Q2 2026 Arcus Biosciences Inc Earnings Call

August 5, 2026

Operator 3: Hello, everyone. Thank you for joining us, and welcome to Arcus' Q2 2026 earnings call. After today's prepared remarks, we will host a question and answer session. 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 Pia Eaves, Vice President of Investor Relations. Pia, please go ahead.

Operator: Hello, everyone. Thank you for joining us, and welcome to Arcus' Q2 2026 earnings call. After today's prepared remarks, we will host a question and answer session. 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 Pia Eaves, Vice President of Investor Relations. Pia, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Pia Eaves, Vice President of Investor Relations.

Speaker #1: ahead.

Speaker #2: Good afternoon, and 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 conference call to discuss Arcus's second regarding the advantages and opportunities afforded by our investigational products, our clinical development milestones and timelines, our projected cash runway, and our financial outlook.

Pia Eaves: Good afternoon. Thank you for joining us on today's conference call to discuss Arcus' Q2 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 Investors section of our website.

Speaker #2: 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.

Speaker #2: Those risks and uncertainties are described in our most recent quarterly report on Form 10-Q, which has been filed with the SEC. For today's call, please refer to our latest corporate presentation, posted in the Investors section of our website.

Speaker #2: This afternoon, you'll hear from our CEO, Terry Rosen, CMO, Richard Marcus, President Wan Haiyen, and CFO, Bob Geltz. With that, I'll turn the call over to Terry.

Pia Eaves: This afternoon, you'll hear from our CEO, Terry Rosen; CMO, Richard Marcus; President, Juan Jaen; and CFO, Bob Goeltz. With that, I'll turn the call over to Terry.

Speaker #3: Thanks very much, Pia, and thanks afternoon. We continue to make substantial progress in advancing our portfolio of oncology and so much, everyone, for joining us this immunology programs.

Terry Rosen: Thanks very much, Pia, and thanks so much everyone for joining us this afternoon. We continue to make substantial progress in advancing our portfolio of oncology and immunology programs. Execution throughout H1 of the year has been tremendous, and this tangible productivity will be a focus of today's discussion. Our highest priority, no surprise, continues to be the advancement of casdatifan, which we believe has clear potential to be a $5 to 10 billion drug. The remainder of our pipeline has also been advancing quite well, and we're beginning to share the details and breadth of our other programs. These create a steady and sustainable stream of additional opportunities as well as strategic optionality. Starting with casdatifan, our next-generation HIF-2α inhibitor. The advancement of CAS has driven an inflection in value for Arcus, and we expect further data this year to accelerate this inflection.

Speaker #3: Execution throughout the first half of the year has been tremendous, and this tangible productivity will be a focus of today's discussion. Our highest priority—no surprise—continues to be the advancement of castatafan, which we believe has clear potential to be a 5 to 10 billion dollar drug.

Speaker #3: The remainder of our pipeline has also been advancing quite well, and we're beginning to share the details and breadth of our other programs. These create a steady and sustainable stream of additional opportunities as well as strategic optionality.

Speaker #3: So, starting with castatafan, our next-generation HIP 2 alpha inhibitor. The advancement of cast has driven an inflection in value for Arcus, and we expect further data this year to accelerate this inflection.

Speaker #3: Our first phase three trial, Peak 1, evaluating cast plus cabozantinib to gold standard care in second-line clear cell RCC, has tremendous investigator enthusiasm, and we remain on track to complete enrollment by the end of this year.

Terry Rosen: Our first phase III trial, PEAK-1, evaluating CAS plus cabozantinib, the gold standard of care in second-line ccRCC, has tremendous investigator enthusiasm, and we remain on track to complete enrollment by the end of this year. Last year, we presented a wealth of data that demonstrated clearly casdatifan's efficacy advantages over belzutifan. Over the next 6 months, we will share new data that will provide clear line of sight to casdatifan's full market potential. Based upon casdatifan's superior profile as well as our development strategy, we expect CAS to become the backbone therapy for all patients in all lines of treatment in ccRCC, and we're maximizing that opportunity by rapidly expanding our development program.

Speaker #3: Last year, we presented a wealth of data that demonstrated clearly castatafan's belsutafan. Over the next six months, we will share new data that will provide clear line of sight to castatafan's full market potential.

Speaker #3: Based upon Casatafan's superior profile, as well as our development strategy, we expect Casatafan to become the backbone therapy for all patients in all lines of treatment in clear cell RCC, and we're maximizing that opportunity by rapidly expanding our development program.

Speaker #3: With the recent failure of Merck's Lightspark 012 study, cast now has no competition in the frontline space, and our development plan already ongoing creates a clear path for cast to consolidate what's currently fragmented frontline market as the first and only HIP 2 alpha inhibitor in this setting.

Terry Rosen: With the recent failure of Merck's LITESPARK-012 study, CAS now has no competition in the frontline space, and our development plan, already ongoing, creates a clear path for CAS to consolidate what's currently fragmented frontline market as the first and only HIF-2α inhibitor in this setting. We're leveraging our platform study, ARC-20, in addition to collaboration studies to support the key combination regimens we'll pursue for first-line treatments. We had our meeting with the FDA to discuss our first frontline phase III study in the setting. We're calling that PEAK-20, and we remain on track to start this registrational trial by the end of 2026. Across the development program, casdatifan is being evaluated in several different combinations across all lines of therapy.

Speaker #3: We're leveraging our platform study, Arc 20, in addition to collaboration studies to support the key combination regimens we'll pursue for first-line treatments. We had our meeting with the FDA to discuss our first frontline phase three study in the setting, recalling that Peak 20, and we remain on track to start this registrational trial by the end of 2026.

Speaker #3: Across the development program, castatafan is being evaluated in several different combinations across all lines of therapy. We're doing this in both a capital- and resource-efficient manner by securing partnerships.

Terry Rosen: We're doing this in both a capital and resource-efficient manner by securing partnerships, more specifically clinical collaborations, and these all allow us to retain the full rights to the casdatifan program. We believe that we are the partner of choice for collaborations involving a HIF-2α inhibitor. This is enabling investigation of the smartest mechanistic combinations and settings. Keep in mind, belzutifan is readily available to anyone. We do not believe it's an accident that others want to combine with casdatifan. We initiated multiple new clinical trial collaborations in the last 2 months. In June, we announced a collaboration with BMS to evaluate CAS in combination with pumitamig, their bispecific anti-PD-L1 VEGF antibody in the first-line setting. In July, we announced a collaboration with Summit Therapeutics to evaluate CAS in combination with IVO, their bispecific anti-PD-1 VEGF antibody.

Speaker #3: More specifically, clinical collaborations, and these all allow us to retain the full rights to the castatafan program. We believe that we are the partner of choice for collaborations involving a HIP 2 alpha inhibitor.

Speaker #3: This is enabling investigation of the smartest mechanistic combinations and settings. Keep in mind, belsutafan is readily available to anyone. We do not believe it's an accident that others want to combine with castatafan.

Speaker #3: We initiated multiple new clinical trial collaborations in the last two months. In June, we announced a collaboration with BMS to evaluate cast in combination with Pumida, their bispecific anti-PD-L1 VEGF antibody in the first-line setting.

Speaker #3: In July, we announced a collaboration with Summit Therapeutics to evaluate cast in combination with Ivo, their bispecific anti-PD-1 VEGF antibody. Arcus will be conducting this study in a first-line cohort as part of Arc 20.

Terry Rosen: Arcus will be conducting this study in a first-line cohort as part of ARC-20. This is the second of three collaborations we've executed to evaluate CAS with an anti-PD-1/VEGF bispecific in the first line. Just to emphasize, we have three collaborations with anti-PD-1/VEGF antibodies. In addition, in July, we also announced a collaboration with AVEO Oncology, in which we'll be combining CAS with TIVO in advanced belzutifan-experienced patients. This study will also enable our planned late-line registrational study that will evaluate CAS-TIVO in both HIF-2 inhibitor-experienced as well as HIF-2 inhibitor-naive patients. Now let me spend a few minutes describing our holistic development strategy for casdatifan. Let me emphasize an important point in introducing this topic. While we believe that casdatifan will completely transform the clear cell RCC treatment paradigm, our strategy is totally consistent with the current treatment paradigm.

Speaker #3: This is the second of three collaborations we have executed to evaluate cast with an anti-PDX VEGF bispecific in the first line. So, just to emphasize, we have three collaborations with anti-PDX VEGF antibodies.

Speaker #3: In addition, in July, we also announced the collaboration with Aveo in which we'll be combining cast with Tivo in advanced belsutafan experienced patients. This study will also enable our planned late-line registrational study that will evaluate cast Tivo in both HIP 2 inhibitor experience as well as HIP 2 inhibitor naive patients.

Speaker #3: So now, let me spend a few minutes describing our holistic development strategy for castatafan. Let me emphasize an important point in introducing this topic.

Speaker #3: While we believe that castatafan will completely transform the clear cell RCC treatment paradigm, our strategy is totally consistent with the current treatment paradigm. We're simply creating a framework that will provide HIP 2 alpha inhibitor-enhanced options that only castatafan, with its unique profile, can offer.

Terry Rosen: We're simply creating a framework that will provide HIF-2α inhibitor-enhanced options that only casdatifan, with its unique profile, can offer. Basically adding on top of the best current regimens that are favored by both physicians and patients. In the first line, we plan to develop multiple options that will make CAS the foundational medicine regardless of the selected combination partner. Our strategy is designed to provide flexibility to physicians with a HIF-2α inhibitor-enhanced regimen corresponding to their preferred treatment approach for all types of clear cell RCC patients. With belzutifan's recent front-line setback, casdatifan has clear path to become the common denominator in what's currently a fragmented front-line setting as the first HIF-2α inhibitor available to these patients. A casdatifan-based TKI-sparing IO/IO regimen is the bedrock of our first-line strategy.

Speaker #3: Basically, adding on top of the best current regimens that are favored by both physicians and patients. So, in the first line, we plan to develop multiple options that will make CAST the foundational medicine, regardless of the selected combination partner.

Speaker #3: Our strategy is designed to provide flexibility to physicians with a HIP 2 alpha inhibitor-enhanced regimen corresponding to their preferred treatment approach for all types of clear cell RCC patients.

Speaker #3: With belsutafan's recent frontline setback, castatafan has clear path to become the common denominator in what's currently a fragmented frontline setting as the first HIP 2 alpha inhibitor available to these patients.

Speaker #3: A cabozantinib-based TKI-sparing IO/IO regimen is the bedrock of our first-line strategy. It's intended to address the key limitation of AP plus nivo, which is an approximately 20% rate of primary progression.

