Arcus Biosciences Stock

All right. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

So I'm very pleased to be hosting this afternoon, Arcus. We have Terry Rosen, the company's CEO, and Bob Goeltz, the company's CFO. Thank you both so much for joining me. Really appreciate it.

And I guess, again, maybe just high level to get started. How should we think about the company, Terry? There have been a lot of changes over the years. Is this really a single product story or is there a platform strategy here? I know a lot of focus on casdatifan, which we'll dig into, but how should we think more broadly about what the company is doing beyond cas?

So first of all, thank you, Terence, for doing this, and thank you for all of those of you who are joining us. And I think very clearly, casdatifan obviously is a center of focus for us, for the world. We believe very strongly it's going to be $5 billion to $10 billion drug. So not surprisingly, that question will come up. But I think Arcus continues to be, as we plan since its inception, to be a company that's focused with a long-term vision.

We have a very sustainable pipeline. We have a program, Quemli, in frontline pancreatic cancer interim analysis happening this quarter. And so we feel that casdatifan is going to lead the way, but that we can build a great long-term and highly valuable company. And if you put in economics, we can come to a $10 billion, $20 billion, $50 billion plus company. And so that continues to be our approach.

Great. And what do you think is one thing that people are underestimating right now about the investment case, one thing?

Yes. Interestingly enough, that question, you get asked that. And I'll share what an investor recently told me, what he thought investors were missing. And I think he hit it spot on. So when you think about casdatifan and that opportunity, if you go back to the earliest data we generated, the PK/PD profile, which is dramatically different from that of belzutifan.

And then you think about the data that we generated subsequent to that. A lot of the questions about the ultimate commercial opportunity with casdatifan as we think about front line, second line, third line should really just come from that simple observation because at the outset, we just had those data, but now we've done 3 medical conference presentations, we've had an investor event, Nature publication. We've published all the details. And it's very clear that those data drive all this efficacy that reads through to all lines.

In the front line we don't even have a competitor. So I think the thing that's missing is those data tell you that casdatifan is going to win in the front line, it's going to win in the second line, it's going to win in the late line, no caveats. And we have an event coming up in October, and I think the data are going to demonstrate that.

Yes.

Great. Yes, I saw the announcement this morning on the timing of the event. So I think you guys gave a little bit of a preview on the second quarter recap. But maybe, again, talk to us about, number one, why you're hosting this event? And then just, again, high level, maybe what are the kind of key things that are going to be in focus? And then I know we'll unpack a lot of those in subsequent questions.

Perfect. So the reason we're doing this, there's a convergence of data sets that read on all of the lines of therapy, front line, second line, and a late line, and we felt like the best venue and best way to communicate all of that was in a single form, and it's over 200 patients' worth of data. So since we'll talk about metrics for each of these and what we need to be successful, let me just describe what those various studies will be. So this is all of the data that we'll be presenting come under the umbrella of a platform study called ARC-20. Now within that study, since we're talking about front line, second line, and late line, you can basically think about those 3 buckets of being the primary data that we're going to speak to.

So on the front line, the standard of care that we're going against is ipi/nivo. So there's clear cell, renal cell carcinoma, and we're talking about a standard care in the front line, ipi/nivo. And what we're going to have for that is a data set where we're looking at anti-PD-1 plus casdatifan without the ipi, and we're going to have about 11-plus months of data to compare it to, and we'll talk about how that fits into the metrics. Now, that will give you a good feel for the efficacy, even without the ipi.

The second component there is in that triplet we'll have anti-PD-1 ipi and cas. And what we're running right now is what will generate the safety data set that both the FDA and the EMA have told us we need to start the registration study at the end of this year. That cohort is fully enrolled. It's 30 patients. And what they want to see is 12 weeks of safety data. Why 12 weeks?

Well, when you think about what is ipi/nivo, ipi/nivo is 4 cycles of ipi/nivo, which is 12 weeks, and then you get nivo for the rest of the therapy. So they want to see that 25 patients with that sort of follow-up. And by the data update, we'll have roughly 20 patients that have had that 12 weeks. So a very good read on the safety.

Now that brings me to the second line. So again, if you think about what we're doing, we believe that we're going to transform the paradigm in this field, but we're doing it in a way where we're providing a HIF2 inhibitor on top of standards of care that physicians like. So we've taken a lot of feedback from physicians insofar as what they want to see, and that reflects our strategy. So in the second line, the standard of care, 40% of that second line therapy is monotherapy cabo. And what we'll have is a data set combining cabo plus casdatifan with roughly 20 months of follow-up, and that's a 40-plus patient data set.

Finally, in the late line, we've used 120 patients data set to really dramatically show the differentiation between casdatifan and belzutifan. And I think that's what really established a major inflection in our program. Now, what we'll have for those 120 patients, we'll now have almost 30 months of median follow-up. And so that's going to lead us to not only show how that data set continues to evolve and how it continues to differentiate itself, but for the first time we'll have an endpoint where we can look at overall survival. And given that Merck with belzutifan, is running on 3 registrational trials, hasn't hit statistical significance on OS yet, we think that could be very, very meaningful.

Great. So let's dig into this. So I think the -- on the frontline study, again, here you have a triplet, you've got a doublet. Talk to us about how you kind of choose between these. Again, I know you've already outlined the design of the phase III, but again, what else informs this doublet versus triplet strategy?

Yes. So it will be a triplet. So it will be ipi/nivo/cas versus ipi/nivo. And largely that came through again, as I was mentioning, our ad boards, both U.S. and European, felt that no matter how good the casdatifan anti-PD-1 data looked alone, to enroll the study, they're such strong believers that the ipi contributes to the survival that they felt running a doublet, we thought about a 3-arm study would slow the enrollment down. So we see that may be a question after people see our data as to would anti-PD-1 cas be good enough, it's going to be a 2-arm study.

The nice thing is there are very, very good benchmarks that we'll be able to compare to. So you can think of bookends on the benchmark front to the standard of care, which is ipi/nivo. That's really our only competitor and is the existing standard of care. And the data for ipi/nivo are -- first of all, it has a rate of primary progression just under 20%, about 18%, has a response rate in the high 30% and it has a median PFS of 12.4 months.

Now, what do physicians want to see? Well, ipi/nivo is really the preferred front line regimen. It's most used, roughly 30% of the front line patient population gets that, and then the other 60 or so percent is fragmented amongst TKIs. The reason ipi gets -- ipi/nivo gets that usage is because it has the best overall survival. And it would get more use if it either, you could improve the regimen where that you could bring down the rate of primary progression or improve even just the timing of that progression, which I mentioned was 12 months and change.

So what we'll be looking to show is that we can lower that rate of primary progression down into the 10% range or so, and then also improve with that 12.5 months median PFS, landmark data would say you got about 50% of the patients still on at about 12 months. And so with 11-plus months of median follow-up, and I think this is going to be one of the most surprising things, not only the data, but the data set itself. It's going to be very clear if casdatifan plus anti-PD-1, even without the ipi, looks better than ipi/nivo.

Now another data set that's very important that most people aren't aware of is that Merck has actually run a study in that exact same patient population with just KEYTRUDA. So what's important about that is when you look at our anti-PD-1 cas, that gives you the other end. You got ipi/nivo, and well, what would anti-PD-1 do alone? And it's very different than ipi/nivo. So for KEYTRUDA in that setting, same patient population, you see a 30% rate of primary progression, an ORR that's in the mid 30s, and a PFS that ranges between 7 and 8 months.

So with those guardrails, we think you're going to come out of that October event with a very clear picture that casdatifan, ipi/nivo is going to be a successful frontline regimen.

And I think on ARC-20, or at least the doublet, you guys already reported that you had, what, 7% primary?

Correct. So the doublet showed a 7% rate of primary progression. We reported that at ASCO -- I'm sorry, J.P. Morgan this year. We also described that the waterfall plot looked really good. So I think the dots are going to connect very well. The other piece there is that since we will have those 20 or so patients that have been on the triplet, we expect a safety profile that should just look simply like ipi/nivo with perhaps some anemia that comes from the on-target activity of the HIF2 inhibiting component of therapy.

Okay, great. And then maybe just remind us in terms of that PEAK-20 trial, like what's the timeline for that and size of it? And anything on powering, et cetera yet?

Yes. So we really will share more details on the design et cetera, as we get closer. But it's on track to start at the end of this year. And, in fact, the safety data, we've already had the discussion with the FDA. And, as I said, that cohort of 30 patients that will provide the 25 with that 12 weeks is already fully enrolled in the study. The primary endpoint will be PFS. So that tells you not only do we expect a fast enrollment, but the readout should come relatively quickly knowing what ipi/nivo looks like.

And just for a minute on LITESPARK-012, that was the other Merck study that recently had a setback in that study. What was the driver? Like what was your kind of conclusion on the reason for that?

Yes. So I'll answer that in 2 ways. What do we think happened? And second, I always feel that question behind the question on that is does it have any read-through to us? And what we feel the primary driver is going back to that, what is everybody missing piece, which is that initial PK/PD data that we discussed. So what's known is that biomarker data revolves around looking at the ability of your HIF2 inhibitor to diminish the production of erythropoietin. So that's the gold standard for inhibiting HIF2 in a human.

And what's known is while casdatifan robustly inhibits that well out past the year, belzutifan loses its effect somewhere between 0 and 13 weeks. And those are Merck's own data. So we feel unquestionably that it's the lack of that durable effect that really manifests itself particularly in the front line. So if you look at the various Merck registrational trials, they've gone first in the late line from some -- versus something they had a PFS of 5 months and change to something that had 10 months to something has 24 months. So we feel like absolutely the efficacy that shorter time of hitting the target hard is getting diluted out.

A lot of people speculate that triplet might be more toxic than the doublet, we'll see. But the important thing is, we think it has 0 read-through for 2 reasons. First of all, it's a completely different regimen. In that case, you're going on top of TKI anti-PD-1. In our case, we're going on top of ipi/nivo. And the second thing, most importantly, is we already have a lot of data. You'll see in October, we have a lot of data in the front line, not only that, that shows a very profound effect of casdatifan in that patient population.

Okay, great. Maybe we'll just pivot to the second line setting now. So again, just remind us kind of what's the benchmark that you're aiming for here at this update in October.

Sure. So we view second line as a huge opportunity to, what I'll say, dramatically differentiate from belzutifan. So belzutifan was successful in the second line. We believe that there's 2 opportunities to really set ourselves apart from the belzutifan, lenvatinib data set. And that is they did not hit on overall survival. And also, we believe there's an opportunity in the second line to very much differentiate on the outcome for patients that in the front line, were treated with a TKI. So I'll say a little bit about that.

We've recently described some of the differences in the patient populations between their registrational trial, LITESPARK-011, and our ARC-20 cohort as well as our registrational trial, which is called PEAK-1. So there's 2 key things about the Merck population. So the first thing is, in their study, they excluded patients that had received prior lenva, that TKI in the front line. They excluded patients that had received cabozantinib in the front line. And also those patients that did get TKI, so 25% of the patients in their study, not just 25% of the TKI patients, 25% of the patients got sunitinib or another first-generation TKI.

So the first thing that we would just say about the patient demographic, it looks very, very different than the real world. In the real world, 60% of the frontline patients are pretty much going to either get cabo, lenva, or axi. And so they have 0 cabo, 0 lenva, and all those of patients with the first-generation TKIs. The second thing that we'd emphasize about that is that it's very different than the ARC-20 in PEAK-1 patient populations. So -- and what I would say in the ARC-20 patient population, it looks very much like the distribution from the real world, including a very substantial portion that are lenva patients.

Now the important reason that we mention that isn't to set expectations that since we have a more difficult to treat patient population that somehow we should expect a lesser performance. But what we wanted to point out is that given those more difficult patients to treat, we feel it's a huge opportunity to essentially show that casdatifan is not only a quantitative and incremental advantage, but completely discontinuous.

So one other fact that I can use as an example here is that what's known, and there have been recently two publications, real-world data. If you get lenvatinib in the front line and then get treated with cabo, your ORR drops to like 5% and the PFS drops to 4 to 5 months. And in fact, your OS is substantially hurt as well. So we feel we have the opportunity to actually do phenomenally well in those patients. So we're thrilled that we have these not only TKI patients but lenva patients.

Now part of the reason for our feeling very strongly, you'll see this very shortly, we'll get to the real data, but we've already generated data in the late line that reads on this. So, this is part of our Nature publication. So what Merck showed in both LITESPARK-005, their approval study in the late line, as well as LITESPARK-013, which is essentially the same population, different study, is that they showed an inverse relationship. The more TKIs that patients were treated, so I'm going from 3 to 2 to 1, the worse performance. So the more TKIs you had the worse you did.

Actually, what we showed in our 120 patients in the late line there's no dependence on that. So whether you had 1 TKI, 2 TKIs, 3 TKIs, and we'll show you the curves, they're right on top of each other. So we think that relates to a couple things. Now one last point that we showed is that in that same study, we showed that the more HIF2 activity that a patient had when it showed up, the better that patient did. Now HIF2 is one of the worst prognostics you can have not only in RCC, but in cancer in general. So the fact that we're doing better in patients with the worst prognostics is generally taken to mean that it's not only correlative, but it's causative.

Now what else do we know about the biology of HIF2 and TKIs in general? And what's known is that when you treat a patient with an anti-angiogenic, including a TKI, that causes the patient to have more HIF2 activity. So what we believe is going on is that those patients that are getting those hard-hitting TKIs in the front line are actually now coming into the second line with one arm tied behind their back, particularly in a world that's HIF2 free. And that's been shown in a number of studies.

So if you take one of those patients and you put them on cabo, they really do poorly. But we feel that with casdatifan, that's hard-hitting and durable, we have a chance just like we showed in the late line, to actually do better in those patients. So I'm not just saying incrementally better. If you look at Merck's data, if you look at the hazard ratios in the patients that were treated with TKI coming into that versus IO-IO, the hazard ratio is better in the IO-IO. We actually feel like we have the opportunity in our registration trial that the cabo patients obviously will perform more poorly, but we feel we could do as well or better.

So we actually feel like we have an opportunity to paradigm, not just do something that's better, because 60% of your patients are going to get TKI in the front line. So coming into second line, they should be on a therapy with a HIF2 inhibitor.

The second point that we'll be able to read on is with 20-plus months of median follow-up, as I mentioned, Merck already, we know missed, even though numerically they had a positive OS signal, statistical significance, they did not have. And so what we know is that cabo's OS is roughly 21 months and change. So we will share OS Kaplan-Meier curves and so we have an opportunity on 2 fronts, that ability to better serve patients that have TKI treatment in the front line and the opportunity to win on OS, which we think for all practical purposes we would own the entire second line opportunity. So we're very excited about those data. You'll see those in October as well.

Great. What -- and then just any caveats as we do that cross-trial comparison? Like, again, you mentioned some of these baseline characteristics, but anything else as we make that comparison to the 21 months with cabo?

Yes. The one baseline thing that I would mention when we think about what belzutifan has done is their patient population. But the -- when you talk about cabo, that's the perfect comparator because that's still going to be -- we actually did a survey of physicians after the LITESPARK-011 data read out. And we talked to 5-0, 50 physicians and about half of them said they would go to that lenva/belz regimen. But cabo will still be primarily used. It's well defined, it's well understood. Physicians like it, so it's the perfect comparator.

Okay. And then maybe bake that all together, what does that mean for your PEAK-1 Phase III trial? That's again, the first Phase III trial that you guys are doing, but talk to us about kind of design of that, time lines. I think you said enrollment completion by year end.

Yeah, so PEAK-1 is enrolling great. We expect it to be fully enrolled by this year. It's 2:1 study arm versus control. So we expect it to enroll rapidly. And importantly, it's going to look similar to this ARC-20 patient population, that the patient population will be representative of what you expect to be coming out of the front line. And of course, we feel that's important because not only do we want to be successful on that ITT population, but those subpatient analyses, again, are very important in so far as dramatically changing that usage in the TKI population.

And then finally, we will be able to give you a sense of -- since we will be sharing Kaplan-Meier curves for both PFS and OS -- this one, since belzutifan did not hit on this, you don't even have to think about the cross-trial comparison. It'll just be how is our hazard ratio going to look versus cabo, and there's plenty of data out there when you see how our OS Kaplan-Meier curve is looking from ARC-20 to give you a quite strong feeling of optimism on that. And we'll talk about what we're going to learn from the late line that I think we'll read through to that.

Yes. And just the primary of PEAK-1 is PFS and then OS, I'm assuming it's powered for OS. So it's a secondary.

So the way this is set up, it's very nice. The primary endpoint is PFS. If we hit on PFS, all of the alpha transfers to OS. So we're in great position on that.

Great. And just remind us, so the -- again, enrollment completion by year-end, what does that mean for timing of data?

We haven't given guidance, but if you were to just do the math, given that the control arm is about 10 months or so, it probably gets you into early 2028.

Okay, okay, got it, great. And then I guess just anything else on the, I guess, market dynamics that we need to consider here as you think about launching into that second line market, just anything else? Again, you walked through a lot of different variables here in terms of some of the TKIs and things like that. But just any other considerations that we think about kind of framing that second line market potential for us, either on the duration side or other dynamics?

Yes. I think Terry described the potential for us to differentiate on the majority of patients that are coming into the second line that have previously seen a TKI. We think that would be huge potential. In terms of the actual commercial execution, we think this is an opportunity that Arcus is eminently capable of executing against. It's -- it'll be a targeted sales force and commercial footprint, and we think it's -- the path for HIF2 inhibitor will be well worn at that point with belzutifan, but we think we have the potential to generate data that puts us in a strong position to capture the market.

And what does that -- maybe just elaborate on that a little bit, but what does the commercial build look like in terms of rough numbers of people?

Yes, it's pretty typical for kind of a large-ish oncology tumor type, sales force sort of in the 100-ish reps kind of zone. We think that it's -- there's been a pretty well-worn path for smaller biopharmas to execute on that type of indication.

And does that build, that spend starts next year most likely, most likely?

Yes. If you look at a launch that wouldn't be before, let's say, late 2028, basically a year out is when you see more significant investments for launch preparation.

Okay. And how are you guys -- I know you already have a partner in Japan, but how are you thinking about the European side of it?

Yes. For right now, we're very focused on maintaining strategic optionality, especially with Western European commercial rights. Not to say that if we got closer and we launch that we might not leverage somebody in that area, but for right now we think it makes a lot of sense for us to retain those rights.

Okay. Okay. Understood. And I guess in terms of -- I mean, Terry, you already talked about this, but the $5 billion to $10 billion, maybe just break that down for us by line of therapy, like what you guys think is second line, third line, first line?

Yes. So we think second line is, I think, with a very conservative duration of treatment is $1.5 billion to $2 billion. If you look at just as a marker right now, belzutifan is doing basically a $1 billion run rate with the majority of that coming from the late line. There's a little bit of second line usage monotherapy, but most of it's late line. And obviously, their late line, the PFS was 5.6 months. Our monotherapy has shown PFS that's on the order of double. So we think there's upside from a duration of therapy perspective. And then obviously, the market size in the second line is also more significant. So we think $1.5 billion to $2 billion is very conservative for the second line.

And then in the front line, if you look at the ipi/nivo regimen, right now it has roughly a 30% share in the front line. We think with compelling data, physicians really want to use that regimen because it gives patients the best chance for long-term survival. If we showed that we can bring near-term disease control, augment long-term survival with a tolerability profile that's probably more attractive than the PD-1 TKI combinations, that it wouldn't be hard to imagine growing that share from 30% to 50%, which translates into a $4 billion-plus commercial opportunity.

