will hear from our CEO, Terry Rosen, Chief Medical Officer, Richard Marcus, President, Juan Jaen, and CFO, Bob Guelph. With that, I'd like to turn the call over to Terry.

Thanks very much, Holly, and thanks, everyone, for joining us this afternoon. We're starting a new era for Arcus with full ownership of our lead program guest data fan, our phase three kidney cancer study peak one enrolling rapidly, a clear path to win in the front line, and a next generation of molecules for inflammation and immunology that can be advanced rapidly into and through development. And with that, the strategic optionality imparted by a rich portfolio of wholly owned molecules and programs. We are at an inflection in value creation for patients and shareholders that will continue to accelerate over the next 12 to 18 months. Arcus has proven to be a highly productive company, creating and advancing a steady stream of potential best-in-class molecules for patients with cancer and inflammatory and autoimmune diseases. We believe that discovery is not a commodity, and we've built exceptional small molecule medicinal chemistry and drug discovery capabilities. Our scientists utilize proven biology to create unmatched medicines designed to raise the standard of care. Since its inception, Arcus has advanced molecules from program initiation to IND filing in as short as 18 months and accelerated platform and signal-seeking studies to move from proof-of-concept phase one studies to randomized phase two and registrational phase three trials in just a few years. Today, the company is laser-focused on castatafan, which represents a market opportunity of more than $5 billion in kidney cancer alone. I want to stress that castatafan's efficacy advantages are underpinned by much better molecular properties and a superior pharmacodynamic profile. This profile reflects the key capabilities in ARCIS that I described earlier. The simple fact is that castatafan hits its target much harder in an amorphous, stained way than does belzutafan is illustrated on slide six. This is a point we've emphasized since the data first emerged. These data are clear and they're striking. We believe this fundamental differentiation between castatafan and belzutafan and the limitations of belzutafan's pharmacodynamic profile and durability of effect are undoubtedly contributors to, if not the principal driver of, the outcome of FlightSpark 012. And the pharmacodynamic advantages of castatafan will continue to result in improved clinical outcomes across lines of therapy. I want to emphasize this point. This dramatic difference in profile has been evident since late last year. It is not esoteric. Its manifestations on clinical outcomes are dramatic and are at the core of our differentiation. No results to date are surprising. Our top priorities for 2026 are clear. One, complete enrollment for peak one, our second line phase three study, and two, initiate a phase three study in the frontline patient population. With the recent outcome of LightSpark 012, castatafan has a clear path to consolidate a fragmented frontline setting as the first hip 2 alpha inhibitor in this setting. Let me spend a moment on why castatafan is at the center of everything we do. We believe castatafan can transform the treatment paradigm in clear cell renal cell carcinoma And our development strategy is designed to generate evidence to secure CAST as a backbone therapy so that every patient has the opportunity to benefit from CAST across each line of therapy. Peak one represents our fast to market strategy. This is designed to build on the clinician enthusiasm that we've seen for CAST as an experimental agent and to generate the data to support the approval of a foundational treatment for Clear Cell RCC as rapidly as possible. Enrollment in PEAK 1 is accelerating, and we're on track to complete enrollment by year-end 2026. We're confident that PEAK 1 will establish CAS plus CABO as the new standard of care in the IO experience setting. The peak sales opportunity for CAS in this setting alone is more than $2 billion. At the same time, we are aggressively building a holistic strategy to embed CAS across the treatment paradigm. We have been making tremendous progress in the frontline setting with multiple IO combinations now enrolling in ARC-20 and generating data in support of our first-line strategy. These approaches offer the greatest potential for long-term survival for patients. One of our key objectives today is to make very clear our integrated development strategy for Cas-Statafed. It's actually quite straightforward. And here's how we believe things will play out. In the first line, our bedrock therapy will be CAS, IPI, anti-PD-1. We believe that we can drive the 35% share of ipinevo to a regimen with greater than 50% of the important first-line market. While the IO regimen of ipinevo is the dominant therapy today, there's a segment of physicians that's always going to want to reach for TKI. particularly for patients with a fast-growing bulky tumor. Therefore, we will also be developing a CAS combination inclusive of a TKI. A TKI with a well-established track record of both efficacy and safety that will allow the patient to have CAS-CABO as a subsequent regimen. Our second-line treatment, now enrolling its registration on trial week one, will be CAS-CABO, building on the standard of care in this line, cabozatinib monotherapy. Finally, we will have a third-line plus regimen cast with another well-established TKI, and we will be investigating this regimen in both Belzunafan-naive and Belzunafan-experienced patients. We think this is a very important kind of cool study. We also plan to explore novel cast combinations in ATC liver cancers. I would like to emphasize that all of the clinical development plans discussed today are accounted for within our existing budget and have no impact on the guidance and runway that we have provided. We now control, in all respects, our early stage pipeline, including our CCR6, CD89, and CD40 ligand programs, all of which are expected to support IND candidates in the next 6 to 18 months. As we focus our resources, capital, human, and otherwise, on the late-stage development of CasDataFan, the follow-on programs in our pipeline are early, but also with clear, early, and capital-efficient clinical proof-of-concept opportunity and huge commercial potential. Therefore, we anticipate low spend and short timelines to get to proof-of-concept that will drive disproportionate value creation. Juan will discuss these programs in more detail later on in this call. If you want to walk away with just one thing from today, it's that Arcus has complete control of its destiny. The core asset of the company is Castatafan, and we have the strategy, data, and resources to transform the treatment of Clear Cell RCC and create a $5 billion plus drug. Bob will further elaborate on the enormous commercial opportunity here. We also continue to leverage our demonstrated competitive advantage in small molecule drug discovery and increasingly scarce capability to generate wholly owned and unique development candidates, the advancement of which further enhances our strategic optionality. With that, I'd like to turn the call over to Richard to discuss our clinical programs.