Terry Rosen: It's intended to address the key limitation of ipi plus nivo, which is an approximately 20% rate of primary progression. Currently, ipi/nivo represents the most commonly used front-line regimen, with a market share of about 30%, and we believe CAS has the potential to increase that to 50% or more. We also plan to develop a CAS-based TKI-inclusive first-line regimen for that segment of physicians who are always going to prefer to reach for TKI, especially for patients with fast-growing bulky tumors. Our partner TKI in the setting will be axitinib, well established as an effective front-line TKI and very importantly, aligning well with subsequent regimens, including cabo and tevo over the long-term treatment strategy. You have to remember that when making prescribing decisions, physicians are considering how they will sequence multiple TKIs to potentially give patients 10 or more years of survival.

Speaker #3: Currently, AP Nivo represents the most commonly used frontline regimen, with a market share of about 30%. We believe CAST has the potential to increase that to 50% or more.

Speaker #3: We also plan to develop a cast-based TKI-inclusive first-line regimen for that segment of physicians who are always going to prefer to reach for a TKI, especially for patients with fast-growing, bulky tumors.

Speaker #3: Our partner TKI in the setting will be Exsitinib, well-established as an effective frontline TKI and, very importantly, aligning well with subsequent regimens, including CABO and Tivo, over the long-term treatment strategy.

Speaker #3: You have to remember that when making prescribing decisions, physicians are considering how they will sequence multiple TKIs to potentially give patients 10 or more years of survival.

Speaker #3: So, combination choices are not selected in a vacuum. Lastly, in the first line, as I mentioned earlier, we're leveraging our partnerships, including with BMS and Summit, to evaluate castatafan in combination with three different novel anti-PD(x) VEGF antibodies.

Terry Rosen: Combination choices are not selected in a vacuum. Lastly, in the first line, as I mentioned earlier, we're leveraging our partnerships, including with BMS and Summit, to evaluate casdatifan in combination with three different novel anti-PD-1/VEGF antibodies. We believe anti-PD-1/VEGF bispecifics may play an increasingly important role in the treatment of kidney cancer going forward. Both the PD-1 and VEGF pathways are factors in disease progression and there's strong biologic rationale for pairing them with a hard-hitting HIF-2α inhibitor like casdatifan to deliver both an early treatment effect and sustained tumor suppression. The rationale for this class of bispecifics to have utility in clear cell RCC is as strong as in any setting, and the combination could provide a TKI-sparing regimen that still incorporates the essential biology of the TKI, but without the baggage that's associated with the poor selectivity of the TKI class.

Speaker #3: We believe anti-PD-1/VEGF bispecifics may play an increasingly important role in the treatment of kidney cancer going forward. Both the PD-1 and VEGF pathways are factors in disease progression, and there's strong biologic rationale for pairing them with a hard-hitting HIF-2 alpha inhibitor like castatafan to deliver both an early treatment effect and sustained tumor suppression.

Speaker #3: The rationale for this class of bispecifics to have utility in clear cell RCC is as strong as in any setting, and the combination could provide a TKI-sparing regimen that's still incorporates the essential biology of the TKI, but without the baggage that's associated with the poor selectivity of the TKI class.

Speaker #3: In the second line, CAST plus CABO is intended to build on the current second-line standard of care. This combination is now in registrational testing with our Phase 3 PEEK1 trial.

Terry Rosen: In the second line, CAS plus cabo is intended to build on the current second-line standard of care. This combination is now in registrational testing with our phase III PEAK-1 trial. Cabo is the most commonly prescribed TKI monotherapy in the setting. It is the TKI that physicians prefer and have greatest experience in managing AEs with the recognition of a better toxicity profile relative to that of the belzutifan combination partner, also sold by Merck, lenvatinib. Lenvah's toxicity profile is well documented with greater rates of cardiovascular toxicities. Notably, in LITESPARK-011, all grade cardiac dysfunction was 7% for bel's lenva versus just 1% for cabo. Grade 3 or higher cardiac dysfunction was 5% for belzutifan/Lenvima versus 0.5% for cabo. That is a big deal. That is a tenfold difference. Keep in mind, these data are a direct comparison from a randomized study.

Speaker #3: CABO is the most commonly prescribed TKI monotherapy in the setting. It's the TKI that physicians prefer and have greatest experience in managing AAEs with the recognition of a better toxicity profile relative to that of the belsutafan combination partner also sold by Merck, Lumbatinib.

Speaker #3: One of those toxicity profiles is well documented, with greater rates of cardiovascular toxicities. Notably, in Lightspark 011, all-grade cardiac dysfunction was 7% for belslenva versus just 1% for CABO.

Speaker #3: Grade three or higher cardiac dysfunction was 5% for belslenva versus 0.5% for CABO. That's a big deal. That's a tenfold difference. Keep in mind these data are a direct comparison from a randomized study.

Speaker #3: With cast is superior efficacy profile versus bells, and CABO is tolerability advantages versus lenva, we expect cast plus CABO to be the preferred HIP 2 alpha combination in the second line based on both efficacy and safety.

Terry Rosen: With CAS's superior efficacy profile versus bel's and cabo's tolerability advantages versus lemba, we expect CAS plus cabo to be the preferred HIF-2α combination in the second line based on both efficacy and safety. Finally, with the announcement of our collaboration with Avail, we are developing casdatifan plus tivozanib in second line plus clear cell RCC, including in belzutifan-experienced patients. As I mentioned, this will precede a registrational trial for both HIF-2α inhibitor-experienced and naive patients. At an upcoming investor event in October, we will be sharing key ARC-20 data readouts for casdatifan. These will be in the first, in the second, and late line settings. These data will provide a holistic picture that will demonstrate the potential for CAS to benefit patients across the treatment paradigm. This will be a large and comprehensive data set, including data from over 200 patients.

Speaker #3: Finally, with the announcement of our collaboration with Aveo, we're developing castatafan plus Tivo in second-line plus clear cell RCC. Including in belsutafan experienced patients.

Speaker #3: As I mentioned, this will precede a registrational trial of both HIP 2 alpha inhibitor experience and naive patients. And in upcoming investor event in October, we'll be sharing key ARC 20 data readouts for castatafan.

Speaker #3: These will be in the first, in the second, and late-line settings. These data will provide a holistic picture that will demonstrate the potential for cast to benefit patients across the treatment paradigm.

Speaker #3: This will be a large and comprehensive data set including data from over 200 patients. Richard will go into more detail on the specific readouts, but I'd like to take a moment to provide some scientific context and a framework for thinking about patient outcomes with castatafan in the various settings.

Terry Rosen: Richard will go into more detail on the specific readouts, but I would like to take a moment to provide some scientific context and a framework for thinking about patient outcomes with casdatifan in the various settings. In this context, in parallel to executing on our holistic development strategy for CAS, we have been committed to the advancement of the highest quality research in the HIF-2α space, particularly on translational studies that have a direct impact on the development program. I want to emphasize that this work, a hallmark of the casdatifan program on all fronts, is not esoteric, but in fact, provides the basis for the quality and profile of the molecule as well as the foundation for our development strategy. Our initial work on casdatifan HIF-2α biology was published recently in Nature last month.

Speaker #3: In this context, in parallel to executing on our holistic development strategy for CAST, we've been committed to the advancement of the highest quality research in the HIF-2α space, particularly on translational studies that have a direct impact on the development program.

Speaker #3: I want to emphasize that this work, a hallmark of the castatafan program on all fronts, is not esoteric, but in fact provides the basis for the quality and profile of the molecule as well as a foundation for our development strategy.

Speaker #3: Our initial work on castatafan HIP-2 alpha biology was published recently in Nature last month. The manuscript describes exceptional scientific research carried out across our drug discovery, bioinformatics, translational, and clinical teams, and includes a number of our clinical collaborators from the academic community.

Terry Rosen: The manuscript describes exceptional scientific research carried out across our drug discovery, bioinformatics, translational, and clinical teams, and includes a number of our clinical collaborators from the academic community. This is the first study to comprehensively connect clinical outcomes from patients receiving a HIF-2α inhibitor with peripheral biomarker changes and associated tumor biology. The research showed that HIF-2α inhibition with casdatifan monotherapy in clear cell RCC patients resulted in deep and sustained suppression of erythropoietin. That the depth of that suppression correlated with higher response rates and longer progression-free survival. Suppression of erythropoietin or EPO production is good. It correlates with positive outcomes. This is just one example of the strides our research team has made towards developing a thorough understanding of HIF-2α biology and its linkage to patient outcomes in kidney cancer. Okay. Now the important piece, thinking prospectively.

Speaker #3: This is the first study to comprehensively connect clinical outcomes from patients receiving a HIF-2 alpha inhibitor with peripheral biomarker changes and associated tumor biology.

Speaker #3: The research showed that HIP 2 alpha inhibition with castatafan monotherapy in clear cell RCC patients resulted in deep and sustained suppression of erythropoietin and that the depth of that suppression correlated with higher response rates and longer progression-free survival.

Speaker #3: Suppression of erythropoietin, or EPO, production is good. It correlates with positive outcomes. This is just one example of the strides our research team has made towards developing a thorough understanding of HIP 2 alpha biology and its linkage to patient outcomes in kidney cancer.

Speaker #3: Okay. Now, the important piece. Thinking perspectively. We've also been investigating how exposure to prior therapies may impact clinical outcomes. For example, let me tie this all together.

Terry Rosen: We've also been investigating how exposure to prior therapies may impact clinical outcomes. For example, let me tie this all together. For example, it's known that, not surprisingly, prior TKI exposure in RCC leads to poorer outcomes for patients who are treated with a TKI in subsequent lines of therapy. Therefore, patients who receive a TKI in the first line are currently underserved by the most commonly prescribed TKI monotherapies in the second line and beyond. At the same time, however, TKI exposure has been shown to result in an upregulation of HIF-2α activity. We've illustrated this on slide 31 of our corporate deck. Let me repeat that. Greater TKI exposure has been shown to result in upregulation of HIF-2α activity. One point I'd like to link back to now.

Speaker #3: For example, it's known that, not surprisingly, prior TKI exposure in RCC leads to poorer outcomes for patients who are treated with a TKI in subsequent-line therapy.

Speaker #3: So therefore, patients who receive a TKI in the first line are currently underserved by the most commonly prescribed TKI monotherapies in the second-line and beyond.

Speaker #3: At the same time, however, TKI exposure has been shown to result in an upregulation of HIP 2 alpha activity. We've illustrated this on slide 31 of our corporate deck.

Speaker #3: So let me repeat that. Greater TKI exposure result in upregulation of HIP 2 alpha activity. One point I'd like to link back to now.