The one thing on the durability that I think really emphasizes the point is in the late line, so we are going to read out on OS on that with the 30 months. But to give you a sense in thinking about this even before we get to October, so approximately 28% of those monotherapy patients were still on the therapy after 2 years. We've even had a couple patients convert from stable disease to a response after 2 years.

So when you see the spider plot, it really gets to the point of a very, very prolonged duration of therapy. And that's in the late line in a very advanced patient population. I was starting to mention before, like if you look in the latest late line, we even have compared -- when you think about belzutifan, we have 20-some-odd percent of patients that are fourth line plus, Merck had 0.

Okay. Well, I think we're up against time, guys, but looking forward to seeing you again in October.

Yes. Thank you. And we think we're going to have a really exciting data set. We look forward to talking about it that day and thereafter. So thanks.

Thank you, Terry. Thanks, everyone else.

The fifth session of the first day of the Back to School Biopharma Summit that Citi is hosting here in New York City. I'm Yigal Nochomovitz. I'm one of the biotech analysts. Our next session is with Arcus Biosciences. So it's really a pleasure to have with me the CFO, Bob Goeltz; and also Pia Eaves, who is the Head of IR and Strategy. So welcome both of you. Appreciate it.

Very much.

And so a lot is happening, obviously, in the space. You have -- you're generating a lot of new data sets. And I understand you have some new slides as well that would be helpful in, sort of, framing the very significant data update in October that you're planning. So Bob, maybe just to start, kind of, tell us what's on deck for October at a high level? And then we can, kind of, walk through, like, the 1L data, the 2L -- the 2L strategy, and how you're thinking about the Phase III strategies for everything.

Perfect. Yes. No, happy to do that, and thanks for having us. Maybe just before I jump into casdatifan, really briefly, just to remind folks about the company. So Arcus is a company that is based on very high-quality drug discovery, particular emphasis on high-quality small molecule drug discovery. We like to focus on areas where there are targets that have good biologic validation, and we think that there's a real opportunity for a very high-quality molecule. That's clearly the case with casdatifan. I know we're going to focus on casdatifan today, and we'll jump right into it. Just a quick reminder -- the rest of the portfolio for us, we also have a drug that's targeting CD73 that's in a pivotal pancreatic cancer study.

In the update for this conference, we also indicated that we expect an interim analysis in the fourth quarter of this year on that pancreatic cancer study. So we're looking forward to seeing data from Quemli, which is that compound in PDAC, pretty shortly. And then we also have a really exciting early-stage immunology portfolio of largely small molecules that's moving along in the first program, an MRGPRX2 inhibitor is now in a healthy volunteer study in the clinic. So shifting to casdatifan, which is definitely the focus for investors right now. Quick reminder, the program -- one of the reasons why we're really excited about the program is that the target, HIF-2 alpha, of casdatifan has been validated by a molecule from Merck, belzutifan. It's had 3 successful Phase III studies, LITESPARK-005 in late-line monotherapy, LITESPARK-011 in second line in combination with lenvatinib, and then also in adjuvant therapy in combination with pembrolizumab.

So good validation for the target, and that drug in the late-line monotherapy is already doing sales of roughly around a run rate of $1 billion a year. However, that molecule does have a liability that's pretty well characterized, which is that it has absorption-limited pharmacokinetics. And so that aspect means that as you increase doses beyond the dose that's approved and that they've been using for their clinical trials, 120 milligrams, you only get incrementally higher exposures. So back to, kind of, the core of Arcus of looking at developing very high-quality small molecules, our goal was to see if more could be taken from the target, HIF-2, if you actually didn't have that liability.

And so casdatifan has dose-proportional and linear pharmacokinetics, and we're essentially, in our clinical trials, utilizing a dose that has roughly fivefold the pharmacodynamic effect of belzutifan. In late-line monotherapy, what we saw was that, that resulted in a very substantial increase in response rate and progression-free survival -- progression-free survival, for example, 12 to 15 months versus 5.6 months from LITESPARK-005, which was their pivotal study. And we also see a substantially lower rate of primary progression, which is progression by the first scan, which is a particular problem in clear cell RCC, where the primary progression rate can be 1/3 or greater for an agent like belzutifan. So that's, sort of, where we are right now. And our first pivotal study for casdatifan will be combining casdatifan plus cabozantinib, which is the standard of care in second-line clear cell RCC versus cabozantinib. That pivotal study is enrolling, and we've indicated we expect to have this study enrolled around the end of this year. The enrollment is going very well. We're excited about that.

And then our frontline strategy will be to combine casdatifan with ipi and nivo, which is one of the preferred regimens in the front line. We can talk about the nuances of what regimens are in the front line and the, sort of, pros and cons to each as we get into the details. And so that will be our second pivotal study. The first one is called PEAK-1, that is the second-line study. The second one is PEAK-20, which is the frontline study. And that brings us to a very meaty update that we'll have in October. We're going to have an investor event on October 20. And we'll be updating data and providing new data across multiple lines of therapy. So we will be providing data on the late-line monotherapy. We'll be providing data on the second line in combination with cabozantinib and then also the front line. So I'll walk through each of those lines of treatment and the data that we'll have and, kind of, how we're thinking about each of those relatively quickly, and we can jump into as much detail on each of those fronts.

For those that are following online, we do have some slides that are incorporated in our corporate deck on our website, and they're available in the appendix to the slide deck, which show the details of the data that we'll be presenting in October. So let me start with the latest line of therapy first, and then I'll work my way earlier because this will be the, kind of, the maturity of the data. So in the late-line monotherapy, I already indicated that we presented what we believe is really compelling response rate data and progression-free survival data already that's pretty mature, and I think has indicated to many that they believe casdatifan is clearly differentiated from belzutifan. The new piece of data that we'll have at our October update is, for the first time, we'll be sharing overall survival data and the Kaplan-Meier curve there. So why is that important? Belzutifan, in their 3 pivotal studies, hasn't demonstrated an overall survival benefit yet. In the second line in LITESPARK-011, they came quite close. They had a hazard ratio of 0.85 with a p-value of 0.06 on overall survival. And overall survival, while PFS is the registrational endpoint, would obviously be a massive differentiator from a commercialization perspective, both in the U.S. in terms of label, but also ex-U.S. to open up reimbursement.

So we think demonstrating that the molecule could bring an overall survival benefit in late-line monotherapy has the potential to read through to multiple lines of therapy. So in the late line, we'll have 28 months of median follow-up. The benchmark here from LITESPARK-005 was 21 months of OS. And so obviously, we'll be able to look at the Kaplan-Meier curve for our data and compare it to that benchmark and see whether or not it appears that there's a difference relative to what we've seen from belzutifan. So pretty simple in the late line.

But you mentioned that in that late line, you had low teens -- low to mid-teens PFS.

Yes.

Right? That should give people some framework for thinking about where OS goes.

Yes. Yes, we're cautiously optimistic, for sure. Absolutely, we think that there's a good potential here. And we think it's really, frankly, the potential for the mechanism. It's just -- we think a lot of the belzutifan data indicates what belzutifan can achieve, not what a great HIF-2 alpha inhibitor can achieve. And so across all of the efficacy metrics in the late line, we're hoping to see what a really good HIF-2 inhibitor can achieve. And so we've already seen it for PFS. And to your point, we think that bodes well for potential OS as well. So very excited about that update.

Just the 21 months, do we have a reference point on PFS for that number as well or not? Or is that harder to...

It was -- so it was 5.6 months, sorry.

Okay. So that's what I'm getting at. 5.6 translated to essentially 21. Now you have -- there are 12 to 15, the math should suggest something north of 21 if things cooperate.

Yes, we -- yes, I think we agree with that, and we're cautiously optimistic. We'll see how the data looks.

Yes. So that's late line.

Yes.

That's a lot of patients. That's a big chunk of...

Yes, exactly. It's 120 -- we always look at -- there's -- for Project Optimus, we looked at 3 doses that range in pharmacodynamic effect from essentially 2.5 to 7.5x the PD effect of belzutifan. And what we generally observed was consistent efficacy. And so we generally look at that pooled data set as, sort of, the best indicator of truth. Within that, to your point, with PFS, the range was 12 to 15 months. But we think the pooled data, which is close to 13 months, is probably the best indicator. So if you think about 13 months, and we'll see what that brings in terms of OS. Right.

Okay. So marching on and...

Marching on to second line. So second line, again, as I mentioned, we're in the midst of enrolling our pivotal study with casdatifan plus cabozantinib versus cabozantinib. We shared very early data roughly a year ago, response rate data from that particular arm of patients, and it wasn't the complete arm of patients. There's 44 patients there. Now we'll have about 20 months of median follow-up. And there's a number of different benchmarks to look at in the second line.

Obviously, the most the most -- the easiest thing to look at would be the LITESPARK-011 pivotal study from Merck, which, as a reminder, compared belzutifan plus Merck's TKI, lenvatinib, versus cabozantinib. And there, they had 0.7 hazard ratio. So the study did pretty well. And, obviously, presumably will result in an approval. It's under review, I believe, currently with FDA.

That was PFS, 0.7.

Yes. The median PFS was 14.7 (sic) [14.8], I believe, versus 10.7 for the control arm. Yes, 0.7 hazard ratio. Importantly, the hazard ratio improved from 0.75 to 0.7 from the first interim to the second interim, largely because what you see from HIF-2 alpha inhibition is a tail effect to some degree. Patients that either achieve stable disease, sustained stable disease or a response generally tend to have very durable activity with HIF-2 inhibitor. And so a lot of the hazard ratio, sort of, happens on the tail side of the curve. So while the landmark PFS numbers are important, we try to emphasize that the totality of the curve is important because the tail is where HIF-2 really, sort of, seems to demonstrate a significant impact.

So the important point for this particular data set in the second line is that the patient demographics are important to pay attention to. So LITESPARK-011, for a couple of reasons, probably deviates pretty substantially from what folks would expect from a real-world patient population. The first main reason is that they enrolled patients that have received -- or did not enroll patients that had received prior lenvatinib or cabozantinib therapy because those were -- both of those 2 agents were in the 2 respective arms.

Which is one of the drawbacks of having a different TKI in both arms in both population.

Yes. Yes, exactly. So you're excluding both of those. So in the front line, so these would be the patients leading into the second line. So in the frontline, patients typically see 1 of 3 TKIs combined with anti-PD-1: so lenvatinib, cabozantinib or axitinib. Or they receive ipi/nivo. And so 70% of the frontline market is those -- is, sort of, fragmented with the anti-PD-1 TKI, 30% is ipi/nivo.

We'll get to that later.

Yes. And so the -- if you think of the roughly 2/3 of the TKI, 70% are essentially being excluded from your incoming population. That's -- it's a pretty substantial portion of what you would anticipate to be the real-world frontline that you're excluding from your patient population. The other piece that's important is that they still enrolled roughly half their patients with prior TKI exposure, which would seem unusual if you were to think that, that was all axitinib. It turns out that it wasn't. The manuscript for LITESPARK-011 was just published in the last couple of weeks. And half of the patients that had prior TKI exposure had exposure to the first-generation TKIs. So these are sunitinib and pazopanib. And patients that have experienced those agents probably have a pretty -- have a different prognostic outcome versus those that have gotten the more potent TKIs like a cabozantinib or lenvatinib.

In particular, the one piece I'd point to is that, obviously, you wouldn't have cabozantinib treatment after cabozantinib. But for patients that receive lenvatinib in the front line, there's a couple of small real-world studies done by high-quality academic institutions that have shown that patients that receive cabozantinib therapy after treatment with lenvatinib in the frontline do particularly poorly. So they have PFS of 4 to 6 months and an OS of under a year, which is obviously much worse than you would typically expect in this patient population. In contrast to the LITESPARK-011 patient population, I think ours is probably a little bit closer to that real-world representation. So we did enroll 7 of our 44 patients that received prior lenvatinib therapy, for example. And we don't have the same representation from the first-generation TKIs as well.

So the patient populations are a little bit different. When we share our update in October, we'll be sharing, obviously, response rate data, PFS Kaplan-Meier curves. And we'll also be sharing an OS Kaplan-Meier curve with 20 months of maturity; OS for cabozantinib is just over that 21 months. So back to the point I made about the late line, we'll have an early sense for how we're seeing performance in the second line, and that could obviously be compared to both LITESPARK-011 as well as the cabo benchmarks.

And then we'll also look at each of these metrics with the relevant patient demographic. So looking at prior TKI treatment, prior lenvatinib treatment specifically because that one has such a poor prognostic, and then prior ipi/nivo treatment because there's good benchmarks for each of those. And in our slides in our deck, we have all the relevant benchmarks called out for each of those patient populations.

And the prior pazopanib and sunitinib, which is a very small contribution, that.

It's a small contribution in our cohort. It was half of the TKI or about 1/4 of the patient population in LITESPARK-011.

The point there is that the overrepresentation or high representation of pazo and sunitinib in LITESPARK-011 drove what specifically?

It's most likely slightly better performance from cabozantinib than what you would expect if you had axitinib therapy, for example. So in general, like, I think -- so their PFS for their cabozantinib treatment arm at 10.7 months, I think it's fair to say it is on the higher end of cabozantinib benchmarks that have been put up. And I think that we would expect that our patient population is a tougher patient population prognostically, and we would expect that in our pivotal study, PEAK-1, that our control arm would not perform the same because we're including these patients that are tougher to treat.

Right. Okay. So you had -- for the pembro/lenva, you had patients -- you had more patients that would be expected to do worse and you had less patients that would be expected to do better with the pazo.

Yes.

That's working -- both working in the same direction.

Correct. Now there's one thing that actually from -- so if we talk about that's the prognostics of the patient population. The one piece that I probably would highlight is we actually are cautiously optimistic about the potential for the benefit that casdatifan can bring to these TKI-treated patients. And in particular, I'd point to one specific piece of data. So Merck has shared data in their late-line monotherapy that shows that the more prior TKI treatment a patient has received, the worse they do on belzutifan therapy. We've indicated, and we'll share the specific data at our October event, that we do not see the same meaningful differences with casdatifan treatment.

For -- so for example, patients that have received 2 lines or 3 lines of prior TKI don't do worse than patients that have received 1 line of prior TKI in a meaningful way. We think that's likely because of the connectedness of HIF-2 to the mechanism for a VEGF TKI. So one thing that we note is that when you treat patient with a VEGF TKI, it results in elevated HIF-2 levels. I mentioned before that belzutifan, one of the challenges with the molecule is the absorption-limited PK. So we're hitting the target essentially 5x harder. So we think that in the event you have higher levels of HIF-2, casdatifan may be better positioned to address those higher HIF-2 levels, and to cover the target in that regard and deliver good efficacy, and that may be why we see the effect that we see.

Okay.

So the punchline being that, essentially from at least a hazard ratio perspective, these underserved patients that received prior TKI may have the potential to do better with casdatifan than they might have done with belzutifan.

Okay. That all makes sense. So you're going to potentially have a, sort of, better -- these patients should do a little -- when you think about the Phase III trial, the PEAK-1 trial, your expectation is that you would have a weaker PFS in those patients.

In the control arm and then...

In the control arm.

Yes. And then the potential to generate more hazard ratio, obviously, in the experimental arm.

Right. Okay. That makes sense. Okay. And then you want to move to the...

Frontline.

Because the frontline, we've been getting questions, which you've been receiving as well, just in terms of the strategy in terms of the comp there, the IO-IO versus TKI, which, as you noted, is the majority of the frontline use, but the IO-IO is certainly a significant fraction as well.

Yes. And so in looking at the current frontline market, it's important to note that ipi/nivo has roughly a 30% share in the frontline despite having, in its pivotal study, the worst progression-free survival performance amongst the pivotal studies, whether it be comparing to axitinib or lenvatinib or cabozantinib. Those drugs have a median PFS of, call it, 16 to 24 months, whereas the median PFS for ipi/nivo is 12 months. So why does that drug -- why does that combination have the best -- or have the best individual share in the front line and still have a 30% share with that performance? It's because it delivers overall survival and meaningful overall survival. In fact, they just presented last year 10-year survival data, and I believe the 10-year survival data for that ipi/nivo regimen is on the order of 30% to 40%.

So really impressive long-term overall survival, notwithstanding the Achilles heel for the therapy is progression-free survival and the fact that so many patients progress quickly. Because of the strength of our late-line monotherapy data, we think that, that's the perfect place for casdatifan to play, essentially to make up for the weakness of a regimen that provides great long-term overall survival. So providing those patients with nearer-term disease control without the toxicity of the TKI. And so the good news in terms of providing an update for data when we share data in October is, because of the tough first year for patients that are treated with that regimen, it doesn't take a long period of time to see if there's a difference from an efficacy perspective by bringing casdatifan into the regimen.

So what data will we have? So we've completed enrollment of a cohort of about 30 patients with casdatifan plus just anti-PD-1 without the anti-CTLA-4 roughly at the beginning of this year. So we'll have about 11 months of median follow-up with 30 patients for casdatifan plus zimberelimab, our anti-PD-1 agent. And we'll be able to look at primary progression. We've already reported that, that's 7% versus ipi/nivo, which is 18%. We'll look at ORR, and then we'll be able to share a Kaplan-Meier curve for progression-free survival. And we'll be able to compare that to ipi/nivo, notwithstanding the fact that we don't have anti-CTLA-4 on board. So CheckMate-214 is the pivotal study there. We'll also be able to compare to KEYNOTE-427, which is monotherapy anti-PD-1, so pembrolizumab in that case, where the median PFS was 7 to 8 months and the response rate was obviously lower, higher primary progressive disease than what you saw with anti-CTLA-4, anti-PD-1. So we think that those 2 benchmarks provide a great backdrop for sharing that first anti-PD-1 plus cas set of data.

And obviously, to the extent we start to see some differentiation certainly from CheckMate-214, in the early go there, we think that bodes really well for the combination that then brings also anti-CTLA-4 to the game. And to that end, we just completed enrollment of our ipi plus zim, cas cohort of 30 patients. That's the data set that will be used to provide safety to FDA to launch the pivotal study at the end of this year, PEAK-20, that I alluded to before. And so at the time of the investor update that we have on October 20, we'll have more than 20 patients that will have made it through the first 4 cycles of therapy, which is the period of time during which ipilimumab is dosed. So that would be the period of time where there would be the most concern for toxicity from all 3 agents. So we like the fact that we're going to be able to provide the efficacy with anti-PD-1 and then also be able to comment on the safety profile and early primary progression, for example, of what we're seeing with ipi on board as well.

Okay. So okay, that's all making sense. So your point is that with the cas plus zim, potentially, we'll see -- you're saying you could be competitive on PFS versus CheckMate-214, which is zim plus ipi, but you're just saying cas plus zim. And then, of course, the standard therapy is the double. So you're going to go into the Phase III with the triple, which I gather would be even better than...

Hopefully, yes.

CheckMate-214.

Yes.

Better than the double. But there is the potential for cas plus zim to be very competitive just with the CheckMate-214 regimen.

We believe so, absolutely. Because we think that, like, when you look at the dynamics of the mechanism, cas brings a component that, that regimen is clearly missing in near-term disease control, together with what we hope to show in terms of the late line in terms of overall survival. So we, sort of, think it's the, sort of, the potential for best of all worlds. So near-term disease control, long-term survival and better tolerability than regimens that include TKI.