Thanks, Terry. I'd like to start with Castatafan. As Terry described, our development plan is designed to establish castatafan as a foundational standard of care in Clear Cell RCC so that all patients have the opportunity to benefit from treatment with a castatafan-based regimen across multiple lines of therapy. At ASCO-GU this year, we presented updated ORR and PFS from our four late-line monotherapy cohorts of our 20. As you can see here, the efficacy data continued to improve with longer follow-up at each data presentation. Moving to slide 12, where we show the ORRs for the 100 milligram QD cohort, which is the dose and formulation being used in our phase three studies, the confirmed ORR increased from 35% at the August data cut to 45%. A 45% ORR in this late-line patient population is rather remarkable. It's twice that observed with Belzudafan in LightSpark 5 or any study in this patient population. Similarly, the confirmed ORR for the pooled analysis improved from 31% to 35%, well above the range of ORRs that have been observed with Belzudafan. On slide 13, we show the Kaplan-Meier curve for the 100 milligram cohort. And you can see here that the 100 milligram cohort shows an impressive median PFS of 15.1 months after 17.9 months of median follow-up. On the next slide, we show the latest Kaplan-Meier curve for the pooled analysis. The median PFS remained at 12.2 months. So overall, we're seeing PFS that is two to three times longer with Cas monotherapy than the 5.6 months observed with Belzodifan in the same setting. And as is often discussed, while a median is an important benchmark, it's not the only metric that's important. As you can see here, and perhaps more impressive, is the number of patients still on treatment beyond 18 months and even beyond 24 months. These data clearly support the proposition that castatafan is the best-in-class HIF-2-alpha inhibitor, and our highest priority now is to maximize the potential of this molecule in CCRCC. Our first registrational trial, which is in the second line setting, is well underway. Enrollment in the ongoing phase three study, peak one, is accelerating, and we are on track to complete enrollment by year end. We are confident that peak one will establish CAS plus CAVO as the new standard of care in the IO experience setting. With a sole primary endpoint of PFS and a two to one randomization favoring the experimental arm, and CAVO as the control arm, We believe Peak1 is optimized for both probability of success and speed to data. I'd like to spend some time now on the frontline setting. With the outcome of Merck's LightSpark 12 last month, CAS has the opportunity to be the first HIF-2 alpha inhibitor option in the frontline setting. Treatment in the frontline is generally bifurcated into IO-IO or a TKI anti-PDX combination. This currently leads to the conceptual trade-off between longer time to response or higher primary progression, but with a potential for durable responses and long-term survival with the IO-IO option, or a faster time to response and lower primary progression, but with much more treatment-associated toxicity for the TKI anti-PDX options. There's currently no treatment option that has the ability to both rapidly control disease and provide the best chance for long-term survival. while also having a favorable tolerability profile for long-term use. We believe a Cas plus IO-IO combination in the frontline setting has the potential to deliver on both of these fronts. We are enrolling several cohorts within the ARC20 study, evaluating Cas combinations in the frontline setting. While the data are maturing, primary progressive disease rates have already been shown to be low, just 7%, or two out of 30 patients, for the Cas plus Zimberlimab, our anti-PD-1 cohort. This rate compares favorably to published rates for anti-PD-1 monotherapy or ipinivo in the first-line setting. And in fact, it is close to the rate of a TKI-containing regimen, but without the need for the TKI. We're also enrolling a cohort evaluating Cas plus Zim plus ipi. Emerging data from these cohorts of ARC20 will inform the first line registrational strategy with the goal of finalizing the phase three study protocol and beginning startup activities by the end of this year. In parallel, we will shortly begin to evaluate additional Cas plus TKI containing regimens in the early and late line settings, including in patients with prior bilzudafan experience. This effort contemplates the preference and in fact, a strategic necessity to utilize alternative TKIs as patients advance from one line of therapy to the next. Near term, we expect to have multiple data readouts for castataphid in 2026. First, mature ORR data and initial PFS data for approximately 45 patients treated in the ARC20 Cas plus Cabo cohort in the IO experience setting will be presented at an investor event or at a medical conference. and all patients will have had at least 12 months of follow-up. Second, we will share initial data from the ARC20 cohorts, evaluating Cas in early-line settings, including the cohort evaluating Cas plus Zim in the first line. We also expect updated data from late-line monotherapy cohorts, including overall survival. Before I hand it over to Juan, I'd like to quickly touch on Kremlin-Klustad. our small molecule CD73 inhibitor. CD73 is highly expressed in pancreatic cancer, and high CD73 expression is associated with significantly poor prognosis in several tumor types. In spite of this, as we recently published in Nature Medicine, in our phase two study, ARC8, those patients with higher baseline levels of CD73 or adenosine activity were the ones with longer PFS and OS, in response to QEMLI treatment. Pancreatic cancer is one of the most aggressive cancers with an average five-year survival rate of just 13%. In PRISM-1, our phase three study, evaluating QEMLI plus gemcitabine and nabpaclitaxel versus gemcitabine and nabpaclitaxel in the frontline pancreatic setting, completed enrollment in September of 2025. Results from this study are expected in the first half of 2027. And if positive, PRISM-1 could represent the first transformative therapy for an all-comer first-line patient population in 30 years. There's no biomarker requirement and no known resistant mechanism. And data to date have indicated that the regimen was well-tolerated. Finally, we recently announced that the Phase III STAR-121 study Evaluating our anti-tigit Dom vanillamab plus Zim and chemotherapy versus pembrolizumab plus chemotherapy as a first-line treatment for metastatic non-small cell lung cancer will be discontinued due to futility. While these are certainly not the results we expected, the study had one important positive outcome. In addition to the assessment of Dom in this trial, STAR-121 also evaluated ZIM plus chemo as an exploratory endpoint. ZIM plus chemo performed consistently with respect to overall survival as compared to PEMBRO plus chemo. These data are consistent with what was observed in numerous studies with ZIM. And this randomized dataset provides valuable support for the utility of ZIM as an anti-PD-1 combination partner for Arcus and its collaborators. And now I'd like to turn the call over to Juan to discuss our immunology and information programs. Thanks, Richard.