Speaker #3: In our Nature paper, we elucidated that high HIP 2 alpha activity is correlated with improved PFS in patients treated with castatafan. However, interestingly, subgroup patient analyses reported by Merck show that patients treated with belsutafan in Lightspark 005 or Lightspark 013 had an inverse correlation of efficacy outcome with number of prior TKI therapies.

Terry Rosen: In our "Nature" paper, we elucidated that high HIF-2α activity is correlated with improved PFS in patients treated with casdatifan. However, interestingly, subgroup patient analyses reported by Merck show that patients treated with belzutifan in LITESPARK-005 or LITESPARK-013 had an inverse correlation of efficacy outcome with number of prior TKI therapies. That is, more prior TKI therapies led to worse outcomes with belzutifan. By contrast, what I can tell you is that in our analyses of our late line casdatifan monotherapy cohort, that's 120 patients, we do not show this inverse correlation.

Speaker #3: That is, more prior TKI therapies led to worse outcomes with belzutifan. By contrast, what I can tell you is that in our analyses of our late-line casdatifan monotherapy cohort—that's 120 patients—we do not show this inverse correlation.

Speaker #3: We therefore believe that more robust and, in fact, more durable HIP 2 alpha inhibition with castatafan may provide better outcomes for patients with prior TKI exposure.

Terry Rosen: We therefore believe that more robust and, in fact, more durable HIF-2α inhibition with casdatifan may provide better outcomes for patients with prior TKI exposure, and this will be one of the parameters that we analyze across our data sets, and we'll be speaking more about our analysis on this topic at the investor event in the fall. Little bit of a transition now. Our commitment to research has been at the core of the company since our founding, and despite relatively minimal capital investment, our parallel work in immunology has enabled us to build a rich portfolio of programs. Perhaps one of the broadest and deepest earlier portfolios of high-quality molecules in the industry. These programs were all created in-house over the last several years and are now approaching clinical development.

Speaker #3: And this will be one of the parameters that we analyze across our datasets, and we'll be speaking more about our analysis on this topic at the investor event in the fall.

Speaker #3: A little bit of a transition now. Our commitment to research has been at the core of the company since our founding. And despite relatively minimal capital investment, our parallel work in immunology has enabled us to build a rich portfolio of programs.

Speaker #3: Perhaps one of the broadest and deepest earlier portfolios of high-quality molecules in the industry. These programs were all created in-house over the last several years and are now approaching clinical development.

Speaker #3: Our portfolio addresses a number of validated and emerging targets, including MRG, PRX2, the TNF receptor-1, CCR6, CD89, STAT6, and CD40 ligand. We expect to initiate human dosing of AB102 and oral small molecule MRG PRX2 antagonist this month.

Terry Rosen: Our portfolio addresses a number of validated and emerging targets, including MRGPRX2, the TNF receptor 1, CCR6, CD89, STAT6, and CD40 ligand. We expect to initiate human dosing of AB102, an oral small molecule MRGPRX2 antagonist this month. It'll be followed shortly thereafter by our oral and selective TNF receptor 1 inhibitor in early 2027. Overall, the portfolio has the potential to generate a steady flow of INDs between now and the end of 2027. These programs afford us great strategic optionality in disease areas with high unmet need and also with extremely large markets. Finally, in addition to casdatifan and our immunology programs, we also have an ongoing phase III study in pancreatic cancer. Coming out of ASCO, there's been increasing focus and excitement in this space. We're preparing for initial data from our phase III PRISM-1 study of quemliclustat and chemotherapy in the frontline setting.

Speaker #3: It'll be followed shortly thereafter by our oral and selective TNF receptor-1 inhibitor in early 2027. Overall, the portfolio has the potential to generate a steady flow of INDs between now and the end of 2027.

Speaker #3: These programs afford us great strategic optionality in disease areas with high unmet need and also with extremely large markets. Finally, in addition to cast and our immunology programs, we also have an ongoing phase III study in pancreatic cancer.

Speaker #3: So coming out of ASCO, there's been increasing focus and excitement in this space. We're preparing for initial data from our phase III PRISM1 study of Quenlanclustat and chemotherapy in the front-line setting.

Speaker #3: We expect this to read out in the first half of next year. We actually see a major opportunity for Quenlan as an all-comer first-line and, importantly, a very well-tolerated option for treatment of this devastating disease.

Terry Rosen: We expect this to read out in H1 of next year. We actually see a major opportunity for quemliclustat as an all-comer first line, importantly, a very well-tolerated option for treatment of this devastating disease. With that, I'll turn the call over to Richard to discuss the status of our clinical programs and upcoming data readouts.

Speaker #3: With that, I'll turn the call over to Richard to discuss the status of our clinical programs in upcoming data readouts.

Speaker #1: Thanks, Terry. As Terry described, our strategy is to establish castatafan as a foundational standard of care across every line of therapy in clear cell RCC.

Richard Marcus: Thanks, Terry. As Terry described, our strategy is to establish casdatifan as a foundational standard of care across every line of therapy in clear cell RCC. We're currently pursuing multiple different combination studies for casdatifan across the first, second, and late lines. In order to conduct this work in a capital and resource-efficient manner, we have been leveraging our ARC-20 platform study and generating data through partner platform studies to support and enable our ongoing and planned registrational studies. We will have multiple important data readouts from ARC-20 later this year, there will be a lot of data. I'll walk through each study, its rationale, and the nature of the near-term readouts. Starting with the first-line ccRCC, we are pursuing a TKI-free approach as the foundation of our strategy while also developing a TKI-inclusive option. The current TKI-free standard of care is the IO doublet ipi-nivo.

Speaker #1: We're currently pursuing multiple different combination studies for castatafan across the first, second, and late lines. In order to conduct this work in a capital and resource-efficient manner, we have been leveraging our ARC20 platform study and generating data through partner platform studies to support and enable our ongoing and planned registrational studies.

Speaker #1: We will have multiple important data readouts from ARC20 later this year, and there will be a lot of data. So I'll walk through each study, its rationale, and the nature of the near-term readouts.

Speaker #1: Starting with the first line, CCRCC, we are pursuing a TKI-free approach as the foundation of our strategy. While also developing a TKI-inclusive option. The current TKI-free standard of care is the IO doublet IPI NIVO.

Speaker #1: And let me remind you exactly what this regimen is. It's a maximum of four cycles or 12 weeks of IPI plus NIVO, followed by NIVO for the duration of the treatment.

Richard Marcus: Let me remind you exactly what this regimen is. It's a maximum of 4 cycles or 12 weeks of ipi plus nivo, followed by nivo for the duration of the treatment. This therapy is highly valued for the overall survival benefit it provides, but it would be used more if the rate of primary progression, which is roughly 20%, were lower. We believe a combination with casdatifan can improve upon that rate of primary progression, in addition to improving progression-free survival and ultimately overall survival. To support the TKI-free approach, there are two key cohorts in our ARC-20. First, casdatifan plus zimberelimab, our anti-PD-1, plus ipi, an anti-CTLA-4. This cohort has enrolled well, we expect enrollment to complete very soon.

Speaker #1: This therapy is highly valued for the overall survival benefit it provides, but it would be used more if the rate of primary progression, which is roughly 20%, were lower.

Speaker #1: We believe a combination with castatafan can improve upon that rate of primary progression, in addition to improving progression-free survival and, ultimately, overall survival. To support the TKI-free approach, there are two key cohorts in ARC-20.

Speaker #1: First, castatafan plus Zimberlimab, our anti-PD-1, plus IPI, an anti-CTLA4. This cohort has enrolled well and we expect enrollment to complete very soon. We're also evaluating a cast plus ZIM first-line cohort in ARC20, which completed enrollment at the beginning of this year.

Richard Marcus: We're also evaluating a CAS plus zim first-line cohort in ARC-20, which completed enrollment at the beginning of this year, for which we've already described a very low rate of primary progression of 7%. That's just two of 30 patients. Keep in mind that anti-PD-1 monotherapy was previously reported to show a 30% rate of primary progression in this front-line setting. For the TKI-inclusive approach, we'll be developing casdatifan in combination with axitinib, a well-established TKI in the front-line that will sequence well with CAS plus cabo as the subsequent regimen. We expect a new cohort in ARC-20 evaluating this combination to initiate in Q4 this year. In collaborations with BMS and Summit, we are also evaluating novel TKI-free VEGF targeting combinations with anti-PD-1/VEGF bispecific antibodies in the first-line setting.

Speaker #1: For which we've already described a very low rate of primary progression of 7%. That's just two of 30 patients. Keep in mind that anti-PD-1 monotherapy was previously reported to show a 30% rate of primary progression in this front-line setting.

Speaker #1: Now, for for the TKI-inclusive approach, we'll be developing castatafan in combination with axitinib, a well-established TKI in the front line, that will sequence well with cast plus CABO as the subsequent regimen.

Speaker #1: We expect a new cohort in ARC20 evaluating this combination to initiate in the fourth quarter of this year. In collaborations with BMSN Summit, we are also evaluating novel TKI-free VEGF targeting combinations with anti-PDX VEGF bispecific antibodies in the first-line setting.

Speaker #1: BMS will be evaluating two cast plus spumitic-based combinations in its platform study, Rosetta RCC 208. In collaboration with Summit, we'll be adding a new cohort to ARC20 to evaluate cast plus IVO in first-line CCRCC.

Richard Marcus: BMS will be evaluating two CAS plus pumitamig-based combinations in its platform study, ROSETTA RCC-208. In collaboration with Summit, we'll be adding a new cohort to ARC-20 to evaluate CAS plus ivo in first-line ccRCC. Both of these studies are expected to begin by the end of this year. In the second line, the current standard of care is cabozantinib monotherapy, representing roughly 40% of the second-line market. PEAK-1, which is evaluating CAS plus cabo versus cabo, is our first registrational study for casdatifan. Site activation and enrollment have been going quite well, and we expect to complete enrollment by the end of this year. We also have an ongoing cohort in ARC-20 evaluating CAS plus cabo in the second line IO experience setting. We shared initial efficacy data for this cohort last year at ASCO.

Speaker #1: Both of these studies are expected to begin by the end of this year. Now, in the second line, the current standard of care is cabozantinib monotherapy, representing roughly 40% of the second-line market.

Speaker #1: Peak one, which is evaluating cast plus CABO versus CABO, is our first registrational study for castatafan. Side activation and enrollment have been going quite well and we expect to complete enrollment by the end of this year.

Speaker #1: We also have an ongoing cohort in ARC-20 evaluating CAST plus CABO in the second-line, IO-experienced setting. We shared initial efficacy data for this cohort last year at ASCO.