And then, I mean, tell me on this point, obviously, I guess a lot of the docs just are very familiar with the ipi/nivo combo. So that's, kind of, their default. But the idea of just doing a cas plus PD-1, like a cas plus nivo frontline study is an idea, right?

Yes. It is an idea, and it's one that actually we explored because we think it makes a lot of sense. What we heard from investigators is that, that -- and one of the ideas that we explored was potentially even a 3-arm study that included -- it would have been ipi/nivo/cas, nivo/cas, and then ipi/nivo would be the comparator arm. What we heard from physicians is that, that study would be harder to enroll because there is a significant portion of physician population that really believes that ipi adds to overall survival, and they want to see the ipi on board.

Right. Okay. And for everyone who's, sort of, still going to do the cross-trial comparisons and look at the frontline.

Yes.

Plus -- IO plus the TKI, your point is that you can avoid the TKI, get better tolerability and then make up the difference in terms of the survival endpoints with the HIF-2 alpha inhibitor.

Yes. And I think it's interesting, if you look at the monotherapy data, casdatifan performs -- I would say that like -- so the disease control from the TKI is different mechanistically than it is for casdatifan. When you look at spider plot for casdatifan, you tend to see, sort of, slower tumor volume reduction, but very sustained action or activity. With the TKI, you tend to see marked tumor volume reduction, but then you can see a V-shape curve in terms of the resistance developing and patients progressing.

And so we think that casdatifan over time can give that same level of efficacy as a TKI. In fact, our monotherapy data, even on response rate and PFS, is comparable or better to a TKI with much less toxicity and a better longer-term profile. So we don't think there's any reason to think that it can't bring over time the same thing that TKI brings. Importantly, too, the other thing is that I would point to that the TKI regimens have a PFS landmark of about 70% at the end of the first year. So that will be an important landmark to look at as well when you look at cas plus anti-PD-1 versus, like, a TKI plus anti-PD-1.

Right. Okay. And so just really quickly, can you just frame the time line? So the PEAK-1 is doing very well with enrollment.

Yes. It will be fully enrolled around the end of this year.

The PEAK-20...

We expect to initiate the study right around the end of the year with enrollment beginning in the first quarter.

Okay. And can you provide any rough idea of data time lines for those 2?

Yes. So obviously, the benchmark for PFS for PEAK-1 is 9 to 11 months for cabozantinib. I think most folks have, sort of, guesstimated, and we haven't given formal guidance yet because we don't have any event rate data yet. But most folks have guesstimated, sort of, the first half 2028 from PEAK-1, which is probably reasonable on its face. The PFS benchmark for PEAK-20 will be very similar. So the time line to data should be very similar. We're optimistic that we can enroll PEAK-20 rapidly. So we'll see how that goes.

I mean it's... even though it's front line, it's still a similar.

It will be very similar, very similar study size and the PFS is only, like, a couple of months better. So it's a very similar time line to data.

Okay. So that's not a 2028 event.

No, it's probably -- I mean, we're phase-shifted in terms of start of enrollment by about a year versus PEAK-1, a year to 15 months. So I think the easiest way to think about it is that it's, sort of, similarly phase-shifted in terms of potential results.

Okay. So just to summarize, so these are the -- so the late line, the second line, the frontline, very significant data updates. Anything else to watch for at the event? I mean that's plenty. You got to just -- just trying to make sure we cover everything.

Yes. No, I think that's it. I mean I think for us, if you think about it from a very high-level perspective, the late-line monotherapy data last year, I think, engendered a lot of confidence that we have a better HIF-2 alpha inhibitor than our primary competitor, who's already generated positive data in 3 pivotal studies. And so I think most people believe the probability of success in the PEAK-1 study is extremely high and that, that study has already been derisked not only because of their data, but also because we're combining with the well-accepted standard of care in that setting and going straight against the standard of care.

And so really, we think that, kind of, from an investor perspective, when people look at the value of the company, most of the value can easily be arrived at by looking at that second-line setting. We think this frontline look was going to be the first look at the front line. When you look, order of magnitude, at the commercial opportunities of the 2, we think the frontline is roughly 2 to 3x, probably closer to 3x the opportunity of the second line. So $1.5 billion to $2 billion opportunity in the second line, more like a $4 billion-plus opportunity in the frontline. So we're excited that the data in the frontline could engender confidence in that opportunity. And hopefully, that's a nice opportunity.

Okay. And just one final question, which is a bit of a different topic, but we're asking everyone this since AI is featuring more heavily in our lives. So to what extent are you using any of AI the tools, models, inference, structures to improve processes or do things faster at Arcus?

Yes. I'd say that we have a team that has been very aggressive in adopting technologies where we see the benefit. And so, like, our small molecule drug discovery team has been similarly utilizing tools where they see the benefit. I think, to some degree, input is important, right? So if you can't input into models, high-quality data, you're not going to generate great output. And so for us, the place to utilize that -- utilize AI is in the place where the inputs are great and can actually plow through things a lot faster than we could otherwise do them.

So that's been where we've really seen the uptake from our side. It's -- I think sometimes folks jump to the idea that like you can solve problems where you don't even have the inputs to solve the problems yet. And for us, I think that we feel like that's a bit of a jump too far. So I'd say we're, sort of, in the camp of aggressively adopting where we see lots of value-add.

And but that's specifically for drug discovery, drug design or...

Yes, absolutely. I mean, in all aspects of filing through data relative to drug discovery and design, for sure.

Yes. Great. Okay. Well, we'll see you in New York on the 20th then.

All right. Thank you.

Thanks.

Thank you. Hello everyone. Thank you for joining us and welcome to the ARCIS second quarter 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 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Pia Eves, Vice President of Investor Relations. Pia, please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss ARCIS' second quarter 2026 financial results and pipeline updates. I'd like to remind you that on this call, management will make forward-looking statements, including statements about our development strategies and our expectations regarding 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. 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. This afternoon, you'll hear from our CEO, Terry Rosen, CMO, Richard Marcus, President Juan Hayen, and CFO, Bob Geltz.

With that, I'll turn the call over to Terry. Terry Johnson, Thank you very much, Pia, and thanks so much, everyone, for joining us this We continue to make substantial progress in advancing our portfolio of oncology and immunology programs. 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 drug. The 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. So starting with Casdatafan, our next generation hiptoalpha inhibitor.

The advancement of Cas has driven reflection and value for ARCIS. We expect further data this year to accelerate this reflection. First phase three trial, peak one, evaluating Cas plus cabozantinib, the gold standard of 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. Last year, we presented a wealth of data that demonstrated clearly Cas-DataVans efficacy. efficacy advantages over Belzudafan. Over the next six months, we will share new data that will provide clear line of sight to Castatafan's full market potential. Based upon CAST DataFan's superior profile, as well as our development strategy, we expect CAST 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. With the recent failure of Merck's LightSpark 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-2-alpha inhibitor in this setting. our platform study ARC20 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 front-line phase three study in the setting. We're calling that PEEP20, and we remain on track to start this registrational trial by the end of 2020. 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, more specifically, a partnership with the Department of Health co-collaborations, and these all allow us to retain the full rights to the CAST DataFan program. We believe that we are the partner of choice for collaborations involving a HIF-2-alpha inhibitor. enabling investigation of the smartest mechanistic combinations and settings. Keep in mind, Belzudafan is readily available to anyone. We do not believe it's an accident that others want to combine with Castatafan.

We've initiated multiple new clinical trial collaborations in the last two months. In June, we announced the collaboration with BMS to evaluate Cas in combination with Pumida, their bispecific anti-PDL1 VEGF antibody in the first line setting. In July, we announced the collaboration with Summit Therapeutics to the cast in combination with Ivo, thereby specific anti-PD-1 VEGF antibody. ARCIS will be conducting this study in a first-line cohort as part of ARC-20. of three collaborations we've executed to evaluate Cas with an anti-PDX VEGF bispecific in the first line. So just to emphasize, we have three collaborations with anti-PDX VEGF antibodies. In addition, in July, we also announced the collaboration with Aveo, in which we'll be combining CAS with TiVo in advanced Belzodafin-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.

So now let me spend a few minutes describing our holistic development strategy for CAST DataFan. Let me emphasize an important point in introducing this topic. While we believe that Casdafan 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 HIF-2-alpha inhibitor enhanced options that only CasDataFan with its unique profile can offer. 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 CAS the foundational medicine regardless of the selected combination partner. The strategy is designed to provide flexibility to physicians with a HIF-2-alpha inhibitor enhanced regimen corresponding to their preferred treatment approach for all types of Clear Cell RCC patients.

Zudafan's recent frontline setback, castazan has clear paths to become the common denominator in what's currently a fragmented frontline setting as the first hip-to-alpha inhibitor available to these patients. A CAST's datafan-based TKI sparing IO-IO regimen is the bedrock of our first line strategy. It's intended to address the key limitation of IP plus NEVO, which is an approximately 20% rate of primary progression. Currently, IPI-NEVO represents the most commonly used frontline regiment 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 cast-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. Partner TKI in the setting will be exit in it, well established as an effective frontline 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. 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 castatafen in combination with three different novel anti-PDX VEGF antibodies. We believe anti-PDX 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 castazepam to deliver both an early treatment effect and sustained tumor suppression. The rationale for this class of bispecific utility and 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.

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 three peak one trial. TABO is the most commonly prescribed TKI monotherapy in the setting. It's 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 Belzudifan combination partner, also sold by Merck, Limvatinib. Lenvo's toxicity profile is well documented with greater rates of cardiovascular toxicities. Notably, in LightSpark 011, all-grade cardiac dysfunction was 7% for Bell's-Lenva versus just 1% for Cabo. grade three or higher cardiac dysfunction was 5% for Bell's and Lemba versus .5% for Cabo. That's a big deal. That's a tenfold difference.

Keep in mind, these data data are a direct comparison from a randomized study. With CAST's superior efficacy profile versus Bell's, and CABO's tolerability advantages versus Lenva, we expect CAST plus CABO to be the preferred HIF-2-alpha combination in the second line based on both efficacy and safety. Finally, with the announcement of our collaboration with Aveo, we're developing Cas-Datafan plus TiVo and Second Line plus Clear Cell RCC, including in Belzutifan-experienced patients. As I mentioned, this will precede a registrational trial both HIF-2-alpha inhibitor experience and naive patients. And an upcoming investor event in October will we'll be sharing key ARC20 data readouts for CAST data fans. 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.

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 Cas Datafan in the various settings. 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-2-alpha 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 Cas-DataFan 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 castafen and HIF-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. This is the first study to comprehensively connect clinical outcomes from patients receiving a HIF-2-alpha inhibitor with peripheral biomarker changes in associated tumor biology.

The research showed that HIF-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 for each patient. survival. Suppression of erythropoietin or EPO production is good. It correlates with positive outcomes. This is just So, just one example of the strides our research team has made towards developing a thorough understanding of HIF-2 alpha biology and its linkage to patient outcomes in kidney cancer. Okay, now the important piece, thinking prospectively. 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.

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. At the same time, however, PKI exposure has been shown to result in an upregulation of HIF-2-alpha activity. We've illustrated this on slide 31 of our corporate deck. So let me repeat that. Greater TKI exposure has been shown to result in upregulation of HIF-2-alpha activity. One point I'd like to link back to now. In our Nature paper, we elucidated that high HIF-2-alpha activity is correlated with improved PFS in patients treated with Cas-Statafan. However, interestingly, subgroup patient analyses reported by Merck showed that patients treated with Belzodifan in LightSpark 005 or LightSpark 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 Belzodifan. By contrast, what I can tell you is that in our analyses of our late line castatafan monotherapy cohort, that's 120 patients, we do not show this inverse correlation. We therefore believe that more robust and in fact more durable HIF-2-alpha inhibition with Cas-Dafan 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. the investor event in the fall. 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. 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. Our portfolio addresses a number of validated and emerging targets, including MRGPRX2, the TNF receptor 1, CCF2, CD89, STAT6, and CD40 ligand. We expect to initiate human dosing of AB102, an oral small molecule MRGPRX2 antagonist, this month. 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 CAS and our immunology programs, we also have an ongoing phase three study in pancreatic cancer. So coming out of ASCO, there's been increasing focus and excitement in this space.

We're preparing for initial data from our phase three PRISM-1 study of chlamyloclostatin chemotherapy in the front line setting, we expect this to read out in the first half of next year. We actually see a major opportunity for Quemley as an all-comer, first line, and importantly a very well tolerated option for treatment of this devastation. disease. With that, I'll turn the call over to Richard to discuss the status of our clinical programs in upcoming data readouts.

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. We're currently pursuing multiple different combination studies for Cas-Tatafan 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. We will have multiple important data readouts from R20 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. 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, IPPI-NEVO.

And let me remind you exactly what this regimen is. It's a maximum of four cycles, or 12 weeks, of IPPI plus NEVO, five weeks of IPPI plus followed by Nevo for the duration of the treatment. This therapy is highly valued for the overall survival benefit it provides. would be used more if the rate of primary progression, which is roughly 20%, were lower. 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. First, Cascatofan plus Zimberlimab, our anti-PD-1, plus Ipi, an anti-CHLA-4. This cohort has enrolled well, and we expect enrollment to complete very soon.

We're also evaluating a Cas plus Zim first-line cohort in our 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 frontline setting. Now, for the TKI-inclusive approach, you'll be developing castatafan in combination with axitinib. established TKI in the front line that will sequence well with Cas plus Cabo as the subsequent We expect a new cohort in ARC-20 evaluating this combination to initiate in the fourth quarter this year. In collaborations with BMS and Summit, we are also evaluating novel TKI-free VEGF targeting combinations with anti-PDX VEGF bispecific antibodies in the first-line setting. BMS will be evaluating two Cas plus Pumidac-based combinations in its platform study, Rosetta RCC208. 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. Now in the second line, the current standard of care is cabozantinib monotherapy, representing roughly 40% of the second line market. Peak one, which is evaluating Cas plus CAVO versus CAVO, is our first registrational study for Cas Datafan. 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 a second line, IO experience setting. We shared initial efficacy data for this cohort last year at ASCO. And finally, in late line clear cell RCC, where the current standard of care is Belzudifan or TKI monotherapy, we're adding a new randomized cohort in ARC20 to evaluate Cascatofan plus TiVo versus TiVo alone in patients that have received prior Belzudifan.

This cohort will generate data to support a registrational strategy combining CAS with TiVo by clarifying Casdatafen's benefit specifically in IF2-alpha inhibitor-experienced patients. We expect enrollment to begin later this year. Now, let me briefly summarize the readouts coming from Mark 20 this year. In the first line, initial safety data from the ARC-20 cohort evaluating Cas plus Zim plus Ipi. 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 Nevo plus Ipi as the bedrock of our frontline We will 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 Cas Plus Zim. We will share and given that the median progression free survival for ipinivo from checkmate 214 in this first line is just 12.4 months.

We expect the spider plus 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. And in our late-line monotherapy cohorts, you'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. While OS is not required for approval and registration of trials for CCRCC, It could impact access in X US regions and is recognized as another potential major differentiator relative to abluzudipine, which has now failed to show statistically significant benefit in OS in three out of three registrational trials. So, this first look at OS for Castatocan will provide important comparative data. Taken together, these data readouts will create a holistic picture of Castatocan'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.

And with that, I'll turn the call over to Juan to discuss our immunology portfolio.

Thanks, Richard. Over the past few years, the same discovery team that created Gasterifan 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. 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 establish 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 MRG-TRX2 antagonist and followed by our TNF receptor 1, CCR6, TAD6, 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, AV102, 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. X2 is a key regulator of mast cell activation in these diseases, releasing inflammatory signals that drive swelling and itch, making it making this a promising target for conditions like CSU and atopic dermatitis. 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 mass cell degranulation and inhibition of all common human X2 variants. This data supports the potential for a potent selective once daily oral X2 antagonist to impact key disease outcomes in conditions driven by aberrant mast cell activity. AB 102 is entering the clinic imminently, with PK profile data expected in the fourth quarter 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. Like 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 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 receptors 1 and 2. As you may know, blocking TNF receptor 2 can produce lead to an inflammatory response in some patients. We expect this program to enter the clinic in early 2027. 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 Castatifan as well as our financial results.

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 Kazdatafan. 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-2-alpha inhibitors on the horizon and clear advantages for Cas-Batazan, we believe Arcus has a path to become a common denominator across lines of kidney cancer treatment. Cazdatafan is targeting lines of therapy with large patient populations and long treatment durations. Peak one addresses approximately 20,000 IO experience patients in the major markets, representing an opportunity of more than $2 billion. And the first upline opportunity is even larger, exceeding $4 billion.

All told, we see a total peak sales opportunity for Casdatafan of $5 to $10 billion, driven in part by duration of therapy from a long-term tail effect. 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, ARCIS owns all commercial rights to catatafans outside of Japan and certain other Asian territories where rights are held by our partner, TAIO. Turning to QEMLI, we continue preparations for the readout from PRISM-1. While there's been exciting progress made in the treatment of later line pancreatic cancer, QEMLI 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. Further, we believe QEMLI'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 Cazdatafan gives us significant strategic optionality and supports a capital-efficient collaboration strategy. Our new agreements with BMS sum and AVEAO are structured to advance catatafan combinations without placing outside demands on our own resources. 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. 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. by the wind down of the DOMP and LNED program. 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 DOMP phase three trials and reduced spend family, together with broader spend management. By 2027, we expect more than 80% of our portfolio spend to be directed toward CAS Data Payment 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.

Thanks very much, Bob. So let me close by summarizing our priorities for the remainder of 2026. No surprise, CAS Data Fan 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 all-CAS the MAPS backbone of kidney cancer treatment across all lines of therapy. In the coming months, we'll share data for Cas-DataFan as monotherapy and in combination in first, second, and late line settings. We expect these to further reinforce Cas-DataFan's best in class profile and drive conviction in its potential as a transformative therapy. These studies will support a broad registrational strategy, bringing both the qualitative and quantitative advances that HIF-2-alpha inhibition offers for the Clear Cell RCC treatment paradigm, starting with the ongoing PEAK-1 study, which is on track for full enrollment by year end, as well This is 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. For clarity, I want to confirm that we will be using Ipi-Nevo as the combination partner for Cas-Datafan in this registrational study.

And for non-caste datafans, our PRISM-1 phase 3 trial for quimliclustat and pancreatic cancer remains on track for a readout next year. And Juan walked you through the exciting progress across our immunology portfolio, with AB-102 advancing into the clinic, followed by our TNF inhibitor shortly thereafter. programs over the next 18 months. 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. 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 in continued support of ARCUS, and we'll now open the call for questions.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 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 Mitsuo.

Your line is open. Please go ahead.

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, 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? And also while we're there, are there any particular parts of the data set that you would like to see? place a little bit more prominence on where you want people to anchor to. Thanks so much.

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. 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. So I think one of the ways to frame this is put it 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 in value that was due to recognition in the investor community that there was really a very substantial differentiation between Castatafan and Belzudafan. And what we've heard from a lot of investors is that led sort of to a recognition a value that was reflected in our second line strategy that we were given value for an expectation that CAS 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, YOU KNOW, you know, more broadly and particularly in the front line. And I think a couple of 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. So 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 frontline. And the frontline is huge because that's the $5 billion plus part of the market opportunity. So keep in mind, we're going We have no competition in the front line without Belzutifan. There 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 on a couple of things that Richard pointed out. 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 going to have. that we're running as part of our 20. 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. I think the thing that might surprise people as they're thinking about this now, and we get more granular, is that the CAS-ZIM dataset is actually going to be relatively mature despite being an early data set.