Arcus has an exceptional small molecule discovery team that has demonstrated time and time again the ability to create highly effective drug candidates against difficult targets. We have been utilizing this expertise to create and develop drugs that have the potential to address very large markets in inflammation, allergy, and autoimmune diseases. In-house expertise in immunology has been a core aspect of our discovery group since ARCIS' funding, having been key to many of our oncology programs. Our team is addressing well-understood and validated mechanisms and has implemented a two-pronged strategy in immunology. First, we leverage our medicinal chemistry capabilities to design and create small molecule drugs that regulate key cytokines therapeutically validated by existing biologics. Secondly, we target the immune cell types that play key roles in human disease and have been historically understudied, such as mast cells and neutrophils. Our first molecule in the immunology area to enter the clinic would be AB102, a highly selective orally bioavailable MRGPRX2 antagonist. In the coming weeks, we will be sharing its clinical profile in an oral presentation at the Society for Investigative Dermatology. The presentation will highlight the ability of AB102 to fully block MRGPRX2-dependent activation and degranulation of mast cells. AB102 inhibits all common human MRGPRX2 variants. We have optimized the potency of AD-102 under physiological conditions, such as in human blood and serum. Due to its potency under these conditions, we believe that AD-102 is a potential best-in-class once-daily oral treatment for chronic spontaneous urticaria and other atopic conditions, such as atopic dermatitis, and allergic asthma. It is expected to enter the clinic in the third quarter of 2026 with TK data available shortly thereafter and potential for proof of concept data in early 2027. In rapid succession, we have selected an oral small molecule TNF inhibitor drug candidate, which is a potential treatment for rheumatoid arthritis, psoriasis, and inflammatory bowel disease. and an orally active small molecule CCR6 antagonist candidate as a potential treatment for psoriasis. Both of these molecules are expected to enter the clinic in 2027. We are very excited about the potential for our IAI programs to provide improved options for patients, and we are working to advance these into the clinic as rapidly as possible. I'd now like to turn the call over to Bob to discuss the market financial results.