Speaker #1: And finally, in late-line clear cell RCC, where the current standard of care is belzutifan or TKI monotherapy, we're adding a new randomized cohort in ARC-20 to evaluate casdotafam plus TIVO versus TIVO alone, in patients that have received prior belzutifan.

Richard Marcus: In late line ccRCC, where the current standard of care is belzutifan or TKI monotherapy, we're adding a new randomized cohort in ARC-20 to evaluate casdatifan plus tivozanib versus tivozanib alone in patients that have received prior belzutifan. This cohort will generate data to support a registrational strategy combining CAS with tivozanib by clarifying casdatifan's benefit, specifically in HIF-2α inhibitor-experienced patients. We expect enrollment to begin later this year. Let me briefly summarize the readouts coming from ARC-20 this year. In the first line, initial safety data from the ARC-20 cohort evaluating CAS plus zimberelimab plus ipilimumab. We've already met with the FDA and EMA to discuss how these data will support the start of our registrational trial evaluating CAS plus nivo plus ipilimumab as the bedrock of our frontline strategy. We'll also be able to share preliminary data on primary progression.

Speaker #1: This cohort will generate data to support a registrational strategy combining cast with TIVO by clarifying castatafan's benefit specifically and into alpha inhibitor experienced patients.

Speaker #1: We expect enrollment to begin later this year. Now, let me briefly summarize the readouts coming from ARC20 this year. In the first line, initial safety data from the ARC20 cohort evaluating cast plus ZIM plus IPI regarding met with the FDA and EMA to discuss how to use data will support the start of our registrational trial evaluating cast plus NIVO plus IPI as the bedrock of our front-line strategy.

Speaker #1: We'll also be able to share preliminary data on primary progression. Also, in the first line, we'll have ORR data with approximately 11 months of follow-up from the cohort evaluating cast plus ZIM.

Richard Marcus: In the first line, we'll have ORR data with approximately 11 months of follow-up from the cohort evaluating CAS plus zimberelimab. We will share waterfall and spider plots for that cohort. Given that the median progression-free survival for ipilimumab nivo from CheckMate 214 in this first line is just 12.4 months, we expect the spider plots for this cohort to be informative since they may impart an early look at how PFS will unfold for this cohort. In the second line, we'll have more mature ORR and PFS data for CAS plus cabo in approximately 45 patients with at least 18 months of follow-up, and we may have an early read on OS. In our late-line monotherapy cohorts, we'll be able to share an early look at overall survival with approximately 28 months median follow-up from the approximately 120 late-line monotherapy patients.

Speaker #1: We will share waterfall and spider plots for that cohort. And given that the median progression-free survival for IPI NIVO from check May 214 in this first line is just 12.4 months, we expect the spider plots for this cohort to be informative since they may impart an early look at how PFS will unfold for this cohort.

Speaker #1: In the second line, we'll have more mature ORR and PFS data for cast plus CABO in approximately 45 patients with at least 18 months of follow-up.

Speaker #1: And we may have an early read on OS. And in our late-line monotherapy cohorts, we'll be able to share an early look at overall survival with approximately 28 months median follow-up from the approximately 120 late-line monotherapy patients.

Speaker #1: While OS is not required for approval and registrational trials for CCRCC, it could impact access and ex-US regions and is recognized as another potential major differentiator relative to belsutafan which has now failed to show statistically significant benefit in OS in three out of three registrational trials.

Richard Marcus: While OS is not required for approval in registrational trials for ccRCC, it could impact access in ex-US regions and is recognized as another potential major differentiator relative to abiraterone, which has now failed to show statistically significant benefit in OS in three out of three registrational trials. This first look at OS for casdatifan will provide important comparative data. Taken together, these data readouts will create a holistic picture of casdatifan's efficacy across all lines of therapy and should generate strong conviction in its potential as the new backbone of kidney cancer treatment. As Terry mentioned, we expect to share the totality of these data together in an investor forum in October prior to ESMO. With that, I'll turn the call over to Juan to discuss our immunology portfolio.

Speaker #1: So, this first look at OS for castatafan will provide important comparative data. Taken together, these data readouts will create a holistic picture of castatafan's efficacy across all lines of therapy and should generate strong conviction in its potential as the new backbone of kidney cancer treatment.

Speaker #1: As Terry mentioned, we expect to share the totality of these data together in an investor forum in October, prior to ESMO. And with that, I'll turn the call over to Juan to discuss our immunology portfolio.

Speaker #2: Thanks, Richard. Over the past few years, the same discovery team that created castatafan has been working on creating a broad portfolio of programs that span the whole spectrum of autoimmune and allergic diseases.

Juan Jaen: Thanks, Richard. Over the past few years, the same discovery team that created casdatifan has been working on creating a broad portfolio of programs that span the whole spectrum of autoimmune and allergic diseases. While we haven't said much about this effort until now, we are very proud of its quality and scope. The overarching strategy has been to design molecules that might provide safe treatments for important patient segments across the immunology landscape. We have also prioritized approaches that leverage our demonstrated expertise in designing potent and selective molecules that work in the real world under physiological stress, rather than just in a culture dish. Further, we have looked for ways to minimize the inherent biological risk associated with novel mechanisms of action.

Speaker #2: What we haven't said much about this effort until now, we are very proud of its quality and scope. The overarching strategy has been to design molecules that might provide safe treatments for important patient segments across the immunology landscape.

Speaker #2: We have also prioritized approaches that leverage our demonstrated expertise in designing potent and selective molecules that work in the real world under physiological stress rather than just in a culture dish.

Speaker #2: Further, we have looked for ways to minimize the inherent biological risk associated with novel mechanisms of action. You may notice a couple of recurring themes in the mechanisms of action that we have chosen to pursue in implementing our portfolio strategy, including the development of oral small molecule alternatives to established biologics and an emphasis on targeting immune cell populations that have generally been understudied.

Juan Jaen: You may notice a couple of recurring themes in the mechanisms of action that we have chosen to pursue in implementing our portfolio strategy, including the development of oral small molecule alternatives to established biologics and an emphasis on targeting immune cell populations that have generally been understudied. We expect a steady cadence of molecules advancing into the clinic, beginning with our MRGPRX2 antagonist and followed by our TNF receptor 1, CCR6, STAT6, CD89, and CD40 ligand programs, all of which are positioned to deliver IND-ready candidates between now and the end of 2027. Our first program, AB102, an oral MRGPRX2 antagonist being developed for chronic spontaneous urticaria, or CSU, and atopic dermatitis, is wholly owned by Arcus. Available biologics have meaningfully advanced the treatment of allergic conditions, but substantial clinical need remains.

Speaker #2: We expect a steady cadence of molecules advancing into the clinic beginning with our MRG PRX2 antagonist and followed by our TNF receptor 1, CCR6, TAT6, CD89, and CD40 ligand programs, all of which are positioned to deliver IND-ready candidates between now and the end of 2027.

Speaker #2: Our first program, AV102, an oral MRG PRX2 antagonist, being developed for chronic spontaneous urticaria or CSU, and atopic dermatitis, is wholly owned by Arcus.

Speaker #2: Available biologics have meaningfully advanced the treatment of allergic conditions but substantial clinical need remains X2 is a key regulator of mass cell activation in these diseases, releasing inflammatory signals that drive swelling and itch, making this a promising target for conditions like CSU and atopic dermatitis.

Juan Jaen: X2 is a key regulator of mast cell activation in these diseases, releasing inflammatory signals that drive swelling and itch, making this a promising target for conditions like CSU and atopic dermatitis. At the Society for Investigative Dermatology annual meeting earlier this year, we presented preclinical data on an oral X2 approach showing full blockade of X2-dependent mast cell degranulation and inhibition of all common human X2 variants. These data support the potential for a potent, selective once-daily oral X2 antagonist to impact key disease outcomes in conditions driven by aberrant mast cell activity. AB102 is entering the clinic imminently with PK profile data expected in Q4 from the first cohorts of our first-in-human healthy volunteer study. We expect to follow with a proof of concept study in CSU in mid 2027.

Speaker #2: At the Society for Investigative Dermatology annual meeting earlier this year, we presented first clinical data on an oral X2 approach, showing full blockade of X2-dependent mast cell degranulation and inhibition of all common human X2 variants.

Speaker #2: These data support the potential for a potent selective once-daily oral X2 antagonist to impact key disease outcomes in conditions driven by aberrant mass cell activity.

Speaker #2: AV102 is centered in the clinic imminently with PK profile data expected in the fourth quarter from the first cohorts of our first in-human healthy volunteer study.

Speaker #2: We expect to follow with a proof of concept study in CSU in mid-2027. Unlike other recent clinical failures in the X2 space, we believe that the excellent potency of AV102 optimized to be efficacious under physiological conditions provides the best opportunity to round the definitive proof concept study with an X2 antagonist in CSU.

Juan Jaen: Unlike other recent clinical failures in the X2 space, we believe that the excellent potency of AB102, optimized to be efficacious under physiological conditions, provides the best opportunity to run the definitive proof of concept study with an X2 antagonist in CSU. We also are developing an oral small molecule TNF inhibitor as a potential treatment for conditions such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease. Our TNF inhibitor is designed to selectively block TNF receptor 1, which we believe could translate into better safety and efficacy relative to approved anti-TNF biologics, which block both TNF receptor 1 and TNF receptor 2. As you may know, blocking TNF receptor 2 can paradoxically lead to an inflammatory response in some patients. We expect this program to enter the clinic in early 2027.

Speaker #2: We also are developing an oral small molecule TNF inhibitor as a potential treatment for conditions such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease.

Speaker #2: Our TNF inhibitor is designed to selectively block TNF receptor 1, which we believe could translate into better safety and efficacy relative to approved anti-TNF biologics which block both TNF receptors 1 and 2 as you may know blocking TNF receptor 2 can paradoxically lead to an inflammatory response in some patients.

Speaker #2: We expect this program to enter the clinic in early 2027. Behind AV102 and our TNF programs we have a portfolio of earlier stage immunology programs for which we will share more details as they approach entry into the clinic.

Juan Jaen: Behind AB102 and our TNF programs, we have a portfolio of earlier-stage immunology programs for which we will share more details as they approach entry into the clinic. I'll now hand it over to Bob to discuss the market opportunity for casdatifan as well as our financial results.

Speaker #2: I'll now hand it over to Bob to discuss the market opportunity for castatafan as well as our financial results.

Speaker #3: Thanks, Juan. Before I get into the quarter's financials, I want to spend a few minutes on the multi-billion dollar market opportunity for castatafan. Sales for RCC drugs in just the major markets are expected to grow to roughly $13 billion by 2030.