Because if you contextualize a PFS for ipinivo that's just over 12 months, as well as a well done study with PEMBRO alone where you have a PFS on the seven to eight months, you'll be able to a feel from our curve as to how our PFS is looking compared to those regiments. Also, with over 18 months of median follow-up, I think we'll have a good look potentially at OS, as we move into the second line, is playing out, and some of these things will start to go across, So let me now talk about the second line and build on what I just said there. So in the second line, our CASCABO data will really support that we will have what will look like a better TFS than what was seen with Bell's Lemba and I think given the safety and we talked a little bit earlier about what's been associated with LEMBA and LEMBA-BELS that we think we'll have advantages that read on both the safety and efficacy. The other thing to look at is that the, 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 Bell's Lent. I think the more important piece though is that given that the 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 CAS data fan regiment. Keep in mind, Our OS is only going to be based upon how we look relative to direct comparison to the and that'll be defined by its hazard ratio. As Richard mentioned, thus far, Belzudafan has been 043.

So we're pretty excited about having those first data that read on OS. And that brings me to the late line. So the late line, we've clearly shown a single agent, a very dramatic difference compared to the data that have been generated. with Belzudafan, but we'll have 28 months of follow-up. And again, given that the OS for Belzudafan is just over 20 months, I think it gives us an opportunity. You'll see the Depp-Leymeyer curves. We don't know how it's going to play out, but I think with the very, robust durable if to inhibitor this will start to perhaps show us the 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. 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.

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 Data Defense 1, I think we've laid that up pretty clearly, we're executing on it, but those data will have enough data now that you'll see we actually will win and that castatafan really will look like it's going to become the common denominator for all Clear Cell RCC treatments.

Okay, super helpful. Thanks so much, Terry. Thanks, Salim. Your next question comes from the line of Dana Graybosh with LERINK Partners. Your line is open. Please go ahead.

Hi, thanks for the question. Looking forward to another fall event. I wonder if you can talk about Light Spark 12, which we'll see at ESMO after that event. your expectations for PFS and OS in that study? And is there a specific signal that would give you confidence or increase your confidence that CAS can exceed there with AXI and a PD-1 where Bell's, Lemva and Pembro failed? Thank you.

THANKS, DANA. SO THIS IS GOING TO BE A THEME WE COME BACK TO. PEOPLE ASK A LOT OF TIMES ABOUT READTHROUGH FROM TRIALS AND TALK ABOUT THERE'S READTHROUGH FROM THINGS WHERE WE HAVE THE DATA, LIGHT SPARK. and two we don't have the data but i think the most important thing is go to slide five you know you can you can say like uh elections have cons consequences biomarker data have consequences and when you look at the comparative um THE DURABILITY OF THE ABILITY TO SUPPRESS ERYTHROPOETIN, SO THE ABILITY TO INHIBIT HIF-2, I THINK THAT'S THE THING THAT TELLS 90-PLUS PERCENT OF THE STORY. SO PEOPLE SPECULATED ABOUT SAFETY ISSUES OF THE TRIPLET, ET CETERA. I THINK EVERYTHING THAT 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. So I think the biggest problem that, you know, you know, Belzutifin probably had is the durability and the, you know, decrease with time and ability to inhibit HIF-2 where their own papers talk about effect on the biomarker, you know, looking very nominal it just 12 weeks, keep in mind the, 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.

And then the thing that gives us confidence is we know that Casdatafan is inhibiting not only robustly on day one, but out past the year, and in fact, as long as you're on treatment. So you do not run into 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-alpha. So you get more HIF-2-alpha activity. So essentially what you have in that study is the treatment with the TKI, this is not a discontinuity. continuous event that happens in a continuous way. So you've got increasing levels of HIF-2 activity and you've got a HIF-2 inhibitor that is measured by that, you know, biomarker work is clearly not inhibiting HIF-2 is strongly with time.

So less activity of the molecule, more activity coming from the TKI-induced HIF-2 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 HIF-2 as a driver, We'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. And we can't even imagine something that would come out of LightSpark 012 that will cause us to think differently. And I'll remind you, our number one focus there is on top of IPI-NEVO, 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.

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

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, but how many patients got Lenvima prior? And 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. You know, what do you expect to see for time to response in first line versus second line? 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?.

Okay, so remind me the first question and then I'll get to the ORR. That's prior LEMBA. Which by the way, we're not hesitant. So yes, prior LEMBA. Yes, 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 cascabo as well as our registrational study versus the LightSpark 011 study, because In that study, Merck had Cabo in the control arm and a Lemba in the study arm, really the only TKIs of probably substantial number that they saw were patients on Axi, so it was probably a mix of Axi and ipinevo. We'll give specific numbers at that time, but what I'd say is our Lemba patients are very representative. of what you would normally see in the first line. So we'll have a substantial number of Lemba patients out of that 40 some odd patients who looks relatively like the first line. distribution.

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 studies 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. And we think even what you'll see from just our anti-PD-1 plus cast, that'll give you warm feelings about efficacy given, you know, well, have that 11 months of median follow-up, and that still may improve. But with the, we'll share what the early responses looked like. I think the thing to think about is that the timing of an IO plus a cas data fan regimen may look, you know, a little bit more like IO alone or HIF-2 inhibitor alone where, you know, responses, you know, that did you cross 30%? or not when that happens may be more prolonged. The thing is when you combine with the TKI, you know, as you know, you're really affecting the vascular system and you know, it's a very overwhelming or a very sort of response fast type of phenomena, but then obviously it doesn't give you the durability. So we'll share those data, but I think, you know, the more important things that you'll you'll get out of it are the safety um of 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 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 Ipi Nevo out at 12 months, you're getting in that 50-ish percent range. you know, plus or minus place, it'll just be a very, you know, clear comparison, but you shouldn't think we have any hesitancy sharing those data it's it's just that uh time will probably you know, affect more of the response rate. I think one other thing that, you know, 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 Belzodifan data, how profound the ability to inhibit if to it on durability. But I'll just use actually Belzodifan data. People ask for read through, we get asked about read through from LightSpark 01 where we haven't seen the data, but the places where we've seen a lot of data, for example, LightSpark 005, and we've seen a monotherapy data. Now, interestingly enough, if you go back and look at those data, median PFS for Belzutaphan in that late line setting was about 5.6 months, which is about the same as the median PFS for ever aligners.

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 hard. However, they still won. The guys 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, you know, on the other side of the of the median. So we think HIF-2 is going to turn out, and I think our data will certainly, you know, give the opportunity to assess that, that HIF-2 is going to turn out to be something that affects everything on those durability measures. that the Belzunifan data have foreshadowed that because despite what's probably a marginal ability to really hit too hard and hit it long, they still had very good effects. I think the first place where you saw the manifestation of that less than optimal durability of hitting HIF too 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. So the percentage of time that that it's bringing value is, you know, smaller compared to, um, whether it's the, uh, light spark old five or light spark 0 1 1, where it's, it's fighting a shorter battle compared to the, uh, uh,.

standard of care. Your next question comes from the line of Lee Wastick with Cantor. Your line is open. Please go ahead.

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 Cabo cohort. How should we think about the impact of prior lymph exposure on the types of patients? enrolled into the study relative to the light spark 11 trial just trying to understand the right PFS benchmark given there's some differences in the patient population and then And second, Terry, you mentioned prior TKI exposure increases the HIP-2 levels. Just trying to clarify if you're implying CASPFS has a positive relationship with prior lines of TKI.

OKAY, SO THANKS ON BOTH OF THOSE. SO THE FIRST THING WE WOULD SAY IS WE ACTUALLY FEEL QUITE GOOD. AND I MENTIONED THE WHAT WE SAW IN THE LATE LINE THAT WE DID NOT a degradation in the monotherapy, 120 patients 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 005 and LightSpark 13. So going in, we're feeling really confident that despite the fact that we'll have those you know, TKI experienced patients and Lenva patients, we feel very optimistic about the benefit that those patients will, receive. So sort of across the frontline strategies, we feel good that the benefit that KIFT II will bring on top of CABO will be advantageous. In terms of comparisons, to your point, one of the things, just give me an opportunity to talk about how we'll present the data. So, I'll even use the word that John used a second ago about hesitancy. we're going to be effusive with the data.

And, you know, 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. 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, you know, what the advantages of castatafan are. We feel like it's a great opportunity because, you know, castatafan is going to bring a lot to the table. And one of the tools that we'll have is the study Cabo Point. And Cabo Point, if you go back 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. And then how did those different groups look when they then received cabo so it's a perfect comparison yes we'll compare to um bell's lenva yes we'll compare to any other registrational data with cabo alone but 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 knew what it was bringing to the table.

So it's a perfect data set. So we will do subpatient analyses since we'll be forced to go cross trial comparison as much as everybody doesn't like it actually everybody loves it and so we'll look at how we compare to both of the segments of the population from the Cabo point study to see how the advantages we're bringing to Cabo whether it's from prior TKI treatment or prior, uh, IOIO treatment and keep in mind, we're going to have curves. So those curves will not only, you know, give you a sense of, uh, 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, some tails are corresponding both to what you would see with Cabo and what you saw with Bell's-Lenva. Nicely, both of our programs are 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 I think that'll compare to a hazard ratio of what you saw for Bell's Limbaugh.

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.

So I want to thank everybody. You know, 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 castataphan-based therapy. So thanks for joining and we look forward to speaking to you.

you know over the coming months this concludes today's call thank you for attending you may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

All right. Let's kick off our next session with me, Terry [Audio Gap] company. Welcome. Very exciting times this year. And before we go to the question, which I have a lot, I'm going to turn it to you guys for opening remarks. So Terry.

Great. So let me just introduce Arcus to those of you out here who might not be as familiar with us. I'll be brief. The company was founded about 10 years ago. We built ourselves around a very strong R&D capability, particularly discovery. That's reflected in the type of programs we choose. We focus on programs particularly with small molecules, where there's been great validation but perhaps not a great molecule yet. And I think that leads me to Casdatifan, which is clearly our most valuable program right now. And it -- that kind of fits the paradigm where we think we have demonstrated unequivocally we have better molecule than the one other molecule that's out there Belzutifan molecule. It's validated the program clinically, validated it commercially and we think we have shown a lot of data and we have a lot more coming this year that shows we not only have a better molecule but it enables a better development strategy. So as we sit here now, we look at Casdatifan as a $5 billion to $10 billion opportunity commercially.

Finally while we talk less about it in next year for example 80% of our resources will be invested in Casdatifan development. We have somewhat quietly built a very strong immunology and information portfolio of molecules. And they all fit that same paradigm where there's strong validation.

In this case a lot of it coming from biologicals where you have double-digit billion-dollar drugs even. But where there's something that could be addressed that might be a disadvantage of those programs with a small molecule. So for example we have an X2 antagonist that's heading into humans imminently. We will have proof of concept for that probably early next year. We'll have PK data later this year. We have a TNF receptor 1 Antagonist in development. We have [ STAT6 inhibitor ], CCR6. Small molecule inhibitor as well. So a very robust -- I put it up there against any company, large or small. And so far as an I&I portfolio. So that's moving along in parallel to the Casdatifan development. So final point I would just make is our cash position is strong. We are funded into the second half of 2028 with everything we'll talk about today, and that gets us on to the other side of data from what's the first registrational trial that's ongoing and enrolling right now for Casdatifan in the second line. So I'll stop there, and I'm sure...

Yes. A lot going on in the company. There's a lot of readouts. Can you walk us through like the timing for some of these readouts, including the PDAC, what's going on in the I&I program? I know that you guys started that Phase III, the PEAK1 study was the status for that. So maybe just kind of give us a status on these programs and the timing for the readout?

Sure. So you mentioned PDAC. So we have an ongoing fully enrolled as of September of 2025 study in pancreatic cancer with our small molecule CD73 inhibitor QUEMLI. And we're anticipating that to read out with data in the earlier part of 2027. That's purely event-driven. And so that's running QUEMLI, Gem/Abraxane versus Gem/Abraxane. You'll see when we talk about Casdatifan, we like to go on top of standard of care, very clean study, very clean data readout, and that was driven by very strong Phase II data. And so that's a 2027 readout. Casdatifan, the first registrational study -- we started enrolling that basically at the beginning of this year. We expect it, and we're on track to be fully enrolled by the end of this year. When you think about that Casdatifan plus cabozantinib versus cabozantinib -- when you think about cabo is having a PFS on the order of 10 months or so, while we haven't given guidance to the readout, clearly, that just doing the mathematics takes you -- if it's fully enrolled at the end of this year, it takes you probably into the earlier part of 2028 for data.

In terms of the I&I portfolio, the first program heading into the clinic, which is imminent is our X2 antagonist will generate PK data in healthy volunteers quickly. We'll do an in cabinet challenge. We'll have those data likely by early next year. And with all the other data going on the field, proof of concept, we'll likely be entering urticaria study catching up to others because we kind of are able to skip a step and go directly to the real study there. And then there's a steady cadence of INDs that will flow in that immunology program. All those molecules I mentioned, STAT6, CCR6, TNF receptor 1 are IND candidates in the next to 12-plus months.

I'll also just note on timing because it's probably the most important study that we'll be doing. We anticipate getting our frontline first registrational study in kidney cancer with Casdatifan up and going by the end of this year, and that will be looking at Casdatifan Anti-PD-1 Ipi versus Ipi/Nivo. And I'll just remind people that in the frontline, that's the most commonly used regimen right now, Ipi/Nivo. And we'll talk a little bit more about our plans and the data we're generating in support of that as well.

Okay. Yes. A lot of questions on that and others. So the big data readout was obviously the one coming midyear. I think you guys mentioned could be close -- more closer to ESMO timing. Maybe just give us an idea of, obviously, that CA/cabo combination that update to that data, we're going to get that. Besides that, what other CA data are we going to see along the different lines of treatment? How many patients should we expect to see with these various updates?

Great. So I think this is probably the most important question. So in terms of data flow for this year, we've recognized basically with the failure of Belzutifan and LITESPARK-012, the frontline is there for the taking, and we think it's with a great drug and also a great development strategy. And so we have ongoing studies or imminently starting studies that read on all lines of therapy. And our strategy is actually very simple. So we want to make sure that every patient can experience and have the opportunity to get Casdatifan basically that it becomes a backbone therapy across all lines of therapy for clear cell RCC.

So let me just [Audio Gap] that, and then I'll talk about the data that will support [Audio Gap]. In the front line, if you want to think about the brass ring in this whole area, that's thinking about ipi/nivo, which is used in about 35% of frontline patients, has limitation that's associated with its rate of primary progression, which is about 20%. If not for that, it would be used more. So we think with what we've already shown with Casdatifan even on top of Anti-PD-1, we can reduce that rate of primary progression. And we think that we can take that Ipi/Nivo from 35% to roughly 50-plus percent of the market. Now with that said, -- the rest of that frontline is fragmented. So that other 60-some-odd percent is broken into multiple TKI inclusive regimens. So while individually, they're smaller and fragmented as a whole, it's a big opportunity. And we recognized, particularly as we had ad board discussions with both U.S. and European advisory boards that we should have a TKI inclusive regimen available in addition to that IO-IO CA. So that covers the first line. The second line, as you mentioned, very straightforward. The most commonly used largest part of that market is Monotherapy Cabozantinib, and we have an ongoing study that's looking at Cabozantinib plus Casdatifan. Finally, in the later lines, we're going to be looking at another TKI. We'll announce that shortly, and we'll be combining that with Casdatifan running a randomized study versus the TKI alone. And importantly, we'll be doing that in Belzutifan experienced patients. So we're killing a couple of birds with 2 stones, generating the data to support the registrational study, but also showing that Casdatifan works in [ Belzutifan-experienced ] patients.

Finally, and this will be -- we haven't talked about this much, but I want to comment on this now, and we'll be talking about it more as the year goes along. So we've really used our Monotherapy single-agent late-line study to demonstrate that dramatic difference between Casdatifan and Belzutifan. And obviously, you don't have to parse out other agents in the combination. And so we're reaching a point where we should have OS data later this year as well.

So I'll remind everybody that while in clear cell RCC, the approvable endpoint is PFS, it's been thought that a dramatic differentiation could be an OS benefit. And we feel that later this year, the OS will be mature enough from that late line to demonstrate a benefit that we think will read through all lines of therapy. So what will those data sets look like? Okay. So first of all, we have the 120 patients of Monotherapy data that will update not only all the other parameters, but a first look at OS. In the front line, we have an ongoing cohort that's generating the safety data that will support the Phase III study. That's looking at Casdatifan plus our Anti-PD-1 Zim plus Ipi. We've already spoken with the FDA. We know the amount of safety data that we'll need.

Keep in mind, when people talk about Ipi/Nivo as a regimen, that's actually you get 4 cycles of Ipi/Nivo and then you get Nivo. So it's 12 weeks of Ipi/Nivo therapy. So we'll have double-digit patients later this year that have had Ipi, Anti-PD-1, Casdatifan that will form that safety component. Now we've also been running a 30-patient -- 31 patient cohort that looks at Anti-PD-1 plus Casdatifan. We reported in January of this year that there was only a 7% rate of primary progression. Keep in mind the KEYTRUDA alone in this setting, which show 25% to 30% rate of primary progression. Ipi/Nivo shows maybe 18%, 19%, 20%. So with Casdatifan Anti-PD-1 alone, we're already addressing what is believed to be the most limiting factor with the use of that Ipi/Nivo.

So we'll show not only the rate of primary progression data, but you'll get a good look with probably about a 9 months of median follow-up of the waterfall and the early ORR, and you'll be able to squeeze together the Ipi Anti-PD-1 CAS plus the Anti-PD-1 CAS, and that basically looks like the therapy that we think is most important. And then we'll have up and running our study with that late-line Casdatifan plus other TKI. And then we'll have roughly 40-some-odd patient data set that's looking at Casdatifan plus cabo in the second-line setting.

We may even have early data on OS for that. We'll certainly have Kaplan-Meier curves for that as well on PFS. And we -- we're going to make sure that we compare to all the other data sets that are out there, whether they be belz/cabo, cabo alone or belz/lemba. So we think we'll be able to compare across lines of therapy in cohorts ranging from 30 to 40 to the 120 patients that have late line and so very large data set of Casdatifan later this year.

So that's a lot. So let me just kind of list it to you to make sure I capture everything. So obviously, I think the cas cabo in that second line plus, I think you mentioned about 40 patients. So that's the update from the previous that you guys already gave. And then the mono update as well to the 120...

120 patients...

Later line, second-line setting for mono.

Third line plus.

Third line plus 4 for CAS. And then you also mentioned there's 2 -- the frontline regimens, the PD-1 plus CAS. Correct. And how many patients should we...

That's just over 30.

About 30 patients. And then there's another CAS, PD-1 and IPI also in the frontline and how many.

That will be about 30.

Yes. I mean I think so we'll have the 31 patients for the CA-Zim, the median follow-up will probably be in the 8- to 10-month range. So we'll have like an early look at efficacy there, whereas like Terry was saying, the CAS-Zim Ipi cohort we'll have double-digit number of patients that will have made it through the 12 weeks with the ipi-containing portion. So that's going to be mostly a read on the ability to tolerate that triplet.