Thanks, Juan. Before I get into the quarterly financials, I'd like to spend some time on the multi-billion dollar market opportunity in RCC for Cazdatafan. Sales for RCC drugs in just the major markets are anticipated to grow to $13 billion by 2030. Historically, the market has been dominated by two classes of therapy, IO and TKIs. There have been a number of offerings in both classes, which is why the market is fragmented. In contrast, there are only two HIF-2-alpha inhibitors on the horizon, and we believe our data have demonstrated clear advantages over our only competitor. We have a clear path to consolidate the market and entrench Casdatafan as the primary backbone therapy. The development plan that Terry and Richard described is designed to accomplish this objective. If we look at the sales for the sole marketed HIF-2-alpha inhibitor, Belzudafan, which is currently approved only in late-line clear cell RCC, is already generating annual run rate sales of nearly $1 billion, only scratching the surface. With CasDataFan, we are also targeting earlier line settings, the IO experienced population with peak one and the IO naive first line population with our next pivotal study. These earlier line settings have larger patient populations and longer durations of therapy, both of which contribute to a much larger market opportunity. Specifically, our peak one study targets approximately 20,000 patients in the major markets in the IO experience setting. We believe our commercial opportunity here exceeds $2 billion. In the first line, the opportunity is even greater. With the lack of HIF-2-alpha inhibitor competition in the front line, our goal is to grow the IO-IO share from roughly a third of the market to more than half by adding tests. In fact, our market research indicates that oncologists overwhelmingly prefer the promise of a Cas plus IO-IO over a TKI-containing regimen. As Richard mentioned, we also plan to investigate a regimen with IO and TKI in the front line to address the remainder of the market. We believe the opportunity for Cas Datafan in the front line exceeds $4 billion. One point I'd really like to emphasize as we think about the commercial opportunity is duration of treatment. We've seen impressive data in late-line monotherapy with many patients on therapy beyond 18 months. We plan to share updated data later this year. As we think about earlier lines of therapy, we believe there is the potential for meaningful upside resulting from the durability of effect. Conceptually, we think strong HIF-2-alpha inhibition holds the promise of a long-term tail effect. All in, we think CAS has a peak sales opportunity of $5 to $10 billion. As a reminder, we own all of the commercial rights to CAF other than in Japan and certain other Southeast Asian countries held by our partner, TAIO. Now let's turn to the financials. ARCIS is well positioned to advance its full pipeline with $876 million in cash at the end of the quarter. We have cash runway until at least the second half of 2028. We expect to end 2026 with approximately $600 million in cash. indicative of the declining spend we expect over the year. As Terry outlined, ARCIS is entering a new era with more control over our pipeline investments. While we are building a plan to take full advantage of the cash data plan opportunity, we are also sequencing these investments such that any significant growth in overall spend will be largely incurred after a peak one readout. As a result of the wind down of DOM and reduced spend on QEMLI, Together with broader spend management, we expect to significantly reduce our overall R&D spend in 2026 and 2027 compared to 2025. For example, as our late-stage efforts have become focused on CAS DataFan, we have decreased our headcount by approximately 10%. Let me transition to the financials for the quarter. For our P&L, we recognized gap revenue for the first quarter of $17 million. Our revenue continues to be primarily driven by our collaboration agreements. We continue to expect to recognize GAAP revenue of $50 to $65 million for the full year of 2026. Our R&D expenses for the first quarter are stated net of reimbursements and were $122 million and included non-recurring workforce costs. Our actions to reduce headcount have lowered our ongoing cost structure, which we expect will result in reduced R&D expense in future periods. The discontinuation of Star 121 and the broader reduction in our DOM-related investment will contribute to a meaningful decrease in R&D expenses as the year goes on. By 2027, we expect more than 80% of our portfolio spend will be directed toward cash development. T&A expenses were $29 million for the first quarter. Total non-cash stock-based compensation was $19 million for the first quarter. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10Q. I will now turn it back to Terry.

Thanks, Bob. That was awesome. Let me close by summarizing the key themes for the remainder of 2026. Castatafan is our number one priority, and this year will be another transformative year for data and, importantly, development as we advance towards commercialization. We expect multiple data sets, CAS plus CABO data, initial first-line data, and overall survival data from late-line monotherapy cohorts, all of which will further reinforce CAS DataFan's best-in-class profile and support our registrational strategy. Peak one enrollment continues to accelerate, and we're targeting full enrollment by year end. All of the clinical development plans for CAS DataFan that were discussed today are accounted for within our existing budgets. and have no impact on our guidance or runway. Beyond Cas-DataFan, our PRISM-1 phase three trial for quinolone pancreatic cancer is fully enrolled and on track for a readout in the first half of 2027. Juan shared the exciting progress on our INI portfolio with AB102 expected to enter the clinic in the third quarter and our TNF inhibitor CCR6 antagonist following shortly thereafter. With $876 million in cash and investments and runway into the second half of 2028, we're well-positioned to execute on all of these priorities and create significant value for patients and shareholders. We're moving into a new era for Arcus with full ownership of our lead program guest data plan and a clear strategy to win and transform the frontline setting while rapidly advancing the next generation of wholly owned molecules for inflammation and immunology. We have no doubt that we will be generating disproportionate value for patients and shareholders over the coming 12 to 18 months. Thank you all for joining us. We appreciate your interest and continued support of ARCIS, and we will now open the call for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to follow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Diana Graybosh with Lear Inc. Partners. Diana, your line is now open.