Bob Goeltz: Thanks, Juan. Before I get into the quarter's financials, I want to spend a few minutes on the multi-billion dollar market opportunity for casdatifan. Sales for RCC drugs in just the major markets are expected to grow to roughly $13 billion by 2030. Historically, this market has been fragmented, primarily split across the IO and TKI classes. With only two HIF-2α inhibitors on the horizon and clear advantages for casdatifan, we believe Arcus has a path to become a common denominator across lines of kidney cancer treatment. Casdatifan is targeting lines of therapy with large patient populations and long treatment durations. PEAK-1 addresses approximately 20,000 IO-experienced patients in the major markets, representing an opportunity of more than $2 billion. In the first top-line opportunity is even larger, exceeding $4 billion.

Speaker #3: Historically, this market has been fragmented, primarily split across the IO and TKI classes. With only two HIF-2 alpha inhibitors on the horizon, and clear advantages for castatafan, we believe Arcus has a path to become a common denominator across lines of kidney cancer treatment.

Speaker #3: Castatafan is targeting lines of therapy with large patient populations and long treatment durations. PEEK1 addresses approximately 20,000 IO experienced patients in the major markets, representing an opportunity of more than $2 billion.

Speaker #3: In the first hotline opportunity is even larger, exceeding $4 billion. All told, we see a total peak sales opportunity for castatafan of $5 to $10 billion driven in part by duration of therapy from a long-term tail effect.

Bob Goeltz: All told, we see a total peak sales opportunity for casdatifan of $5 to 10 billion, driven in part by duration of therapy from a long-term tail effect. This is something we've seen consistently in our late line monotherapy data, where approximately 25% of patients remain on treatment beyond 2 years. As a reminder, Arcus owns all commercial rights to casdatifan outside of Japan and certain other Asian territories where rights are held by our partner, Taiho. Turning to quemliclustat, we continue preparations for the readout from PRISM-1. While there's been exciting progress made in the treatment of later-line pancreatic cancer, quemliclustat has the opportunity to be the first meaningful advancement in the front line in decades. We believe this is a multi-billion dollar commercial opportunity.

Speaker #3: This is something we've seen consistently in our late-line monotherapy data, where approximately 25% of patients remain on treatment beyond two years. As a reminder, Arcus owns all commercial rights to castatafan outside of Japan and certain other Asian territories where rights are held by our partner TAIO.

Speaker #3: Turning to Quemly, we continue preparations for the readout from PRISM1. While there's been exciting progress made in the treatment of later line pancreatic cancer, Quemly has the opportunity to be the first meaningful advancement in the front line in decades.

Speaker #3: We believe this is a multi-billion dollar commercial opportunity. Further, we believe Quemly's well-tolerated profile as well as its promise to substantially enhance the benefit of immunogenic chemotherapy would make it attractive as a combination partner if PRISM1 is successful.

Bob Goeltz: Further, we believe quemliclustat's well-tolerated profile as well as its promise to substantially enhance the benefit of immunogenic chemotherapy would make it attractive as a combination partner if PRISM-1 is successful. I also want to touch on capital efficiency. Full ownership of casdatifan gives us significant strategic optionality and supports a capital-efficient collaboration strategy. Our new agreements with BMS, Summit, and AVEO are structured to advance casdatifan combinations without placing outside demands on our own resources. The same is true of our wholly owned immunology portfolio, where the TNF program is the only one carrying an option held by Gilead. Turning to our financial results for the quarter, our cash and investments as of 30 June 2026 were $775 million as compared to $876 million at the end of Q1.

Speaker #3: I also want to touch on capital efficiency. Full ownership of castatafan gives us significant strategic optionality and supports a capital-efficient collaboration strategy. Our new agreements with BMS, Summit, and Aveo are structured to advance castatafan combinations without placing outside demands on our own resources.

Speaker #3: The same is true of our wholly owned immunology portfolio where the TNF program is the only one carrying an option held by Gilead. Turning to our financial results for the quarter, our cash and investments as of June 30th, 2026 were $775 million as compared to $876 million at the end of the first quarter.

Speaker #3: We continue to expect to end 2026 with approximately $600 million in cash and investments and expect these resources to provide runway into at least the second half of 2028.

Bob Goeltz: We continue to expect to end 2026 with approximately $600 million in cash and investments and expect these resources to provide runway into at least the second half of 2028. We recognize GAAP revenue for the second quarter of $41 million and now expect full year 2026 GAAP revenue of $65 to 75 million. Revenue continues to be driven primarily by our collaboration agreements. Future operating results are expected to reflect lower collaboration revenue due to reduced activity under the Gilead collaboration, driven by the wind down of the domvanalimab program.

Speaker #3: We recognize gap revenue for the second quarter of $41 million and now expect full year 2026 gap revenue of $65 to $75 million. Revenue continues to be driven primarily by our collaboration agreements.

Speaker #3: Future operating results are expected to reflect lower collaboration revenue due to reduced activity under the Gilead collaboration. Driven by the wind down of the dominant element program.

Speaker #3: Our R&D expenses for the second quarter were $113 million net of reimbursements and we continue to expect meaningful decrease in overall R&D spend in 2026 and 2027 relative to 2025 as a result of the wind down of the DOM phase three trials and reduced spend on Quemly.

Bob Goeltz: Our R&D expenses for the second quarter were $113 million net of reimbursements, and we continue to expect meaningful decrease in overall R&D spend in 2026 and 2027 relative to 2025 as a result of the wind down of the domvanalimab phase III trials and reduced spend on Quemli, together with broader spend management. By 2027, we expect more than 80% of our portfolio spend to be directed toward casdatifan development. G&A expenses were $24 million for the second quarter, and total non-cash stock-based compensation was $15 million. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10-Q filing. I'll now turn it back to Terry for closing remarks.

Speaker #3: Together with broader spend management. By 2027, we expect more than 80% of our portfolio spend to be directed toward castatafan development. GNA expenses were $24 million for the second quarter and total non-cash stock-based compensation was $15 million.

Speaker #3: For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10Q filing. I'll now turn it back to Terry for closing remarks.

Speaker #4: Thanks very much, Bob. So let me close by summarizing our priorities for the remainder of 2026. No surprise, castatafan remains our number one priority.

Terry Rosen: Thanks very much, Bob. Let me close by summarizing our priorities for the remainder of 2026. No surprise, casdatifan remains our number one priority. We're working aggressively, both independently and with clinical collaborators, to expand the development program with the goal of positioning cas to be the CAG backbone of kidney cancer treatment across all lines of therapy. In the coming months, we'll share data for casdatifan as monotherapy and in combination in first, second, and late-line settings. We expect these to further reinforce casdatifan's best-in-class profile and drive conviction in its potential as a transformative therapy.

Speaker #4: We're working aggressively, both independently and with clinical collaborators, to expand the development program with the goal of positioning CAS to be the CAG backbone of kidney cancer treatment across all lines of therapy.

Speaker #4: In the coming months, we'll share data for castatafan as monotherapy and in combination in first, second, and late line settings. We expect these to further reinforce castatafan's best-in-class profile and drive conviction in its potential as a transformative therapy.

Speaker #4: These studies will support a broad registrational strategy bringing both the qualitative and quantitative advances that HIF2 alpha inhibition offers for the clear cell RCC treatment paradigm.

Terry Rosen: These studies will support a broad registrational strategy, bringing both the qualitative and quantitative advances that HIF-2α inhibition offers for the ccRCC treatment paradigm, starting with the ongoing PEAK-1 study, which is on track for full enrollment by year-end, as well as a Phase III trial, again, that's called PEAK-20 That's evaluating CAS plus Ipi plus Nivo in first-line to be initiated by year-end. For clarity, I want to confirm that we will be using Ipi Nivo as the combination partner for casdatifan in this registrational study. Beyond casdatifan, our PRISM-1 phase III trial for quemliclustat in pancreatic cancer remains on track for a readout next year. Juan walked you through the exciting progress across our immunology portfolio with AB102 advancing into the clinic, followed by our TNF inhibitor shortly thereafter, and other immunology programs over the next 18 months.

Speaker #4: Starting with the ongoing PEEK1 study, which is on track for full enrollment by year end, as well as a phase three trial, again, that's called PEEK20, that's evaluating CAS plus IPI plus NEVO in first line to be initiated by year end.

Speaker #4: For clarity, I want to confirm that we will be using IPI NEVO as the combination partner for castatafan in this registrational study. Beyond castatafan, our PRISM1 phase three trial for Quemlyclostatin pancreatic cancer remains on track for a readout next year.

Speaker #4: And while I walked you through the exciting progress across our immunology portfolio, with AB102 advancing into the clinic, followed by our TNF inhibitor shortly thereafter, and other immunology programs over the next 18 months.

Speaker #4: With $775 million in cash and investments, and runway into at least the second half of 2028, we're well positioned to execute on all of these priorities.

Terry Rosen: With $775 million in cash and investments and runway into at least H2 2028, we're well-positioned to execute on all of these priorities. We see a clear opportunity for value creation for patients and shareholders to accelerate, perhaps dramatically, over the coming months. Thank you for joining us today. We appreciate your interest and continued support of Arcus and will now open the call for questions.

Speaker #4: We see a clear opportunity for value creation for patients and shareholders to accelerate and perhaps dramatically over the coming months. Thank you for joining us today.

Speaker #4: We appreciate your interest in continued support of Arcus and will now open the call for questions.

Speaker #1: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand.

Operator 3: We will now begin the question and answer session. 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 allow 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 Salim Syed with Mizuho. Your line is open. Please go ahead.

Terry Rosen: We will now begin the question and answer session. 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 allow 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 Salim Syed with Mizuho. Your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: 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 Salim Sayed with Mizuho.

Speaker #1: Your line is open. Please go ahead.

Speaker #2: Great. Congrats on the progress, guys, and thanks for the question. Just one kind of going into all the October data, obviously a lot of data that we'll be getting.

Salim Syed: Great. Congrats on the progress, guys. Thanks for the question. Just one kind of going into all the October data, obviously a lot of data that we'll be getting. Is there a bogey or measure of success that you're looking at in each of these lines that you would care to elucidate here for folks? Also while we're there, are there any particular parts of the data set that you would place a little bit more prominence on where you want people to anchor to? Thanks so much.

Speaker #2: Is there a bogey or measure of success that you're looking at in each of these lines that you would care to elucidate here for folks?

Speaker #2: And also, while we're there, are there any particular parts of the data set that you would place a little bit more prominence on where you want people to anchor to?

Speaker #2: Thanks so much.