Okay. And then I remember in the past, you also mentioned a monotherapy cohort in the frontline for like that favorable risk group. Is that also going to be part of it?

We have that whether or not we update on it. We're trying to be very focused on what we're doing insofar as the data we're generating that supports the registrational studies. So we have those data. We'll probably comment on them. But as you said, it sounds like a lot. We're trying to make it like simple, not confusing in since that those cohorts essentially read on rates of primary progression, which look really good, but they're not really adding to the data set that support those registrational studies. So whether we mix that in or do it at a different point is TBD.

Got it. Okay. And then you guys also mentioned that there was another TKI-free regimen that you were exploring. And then later on, we saw this PR on this bispecific from Bristol. Was that -- is that the one that you guys are -- or is there another one?

So that -- so what Rich is referring to is we just announced a collaboration with BMS, where basically the BMS BioNTech bispecific, VEGF PD-L1 bispecific, we're combining 2 arms of their platform study that BMS is executing. We're very excited about that. I think it's a high priority for them. That is another part of our strategy. It's very compartmentalized. So nothing else we're doing is dependent on that, but that is going to be starting pretty soon. I think Bob kind of has described it nicely as it's kind of in between TKI sparing and IO-IO, where you have that VEGF component there.

I should also say, though, that's part of a strategy in and of itself. So it's a sub-strategy. So you'll see us announcing additional collaborations. We've set expectations that we would have more than one. And they're covering -- they're basically going to cover 3 different important aspects to us. So one, we're working with like a partner, for example, like BMS. They have such strong experience, expertise and commitment in clear cell RCC. So for a number of reasons, they're a great partner. They've got their platform study up and running.

There'll be another study where you'll see that we also weave in an HCC component, which is, again, a very smart place for those bispecifics to go. It's a very smart place for casdatifan to go. And then there'll be a third where we'll actually be the one executing the study. So while we value the strategic elements of these collaborations, we also like the idea that within ARC-20, we know we'll get one done very fast. And if one of these other partners can beat us, great, but we feel like we'll execute very efficiently. So we're covering strategic partners, HCC as well as RCC, a couple of interesting combinations and then a study where we will execute it ourselves.

I see. Okay. Do you believe that there's still a debate if cas is the better HIF-2alpha compared to belz? Because one argument is that in the mono and the combo data that you guys have generated so far, it's still early, right? Small sample sizes, there's no control arm. What is giving you confidence that cas is better?

Yes. So I don't think there's much of a debate. And certainly, when we talk to people, that's not something out of all the questions that people raise, and I'll explain why. So first of all, we have such a huge amount of data as single agent. So the 120-patient monotherapy, that's actually a fairly large n. Keep in mind that involves over 40 sites. Then we've got multiple different settings combinations, et cetera, where we generated data. I think the most compelling data though -- so if you first just take the clinical efficacy data, we're so much better than belzutifan on every endpoint, whether it's ORR, PFS, our durability, our rate of primary progression.

But to me, the thing -- and we have -- within a very short period of time, you're going to see a publication in this high-impact journal that there is that ties together the basic biology and science of HIF-2 and casdatifan, the biomarker data and the clinical efficacy. So that will all be out there. But the piece that's intrinsic in that, that gives the most confidence and to me, it enhances that confidence by orders of magnitude is that you've got the biomarker correlative data from monotherapy patients that shows dramatic -- and I state that I'll emphasize with all caps, dramatic differentiation from belzutifan.

So if you just saw those data alone, you would think these 2 molecules absolutely have to be different. Now keep in mind, everything is rooted in -- this is highly reproducible and has nothing to do with patient population. You have a dramatic PK/PD difference between the molecules. And that's not something that has to do with patient demographics. You could -- we did our initial work even in healthy volunteers. But then when you look at the biomarker data, and that's very well defined that suppression of erythropoietin production. Not only do you see a deeper inhibition by casdatifan than you do with belzutifan, but the time course is what's really dramatic. And this is Merck's own data and our data. And these are, again, not sort of dependent on patient characteristics or you don't need to randomize to do this, you go do another 50,000 patients, and they're still going to look the same.

And then I think the piece that not only do we see that dramatic difference in durability of effect, but we've also demonstrated that the ability to suppress erythropoietin production is correlative with clinical outcome. So if you combine all those factors, the fact that you're seeing better clinical efficacy and you've shown that your suppression of erythropoietin production is deeper and longer, and you've shown the correlation of ability to suppress that production. You've got too many dots connecting to not have strong confidence in the differentiation of the molecules.

I see. Okay. And then -- so you guys -- I mean, you laid out earlier, so your vision for cas in that 1L to 3L plus setting. So basically, really dominate the entire treatment paradigm. So looking at that, I mean, what is your partnership strategy in general for cas? Because you guys have been traditionally been very friendly to partnerships. You have a lot of ongoing partnerships. So for cas itself, how are you guys thinking about that partnership strategy? Or is there one?

Yes. Let me state that and I'll see if Bob wants to add anything to that. So what's nice because this is a 2-horse race, there's only 2 molecules out there. And belzutifan, Merck is developing that. We think we have a better molecule. We think strategics that might want to combine or collaborate with us recognize that as well. And we're in a position where the collaboration strategy is do things like what you've just seen where we're combining with something that makes a whole lot of sense and both companies maintain the rights to their own molecule. And we have every intent of commercializing casdatifan and not partnering anything that relates to the commercial rights. Is there anything else you would add?

That was the -- yes, underlining the latter part for sure. I think we view whole ownership of casdatifan as providing a ton of strategic optionality. And we think that the molecule is very attractive from a clinical collaboration perspective, and that enables us in a very capital-efficient way to go places that we wouldn't be able to go by ourselves.

I'd almost take that, and that's how I think we should want people to think about looking at the entire portfolio. So with casdatifan, we own 100%. There's no reason to want to give up any of that. We think we can manage the commercialization. Even in the I&I, basically, the only program right now that -- where there's even option rights is that our TNF receptor 1 program, Gilead maintains an option to that, that we think we'll probably get to a decision on that by the latter part of this year. But X2, CCR6, STAF6, actually, CD40 ligands, CD89 antibody, those are all wholly owned Arcus programs, and that gives us another angle of strategic optionality to complement what we're doing with casdatifan.

Fantastic. We have a couple more minutes left. There's still a lot for me to go through. The -- it's just a very interesting talking with you guys. So let's go into that second-line setting, right? You guys have data coming out for that cas/cabo data. So Merck read out the LITESPARK-011 in that second-line setting as well for the belz/lenva combination and achieved a hazard ratio of 0.7 and then about 15 months PFS against cabo 11 months. You guys already showed that 15 months for that monotherapy cohort as well in that line setting. What do you think is meaningfully better compared to that 15 months for belz that would clearly show that the strategy that you guys have with that cas/cabo is a more superior approach versus lenva and belz?

Yes. We think we're going to be able to illustrate that by sharing Kaplan-Meier curve. So we're not going to put out some number that is, as you know, median PFS gets criticized for what it means because it's a single point, particularly for a program where durability is driving hazard ratio. It's also going to drive the commercial aspects of this. I think also when you think about the Merck study, it's a fairly different study in terms of the design we're both running against cabo, which we think is great because that hazard ratio will let you compare directly.

When you think about the Merck study, they had to exclude both lenva-experienced patients as well as cabo-experienced patients. We don't have that limitation because we're running cabo as the control, so we can include lenva patients as well as IO patients. So what you'll see from us that I think will give you very strong confidence is Kaplan-Meier curves will compare to all the corresponding Kaplan-Meier curves from the other combinations that you mentioned. And we -- like as I mentioned before, we may even have some initial reads on OS, which for us is sort of like, well, this field hasn't been around long enough with HIF-2 inhibition. We feel that can be the holy grail from a commercial standpoint because while OS hasn't been a required registrational endpoint, it's a huge point of differentiation. And I think it also reflects on that durability where we'll have an opportunity to maybe show advantages to their paradigm. So keep in mind, Merck has essentially had 3 opportunities now and has not shown yet an OS advantage.

Okay. Got it. So you mentioned to you're not that concerned about PFS However, the market is going to be very, very concerned about PFS. So if they should not be concerned about PFS, people like numbers. They like one number that they can easily compare things to. How would you think about it? Is that hazard ratio that you should be -- that people should be more focusing on than PFS? Like what's that one number for you?

So to me, absolutely, it is the hazard ratio. And I think from -- while you'll be able to look at those curves, you'll be able to extrapolate to how you think that looks. But I also think people can pick whatever number they want. We're not going to twist anybody's arm out of a particular number, but we feel it would be silly to sit here now and pull a number out of the air that we think represents some sort of a milestone on any of our endpoints.

Even when you look at our late-line data, what we would emphasize is the shape of our curve and we talk about it all the time, the number of patients, even stable disease patients that are out past 2 years of therapy, that's really going to drive both the utilization and then the commercial opportunity. So we recognize that people will look at the number. We think our numbers will be good, but we're not going to just -- we can get asked as much as people want. We're not going to look to throw out any single number for any single endpoint nor an ORR, you name it. We're not just going to throw a random number out, especially when we don't know the data yet.

Right. Okay. Got it. And then so for this year or as toward more ASCO timing readout, can you walk through what are the endpoints that you would show? I think you talked about the Kaplan-Meier curve, there's about 40 patients or so. What other endpoints should we see? Is it DOR? I think you mentioned potentially OS. Maybe just walk through all that.

Yes. I mean some pieces of that will be a little bit more mature than others for sure. But it's -- I think Terry said the Kaplan-Meier curve for PFS is probably the piece that we would most underscore in terms of telling us the most about the future of the program. I think we'll have various landmark numbers. So you'll look at kind of that time course of what's happening with patients over time. We do think that, especially just given the pharmacodynamic profile of casdatifan, we think the tail effect for the program -- or for that molecule could look really good. So landmark numbers will be important in addition to just a median. And then I think, as Terry also mentioned, the less mature pieces, but the pieces that we may begin to look at would be OS and then duration of response, as you mentioned.

I see. Okay. Got it. And then how do we know that this data is going to be reliable just given that there's no control for this? And then is there any reason to believe that this number could be somewhat inflated? And then once you go start that Phase III larger study, that it's different.

Yes. So it's interesting. Ironically, in this particular setting, you saw a little bit of the opposite effect with the belzutifan data. And the other piece of it is actually ex U.S. sites performed from an actual efficacy perspective with the belzutifan program, slightly better than the U.S. sites. So some of the dogma that folks have around like deterioration of data in U.S. versus ex U.S. hasn't played out in their pivotal program for belzutifan. We think we have a pretty representative footprint, U.S. ex U.S. ARC-20 is a big platform, if you will, with over 40 sites, and we think there's a good representation there. So I think we feel as good about it as you could for a study of that size.

I think the data are so robust and there are so many different studies all pointing to the same answer that, of course, your question is like it's one of those questions that could never be answered. You haven't run the 1,000-patient study, no one's run the 1,000-patient study before they've run the 1,000-patient study. But I don't think you could have a better, more comprehensive data set that goes from biological profile, PK, PD, clinical efficacy, large number of sites, large number of settings as opposed to so many times where data doesn't hold up is when someone comes in with like 20 patients' worth of data, and there's nothing to calibrate it against.

The other thing that we've shown, and we have the same questions early in the monotherapy. Everything you're asking now when we have the same questions with the monotherapy data. And what we've shown consistently, and we actually always put the slide in, and we'll do it again, the data have gotten better with time as opposed to degrading. And I think it's a hallmark of this mechanism where you have something that's -- keep in mind, 85% to 90-plus percent of patients have HIF-2 as a driver. So every time when someone would ask a question about like how do you think whether it would hold up or not, it would almost be the opposite that would be the shock because you're going after something that's fundamentally a part of this tumor setting and you're hitting it robustly. And I think if anything, the Merck data with a relatively modest good HIF-2 inhibitor have so validated the target and the idea that you would have a molecule that's hitting the target so much harder and not have it manifest itself would be more of the shock than the other one.

Fantastic. So we're well over time. Thank you so much. Thank you and very exciting stuff. I think next year, we have to -- hope you guys get 2 fireside chat.

Thanks. Thanks for giving us those extra 3 minutes. Appreciate it.

Hello, everyone. Thank you for joining us, and welcome to the Arcus Biosciences' First Quarter 2026 Business Update and Financial Results. [Operator Instructions]

I will now hand the conference over to Holli Kolkey, VP of Corporate Affairs. Holli, please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss Arcus's first quarter 2026 financial results and pipeline update.

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 time lines, 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.

This afternoon, you will hear from our CEO, Terry Rosen; Chief Medical Officer, Richard Markus; President, Juan Jaen; and CFO, Bob Goeltz.

With that, I'd like to turn the call over to Terry.

Thanks very much, Holli. And thanks, everyone, for joining us this afternoon.

We're starting a new era for Arcus with full ownership of our lead program, casdatifan, our Phase III kidney cancer study, PEAK-1, enrolling rapidly, a clear path to win in the frontline and the next generation of molecules for inflammation and immunology that can be advanced rapidly into and through development, and with that, the strategic optionality imparted by a rich portfolio of wholly owned molecules and programs. We are at an inflection in value creation for patients and shareholders that will continue to accelerate over the next 12 to 18 months.

Arcus has proven to be a highly productive company, creating and advancing a steady stream of potential best-in-class molecules for patients with cancer and inflammatory and autoimmune diseases. We believe that discovery is not a commodity, and we have built exceptional small molecule medicinal chemistry and drug discovery capabilities. Our scientists utilize proven biology to create unmatched medicines designed to raise the standard of care.

Since its inception, Arcus has advanced molecules from program initiation to IND filing in a short of 18 months and accelerated platform and signal-seeking studies to move from proof-of-concept Phase I studies to randomized Phase II and registrational Phase III trials in just a few years. Today, the company is laser-focused on casdatifan, which represents a market opportunity of more than $5 billion in kidney cancer alone.

I want to stress that casdatifan's efficacy advantages are underpinned by much better molecular properties and a superior pharmacodynamic profile. This profile reflects the key capabilities in Arcus that I described earlier. The simple fact is that casdatifan hits its target much harder and in a more sustained way than belzutifan.

As illustrated on Slide 6, this is a point we've emphasized since the data first emerged. These data are clear and they're striking. We believe this fundamental differentiation between casdatifan and belzutifan and the limitations of belzutifan's pharmacodynamic profile and durability of effect are undoubtedly contributors to, if not the principal driver of, the outcome of LITESPARK-012. And the pharmacodynamic advantages of casdatifan will continue to result in improved clinical outcomes across the lines of therapy.

I want to emphasize this point. This dramatic difference in profile has been evidenced since late last year. It is not esoteric. Its manifestations on clinical outcomes are dramatic and are at the core of our differentiation. No results to date are surprising.

Our top priorities for 2026 are clear. One, complete enrollment for PEAK-1, our second-line Phase III study; and two, initiate a Phase III study in the frontline patient population. With the recent outcome of LITESPARK-012, casdatifan has a clear path to consolidate a fragmented frontline setting as the first HIF-2 alpha inhibitor in this setting.

Let me spend a moment on why casdatifan is at the center of everything we do. We believe casdatifan can transform the treatment paradigm in clear cell renal cell carcinoma, and our development strategy is designed to generate evidence to secure cas as a backbone therapy so that every patient has the opportunity to benefit from cas across each line of therapy.

PEAK-1 represents our fast-to-market strategy. This is designed to build on the clinician enthusiasm that we've seen for cas as an experimental agent and to generate the data to support the approval of a foundational treatment for clear cell RCC as rapidly as possible.

Enrollment in PEAK-1 is accelerating, and we're on track to complete enrollment by year-end 2026. We're confident that PEAK-1 will establish cas plus cabo as the new standard of care in the IO experience setting. The peak sales opportunity for cas in this setting alone is more than $2 billion. At the same time, we are aggressively building a holistic strategy to embed cas across the treatment paradigm. We have been making tremendous progress in the frontline setting with multiple IO combinations now enrolling in ARC-20 and generating data in support of our first-line strategy. These approaches offer the greatest potential for long-term survival for patients.

One of our key objectives today is to make very clear our integrated development strategy for casdatifan. It's actually quite straightforward, and here's how we believe things will play out. In the first line, our bedrock therapy will be cas, ipi, anti-PD-1. We believe that we can drive the 35% share of ipi/nivo to a regimen with greater than 50% of the important first-line market.

While the IO regimen of ipi/nivo is the dominant therapy today, there's a segment of physicians that's always going to want to reach for TKI, particularly for patients with a fast-growing bulky tumor. Therefore, we will also be developing a cas combination inclusive of the TKI, a TKI with a well-established track record of both efficacy and safety that will allow the patient to have cas/cabo as a subsequent regimen. Our second-line treatment now enrolling its registrational trial PEAK-1 will be cas/cabo, building on the standard of care in this line, cabozantinib monotherapy.

Finally, we will have a third-line plus regimen cas with another well-established TKI, and we will be investigating this regimen in both belzutifan naive and belzutifan experienced patients. We think this is a very important, kind of cool study. We also plan to explore novel cas combinations in HCC, liver cancer.

I would like to emphasize that all of the clinical development plans discussed today are accounted for within our existing budget and have no impact on the guidance and runway that we have provided.

We now control in all respects our early-stage pipeline, including our CCR6, CD89 and CD40 ligand programs, all of which are expected to support IND candidates in the next 6 to 18 months. So as we focus our resources, capital, human and otherwise on the late-stage development of casdatifan. The follow-on programs in our pipeline are early, but also with clear, early and capital-efficient clinical proof-of-concept opportunity and huge commercial potential. Therefore, we anticipate low spend and short time lines to get the proof-of-concept that will drive disproportionate value creation. Juan will discuss these programs in more detail later on in this call.

If you want to walk away with just one thing from today, it's that Arcus has complete control of its destiny. The core asset of the company is casdatifan, and we have the strategy, data and resources to transform the treatment of clear cell RCC and create a $5 billion-plus drug. Bob will further elaborate on the enormous commercial opportunity here.

We also continue to leverage our demonstrated competitive advantage in small molecule drug discovery, an increasingly scarce capability to generate wholly owned and unique development candidates, the advancement of which further enhances our strategic optionality.

With that, I'd like to turn the call over to Richard to discuss our clinical programs.

Thanks, Terry. I'd like to start with casdatifan. As Terry described, our development plan is designed to establish casdatifan as a foundational standard of care in clear cell RCC so that all patients have the opportunity to benefit from treatment with a casdatifan-based regimen across multiple lines of therapy.

At ASCO GU this year, we presented updated ORR and PFS from our 4 late-line monotherapy cohorts of ARC-20. As you can see here, the efficacy data continued to improve with longer follow-up at each data presentation.

Moving to Slide 12, where we show the ORRs for the 100-milligram QD cohort, which is the dose and formulation being used in our Phase III studies, the confirmed ORR increased from 35% at the August data cut to 45%. A 45% ORR in this late-line patient population is rather remarkable. It's twice that observed with belzutifan in LITESPARK-005 or any study in this patient population. Similarly, the confirmed ORR for the pooled analysis improved from 31% to 35%, well above the range of ORRs that have been observed with belzutifan.