Hi, David.

Did you change your name? Wow, some real surprises today. No, not yet, but that's okay. Tell us about the cast TKI frontline combo. Specifically, we all know Merck failed with that triplet mechanistically with Bell's Lemba Pembroke. and that's the LightSpark 12. We have the press release. We don't know the detailed data. What could you see in that detailed data that would give you more confidence in CAST, TKI, IO, and what could you see in the Merck data that would give you less confidence in the TKI combo strategy?

Thanks, Dana. I think we'll see what their data say, but I think the data that are out there, tell us a lot already. So if you consider what we discussed at the beginning, that pharmacodynamic difference between castatafan and belazodafan, not only the depth of response, but particularly the durability. And you think of that as a surrogate for its anti-tumor activity in a direct measure of its ability to inhibit HIF-2. I think what you can reconcile very easily is even in the absence of the data from the study itself, if you think about LightSpark 011 versus LightSpark 012, the duration of the treatment that you're talking about, when you think about PFS, roughly for the two different studies, is almost 2x. So if you recognize that Belzudafan is whatever that surrogate for HIF-2 inhibition directly relates to inhibition of the tumor, it's clearly losing that effect with time and dramatically. So you see, at least on erythropoietin production, on the average, you've lost that effect within, you know, 9 to 13 weeks. so when you think about it in the second line population the percentage of time where it's bringing benefit is x and then in the front line it's much less then on top of that if you think about the regimen it's you know it's pretty toxic regimen so even uh pembro lenva had about 37 percent uh rate of discontinuation we know that the trip it was you know, pretty unfavorable from a, you know, patient perspective. So if you think about basically you're having diminishing effect of the HIF-2 inhibitor on top of a much longer duration of an arm that has more AEs than the control arm, so you're basically getting, you know, paying a price but getting less benefit. So it's not surprising that that you would end up with a hazard ratio that might not be too favorable. For us, we're going to select a TKI that we think has a very favorable relative to the group of TKIs out there profile, but the most important feature will be that we have a HIF-2 inhibitor that has its robust effect and the durability of that effect is essentially the same on day one as it is on day 730.

Got it. Thank you very much.

Thanks, Pam.

Our next question comes from the line of Jonathan Miller with Evercore. Jonathan, your line is now open.

Hi, guys. Thanks for taking my question, and congrats on all the progress. Looking at a very broad cast development plan here with a lot of combinations across first, second, third line settings, one thing that's notably absent is any approach in the adjuvant setting, which obviously we know Merck is going after. So I'd love to hear your updated thoughts on adjuvant and why that's missing from the current development plan. And then related to that, I guess, or the full set of that is, Relatively recently, as recently as relatively recently, you were talking about a more conservative approach to late stage development for CAS, at least with respect to the number of phase three trials you would want to start. You were considering going after partnerships to ameliorate the cost of late stage development. Obviously, there's been a bit of a shift there, but Terry and Bob, I heard you say we don't expect to see any impact on runway or the ability to prosecute all these different programs. So I'd love to get a little bit more granularity on the sequencing that you're talking about and when you would start these TKI containing and potential novel combo development efforts to enable you to pursue all of these different approaches without running up against the bandwidth limitations. Thanks.

Thanks a lot. Thanks, John. And Bob will handle that, and then I may have a few comments to add.

Yeah, in terms of the adjuvant setting, I think for us it comes down to two simple things. One is, you know, the size of the opportunity, and probably more importantly is the need. So when you think about that particular setting, we think that it's around 12,000 patients or so that get therapy in the adjuvant setting. It's only the high-risk patients with resection, and their treatment's capped at a year. And so when you actually do the math on that, we actually think that the opportunity, certainly from a revenue perspective, is certainly smaller than the second line and probably even smaller than what could be a third-line regimen with an alternate TKI, as we described. I think the other important part is we've had a chance to talk to physicians after seeing the LightSpark 12 data. And the bar to add another therapy on top of EMBRO is considered quite high. In fact, most physicians told us that they actually wouldn't add Belzutifan to the regimen, even in light of the LightSpark 12 data. So we actually think it'll be a minority of patients that ultimately will receive Belzutifan in that setting. So, you know, it's prioritization and, frankly, the other settings in first, second, and third line. are higher on the list for us. And so that's sort of why we've made the decision that we have from an adjuvant perspective. In terms of the sequencing of the spend, as we highlighted, we have peak one up and enrolling right now. Our goal is to have the study enrolled by the end of the year. The work towards launching these additional phase three studies would have us in a position to sort of move those studies forward as early as late this year. into next year with obviously probably our highest priority being that frontline combination with IPPE and Anti-PD-1. But the other studies will be shortly on the heels. But if you think about just sort of the general investment profile for the studies, we'll be through the bolus of study startup for peak one. And the cost profile for peak one, you know, will be starting to decrease as we get into the second half of next year. So we kind of feel like that it's going to be a nice portfolio effect that when we think about these other studies kicking in really from a spend perspective in late 27 and into 28, we sort of see a generally steady spend profile through the peak one readout like we described.