Speaker #4: Thanks, Salim. Great question. And I'll address all that. I'll start at a very high level. And then I'll get increasingly granular. So I think you can walk away with some very clear expectations as to how we're looking at things.

Terry Rosen: Thanks, Salim. Great question. I'll address all that. I'll start at a very high level. Then I'll get increasingly granular. I think you can walk away with some very clear expectations as to how we're looking at things. At the highest level, I think we want people to walk away and believe they will walk away knowing that casdatifan is going to become the backbone standard in RCC across all lines of therapy. I think one of the ways to frame this is put in the context of value and value creation and looking at it through an investor standpoint. I think it's very clear that last year we received an inflection in value that was due to recognition in the investor community that there was really a very substantial differentiation between casdatifan and belzutifan.

Speaker #4: So, at the highest level, I think we want people to walk away—and believe they will walk away—knowing that castatafan is going to become the backbone standard in RCC across all lines of therapy.

Speaker #4: So I think one of the ways to frame this is put in the context of value and value creation and looking at it through an investor standpoint.

Speaker #4: So I think it's very clear that last year we received an inflection in value that was due to recognition in the investor community. That there was really a very substantial differentiation between castatafan and Belzutafan.

Speaker #4: And what we've heard from a lot of investors is that led sort of to a recognition of value that was reflected in our second line strategy that we were given value for an expectation that CAS plus CAVO is going to be CAVO and that's going to look good.

Terry Rosen: What we've heard from a lot of investors is that led sort of to a recognition of value that was reflected in our second line strategy, that we were given value for an expectation that casdatifan plus cabo is going to be cabo, and that's going to look good. I think the other piece, though, was that with that differentiation, there still remain questions as to whether that differentiation, which is clearly there, how will that translate more broadly, and particularly in the front line. I think a couple of things have happened. First, you had the failure of LITESPARK-012. We've also had another year's worth of follow-up clinical data. I think what's going to happen as we come into this readout is that we'll be able to give very strong conviction across all lines of therapy, including the front line.

Speaker #4: I think the other piece, though, was that with that differentiation, there still remain questions as to whether that differentiation, which is clearly there, will translate more broadly.

Speaker #4: And particularly in the front line. And I think a couple things have happened. First, you had the failure of Lightspark 012, but then we've also had another year's worth of follow-up clinical data.

Speaker #4: So I think what's going to happen is we come into this readout is that we'll be able to give very strong conviction across all lines of therapy, including the front line and the front line is huge, because that's the $5 billion plus part of the market opportunity.

Terry Rosen: The front line is huge because that's the $5 billion+ part of the market opportunity. Keep in mind, we have no competition in the front line without belzutifan. There, the competition is the standard of care. In that context, let me go down another layer and talk about the front line and build out on a couple of things that Richard pointed out. Our foundational registrational study there will be casdatifan plus Ipi plus Nivo versus Ipi Nivo. What we're going to have, we'll have at least 20 patients worth of data from that casdatifan anti-PD-1 Ipi cohort that we're running as part of ARC-20. Keep in mind, this is exactly what we've agreed upon with the FDA in terms of safety.

Speaker #4: So keep in mind, we have no competition in the front line without Belzutafan. They're the competition is the standard of care. So in that context, let me go down another layer and talk about the front line and build out in a couple of things that Richard pointed out.

Speaker #4: So our foundational registrational study there will be CAS plus IPI plus NEVO versus IPI NEVO. And what we're going to have—we'll have at least 20 patients' worth of data from that CAS, anti-PD-1, IPI cohort that we're running as part of our 20.

Speaker #4: Keep in mind, this is exactly what we've agreed upon with the FDA in terms of safety. So we'll have a safety profile with that 12 or more weeks, and we'll also have a look at the rate of primary progression.

Terry Rosen: We'll have a safety profile with that 12 or more weeks, and we'll also have a look at the rate of primary progression. Now, I think the thing that might surprise people as they're thinking about this now and we get more granular is that the casdatifan Zim data set is actually going to be relatively mature despite being an early data set. Because if you contextualize a PFS for ipilimumab/nivolumab, that's just over 12 months. As well as a well-done study with pembrolizumab alone, where you have a PFS on 7 to 8 months, you'll be able to get a feel from our curve as to how our PFS is looking compared to those regimens.

Speaker #4: Now, I think the thing that might surprise people is they're thinking about this now is, and we get more granular, is that the CAS ZIM data set is actually going to be relatively mature despite being an early data set.

Speaker #4: Because if you contextualize a PFS for IPI NEVO that's just over 12 months, as well as a well-done study with Pembro alone, where you have a PFS on the 7 to 8 months, you'll be able to get a feel from our curve as to how our PFS is looking compared to those regimens.

Speaker #4: Also, with over 18 months of median follow-up, I think we'll have a good look potentially at how OS as we move into the second line is playing out in some of these things.

Terry Rosen: Also, with over 18 months of median follow-up, I think we'll have a good look potentially at how OS, as we move into the second line, is playing out, and some of these things will start to go across studies. Let me now talk about the second line and build on what I just said there. In the second line, our casdatifan-cabo data will really support that we will have what will look like a better PFS than what was seen with bel's lenva. I think given the safety, and we talked a little bit earlier about what's been associated with lenva and lenva bel's, that we think we'll have advantages that read on both the safety and efficacy.

Speaker #4: We'll start to go across studies. So let me now talk about the second line and build on what I just said there. So in the second line, our CAS CAVO data will really support that we will have what will look like a better PFS than what was seen with Bell's Lambda.

Speaker #4: And I think given the safety and we talked a little bit earlier about what's been associated with Lambda and Lendva Bells, that we think we'll have advantages that read on both the safety and efficacy.

Speaker #4: The other thing to look at is that, given that maturity, as I was saying, of over 18 months, I think the shape of our curve will give you a sense that we could have a very dramatically different hazard ratio when we compare it to CAVO versus the hazard ratio of 0.7 that was seen for Bell's Lambda.

Terry Rosen: The other thing to look at is that given that maturity, as I was saying, of over 18 months, I think the shape of our curve will give you a sense that we could have a very dramatically different hazard ratio when we compare it to CABO versus the hazard ratio of 0.7 that was seen for belzutifan's Lenvima. The more important piece, though, is that given that what's known for the OS of CABO, which is just over 21 months, given that we'll have that 18 months of follow-up, we may see, in fact, what appears to be an OS advantage for the casdatifan regimen. Keep in mind, our OS is only going to be based upon how we look relative to direct comparison to CABO, and that'll be defined by its hazard ratio. As Richard mentioned, thus far, belzutifan has been 0.43.

Speaker #4: I think the more important piece, though, is that given that the given that what's known for the OS of CAVO, which is just over 21 months, given that we'll have that 18 months of follow-up, we may see in fact what appears to be an OS advantage for the CAS datafan regimen.

Speaker #4: Keep in mind, our OS is only going to be based on how we look relative to direct comparison to CAVO, and that'll be defined by its hazard ratio, as Richard mentioned.

Speaker #4: Thus far, Belzutafan has been 0.43. So we're pretty excited about having those first data that read on OS. And that brings me to the late line.

Terry Rosen: We're pretty excited about having those first data that read on OS. That brings me to the late line. The late line we've clearly shown is single agent, a very dramatic difference compared to the data that have been generated with belzutifan. We'll have 28 months of follow-up. Again, given that the OS for belzutifan is just over 20 months, I think it gives us an opportunity. You'll see the Kaplan-Meier curves. We don't know how it's going to play out, but I think with a very robust, durable HIF-2 inhibitor, this'll start to perhaps show us how important HIF-2 really is as a target in clear cell RCC, and you'll clearly have some sense, we all will, of how OS will look in that setting.

Speaker #4: So the late line we've clearly shown a single agent a very dramatic difference compared to the data that have been generated with Belzutafan. But we'll have 28 months of follow-up.

Speaker #4: And again, given that the OS for Belzutafan is just over 20 months, I think it gives us an opportunity. You'll see the Keppler-Meier curves we don't know how it's going to play out, but I think with the very robust, durable, if two inhibitor, this'll start to perhaps show us the how important HIF2 really is as a target in clear cell RCC, and you'll clearly have some sense.

Speaker #4: We all will of how OS will look in that setting. And I think the nice thing there, since it's single agent, that will give read-through, and you were asking about what things are important.

Terry Rosen: I think the nice thing there, since it's single agent that will give read-through, and you were asking about what things are important. I think that'll read through to the mechanism across lines of therapy. Just to summarize, I think overall success will be that you come away knowing that not only do we have a plan for casdatifan 21, I think we've laid that out pretty clearly. We're executing on it. Those data will have enough data now that you'll see we actually will win and that casdatifan really will look like it's going to become the common denominator for all clear cell RCC treatments.

Speaker #4: I think that'll read through to the mechanism across lines of therapy. So just to summarize, I think overall success will be that you come away knowing that not only do we have a plan for CAS datafan to win, I think we've laid that out pretty clearly.

Speaker #4: We're executing on it. But those data will have enough data now that you'll see we actually will win. And that CAS datafan really will look like it's going to become the common denominator for all clear cell RCC treatments.

Speaker #2: Okay. Super helpful. Thanks so much, Terry.

Salim Syed: Okay, super helpful. Thanks so much, Terry.

Speaker #4: Thanks, Salim.

Terry Rosen: Thanks, Salim.

Speaker #3: Your next question comes from the line of Dana Greybosh with Lyrink Partners. Your line is open. Please go ahead.

Operator 3: Your next question comes from the line of Daina Graybosch with Leerink Partners. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Daina Graybosch with Leerink Partners. Your line is open. Please go ahead.

Daina Graybosch: Hi. Thanks for the question. Looking forward to another fall event. I wonder if you could talk about LITESPARK-012, which we'll see at ESMO after that event, and your expectations for PFS and OS from that study. Is there a specific signal that would give you confidence or increase your confidence that casdatifan can exceed there with Axi and a PD-1 where Bells, Lenva, and Pembro failed? Thank you.

Speaker #5: Hi. Thanks for the question. I'm looking forward to another fall event. I wonder if you can talk about LightSpark 12, which we'll see at ESMO after that event.

Speaker #5: In your expectations for PFS and OS from that study, and is there a specific signal that would give you confidence or increase your confidence that CAS can exceed there with AXIE and a PD-1 where Bell's Lambda and Pembro failed?

Speaker #5: Thank you.

Speaker #4: Thanks, Dana. So this is going to be a theme we come back to. People ask a lot of times about read-through from trials, and talk about there's read-through from things where we have the data, LightSpark 0.12 we don't have the data.