On Slide 13, we show the Kaplan-Meier curve for the 100-milligram cohort. As you can see here that the 100-milligram cohort shows an impressive median PFS of 15.1 months after 17.9 months of median follow-up. On the next slide, we show the latest Kaplan-Meier curve for the pooled analysis. The median PFS remained at 12.2 months.

So overall, we're seeing PFS that is 2 to 3 times longer with Cas monotherapy than the 5.6 months observed with belzutifan in the same setting. And as is often discussed, while the median is an important benchmark, it's not the only metric that's important.

As you can see here and perhaps more impressive is the number of patients still on treatment beyond 18 months and even beyond 24 months. These data clearly support the proposition that casdatifan is the best-in-class HIF-2 alpha inhibitor. And our highest priority now is to maximize the potential of this molecule in ccRCC.

Our first registrational trial, which is in the second-line setting, is well underway. Enrollment in the ongoing Phase III study, PEAK-1, is accelerating, and we are on track to complete enrollment by year-end. We are confident that PEAK-1 will establish cas plus cabo as a new standard of care in the IO experience setting.

With a sole primary endpoint of PFS and a 2:1 randomization favoring the experimental arm and cabo as the control arm, we believe PEAK-1 is optimized for both probability of success and speed to data.

I'd like to spend some time now on the frontline setting. With the outcome of Merck's LITESPARK-012 last month, Cas has the opportunity to be the first HIF-2 alpha inhibitor option in the frontline setting. Treatment in the frontline is generally bifurcated into IO-IO or a TKI, [ anti-PD-x ] combination. This currently leads to the conceptual trade-off between longer time to response or higher primary progression, but with the potential for durable responses and long-term survival with the IO-IO option or a faster time to response and lower primary progression but with much more treatment-associated toxicity for the TKI, [ anti-PD-x ] options.

There's currently no treatment option that has the ability to both rapidly control disease and provide the best chance for long-term survival, while also having a favorable tolerability profile for long-term use. We believe a Cas plus IO-IO combination in the frontline setting has the potential to deliver on both of these fronts.

We are enrolling several cohorts within the ARC-20 study, evaluating Cas combinations in the frontline setting. While the data are maturing, primary progressive disease rates have already been shown to be low, just 7% or 2 out of 30 patients for the Cas plus zimberelimab, our anti-PD-1 cohort.

This rate compares favorably to published rates for anti-PD-1 monotherapy or ipi/nivo in the first-line setting. And in fact, it is close to the rate of a TKI-containing regimen but without the need for the TKI. We're also enrolling a cohort evaluating Cas plus zim plus ipi. Emerging data from these cohorts of ARC-20 will inform the first-line registrational strategy with the goal of finalizing the Phase III study protocol and beginning start-up activities by the end of this year.

In parallel, we will shortly begin to evaluate additional Cas plus TKI-containing regimens in the early and late-line settings, including in patients with prior belzutifan experience. This effort contemplates the preference and in fact, the strategic necessity to utilize alternative TKIs as patients advance from one line of therapy to the next.

Near term, we expect to have multiple data readouts for casdatifan in 2026. First, mature ORR data and initial PFS data for approximately 45 patients treated in the ARC-20 Cas plus cabo cohort in the IO experience setting will be presented at an investor event or at a medical conference, and all patients will have had at least 12 months of follow-up.

Second, we will share initial data from the ARC-20 cohorts evaluating Cas in early line settings, including the cohort evaluating Cas plus zim in the first line. We also expect updated data from late-line monotherapy cohorts, including overall survival.

Before I hand it over to Juan, I'd like to quickly touch on quemliclustat, our small molecule CD73 inhibitor. CD73 is highly expressed in pancreatic cancer and high CD73 expression is associated with significantly poor prognosis in several tumor types. In spite of this, as we recently published in Nature Medicine, in our Phase II study, ARC-8, those patients with higher baseline levels of CD73 or adenosine activity were the ones with longer PFS and OS in response to quemli treatment. Pancreatic cancer is one of the most aggressive cancers with an average 5-year survival rate of just 13%.

In PRISM-1, our Phase III study evaluating quemli plus gemcitabine and nab-paclitaxel, versus gemcitabine and nab-paclitaxel in the frontline pancreatic study, completed enrollment in September of 2025. Results from this study are expected in the first half of 2027. And if positive, PRISM-1 could represent the first transformative therapy for an all-comer first-line patient population in 30 years. There's no biomarker requirement and no nonresistant mechanism and data to date have indicated that the regimen was well tolerated.

Finally, we recently announced that the Phase III STAR-121 study, evaluating our anti-TIGIT domvanalimab plus zim and chemotherapy, versus pembrolizumab plus chemotherapy as a first-line treatment for metastatic non-small cell lung cancer will be discontinued due to futility. While these are certainly not the results we expected, the study had one important positive outcome. In addition to the assessment of Dom in this trial, STAR-121 also evaluated zim plus chemo as an exploratory endpoint. Zim plus chemo performed consistently with respect to overall survival as compared to pembro plus chemo.

These data are consistent with what was observed in numerous studies with zim. And this randomized data set provides valuable support for the utility of zim as an anti-PD-1 combination partner for Arcus and its collaborators.

I'd now like to turn the call over to Juan to discuss our immunology and inflammation programs.

Thanks, Richard. Arcus has an exceptional small molecule discovery team that has demonstrated time and time again the ability to create highly effective drug candidates against difficult targets. We have been utilizing this expertise to create and develop drugs that have the potential to address very large markets in inflammation, allergy and autoimmune diseases.

In-house expertise in immunology has been a core aspect of our discovery group since Arcus's founding, having been key to many of our oncology programs.

Our team is addressing well-understood and validated mechanisms, and has implemented a two-pronged strategy in immunology. First, we leverage our medicinal chemistry capabilities to design and create small molecule drugs that regulate key cytokines therapeutically validated by existing biologics. Secondly, we target immune cell types that play key roles in human disease and have been historically under studied such as mast cells and neutrophils.

Our first molecule in the immunology area to enter the clinic will be AB102, a highly selective, orally bioavailable MRGPRX2 antagonist. In the coming weeks, we will be sharing its preclinical profile in an oral presentation at the Society for Investigative Dermatology. The presentation will highlight the ability of AB102 to fully block MRGPRX2-dependent activation and degranulation of mast cells. AB102 inhibits all common human MRGPRX2 variants.

We have optimized the potency of AB102 under physiological conditions, such as in human blood and serum. Due to its potency under these conditions, we believe that AB102 is a potential best-in-class once-daily oral treatment for chronic spontaneous urticaria and other atopic conditions such as atopic dermatitis and allergic asthma. It is expected to enter the clinic in the third quarter of 2026 with PK data available shortly thereafter and potential for proof-of-concept data in early 2027.

In rapid succession, we have selected an oral, small-molecule TNF inhibitor drug candidate, which is a potential treatment for rheumatoid arthritis, psoriasis and inflammatory bowel disease and an orally active small-molecule CCR6 antagonist candidate as a potential treatment for psoriasis. Both of these molecules are expected to enter the clinic in 2027.

We are very excited about the potential for our I&I programs to provide improved options for patients, and we are working to advance these into the clinic as rapidly as possible.

I'd now like to turn the call over to Bob to discuss the market opportunity for casdatifan and our financial results.

Thanks, Juan. Before I get into the quarterly financials, I'd like to spend some time on the multibillion-dollar market opportunity in RCC for casdatifan. Sales for RCC drugs in just the major markets are anticipated to grow to $13 billion by 2030. Historically, the market has been dominated by 2 classes of therapy, IO and TKIs. There have been a number of offerings in both classes, which is why the market is fragmented.

In contrast, there are only 2 HIF-2 alpha inhibitors on the horizon, and we believe our data have demonstrated clear advantages over our only competitor. We have a clear path to consolidate the market and entrench casdatifan as the primary backbone therapy. The development plan that Terry and Richard described is designed to accomplish this objective.

If we look at the sales for the sole marketed HIF-2 alpha inhibitor, belzutifan, which is currently approved only in late-line clear cell RCC, is already generating annual run rate sales of nearly $1 billion, only scratching the surface. With casdatifan, we are also targeting earlier line settings, the IO experienced population with PEAK-1 and the IO naive first-line population with our next pivotal study. These earlier line settings have larger patient populations and longer durations of therapy, both of which contribute to a much larger market opportunity.

Specifically, our PEAK-1 study targets approximately 20,000 patients in the major markets in the IO experience setting. We believe our commercial opportunity here exceeds $2 billion.

In the first line, the opportunity is even greater. With the lack of HIF-2 alpha inhibitor competition in the front line, our goal is to grow the IO-IO share from roughly 1/3 of the market to more than 1/2 by adding Cas. In fact, our market research indicates that oncologists overwhelmingly prefer the promise of a Cas plus IO-IO over a TKI-containing regimen.

As Richard mentioned, we also plan to investigate a regimen with IO and TKI in the frontline to address the remainder of the market. We believe the opportunity for casdatifan in the frontline exceeds $4 billion.

One point I'd really like to emphasize as we think about the commercial opportunity is duration of treatment. We've seen impressive data in late-line monotherapy with many patients on therapy beyond 18 months. We plan to share updated data later this year.

As we think about earlier lines of therapy, we believe there is the potential for meaningful upside resulting from the durability of effect. Conceptually, we think strong HIF-2 alpha inhibition holds the promise of a long-term tail effect. All in, we think Cas has a peak sales opportunity of $5 billion to $10 billion. As a reminder, we own all of the commercial rights to Cas other than in Japan and certain other Southeast Asian countries held by our partner, Taiho.

Now let's turn to the financials. Arcus is well positioned to advance its full pipeline with $876 million in cash at the end of the quarter. We have cash runway until at least the second half of 2028. We expect to end 2026 with approximately $600 million in cash, indicative of the declining spend we expect over the year. As Terry outlined, Arcus is entering a new era with more control over our pipeline investments.

While we are building a plan to take full advantage of the casdatifan opportunity, we are also sequencing these investments such that any significant growth in overall spend will be largely incurred after the PEAK-1 readout. As a result of the wind down of Dom and reduced spend on quemli, together with broader spend management, we expect to significantly reduce our overall R&D spend in 2026 and 2027 compared to 2025. For example, as our late-stage efforts have become focused on casdatifan, we have decreased our headcount by approximately 10%.

Let me transition to the financials for the quarter. For our P&L, we recognized GAAP revenue for the first quarter of $17 million. Our revenue continues to be primarily driven by our collaboration agreements. We continue to expect to recognize GAAP revenue of $50 million to $65 million for the full year 2026.

Our R&D expenses for the first quarter are stated net of reimbursements and were $122 million and included non-recurring workforce costs. Our actions to reduce headcount have lowered our ongoing cost structure, which we expect will result in reduced R&D expense in future periods. The discontinuation of STAR-121 and the broader reduction in our Dom-related investment will contribute to a meaningful decrease in R&D expenses as the year goes on. By 2027, we expect more than 80% of our portfolio spend will be directed towards cash development.

G&A expenses were $29 million for the first quarter. Total noncash stock-based compensation was $19 million for the first quarter.

For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10-Q.

I will now turn it back to Terry.

Thanks, Bob. That was awesome.

Let me close by summarizing the key themes for the remainder of 2026. Casdatifan is our #1 priority, and this year will be another transformative year for data and importantly, development as we advance towards commercialization. We expect multiple data sets, Cas plus Cabo data, initial first-line data and overall survival data from late-line monotherapy cohorts, all of which will further reinforce casdatifan's best-in-class profile and support our registrational strategy.

PEAK-1 enrollment continues to accelerate, and we're targeting full enrollment by year-end. All of the clinical development plans for casdatifan that were discussed today are accounted for within our existing budgets and have no impact on our guidance or runway. Beyond casdatifan, our PRISM-1 Phase III trial for quemli pancreatic cancer is fully enrolled and on track for a readout in the first half of 2027. Juan shared the exciting progress on our I&I portfolio with AB102 expected to enter the clinic in the third quarter and our TNF inhibitor CCR6 antagonist following shortly thereafter.

With $876 million in cash and investments and runway into the second half of 2028, we're well positioned to execute on all of these priorities and create significant value for patients and shareholders. We're moving into a new era for Arcus with full ownership of our lead program casdatifan and a clear strategy to win and transform the frontline setting while rapidly advancing the next generation of wholly owned molecules for inflammation and immunology. We have no doubt that we will be generating disproportionate value for patients and shareholders over the coming 12 to 18 months.

Thank you all for joining us. We appreciate your interest and continued support of Arcus, and we will now open the call for questions.

[Operator Instructions] Your first question comes from the line of Daina Graybosch with Leerink Partners.

Tell us about the Cas-TKI frontline combo. Specifically, we all know Merck failed with that triplet mechanistically with bel, lenva, pembro, and that's the LITESPARK-012. We have the press release. We don't know the detailed data. What could you see in that detailed data that would give you more confidence in Cas-TKI IO? And what could you see in the Merck data that would give you less confidence in the TKI combo strategy?

I think we'll see what their data say, but I think the data that are out there tell us a lot already. So if you consider what we discussed at the beginning, that pharmacodynamic difference between casdatifan and belzutifan, not only the depth of response, but particularly the durability. And you think of that as a surrogate for its antitumor activity and a direct measure of its ability to inhibit HIF-2.

I think what you can reconcile very easily is even in the absence of the data from the study itself, if you think about LITESPARK-011 versus LITESPARK-012, the duration of the treatment that you're talking about when you think about PFS roughly for the 2 different studies, is almost 2x. So if you recognize that belzutifan is whatever that surrogate for HIF-2 inhibition, directly relates to inhibition of the tumor, it's clearly losing that effect with time dramatically. So you see at least on erythropoietin production, on the average, you've lost that effect within 9 to 13 weeks.

So when you think about it in the second-line population, the percentage of times what's bringing benefit is x. And then in the front line, it's much less. Then on top of that, if you think about the regimen, it's pretty toxic regimen. So even pembro-lenva had about a 37% rate of discontinuation. We know that the triplet was pretty unfavorable from a patient perspective. So if you think about basically, you're having diminishing effect of the HIF-2 inhibitor on top of a much longer duration of an arm that has more AEs than the control arm. So you're basically getting -- paying a price, but getting less benefit. So it's not surprising that you would end up with a hazard ratio that might not be too favorable.

For us, we're going to select a TKI that we think has a very favorable -- relative to the TKIs out there, profile. But the most important feature will be that we have a HIF-2 inhibitor that has its robust effect and the durability of that effect is essentially the same on day 1 as it is on day 730.

Your next question comes from the line of Jonathan Miller with Evercore.

Congrats on all the progress.

I guess looking at a very broad Cas development plan here with a lot of combinations in -- across first-, second-, third-line settings. One thing that's notably absent is any approach in the adjuvant setting, which obviously we know Merck is going after. So I'd love to hear your updated thoughts on adjuvant and why that's missing from the current development plan?

And then related to that, I guess, or the flip side of that is relatively recently, recently as well as relatively, you were talking about a more conservative approach to late-stage development for Cas, at least with respect to the number of Phase III trials you would want to start, you were considering going after partnerships to ameliorate the cost of late-stage development. Obviously, there's been a bit of a shift there. But Terry and Bob, I heard you say we don't expect to see any impact on runway or the ability to prosecute all these different programs.

So I'd love to get a little bit more granularity on the sequencing that you're talking about and when you would start these TKI containing and potential novel combo development efforts to enable you to pursue all of these different approaches without running up against the bandwidth limitations?

Thanks, Jon. And I'll let Bob handle that, and then I may have a few comments to add.

Yes, in terms of adjuvant setting, I think for us, it comes down to 2 simple things. One is the size of the opportunity and probably more importantly, is the need. So when you think about that particular setting, we think that it's around 12,000 patients or so that get therapy in the adjuvant setting, it's only the high-risk patients with resection and their treatment is capped in 1 year.

And so when you actually do the math on that, we actually think that the opportunity, certainly from a revenue perspective, is probably certainly smaller than the second line and probably even smaller than what could be a third-line regimen with an alternate TKI as we described.

I think the other important part is we've had a chance to talk to physicians after seeing the LITESPARK-012 data. The bar to add another therapy on top of pembro is considered quite high. In fact, most physicians told us that they actually wouldn't add belzutifan to the regimen even in light of the LITESPARK-012 data.

So we actually think it will be a minority of patients that ultimately will receive belzutifan in that setting. So it's prioritization. And frankly, the other settings in first, second and third line are higher on the list for us. And so that's sort of why we've made the decision that we have from an adjuvant perspective.

In terms of the sequencing of the spend, as we highlighted, we have PEAK-1 up and enrolling right now. Our goal is to have the study enrolled by the end of the year. The work towards launching these additional Phase III studies would have us in a position to sort of move those studies forward as early as late this year into next year with obviously probably our highest priority being that frontline combination with ipi and anti-PD-1. But the other studies will be shortly on the heels.

But if you think about just sort of the general investment profile for the studies, we'll be through the bolus of study start-up for PEAK-1 and the cost profile for PEAK-1 will be starting to decrease as we get into the second half of next year. So we kind of feel like that it's going to be a nice portfolio effect that when we think about these other studies, kicking in really from a spend perspective in late '27 and into '28, we sort of see a generally steady spend profile through the PEAK-1 readout like we described.

Jon, and I'll -- Bob kind of gave you the line of the spend along with the studies, and I'll give you a little bit more granularity on how we literally see the trials themselves playing out.

So the first study, obviously, PEAK-1 that's enrolling, as Bob said, it will be fully enrolled by the end of this year, and then we'll be waiting for readout. We're going full speed ahead and expect that ipi, anti-PD-1 Cas, as we've been talking about for some time, to be getting up and going by the end of this year.

We'll see where the TKI inclusive regimen comes in. There's -- Without getting into all the detail now, we'll be sorting through whether there's -- that's actually 2 studies -- 2 registrational studies or a 3-arm study is also a possibility.

And then finally, in the later line study that we talk about, we'll start off in ARC-20. And as you know, those are relatively small cohorts that enroll very efficiently. But the other point that I think will be very important within those studies, and we'll get the answers quickly is that we'll be looking at that combination in the third-line plus in belzutifan-naive patients as well. And I think that will establish. It's a cool study, and I think, it's going to establish something [indiscernible]

[indiscernible]

Yes, I'm sorry, bel's experience in addition to bel's naive. Thank you, Juan.

And I think that will nail something that we think we know the answer to, but we'll have those data even this year.

Our next question comes from the line of Li Watsek with Cantor.

Hey guys congrats on the progress. I guess just one question on the ARC-20 update, especially from the triplet cohort. It sounds like you guys are enrolling the combination with zim plus ipi. Can you clarify if we're going to see the initial data from this cohort this year? And what data points would you want to see to enable a Phase III frontline trial?

Thanks, Li. So we do think what you'll get to see, and it will be probably in the fall, are the initial data from ipi anti-PD-1 Cas regimen. And essentially, we'll get a sense of the safety data and the rate of primary progression. While there may be some early ORR data, we don't consider that critical. We're most focused on the safety. We'll have an agreement with the FDA as to what safety data package they would want to see to enable us to get that Phase III up and going by the end of this year. And then obviously, because that's the first point, but it's also an important point for that regimen is we'll see the rate of primary progression.

I think one thing to recognize about that regimen when we think about triplets, doublets, et cetera, is also just I'd like to make the point is, as you know, we've already talked about the rate of primary progression with casdatifan plus anti-PD-1 alone and those initial data are quite favorable where we only saw a 7% rate of primary progression.