John, Bob kind of gave you the line of the spend along with the studies. I'll give you a little bit more granularity on how we literally see the uh trials themselves playing out so uh the the first um uh study obviously peak one that's enrolling as bob said it'll be fully enrolled um by the end of this year and then we'll be waiting for readout uh we're going full speed ahead um and expect that ipi uh anti-pd1 has as we've been talking about for some time uh to be getting up and going by the end of this year We'll see where the TKI inclusive regimen comes in. There's, you know, without getting into all the detail now, we'll be sorting through whether there's actually two studies, two registrational studies, or a three-arm study is also a possibility. And then finally, in the later line study that we talk about, We'll start off in ARC-20, and as you know, those are relatively small cohorts that enroll very efficiently. But the other point that I think will be very important within those studies, and we'll get to answers quickly, is that we'll be looking at that combination in the third-line plus in belazodifan-naive patients as well. And I think that'll establish a cool study, and I think it's going to establish something Well, yes, I'm sorry. Bell's experience in addition to Bell's naive. Thank you, Juan. And I think that'll nail something that we think we know the answer to, but we'll have those, you know, data even this year.

Excellent. Thank you so much.

Thanks, John.

Our next question comes from the line of Lee Watzik with Bancers. Lee, your line is now open.

Hey guys, congrats on the progress. I guess just one question on the Arc20 update, especially from the triplet cohort. Sounds like you guys are enrolling the combination with Zen plus EP. Can you clarify if we're going to see the initial data from this cohort this year? And what data points would you want to see to enable a phase three frontline trial?

Thanks, Lee. So, we do think what you'll get to see, and it'll be, you know, probably in the fall, are the initial data from that IPPE anti-PD1 cast. regimen and essentially we'll get a sense of the safety data and the rate of primary progression. While there may be some early ORR data, we don't consider that critical. We're most focused on the safety. That's what we'll have an agreement with the FDA as to what safety data package they would want to see to enable us to get that phase three up and going by the end of this year. And then, obviously, because that's the first point, but it's also an important point for that regimen, is we'll see the rate of primary progression. I think one thing to recognize about that regimen, when we think about triplets, doublets, et cetera, Also, just I'd like to make the point, as you know, we've already talked about the rate of primary progression with Cas Datafam plus anti-PD-1 alone, and those initial data are quite favorable where we only saw 7% rate of primary progression. Now, if you think about what that Cas anti-PD-1 IPI regimen is going to look like, you basically get four cycles of iffy at the outset, of course, with Cas and anti-PD-1. But then the duration and the bulk of your therapy is going to be anti-PD-1 plus Cas. So both the efficacy that you're seeing with that as well as the safety of that will certainly impact the bulk of the therapy. So we're excited about that regimen. We think we're well on track to be able to start the phase three by the end of this year and have a good safety data package. And we do plan to share that with the external world as well this year.

Thank you.

Thanks, Lee.

Our next question comes from the line of Richard Law with Goldman Sachs. Richard, your line is now open.

Oh, hey, guys. Yeah, very helpful to see Cas's development all laid out in his life for all the different lines of therapy. A couple of questions from me. So, looking at the life part 12 failure in both triplets and volu-Cas discontinuation by AZ, and then all the frontline therapies of doublets or monotherapy so far, what is your confidence that a Cas triplet of any kind, either with IOIO or ILTKI, could be safe enough to succeed in 1L? And I mean, what do you think of that safety bar for 1L? Do you think that those triplets have a shield like comparable safety profile to like that I-O-I-O, I-O-T-K-I triplet for them to work?

So, I think we feel very confident and, you know, based upon what we already know about our molecules with triplets, whether it's a triplet inclusive of a TKI or a triplet with the IPPE anti-PD-1. So keep in mind, while we haven't analyzed in detail, and we will later this year, the ZIM, so that anti-PD-1 cast, we know that doublet and We certainly haven't seen anything untoward with that. We know, you know, we can combine with Cabo well. So what we believe is that the ipi-nevo regimen has been extraordinarily well worked out in terms of dosing of that particular regimen, and as I was mentioning, in my response to Lee, you're basically going to treat with four cycles of IPI that's quite worked out. So we believe that we have, you know, orthogonal AEs. We haven't seen anything, you know, in terms of a clear combination issues. When you think about Casdatafen, you're basically bringing those on target anemia, and of course, certainly more rarely, hypoxia. Again, we're going to pick a good TKI. We know that Cas anti-PD-1 is looking good, so we think a reasonable TKI will not bring anything on toward there. Keep in mind, we haven't actually seen the Merck data, and I think The thing that you should take away until otherwise is, you know, their hazard ratio must have been not good. So that doesn't get to an intrinsic inability to have a triplet. It just says when you're bringing that TKI, when you're bringing Belzunafan on top of a pretty rough doublet and you're training for a long period of time and you are undoubtedly introducing some new aes but you're not having a robust long-term efficacy effect you're you're probably not creating a hazard ratio but we really don't know exactly how that played out but all the data with our own molecules suggest that cast data fan is a very well tolerated and robust uh hip2 inhibitor and you know with an orthogonal ae profile from anything that we plan to combine with. And we'll have those data, you know, within the next six months or so.