Terry Rosen: Thanks, Daina. This is going to be a theme we come back to. People ask a lot of times about read-through from trials and talk about there's read-through from things where we have the data, LITESPARK-012, we don't have the data. I think the most important thing is go to slide five. You can say, like elections have consequences, biomarker data have consequences. When you look at the comparative durability of that ability to suppress erythropoietin, so the ability to inhibit HIF-2, I think that's the thing that tells 90%-plus of the story. People speculated about safety issues of the triplet, et cetera. I think everything comes down to a dramatic differentiation of the molecules, and I think what you're starting to see now is data where that'll play out.

Speaker #4: But I think the most important thing is go to slide 5. You can say elections have consequences. Biomarker data have consequences. And when you look at the comparative durability of the ability to suppress erythropoietin, so the ability to inhibit HIF2, I think that's the thing that tells 90-plus percent of the story.

Speaker #4: So people speculated about safety issues of the triplet, etc. I think everything comes down to a dramatic differentiation of the molecules. And I think what you're starting to see now is data where that'll play out.

Speaker #4: So I think the biggest problem that Belzutafan probably had is the durability and the decrease with time in ability to inhibit HIF2, where their own papers talk about effect on the biomarker looking very nominal.

Terry Rosen: I think the biggest problem that belzutifan probably had is the durability and the decrease with time and ability to inhibit HIF-2, where their own papers talk about effect on the biomarker looking very nominal at just 12 weeks. Keep in mind, the PFS for the control arm there is 24 months. The fact that you're not inhibiting strongly for that durability, I think that's the issue. The thing that gives us confidence is we know that casdatifan is inhibiting not only robustly on day 1, but out past the year, and in fact, as long as you're on treatment. You do not run in those issues. Keep in mind one last piece that, again, however that affects things. As we've talked about, treatment with TKI does induce the increased activity of HIF-2α. You get more HIF-2α activity.

Speaker #4: It just. 12 weeks. Keep in mind the PFS for the control arm there is 24 months. So the fact that you're not inhibiting strongly for that durability, I think that's the issue.

Speaker #4: And then, the thing that gives us confidence is we know that CAS datafan is inhibiting not only robustly on day one, but out past the year.

Speaker #4: And in fact, as long as you're on treatment. So you do not run in those issues. Keep in mind one last piece that, again, however that affects things.

Speaker #4: As we've talked about, treatment with TKI does induce the increased activity of HIF alpha. So you get more HIF2 alpha activity. So essentially what you have in that study is the treatment with the TKI, this is not a discontinuous event.

Terry Rosen: Essentially what you have in that study is the treatment with the TKI, this is not a discontinuous event. That happens in a continuous way. You've got increasing levels of HIF-2 activity, and you've got a HIF-2 inhibitor that is measured by that biomarker work is clearly not inhibiting HIF-2 as strongly with time. Less activity of the molecule, more activity coming from the TKI-induced HIF-2 activity. I think that's a recipe for difficulty. Whereas the Arcus molecule, you're talking about a paradigm of a tumor where 85% to 90%-plus of the patients have HIF-2 as a driver. You're going to put a HIF-2 inhibitor, which only brings anemia on top of a good regimen of a TKI and an anti-PD-1, and we feel super excited about it.

Speaker #4: That happens in a continuous way. So you've got increasing levels of HIF2 activity, and you've got a HIF2 inhibitor that—as measured by that biomarker work—is clearly not inhibiting HIF2 as strongly with time.

Speaker #4: So less activity of the molecule, more activity coming from the TKI-induced HIF2 activity. So I think that's a recipe for difficulty. Whereas the Arcus molecule, you're talking about a paradigm of a tumor where 85 to 90-plus percent of the patients have HIF2 as a driver.

Speaker #4: And you're going to put a HIF2 inhibitor, which only brings anemia, on top of a good regimen of a TKI and an anti-PD-1. And we feel super excited about it.

Speaker #4: And we can't even imagine something that would come out of LightSpark 0.12 that would cause us to think differently. And I'll remind you, our number one focus there is on top of epinebo.

Terry Rosen: We can't even imagine something that would come out of LITESPARK-012 that would cause us to think differently. I'll remind you, our number one focus there is on top of ipi/nivo, and you'll see a really strong data set, I think, as we go into fall. We feel really great about the front line.

Speaker #4: And you'll see a really strong data set, I think, as we go into fall. So we'll feel really great about the front line.

Speaker #3: Your next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open. Please go ahead.

Operator 3: Your next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open. Please go ahead.

Speaker #2: Hi guys. Thanks for taking my question. A couple more about what we're expecting in October. In the second line cohort, can you remind us how much prior Lenvima those patients have gotten?

Jonathan Miller: Hi, guys. Thanks for taking my question. A couple more about what we're expecting in October. In the second-line cohort, can you remind us how much prior Lenvima those patients have gotten? Terry, to your point, not all TKIs are created equal, and we know that sequencing has effects. I think we've seen prior TKI treatment numbers, how many patients got Lenvima prior? Secondly, in first line, I'm a little surprised that you're so hesitant about giving ORR or broader efficacy readouts for the triplet in first line. You'll have two scans or more for most patients. What do you expect to see for time to response in first line versus second line? Why are you so hesitant to give ORR, why do you think that there won't be enough to at least start directionally talking about that?

Speaker #2: Terry, to your point, not all TKIs are created equal. We know the sequencing has effects. I think we've seen prior TKI treatment numbers. But how many patients got Lenvima prior?

Speaker #2: And then secondly, in first line, I'm a little surprised that you're so hesitant about giving ORR or broader efficacy readouts for the triplet in first line.

Speaker #2: You'll have to scans or more for most patients. What do you expect to see for time to response in first line versus second line?

Speaker #2: Why are you so hesitant to give ORR and why do you think that there won't be enough to at least start directionally talking about that?

Speaker #4: Okay, so remind me of the first question, and then I'll get to the ORR—which, by the way, we're not hesitant. Yeah. Oh, prior Lambda.

Terry Rosen: Okay. Remind me the first question, I'll get to the ORR-

Jonathan Miller: Prior Lenvima in-

Terry Rosen: Which, by the way, we're not hesitant. Yeah. Prior Lenva. Yeah. We'll give you specific numbers at the time. Let me remind everyone else as well. It's probably when people talk about differences between the ARC-20 casdatifan CABO as well as our registrational study versus the LITESPARK-011 study because in that study, Merck had CABO in the control arm and Lenva in the study arm. The only TKIs of probably substantial number that they saw were patients on axi, it was probably a mix of ipilimumab/nivolumab. We'll give specific numbers at that time, what I'd say is our Lenva patients are very representative of what you would normally see in the first line. We'll have a substantial number of Lenva patients out of that 40 some odd patients who looks relatively like the distribution.

Speaker #4: Yeah. So we'll give you specific numbers at the time. Let me remind everyone else as well. It's probably when people talk about differences between the Arc 20 CAS capo as well as our registrational study, versus the LightSpark 0.11 study because in that study, Merck had capo in the control arm and Lambda.

Speaker #4: And the study arm really the only TKIs of probably substantial number that they saw were patients on axis. So it was probably a mix of axis and epinebo.

Speaker #4: We'll give specific numbers at that time. But what I'd say is our Lenva patients are very representative of what you would normally see in the first line.

Speaker #4: So we'll have a substantial number of Lenva patients out of that 40-some-odd patients. Looks relatively like the distribution. In terms of your other question, we will share those information.

Terry Rosen: In terms of your other question, we will share those information. There's no hesitancy. I think just on expectations, given that, keep in mind that study's enrolled very quickly, that triplet. We think the most important part of those data will be first, the safety, and second, the rate of primary progression, because that's really what you're addressing. We think even what you'll see from just our anti-PD-1 plus casdatifan, that'll give you warm feelings about efficacy, given we'll have that 11 months of median follow-up, and that still may improve. But we'll share what the early responses look like. I think the thing to think about is that the timing of an IO plus a casdatifan regimen may look a little bit more like IO alone or HIF-2 inhibitor alone, where responses, that did you cross 30% or not when that happens may be more prolonged.

Speaker #4: There's no hesitancy. I think just on expectations, given that keep in mind that studies enrolled very quickly, that triplet, you'll we think the most important part of those data will be first the safety and second the rate of primary progression because that's really what you're addressing.

Speaker #4: And we think even what you'll see from just our anti-PD-1 plus CAS, that'll give you warm feelings about efficacy. Given we'll have that 11 months of median follow-up.

Speaker #4: And that still may improve. But with the we'll share what the early responses look like. I think the thing to think about is that the timing of an IO plus a CAS data fan regimen may look a little bit more like IO alone or HIF2 inhibitor alone, where responses that did you cross 30% or not when that happened may be more prolonged.

Speaker #4: The thing is when you combine with a TKI, as you know, you're really affecting the vascular system. And it's a very sort of response-fast type of phenomena.

Terry Rosen: The thing is when you combine with a TKI, as you know, you're really affecting the vascular system, and it's a very response fast type of phenomena, but then obviously it doesn't give you the durability. We'll share those data, but I think the more important things that you'll get out of it are the safety of the triplet, the rate of primary progression. The rate of primary progression from any of the studies we've done that don't include a TKI, particularly those in the earlier lines as well as a few other monotherapy datasets. And then the casdatifan plus Lenvima simply because you will have a longer period of treatment.

Speaker #4: But then obviously, it doesn't give you the durability. So we'll share those data, but I think the more important things that you'll get out of it are the safety, of the triplet, the rate of primary progression, the rate of primary progression, from any of the studies we've done that don't include a TKI, particularly those in the earlier lines as well as a few other monotherapies data sets.

Speaker #4: And then the CAS plus ZIM, simply because you will have a longer period of treatment. And so not only will you see ORR there, but I think the shape of the curve—particularly knowing that if you look at actually Epi-Nebo out at 12 months, you're getting in that 50-ish percent, plus or minus, place.

Terry Rosen: Not only will you see ORR there, but I think the shape of the curve, particularly knowing that if you look at actually ipilimumab/nivolumab out at 12 months, you're getting in that 50-ish%, plus or minus place. It'll just be a very clear comparison. But you shouldn't think we have any hesitancy sharing those data. It's just that time will probably affect more of the response rate. I think one other thing that is worth, I'll just use this as an opportunity to highlight this. I think it's probably not fully appreciated because of the totality of the belzutifan data, how profound the ability to inhibit HIF-2 is on durability. But I'll just use actually belzutifan data. People ask for read-through.

Speaker #4: It'll just be a very clear comparison. But you shouldn't think we have any hesitancy sharing those data. It's just that time will probably affect more of the response rate.

Speaker #4: I think one other thing that is worth I'll just use this as an opportunity to highlight this. I think it's probably not fully appreciated because of the totality of the belsutafan data how profound the ability to inhibit HIF2 is on durability.