Now if you think about what that Cas, anti-PD-1 ipi regimen is going to look like, you basically get 4 cycles of ipi at the outset, of course, with Cas and anti-PD-1. But then the duration and the bulk of your therapy is going to be anti-PD-1 plus Cas. So both the efficacy that you're seeing with that as well as the safety of that will certainly impact the bulk of the therapy.

So we're excited about that regimen. We think we're well on track to be able to start the Phase III by the end of this year and have a good safety data package. And we do plan to share that with the external world as well this year.

Our next question comes from the line of Richard Law with Goldman Sachs.

Yes, very helpful to see Cas's development laid out in its life for all the different lines of therapy. A couple of questions from me. So looking at the LITESPARK-012 failures in both triplets and dual Cas discontinuation by [ AZ ] and then all the frontline therapies of doublets or monotherapy so far, what is your confidence that a Cas triplet of any kind either with IO-IO or IO-TKI could be safe enough to succeed in 1L? And I mean, what do you think is the safety bar for 1L? Do you think that those triplets have to show like comparable safety profile to like that IO-IO, IL-TKI doublet for them to work?

So I think we feel very confident based upon what we already know about our molecules with triplets, whether it's a triplet inclusive of a TKI or a triplet with the ipi anti-PD-1. So keep in mind, while we haven't analyzed in detail, and we will later this year, the zim, so that anti-PD-1 Cas, we know that doublet, and we certainly haven't seen anything untoward with that. We know we can combine with cabo well.

So what we believe is that the ipi/nivo regimen has been extraordinarily well worked out in terms of dosing of that particular regimen. And as I was mentioning in my response to Li, you're basically going to treat with 4 cycles of ipi, that's quite worked out. So we believe that we have orthogonal AEs. We haven't seen anything in terms of a clear combination issues.

When you think about casdatifan, you're basically bringing those on-target anemia and of course, rarely or certainly more rarely hypoxia. Again, we're going to pick a good TKI. We know that Cas anti-PD-1 is looking good. So we think a reasonable TKI will not bring anything untoward there.

Keep in mind, we haven't actually seen the Merck data. And I think the thing that you should take away until otherwise is their hazard ratio must have been not good. So that doesn't get to an intrinsic inability to have a triplet. It just says when you're bringing that TKI, when you're bringing belzutifan on top of a pretty rough doublet, and you're treating for a long period of time and you are undoubtedly introducing some new AEs, but you're not having a robust long-term efficacy effect, you're probably not creating a hazard ratio, but we really don't know exactly how that played out.

But all the data with our own molecule suggests that casdatifan is a very well-tolerated and robust HIF-2 inhibitor and with an orthogonal AE profile from anything that we plan to combine with. And we'll have all those data within the next 6 months or so.

Got it. And then a follow-up on that. Have you seen the efficacy and the safety results from that dual Cas before Astra discontinued it? And will that data be shared to you guys even if Astra does not plan to share that?

So we haven't seen anything other than what we said at the outset. Since they did disclose, you can now know that there were 9 patients. We -- What we described was that initial safety signal that was very CTLA-4 and more specifically volru-like when they dosed down volru. But casdatifan at the same 100 milligram dose we didn't see any more of it. And those patients still continue on. And in fact, the interesting thing out of that is, as we've commented before, we didn't see any progression.

So that, if anything, we don't even know, quite honestly, that given that it was 9 patients, it's not obvious whether that was even purely volru or not. But what is obvious to us, at least as we were thinking about going forward, is that given that ipi/nivo well worked out regimen, well worked out dose, it's time tested. And of course, probably most importantly that you're only going to be carrying your anti-CTLA-4 dosing for 4 cycles made it a clear regimen for us to want to proceed with all the 4 things considered, not wanting to have both of those activities for the duration of the therapy.

Our next question comes from the line of Salim Syed with Mizuho.

This is Mike Linden on for Salim.

Just one from us on casdatifan in frontline again. Maybe just how you guys are thinking about patient selection for an ipi/nivo plus Cas combination for a Phase III? Like would these be all-comers versus poor intermediate favorable risk patients, things like that? And I guess, how is the thinking around patient selection changed post LITESPARK-012 failure?

Yes. So our patient selection strategy hasn't changed. And in fact, we're thinking of all comers. And we would also be thinking of all comers in so far as a TKI inclusive regimen. So what we're really trying to address there is there's clearly -- we've had at Board meetings, there's clearly a strong preference for a TKI sparing regimen. So that's unequivocal, and that's the way we described it as the bedrock of the front line.

With that said, it's a little bit one of those things where there's almost a tribalism is the way the investigators in the field would describe it, where there are certain investigators that are very prone, particularly if there is a bulky fast-growing tumor, but even otherwise do want to reach for TKI. So we feel from that overlap of particular patient with particular investigator, there should be a HIF-2 inhibitor containing regimen. And we think we can offer a very good one. So we look at both of those to be in all-comer patient populations.

I think, again, the LITESPARK-012 data for us until we see something otherwise, we simply think it has to do -- and certainly, this has to be a contributing factor to that durability of effect, and let's just call it on HIF-2 inhibition with time that we know that's a dramatic difference between our 2 molecules.

And of course, when we look at the choices of what to combine with, keep in mind, we have no commercial predisposition there. I -- Essentially, the world is our oyster. If you look at the front line, there's a number of TKIs used. There's not one that's particularly dominant. Overall, you have probably 60% of the patients are getting a TKI, but they're spread somewhat evenly. So we've gone and looked and been very strategic about it and looked at what's the smartest TKI from a safety standpoint, it's well used, it's well tested, approved, understood that we should combine within the front line. We know that we're going to have cabo in the second line. And then we've done the same in thinking about that late-line patient population with what then becomes another TKI that you would use in the late line.

And like I said, the other important thing there is that we are going to look at that combination of Cas with that TKI in belzutifan experienced patients and establish that unequivocally. You get the activity that you want to see in that HIF-2 experienced patient.

Our next question comes from the line of Jason Zemansky with Bank of America.

This is Jackie on for Jason Zemansky. Congrats on the progress.

Just a quick one for you. So what do you think is necessary to drive broad uptake of a TKI-free regimen in the first-line RCC, given how popular TKIs are overall, especially given their ability to rapidly debulk tumors? Or is the goal to compete directly with dual IO therapies?

So I think -- so what's interesting is we think there is a strong receptivity towards this. Now one of the most important things that we've seen to date is that casdatifan as a monotherapy, even in the late line, performs -- is good or better than TKI in any line of setting. So if you go -- we have in our deck somewhere, you can actually look that even in the late line casdatifan monotherapy, whether you're looking at ORR or PFS, looks quite good.

And the thing that's standing out, and I think this is the issue that was identified with belzutifan at the outset was that rate of primary progression. So I think that's raised the question for HIF-2 inhibition, can you compete with TKI at bringing that tumor under control quick enough that you don't have that high rate of primary progression.

So we believe that belzutifan was forced in the front line to combine with the TKI to address a potential high rate of primary progression, but we actually think that despite the fact that HIF-2 inhibition is well tolerated, it can get the tumor under control quite fast. And the place where we've already seen our evidence of that is in combining with anti-PD-1, where in 30 patients, we only saw 2 progressors, 2 primary progressors. So 7%, very much in line with the TKI.

So we think there's a receptivity to the TKI-sparing regimen, and we think that the key thing to driving that uptake will be to show that our rate of primary progression and then everything that flows from, that looks like a TKI.

The last point I would make is it's almost like there -- the mentality would be like because TKIs are a rougher treatment, it's sort of like when you think about chemotherapy that there's a linkage that sort of in people's minds, they associate rougher, but bringing the tumor more under control.

Keep in mind that 85% to 90-plus percent of clear cell RCC has HIF-2 as a key driver. So you're hitting the tumor with something that really matters. And we think that's why with a robust HIF-2 inhibitor like casdatifan, you actually can compete with the efficacy effects of a TKI.

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

Our next question comes from the line of Emily Bodnar with H.C. Wright.

Based on the LITESPARK-011 data, how are you kind of looking at your upcoming Cas plus cabo updated data? And what are you kind of hoping to see to feel confident that you might have a superior profile versus what we saw in the LITESPARK-011 trial?

Yes. So we already feel that confidence, and we're obviously running the Phase III trial. I think you kind of have to think of things holistically. In the end, what you're going to have is a hazard ratio. And what's nice is that since we are both running versus cabo, those will be directly comparable. While our data when we share later this year, we will still be early, we're going to give Kaplan-Meier curve. We'll have landmark PFS, we'll have ORR. And people will be able to extrapolate to whatever extent how they want to look at those data, but we'll give a very holistic view.

I think the other thing that we don't want lost on people because we think it's an interesting other aspect of the data that really will only be emerging. And we'll see how things play out by the time we have some mature data later this year. So while from a regulatory standpoint, the PFS is what matters, we're going to have data now our -- from our monotherapy cohorts that are getting mature enough that we'll start to get a sense of whether we do bring an OS advantage there, albeit in the late line.

And the reason we feel that's important is it just -- depending on how that looks for casdatifan, it will potentially give a good sense that this mechanism can not only drive enhancements in PFS, but bring enhancements to OS. And while that may not be a requirement from a regulatory standpoint, we certainly could see it as an important differentiation that would drive more uptake by clinician, in fact, we start to show that there can be OS enhancement from HIF-2 inhibition, which we believe there's no reason there shouldn't be.

Our last question comes from the line of Yigal Nochomovitz with Citigroup.

This is Joohwan Kim on for Yigal. Congrats on the progress. Maybe just to mix in a noncash question. Regarding AB102, while it's still early, is there any color you can provide on the intended proof-of-concept study design, whether you're planning on going into CSD versus AD first? Any color on primary endpoints or level of clinical signal you need to see to give confidence to advance into a future registrational program?

So Juan, why don't you describe how we see ourselves going from A to B to C in the near term?

Yes. So at a very high level, we have recognized that while we think we may have a better molecular profile, we have a little bit of ground that we need to make up relative to the couple of existing clinical players. So what we've devised is a fairly accelerated plan for establishing PK tolerability in healthy volunteers, followed by a fairly quick, rapid mechanistic confirmation of biological activity and very quickly progressing into a Phase II study in CSU. So we think we will in reasonable speed, catch up and hopefully begin to illustrate the better profile of our drug.

In parallel with that, we're thinking about where it might make sense concurrently with that CSU type of Phase II study to demonstrate the value of an MRGPRX2 inhibitor. Right now, our lead candidate for that additional indication seems to be allergic asthma, but that's still at a very early stage of conceptual framing.

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

Thanks, everybody.

Goodbye.

Hello, everyone, and thank you for joining the Arcus Biosciences Full Year and Fourth Quarter 2025 Earnings and Financial Results Call. My name is Claire and I'll be coordinating your call today. [Operator Instructions]

I will now hand over to Holli Kolkey from Arcus Biosciences to begin. Please go ahead.

Good afternoon and thank you for joining us on today's conference call to discuss Arcus' fourth quarter and full year 2025 financial results and pipeline updates. I will be filling in for Pia Eaves, our Head of IR, who is out on maternity leave.

I would like to remind you that on this call, management will make forward-looking statements, including statements about our cash runway, our projected 2026 revenue and our expected clinical development milestones and timelines. All statements other than historical facts reflect the current beliefs and expectations of management and involve risks and uncertainties that may cause our actual results to differ from those expressed. Those risks and uncertainties are described in our most recent annual report on Form 10-K 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. This afternoon, you'll hear from several members of our management team.

So now I'll turn the call over to our CEO, Terry Rosen, to begin.

Thanks very much, Holli, and thank you, everyone, for joining us this afternoon.

2026 is going to be a transformative year for Arcus. As you know, we are -- we've been focused on establishing casdatifan as the unequivocal best-in-class HIF-2 alpha inhibitor and the new standard of care for clear cell renal cell carcinoma. And this year is going to be another substantial year for data presentations as well as the advancement and expansion of our Phase III clinical program for CAS.

I want to emphasize, particularly those who are new to Arcus or casdatifan that the advantages of casdatifan are well understood. That's all connect from the earliest days of its design and development, the advantages derived from dramatic differentiation of casdatifan's PK/PD profile. These are evident in the highly quantitative and reproducible differentiation on the primary biomarker for HIF-2 alpha inhibition, EPO production and the manifestation is improvement on all key efficacy measures. Casdatifan hits the target harder, hits it earlier.

Just this week, we shared updated data from our ARC-20 cohorts evaluating casdatifan monotherapy in late-line clear cell RCC. We're also thrilled that Dr. Toni Choueiri will be presenting these data this weekend at ASCO GU. We're going to discuss these data in more detail today, but suffice it to say, the bottom line is that single-agent CAS continues to achieve unprecedented ORR and PFS in late-line clear cell RCC. It's not only relative to data for belzutifan, the only currently marketed HIF-2 alpha inhibitor, but also relative to data for standard of care TKIs.

This can be seen very clearly on Slide 7 of our corporate deck. Importantly, casdatifan achieves these outcomes without the debilitating toxicities associated with TKIs. In addition to the clinical data, the ASCO GU presentation will include biomarker data that further reinforce the confidence in the differentiation of casdatifan versus belzutifan.

Also at ASCO GU, we're going to see the detailed results from the Phase III LITESPARK-0011 (sic) [ LITESPARK-011 ] study. This evaluated belzutifan plus lenvatinib versus cabozantinib in IO-experienced clear cell RCC. These data should be both validating and highly derisking for our ongoing Phase III PEAK-1 study, which is evaluating cas plus cabo in a similar setting and with the same control arm.

With both our own data and the belzutifan data being presented, this ASCO GU will be an extremely important event for the HIF-2 alpha inhibitor class, firmly establishing it as a key standard of care in the treatment of RCC. We believe HIF-2 alpha inhibitors will have a place in every line of treatment for RCC, and CAS is extremely well positioned to be the HIF-2 alpha inhibitor of choice across all settings.

In fact, as we will describe later, we believe the profile of CAS will enable a unique frontline regimen that will transform the patient journey in the setting and could translate into multibillion-dollar commercial opportunity.

Our first Phase III study for CAS PEAK-1 is enrolling and is designed to get CAS approved and to patients as quickly as possible. This represents our fast-to-market strategy. There is already a high level of excitement driving enrollment in PEAK-1 and the strength of our new ARC-20 data, coupled with the further validation of the HIF-2 alpha inhibition in early line settings by LITESPARK data, will amplify the enthusiasm for the study. So by combining our best-in-class HIF-2 alpha inhibitor with the most widely used TKI cabozantinib, we believe we'll capture substantial share of the IO experience setting.

Now I'd like to spend a few minutes on our frontline strategy because this is going to be a huge focus for us throughout 2026. Our frontline strategy is enabled by the consistently low rate of primary progression that's been observed with casdatifan across settings. This is shown very clearly on Slide 20 of our corporate presentation.

Primary progression reflects the proportion of patients whose disease progresses at or before the first scan. It's important for this rate to be as low as possible, particularly in early line treatments because patients with primary progression do not get an opportunity to benefit from therapy. This is devastating for both patients and their doctors.

In contrast to the low rates for CAS, belzutifan is associated with a very high rate of primary progression, 35% is monotherapy in its Phase III trial. The manifestation of this key differentiation is that in frontline RCC, belzutifan will likely always require combination with a TKI to keep primary progression low. In fact, Merck's Phase III study in the frontline setting is evaluating exactly that. Lenva, belz, pembro -- that's a pretty nonpatient-friendly regimen in the context of quality of life.

A TKI-free regimen, on the other hand, is much more desirable for both patients and clinicians. The most common feedback that we received from investigators is that given casdatifan's profile, the use of a TKI can likely be put off for years. This offers a far better option for patients that would greatly improve their quality of life. Therefore, our frontline strategy is to develop casdatifan without a TKI and specifically with a backbone of casdatifan plus anti-PD-1, which we can build upon with a third non-TKI mechanism.

We plan to execute on this strategy quickly and efficiently using our ARC-20 study. It's probably a good time to explain how we have and will continue to leverage ARC-20 to drive our development strategy for CAS. First, with 4 monotherapy cohorts and 121 patients of efficacy data in late-line clear cell RCC, ARC-20 enabled us to clearly demonstrate that CAS has the best-in-class HIF-2 alpha inhibitor profile.

Second, with these 4 monotherapy cohorts, which were designed to satisfy Project Optimus, we've established that 100 milligrams once a day is the optimal going-forward dose of casdatifan. Finally, the design allows us to rapidly and efficiently add and enroll cohorts to evaluate CAS and CAS-based combinations in other settings. We now have around 30 sites across 4 countries active in the study, and this drives efficiency.

We first utilized this with the cas plus cabo cohort where we quickly generated data to support our first Phase III study, PEAK-1. We then added 3 new cohorts, approximately 90 patients in total, to demonstrate the feasibility of using CAS without a TKI in early line settings.

One of these cohorts is the cas plus zim cohort, which is fully enrolled and for which we've already shared a primary progression rate of 9% for the first 23 of 30 patients. With the low rate of primary progression across all settings, we and our investigator advisers are convinced that the ideal frontline therapy is a TKI-sparing casdatifan regimen.

And we just started enrolling a new cohort to evaluate CAS plus anti-PD-1 and anti-CTLA-4 to support the rapid initiation and execution of our first Phase III study in the frontline setting.

Finally, while RCC is our top priority, we've generated exciting preclinical data for CAS and HCC, and are evaluating opportunities to pursue HCC in a cost and resource-efficient manner.

We spent a lot of time already on casdatifan, but I want to transition now to our immunology portfolio, where there's been a lot of and growing interest. We've leveraged the same small molecule capability that created casdatifan to build an emerging portfolio of inflammation and immunology programs. Two of these are expected to enter the clinic over the next 12 months. We are focused on addressing validated targets against which it has historically been difficult to create small molecule drugs that have optimal pharmaceutical properties.

For this reason, we expect limited competition for our I&I programs, similar to what we're seeing with casdatifan. Our 3 most advanced molecules are an MRGPRX2 antagonist, a TNF inhibitor, and CCR6 antagonist. Later on this call, Juan will speak in more detail about the potential differentiation of our compound relative to others.

But before we go there, I'd like to turn the call over to Richard to review the new and updated casdatifan data that we'll be presenting at ASCO GU this coming weekend.

Thank you, Terry.

I'd like to start on Slide 9 of our corporate deck, just to remind everyone about the design of our ARC-20 study. Today's data include updated ORR and PFS based on a data cutoff date of January 30 from the 4 late-line monotherapy cohorts highlighted on this slide. This is now the fourth time we are presenting data for single-agent casdatifan in a setting. And as you'll see on the next few slides, the efficacy data continued to improve with longer follow-up.

Now moving to Slide 10, where we show the latest ORRs for the 100-milligram QD cohort, which is our going-forward dose and formulation. The confirmed ORR increased from 35% at the August data cut now to 45%. The 45% ORR in this late-line patient population is remarkable and that it's twice that observed with belzutifan in LITESPARK-5 (sic) [ LITESPARK-005 ]. Similarly, the confirmed ORR for the pooled analysis improved from 31% to 35%, well above the range of ORRs that have been observed for belzutifan.

On Slide 12, we show the latest Kaplan-Meier curve for the 100-milligram cohort. And you can see here that this 100-milligram cohort shows an impressive median PFS of 15.1 months after 17.8 months of median follow-up. There are some patients still on treatment who are censored before the median, but even in a highly unlikely scenario where all censored patients progress at the next scan, the median PFS for this cohort would still be 14.4 months.