Got it. And then to follow up on that, have you seen the efficacy and the safety results from that VoluCAS trial before ASHRAE discontinued it? And would that data be shared? Do you guys, even if ASHRAE does not plan to share that?

So we haven't seen anything other than what we said at the outset. Since they did disclose, you can now know that there were nine patients. What we described was that initial safety signal that was very CTLA-4 and more specifically voru-like when they dosed down but kept castatafan at the same 100 milligram dose. We didn't see any more of it, and those patients still continue on. And in fact, the interesting thing out of that is we've commented before, we didn't see any progression. So that, if anything, we don't even know, quite honestly, that given that it was nine patients, it's not obvious whether Um, you know, that was even purely Vol rule or not. And, uh, but what is obvious to us, at least as we were thinking about going forward, is that given that it'd be Nevo, um, well worked out regimen, well worked out dose it's time tested. And of course, probably most importantly that you're only going to be carrying your, um, anti CTLA for, uh, dosing for four cycles. made that a clear regimen for us to want to proceed with all things considered, not wanting to have both of those activities for the duration of the therapy.

Got it. Thanks, guys. Thanks, Rich. Thanks again. Congrats. Thank you.

Our next question comes from the line of Salim Syed with MISUO. Salim, your line is now open.

Hi, this is Mike Linden. I'm for Celine. Thanks for taking our question. Just one from us on CAS Data Sign and Frontline again. Maybe just how you guys are thinking about patient selection for an IPI-NEVO plus CAS combination for a Phase III. Like, would these be all comers versus poor intermediate favorable risk patients, things like that? And I guess, how is the thinking around patient selection changed post LightSpark 12 failure? Thanks.

Yeah, so our patient selection strategy hasn't changed. And in fact, we're thinking of all comers. And we would also be thinking of all comers insofar as a TKI inclusive regimen. So what we're really trying to address there is there's clearly, we've had ad board meetings, there's clearly a strong preference for a TKI sparing regimen. So that's unequivocal and that's the way we describe it as the bedrock of the front line. With that said, it's a little bit one of those things where there's almost a tribalism, as the way the investigators in the field would describe it, where there's certain investigators that are, you know, very prone, particularly if there is a bulky fast growing sewer, but even otherwise to want to reach for TKI, so we feel from that overlap of particular patient with particular investigator, there should be a HIF-2 inhibitor-containing regimen, and we think we can offer a very good one. So we look at both of those to be in low-comer patient populations. I think, again, the LightSpark 012 data For us, until we see something otherwise, we simply think it has to do, and certainly this has to be a contributing factor to that durability of effect, and let's just call it on HIF-2 inhibition with time, that we know that's a dramatic difference between our two molecules. And of course, when we look at the choices of what to combine with Keep in mind, we have no commercial predisposition there. Essentially, the world is our oyster. And if you look at the front line, there's a number of TKIs used. There's not one that's particularly dominant. Overall, you have probably 60% of the patients are getting a TKI, but they're spread somewhat evenly. So we've gone and looked. and been very strategic about it and looked at what's the smartest TKI from a safety standpoint that's well used, that's well tested, approved, understood, that we should combine within the frontline. We know that we're going to have CAVO in the second line, and then we've done the same in thinking about that late line patient population with what then becomes another TKI that you would use in the late line. And like I said, the other important thing there is that we are going to look at that combination of CAS with that TKI in Belzutifan-experienced patients and establish that unequivocally you get the activity that you want to see in that HIF-2-experienced patient. Thank you.

Thanks.

Our next question comes from the line of Jason Zemanski with Bank of America. Jason, your line is now open.

Hi, this is Jackie on for Jason Zemanski. Congrats on the progress and thanks for taking our question. Just a quick one for you. So what do you think is necessary to drive broad uptake of a TKI-free regimen in the first line RCC, given how popular TKIs are overall, especially given their ability to rapidly develop tumors? Or is the goal to compete directly with dual IO therapies?