Speaker #4: But I'll just use actually belsutafan data. People ask for read-through. We get asked about read-through from LightSpark 0.12 where we haven't seen the data.

Terry Rosen: We get asked about read-through from LITESPARK-012, where we haven't seen the data, but the places where we've seen a lot of data, for example, LITESPARK-005, and we've seen a monotherapy data. Now, interestingly enough, if you go back and look at those data, median PFS for belzutifan in that late line setting was about 5.6 months, which is about the same as the median PFS for everolimus. Similarly, the rate of primary progressions for the two were very much the same. We think those sort of relate to the ability to hit the target heart. However, they still won. They got approval, and that's because so much of the manifestation of hitting HIF-2 is coming from what that does to the tumor and how it plays out on the other side of the median.

Speaker #4: But the places where we've seen a lot of data, for example, LightSpark 0.05, and we've seen a monotherapy data. Now, interestingly enough, if you go back and look at those data, median PFS for belsutafan in that late line setting was about 5.6 months, which is about the same as the median PFS for everolimus.

Speaker #4: Similarly, the rate of primary progressions for the two were very much the same. We think those sort of relate to the ability to hit the target heart.

Speaker #4: However, they still won. They got approval. And that's because so much of the manifestation of hitting HIF2 is coming from what that does to the tumor and how it plays out on the other side of the median.

Speaker #4: So we think HIF2 is going to turn out. And I think our data will certainly give the opportunity to assess that HIF2 is going to turn out to be something that affects everything on those durability measures.

Terry Rosen: We think HIF-2 is going to turn out, and I think our data will certainly give the opportunity to assess that HIF-2 is going to turn out to be something that affects everything on those durability measures. I think that the belzutifan data have foreshadowed that because despite what's probably a marginal ability to really hit HIF-2 hard and hit it long, they still have very good effects. The first place where you saw the manifestation of that less than optimal durability of hitting HIF-2 hard for a long period of time came in their frontline study, and that's probably not surprising because it's comparing versus the longest PFS in the control arm.

Speaker #4: And I think that the belsutafan data have foreshadowed that because despite what's probably a marginal ability to really hit HIF2 hard and hit it long, they still had very good effects.

Speaker #4: I think the first place where you saw the manifestation of that less-than-optimal durability of hitting HIF2 hard for a long period of time came in their frontline study.

Speaker #4: And that's probably not surprising because it's comparing versus the longest PFS in the control arm. So the percentage of time that it's bringing value is smaller compared to whether it's the LightSpark 0.05 or LightSpark 0.11, where it's fighting a shorter battle compared to the standard of care.

Terry Rosen: The percentage of time that it's bringing value is smaller compared to, whether it's the LITESPARK-005 or LITESPARK-011, where it's fighting a shorter battle compared to the standard of care.

Speaker #2: Your next question comes from the line of Lee Westick with Cantor. Your line is open. Please go ahead.

Operator 3: Your next question comes from the line of Lee Westak with Cantor. Your line is open. Please go ahead.

Operator: Your next question comes from the line of Lee Westak with Cantor. Your line is open. Please go ahead.

Speaker #5: Hey, guys. Thanks for taking our questions and congrats on the progress. I have two questions. Maybe first, follow up on the LEMVA question for the second line CAS plus carbocohort.

Lee Westak: Hey, guys. Thanks for taking our questions, and congrats on the progress. I have two questions. Maybe first, follow up on the lenva question for the second line casdatifan+ cabo cohort. How should we think about the impact of prior lenva exposure on the types of patients you enrolled into the study relative to the LITESPARK-011 trial? Just trying to understand the right PFS benchmark, given some differences in the patient population. Second, Terry, you mentioned prior TKI exposure increases the HIF-2 levels. Just trying to clarify if you're implying casdatifan's PFS has a positive relationship with prior lines of TKI.

Speaker #5: How should we think about the impact of prior LEMVA exposure on the types of patients you enrolled into the study relative to the LightSpark 11 trial?

Speaker #5: Just trying to understand the right PFS benchmark given some differences in the patient population. And then second, Terry, you mentioned prior TKI exposure increases the HIF2 levels.

Speaker #5: Just trying to clarify if you're implying CAS's PFS has a positive relationship with prior lines of TKI.

Speaker #4: Okay, so thanks on both of those. So the first thing we would say is we actually feel quite good, and I mentioned that what we saw in the late-line is that we did not see a degradation in the monotherapy 120 patients.

Terry Rosen: Thanks on both of those. The first thing we would say is we actually feel quite good, and I mentioned what we saw in the late line, that we did not see a degradation in the monotherapy, 120 patients, prior TKI, and we'll share very specific data in the fall. We did not see a fall-off in efficacy associated with those patients that had seen more TKIs versus the trend that was seen in LITESPARK-005 and LITESPARK-013. Going in, we're feeling really confident that despite the fact that we'll have those TKI-experienced patients and Lenvima patients, we feel very optimistic about the benefit that those patients will receive. Sort of across the front-line strategies, we feel good that the benefit that HIF-2 will bring on top of CABO will be advantageous.

Speaker #4: Prior TKI and we'll share very specific data in the fall. But we did not see a fall-off in efficacy associated with those patients that had seen more TKIs versus the trend that was seen in LightSpark 0.05 and LightSpark 13.

Speaker #4: So going in, we're feeling really confident that despite the fact that we'll have those TKI experienced patients in LEMVA, patients we feel very optimistic about the benefit that those patients will receive sort of across the frontline strategies.

Speaker #4: We feel good that the benefit that HIF2 will bring on top of carbo will be advantageous. In terms of comparisons, to your point, one of the things this gives me an opportunity to talk about how we'll present the data.

Terry Rosen: In terms of comparisons to your point, one of the things, this gives me an opportunity to talk about how we'll present the data. I'll even use the word that John used a second ago about hesitancy. We're going to be effusive with the data. I think when we share our data, you can assume we've squeezed all the water out of the sponge of what we know at the time, and you'll have complete knowledge of what we have. One of the things we're going to do is we're going to use every comparative data set that we can to illustrate what the advantages of casdatifan are. We feel like it's a great opportunity because casdatifan is going to bring a lot to the table. One of the tools that we'll have is the study CABOSUN.

Speaker #4: So I'll leave and use the word that John used a second ago about hesitancy. We're going to be effusive with the data. And I think when we share our data, you can assume we've squeezed the whole all the water out of the sponge of what we know at the time.

Speaker #4: And you'll have complete knowledge of what we have. And one of the things we're going to do is we're going to use every comparative data set that we can to illustrate what the advantages of castatafen are.

Speaker #4: We feel like it's a great opportunity because castatafen is going to bring a lot to the table. And one of the tools that we'll have is the study CarboPoint.

Speaker #4: And carbo point, if you go back and read what the intent was, it really was designed where it looked in two separate groups, randomized, where you had patients that were treated with TKIs and patients that were treated with IOIO.

Terry Rosen: CABOSUN, if you go back and read what the intent was, it really was designed where it looked in two separate groups, randomized, where you had patients that were treated with TKIs and patients that were treated with IO, and then how did those different groups look when they then received CABO? It's a perfect comparison. Yes, we'll compare to belslenva. Yes, we'll compare it to any other registrational data with CABO alone. We also have those nice data sets that were really, if you look at the genesis of that study, the intent was that for future combinations, you'd be able to have a clean data set to see how anything new, what it was bringing to the table. It's a perfect data set.

Speaker #4: And then how did those different groups look when they then received carbo? So it's a perfect comparison yes, we'll compare to Bell's LEMVA. Yes, we'll compare to any other registrational data with carbo alone.

Speaker #4: But we also have those nice data sets that really, if you look at the genesis of that study, the intent was that for future combinations, you'd be able to have a clean data set to see how anything new—what it was bringing to the table.

Speaker #4: So it's a perfect data set so we will do sub-patient analyses since we'll be forced to go cross-trial comparison as much as everybody doesn't like it.

Terry Rosen: We will do subpatient analysis since we'll be forced to go cross-trial comparison, as much as everybody doesn't like it, actually, everybody loves it. We'll look at how we compare to both of the segments of the population from the CABOSUN study to see how the advantages we're bringing to CABO, whether it's from prior TKI treatment or prior IO treatment. Keep in mind, we're going to have curves. Those curves will not only give you a sense of static differences, but I think they'll give you a sense of how the hazard ratios are going to play out, because with that 18 months of follow-up and all the landmark data that comes with that, knowing that the tails are a big deal, you'll see how those tails are corresponding both to what you would see with CABO and what you saw with belslenva.

Speaker #4: Actually, everybody loves it. And so we'll look at how we compare to both of the segments of the population from the carbo point study to see how the advantages we're bringing to carbo whether it's from prior TKI treatment or prior IOIO treatment.

Speaker #4: And keep in mind, we're going ahead curves. So those curves will not only give you a sense of static differences, but I think they'll give you a sense of how the hazard ratios are going to play out because with that 18-months of follow-up and all the landmark data that comes with that, knowing that the tails are a big deal, you'll see how those tails are corresponding both to what you would see with carbo and what you saw with Bell's LEMVA.

Speaker #4: Nicely, both of our programs were run against the same control, and so you'll get a sense of both our hazard ratio versus carbo, as well as how you might think that'll compare to a hazard ratio of what you saw for Bell's LEMVA.

Terry Rosen: Nicely, both of our programs were run against the same control, and so you'll get a sense of both our hazard ratio versus CABO, as well as how you might think that'll compare to a hazard ratio of what you saw for belslenva.

Operator: This brings us to the end of the Q&A session. I will now turn the call back to Terry Rosen, CEO, for closing remarks.

Speaker #5: This brings us to the end of the Q&A session. I will now turn the call back to Terry Rosen, CEO for closing remarks.

Speaker #4: So I want to thank everybody. We're looking forward to speaking more. A couple of you asked some really great questions. And I think not only will we have a lot of clinical data, but we'll have a lot of science and translational work, much like we had in the NATURE paper.

Terry Rosen: I want to thank everybody. We're looking forward to speaking more. A couple of you asked some really great questions, and I think not only will we have a lot of clinical data, but we'll have a lot of science and translational work, much like we had in the Nature paper. I think we're going to have a lot of great discussions about the future of casdatifan-based therapy. Thanks for joining, and we look forward to speaking to you over the coming months.

Speaker #4: And so I think we're going to have a lot of great discussions about the future of castatafen-based therapy. So thanks for joining and we look forward to speaking to you over the coming months.

Speaker #5: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Access the Arcus Biosciences IR website for more information. This line will now disconnect.

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