Thanks. I think that, so what's interesting is we think there's a strong receptivity toward this. Now, one of the most important things that we've seen to date is that castatafan as a monotherapy, even in the late line, performs, you know, is good or better than TKI in any line of setting. So if you go, we have in our deck somewhere, you can actually look that even in the late line, Casdatafam monotherapy, whether you're looking at ORR or PFS, looks quite good. And the thing that's standing out, and I think this is the... you know, the issue that was identified with Belzodifan at the outset was that rate of primary progression. So I think that's raised the question for HIF-2 inhibition, can you compete with TKI in bringing that tumor under control quick enough that you don't have that high rate of primary progression? So we believe that Belzutaphin was forced in the front line to combine with the TKI to address a potential high rate of primary progression. But we actually think that despite the fact that HIF-2 inhibition is well tolerated, it can get the tumor under control quite fast. And the place where we've already seen our evidence of that is in combining with anti-PD-1, where in 30 patients, we only saw two primary progressors, so 7%, very much in line with the TKI. So we think there's a receptivity to the TKI sparing regimen, and we think that the key thing to driving that uptake will be to show that our rate of primary progression and then everything that flows from that looks like a TKI. The last point I would make is it's almost like the mentality would be like because TKIs are a rougher treatment, you know, it's sort of like when you think about chemotherapy, that there's a linkage that sort of in people's minds, they associate, you know, rougher but bringing the tumor more under control. Keep in mind that 85 to 90 plus percent of clear cell RCCs has HIF-2 as a key driver. So you're hitting the tumor with something that really matters, and we think that's why with a robust HIF-2 inhibitor, like Castatafan, you actually can compete with the efficacy effects of a TKI.

Just add one other point. I think Dr. McCain, our event in the fall, indicated this, that the reason she really prefers using ipinevo for the most part, is it gives the patients the best chance for long-term survival. And the problem is, is the Achilles heel, as Terry described, of the primary progression. So if you could blunt that and still give patients the best chance at long-term survival, and we just saw 10-year follow-up data with 40% of patients alive 10 years later, you know, that's a very compelling regimen, we think.

Thank you so much for the call.

Thanks.

Our next question comes from the line of Emily Bodeman with HC Wright. Emily, your line is now open.

Hi, thanks for the questions. Based on the LightSpark 11 data, how are you kind of looking at your upcoming CAS plus CAVO updated data? And what are you kind of hoping to see to feel confident that you might have a superior profile versus what we saw in the LightSpark 11 trial? Thank you.

Yeah, so we already feel that confidence and we're obviously running the phase three trial. I think you kind of have to think of things holistically. You know, in the end, what you're going to have is a hazard ratio. And, you know, what's nice is that since we're both running versus Cabo, you know, those will be directly comparable. uh, while our data, you know, when we share later this year, we'll still be early. We're going to give, you know, uh, Kaplan-Meier curve, we'll have landmark PFS, we'll have ORR, and, you know, people will be able to extrapolate, um, to whatever extent how, how they want to look at those data, but we'll give a very holistic, uh, view. I think the other thing that's, um we don't want loss on people because we think it's it's an interesting um other aspect of the data that really it will only be emerging and we'll see how things play out by the time we have some mature data later this year so while from a a regulatory standpoint the pfs is what matters um we're going to have, you know, data now from our monotherapy cohorts that are getting mature enough that we'll start to get a sense of whether we do bring an OS advantage there, albeit in the late line. And the reason we feel that's important is it just, depending on how that looks for a cast data fan, it will potentially give a good sense that this mechanism can not only drive enhancements in PFS, but bring enhancements to OS. And while that may not be a requirement from a regulatory standpoint, we certainly could see it as an important differentiation that would drive more uptake by a clinician if, in fact, we start to show that there can be OS enhancement from HIF-2 inhibition, which we believe there's no reason there shouldn't be.

Thank you.

Thank you.

Our last question comes from the line of Yigal Nikomovitz with Citigroup. Yigal, your line is now open.

Hi, this is John Kim on for your goal. Congrats on the progress and thanks for taking our question. Maybe just to mix in a non cast question regarding AB 102. While it's still early, is there any color you can provide on the intended proof of concept study design? Whether you're planning on going into CSU versus AD first, any color on primary endpoints or level of clinical signal you would need to see to give confidence to advance into a future registration program? Thanks so much.

So why don't you describe how we see ourselves going from A to B to C?

At a very high level, we recognize that while we think we may have a better molecular profile, we have a little bit of ground that we need to make up relative to the couple of existing clinical players. So what we've devised is a fairly accelerated plan for establishing PK tolerability and healthy volunteers, followed by a fairly quick, rapid, mechanistic confirmation of biological activity and very quickly progressing into a phase two study in CSU. So we think we will, in reasonable speed, catch up and hopefully begin to illustrate the better profile of our drug In parallel with that, we're thinking about where it might make sense concurrently with that CSU type of Phase II study to demonstrate the value of an X2 inhibitor. Right now, our lead candidate for that additional indication seems to be allergic asthma, but that's still at a very early stage of conceptual framing.

Great. Thanks.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.