Let's move on to the next slide, Slide 13, and we show the latest Kaplan-Meier curve for the pooled analysis. The median PFS remained at 12.2 months. And as you can see here, there are quite a lot of patients still on treatment beyond 12 months and even beyond 24 months. So overall, we are seeing PFS that is 2 to 3x longer with CAS monotherapy than the 5.6 months observed for belzutifan in the same setting. These data clearly support the proposition that casdatifan is the best-in-class HIF-2 alpha inhibitor, and our highest priority now is to maximize the potential of this molecule in clear cell renal cell carcinoma.

So I'd now like to spend some time on our development plans, starting with our first Phase III study, PEAK-1, which is evaluating cas plus cabo versus cabo in immune therapy experienced ccRCC. The trial design is shown on Slide 19 of our corporate deck.

PEAK-1 is actively enrolling, and we are confident that the study will complete enrollment quickly. Additionally, PEAK-1 has a sole primary endpoint of PFS, which should enable a relatively short time to read out. So this is a fast-to-market strategy that builds on top of standard of care. And based on all the data to date, we have high confidence that this study will establish cas plus cabo as the new standard of care in IO-experienced clear cell RCC.

Meanwhile, as Terry talked about earlier, our first-line strategy has the potential to transform the treatment paradigm for RCC. We're focused on the development of a TKI-free regimen that improves on the efficacy of IO-only therapy, and there are several opportunities for CAS to do this.

First, the biggest limitation of anti-PD-1 plus anti-CTLA-4 therapy is that it has a relatively high rate of primary progression that is of 20% to 25%. With CAS's low rate of primary progression and its orthogonal mechanism, we believe we can meaningfully improve upon this high rate of primary PD seen with the IO-only therapy. In fact, we have shown that patients who progress quickly on IO-based therapies have tumor markers that correlate with responsivity to CAS.

Additionally, median PFS for IO-only regimens in clear cell RCC is relatively short at about 12 months. So again, we believe we can meaningfully improve on this PFS. To determine the optimal go-forward TKI-free regimen, we are evaluating multiple CAS combinations in ARC-20. These include our fully enrolled cohort evaluating cas plus zim, which we believe will convincingly demonstrate the ability of CAS plus an anti-PD-1 to form the backbone of our first-line regimen based on both safety and efficacy. We plan to share data from this cohort in the second half of this year.

Additionally, we just started a cohort to evaluate CAS in combination with anti-PD-1 and anti-CTLA-4. In addition to this cohort, we also plan to evaluate another TKI-free combination for CAS in the frontline setting, and we'll share more about this in coming months.

Lastly, we continue to monitor data from the EVOLVE study, evaluating CAS plus forimtamig, an anti-PD-1 CTLA-4 bispecific that's in collaboration with AstraZeneca. The safety and early efficacy data from all of these cohorts will inform the design of our first Phase III study for CAS in the frontline setting. We have already started planning activities to enable us to initiate a Phase III study as soon as we have the relevant safety and efficacy data in hand. And our goal is to initiate a Phase III study at the end of this year.

With that, I'd like to turn the call over to Jen to speak in more detail about the potential market opportunity for casdatifan.

Thanks, Richard.

I'd like to start on Slide 22. RCC represents a massive multibillion-dollar market opportunity for casdatifan. Sales for RCC drugs in just some major markets are over $10 billion annually today and anticipated to grow to $13 billion by 2030. As you can see here, historically the market has been dominated by only 2 classes of therapies, IO and TKIs, and HIF-2 alpha inhibition is the only new class of drugs on the horizon today.

Importantly, as of today, the HIF-2 alpha inhibitor field is only a 2-horse race with just belzutifan and us with casdatifan. While Merck is slightly ahead of us, historical data has shown that in just a 2-player market in oncology, second entrants have captured 42% when there is 0 differentiation. And let me repeat that, this is when there is no differentiation.

With efficacy differentiation as we are seeing with casdatifan, this share can be meaningfully higher and oncology analogs have shown that fast followers with differentiation share can be as high as 85%. Additionally, we are developing CAS with different combination partners of belzutifan, which should drive even further differentiation.

Turning to Slide 23. The sole marketed HIF-2 alpha inhibitor, belzutifan, which is currently approved only in late-line clear cell RCC is already generating annual run rate sales of nearly $1 billion. While impressive, this is only scratching the surface in terms of market opportunity for a best-in-class HIF-2 alpha inhibitor.

For casdatifan, we are focused on early line settings, which have larger patient populations and longer durations of therapy, both of which will contribute to a much larger market opportunity that is multibillion dollars in size. Specifically, our PEAK-1 study is targeting the IO experience setting, of which there are approximately 21,000 patients in the major markets alone, so more than twice the third-line patient population where belz is approved today.

Additionally, with the duration of therapy at least double that of belzutifan today, we expect a peak sales opportunity of $2.5 billion in the IO experienced or PEAK-1 setting alone. In first line, the opportunity is even greater. With our TKI-free strategy, we believe we can take meaningful share for both IO/IO and IO/TKI regimens. Here, we estimate peak sales potentially for CAS of $3 billion or more. All in, casdatifan could be a $5 billion drug in first- and second-line RCC alone. And to be clear, this is a revenue opportunity to Arcus, not TAM or total addressable market.

There's opportunity to expand that further with trials that support casdatifan usage in other RCC settings as well as potentially other tumor types like HCC, which Terry referenced earlier. And as a reminder, we own all of the rights to casdatifan, including economics, other than in Japan and certain other Southeast Asian countries, so nearly 100% of casdatifan revenues would accrue to us.

I'll end with one slide that supports our plans to focus on a TKI-free regimen in the front line, and that's Slide 24. Here, we show market research that we recently conducted to determine the preferred combination partner for CAS in the front line. You can see here very clearly that the IO/IO regimen is preferred 3x more than the IO/TKI regimen as a combination partner for CAS for all the reasons we discussed earlier today.

I'd now like to turn the call over to Jaen to discuss our immunology portfolio in more detail.

Thanks, Jen.

I'm happy to describe such emerging immunology portfolio. This is an area in which we've had interest and in-house expertise since our -- the funding of the company. This portfolio currently includes 5 programs that you can see in our slide deck, reflecting the maturity of multiple years of research and compound optimization. Our strategy is simple and has been core to our approach since the very beginning of the company, to minimize biological risk by focusing on and building upon mechanisms with validated clinical activity.

In general, we are focused on taking a small molecule approach to pathways where biologics have been highly successful. This is where we believe that we have an opportunity to create the most value. We generally look for more than just the convenience of an oral drug. In fact, the value proposition for several of our programs includes an expectation of differentiated efficacy, safety relative to the approved biologics.

Our portfolio includes several programs, as I mentioned before, 5 active ones. But today, I will focus on our MRGPRX2 and TNF inhibitor programs, which are expected to be the first to reach the clinic. Firstly, regarding our X2 antagonist program, we plan to target both chronic urticaria as well as atopic dermatitis. X2, which has received a lot of attention in recent months, represents a novel and exciting target for the modulation of mast cell activity.

While anti-IgE and anti-IL-4 receptor antibodies are marketed very successfully, for example, Dupixent alone is a $15 billion drug, there's still significant unmet medical need. While with the marketed antibodies, a substantial percentage of patients don't respond well to treatment. I want to emphasize that targeting mast cells is a validated approach in allergic conditions such as chronic urticaria and allergic asthma. A small molecular approach that targets a novel pathway for mast cell degranulation could represent a differentiated mechanism of action to address the existing clinical need, both in chronic urticaria as well as atopic dermatitis relative to the available biologics.

Our candidate molecule has been specifically designed to improve both on the potency and pharmacokinetics side of the equation relative to the early small molecule entrants into the clinic. In fact, we believe that our required clinical exposure in patients, obviously, will be dramatically lower than those required for the leading small molecule currently being evaluated in clinical trials. This could translate into a potentially improved therapeutic index and potential best-in-class profile.

We expect our MRGPRX2 antagonist to enter the clinic later this year. We plan to start with a healthy volunteer Phase I study and to follow quickly with a proof-of-concept study in chronic inducible urticaria. This program has the potential to generate proof-of-concept data within 9 to 12 months following entry into the clinic.

Our TNF inhibitor program also represents another significant opportunity. Anti-TNF antibodies are amongst the most successful drugs ever developed. With our small molecule approach, we have the potential to develop a Humira in a pill. One of the challenges with today's TNF antibody therapies is that they block TNF signaling at both receptor 1 and receptor 2.

However, blocking TNF receptor 2 can actually impact regulatory T cells and tissue repair, resulting in a paradoxical inflammation as a side effect in some patients. Our approach is designed to selectively prevent TNF from activating TNF receptor 1 while preserving TNF receptor 2 biology, which we expect to be an effective but safer alternative to the antibodies.

Relative to the early competitor in the clinic, our molecule has been designed to have a better overall potency and human PK profile, and we expect to be in the clinic with this program in late '26 or early 2027. Similarly to the X2 program, the TNF program also has the potential to generate proof-of-concept data fairly quickly.

We are very excited about the potential for our immunology programs to provide improved options for patients, and we are working to move these into the clinic as rapidly as possible.

With that, I'd like now to hand it over to Bob to review our financials.

Thanks, Juan.

Our cash at the end of the fourth quarter was $1 billion as compared to $841 million as of the end of the third quarter. Our cash position was bolstered by proceeds from our $288 million financing in November.

Turning to our financial results for the quarter. We recognized GAAP revenue for the fourth quarter of $33 million, which compares to $26 million for the third quarter. Our revenue is primarily driven by our collaboration with Gilead. Our R&D expenses for the fourth quarter were $121 million as compared to $141 million in the third quarter. G&A expenses were $26 million for the fourth quarter compared to $27 million for the third quarter. Total noncash stock-based compensation was $15 million for the fourth quarter compared to $14 million for the third quarter.

Shifting gears to guidance for 2026. We expect to recognize GAAP revenue of $45 million to $55 million for the full year of 2026. As we discussed on prior calls, we expect operating expenses to decrease meaningfully in 2026 as compared to 2025. The magnitude of this decrease will be in part determined by the results of the futility analysis for STAR-121, which will be conducted in the next couple of months. Accordingly, we expect to provide more detailed R&D expense guidance in connection with our Q1 call.

We expect our cash and investments will enable us to fund operations until at least the second half of 2028. For more details regarding our financial results, please refer to our earnings press release from earlier today and our 10-K.

I'll now turn it back over to Terry.

Thanks very much, Bob.

I'm going to end on Slide 33, spend a bit of time on our upcoming news flow for 2026. As I mentioned at the beginning of the call, this is going to be another huge year for casdatifan data. Those data are both going to reinforce the confidence in its best-in-class profile and provide greater clarity on our first-line development strategy. Later this year, we'll have at least 2 additional data presentations for CAS. First, we'll be presenting updated data for the cas plus cabo cohort. We'll do that either at an investor event or medical meeting, by which time we'll have a minimum of 12 months follow-up on all patients. So the aim here is to be able to provide a relatively mature and meaningful data set, including Kaplan-Meier curves.

Also later this year, we'll share new data from the casdatifan plus zim cohort of ARC-20. This is intended to demonstrate the safety and early efficacy of the combination and to establish CAS plus anti-PD-1 as the backbone for our first-line combination.

There's also a lot happening on the development front. For PEAK-1, our first Phase III study for casdatifan, our goal is to complete enrollment by year-end. Also, we're adding first-line combination cohorts to ARC-20 to determine the optimal regimen for our first Phase III study in the frontline setting, and this will enable us to initiate our second Phase III study for casdatifan at the end of this year. We also expect to advance our 2 lead programs targeting inflammation and autoimmune disease into the clinic by early next year.

With that, I'd like to thank everybody for joining us. We appreciate your interest, your continued support of Arcus, and we're happy to open the call for questions.

[Operator Instructions] Our first question comes from Salim Syed from Mizuho.

Congrats on the data at ASCO GU. Just one from us on -- and I appreciate all the color around the first-line strategy. Just the numbers that you provided here on PD and PFS, are there any particular trials that you guys are looking at just so we can start to think about the right IO/IO benchmarks here as you move away from TKI-based regimens? And just second to that, any thoughts here on what you would like to see in terms of improvement from those benchmarks?

Sure. So that's a good question. And I think as we move into this TKI-sparing regimen, the focus should really go to ipi/nivo. So there's a lot of data out there on ipi/nivo. Those of you who were at ASCO last year know that there were even like basically a decade of follow-up. And the reason is ipi/nivo is the #1 therapy that is utilized in the front line. And it's roughly in 1/3 to 35% of patients. And one of the reasons -- it is growing, but one of the reasons that it isn't used even more is the rate of primary progression, and that's on the order of 20% to 25%.

Second, it has a relatively short PFS. It's on the order of 12 months or so. So I think those numbers become very clear, simple lines to put in the sand where, obviously, we want to demonstrate meaningful improvement. And I would emphasize that's all going to start with that rate of primary progression. And we believe it's exciting that we've even shown with anti-PD-1 alone, we're looking at potentially single-digit rate of primary progression, and we'll have more to say on that later this year. But I think those form a good place to start the conversation around benchmark.

Yes. I just would like a specific study. So like CheckMate-214, which was a registrational study for ipi/nivo in frontline RCC. And then the other study to look at that had an ipi/nivo arm with COSMIC-313. And interestingly, the key efficacy measures. So PD, PFS, OS, et cetera, were all very, very similar across those 2 studies.

Our next question comes from Li Watsek from Cantor.

This is Daniel Bronder on for Li. Congrats on the data update as well from our end. We're just curious to hear where you're at with the volru plus cas run-in in the frontline study that's being operationalized by AstraZeneca. I know you had mentioned that it was paused and as you're looking at the data. But any more color about when it might open again, if it's going to open again?

Yes. So thanks. So what the question is referring to is the collaboration that we have with AstraZeneca that's looking at a combination of casdatifan and their bispecific anti-PD-1 anti-CTLA-4 antibody. As you stated, that study was paused, but the patients on the study continued. They were dosed down in terms of the dose of volru. They also saw continued use of casdatifan. So actually, we're learning quite a bit about that access, anti-PD-1, anti-CTLA-4 combined with casdatifan. And it's looking good. So we haven't -- since that dose down, we haven't seen any additional immune AEs. And I'll remind you, those look very volru, very anti-CTLA-4 like. We haven't seen those since there's been the dosing down.

I also think one important thing is we didn't see any primary progression there. So it's a very -- even though it's a small end, things were looking in the direction that we find and expected to be the case. And at this point, I can't say anything further on plans. We're discussing those with AstraZeneca in real time. I think though, it's important to recognize that from a probability standpoint, while we continue to learn from the study and anything we do will inform what we do in Phase III. But the thing to be knocked off the pedestal going in is that we recognize that ipi anti-PD-1 combined with CAS is what anything would need to be. So I think our intent is that study -- that arm is open now. I want to emphasize that it's open in ARC-20. It will enroll fast. We'll get the data that we need, and that will inform what we do in our Phase III study.

Our next question comes from Daina Graybosch from Leerink Partners.

Bill on for Dana. Congrats on all the data. It looks really great. So in your biomarker analyses, you mentioned that the deeper EPO reductions were correlated responses. Is this due to higher baseline EPO? I guess, in other words, did patients generally reach a similar, I guess, numeric EPO level after treatment? And I have one follow-up.

So I'll let Juan give you some comments on that.

Yes. So there's a -- what I would describe as a soft correlation between baseline levels being higher and the extent of reduction. Both of those we interpret we have data to support that those reflect the extent of HIF-2 alpha activity in those tumors. The tumors that have a stronger HIF-2 alpha signal tend to present with higher EPO levels, and those also tend to be the patients that display the deepest and more sustained reductions.

Got it. And when you're looking at these biomarkers, did you also look at VEGF and other genes that might also be downstream of HIF-2?

Yes. And that there are other soluble peripheral markers that we'll be disclosing later this year that are regulated by HIF-2 alpha and are well known to be each one of them independently negative prognostics in this setting.

One thing I would emphasize also about the biomarker work that I think is important for people to recognize, this is most important in just sort of supporting the overall understanding and tie to mechanism of the activity. But in this particular case, there's no sense that we would ever think about having or needing a selection criteria based on the biomarker. Because what I'll remind you is that probably 80-plus percent to 90-some-odd percent of patients with clear cell RCC have some level of HIF-2 as a driver. So when we report on these type of data, what you're actually seeing is while there's correlation, even those patients with lower levels are -- there is benefit. So we get a pretty continuous spectrum of benefit throughout those patients as opposed to some sort of binary cutoff that you might be seeking.

Our next question comes from Richard Law from Goldman Sachs.

This is [ Jane ] on for Rich. Congrats on the progress. So we have 2 questions about the upcoming presentation at ASCO GU this weekend. So first, Merck will present detailed results of belz plus lenva in the Phase III LITESPARK-011, which may set the bar in second line. So what are your thoughts and expectations for LITESPARK-011? And my second question is, so Merck is also running a study of belz plus zanza in the Phase Ib/II KEYMAKER-U03. So they have a poster about TIP poster this weekend. So what's your view on this combo strategy versus cas plus cabo?

So let me start with expectations around LITESPARK-011. From everything that Merck put out, they obviously said that the study was successful and any body language that you might infer, -- we think the data are going to look quite good. And we're excited about that. We think a couple of things. First off, it's really providing important validation for the field in an earlier line setting. And we feel great knowing that we have a better HIF-2 inhibitor, and we're going on top of what is the standard of care cabo in so far as TKI versus lenva, and we have the same control arm.

So from our perspective, obviously we have no knowledge of anything quantitative, but we expect good data and the better the Merck data, honestly, the better we feel it will be better for patients will be better for Arcus because we think we're going to outperform them with both of the molecules in our combination.

The second part, when I say there's 2 important things, is all of our investigators have emphasized this point which we recognize. We have a lot of tailwinds in terms of enrolling PEAK-1. But for a number of reasons, the positive data that they'll present is going to really help us to drive enrollment. As I mentioned, we're looking to be fully enrolled by the end of this year, and we think the LITESPARK data will help us very much.

I'll make a couple of comments on zanza, and I'll see if Jen or Richard want to add anything more on top of it. But we just simply don't see zanza as being a key changer, at least in clear cell RCC at this point. So we think cabo is the clear standard of care. It's -- not only does it have a great profile, but the reality is it's very entrenched. So it's used a lot. Clinicians know how to use it. They know how to deal with the AEs. They're very comfortable with it. So we think cabo is the TKI of choice.

Just one note on KEYMAKER-U03 you were asking for. The presentation is just a tip from the KEYMAKER study, which is just a Phase Ib/II platform study. So there's no data that's going to be presented for belz. It's a trial in progress poster.

Our next question comes from Asthika Goonewardene from Truist.

This is [ Cardi ] on for Asthika from Truist. Just on the first question on ARC-20 monotherapy, the last update had ORR somewhere in the 30% range, and now you're showing improvement in the mid-40s. So how much of that was due to deepening responses? And at what time point were you seeing responses start to deepen?

So it's definitely all due to deepening of response. And I like the question because it does go back. We share a lot of data and we share almost in real time. And so one of the slides we've included, we've shown how those data have evolved over time. But we also pointed out at the earliest time point, how with this mechanism and also the safety profile, it's very clear that responses can occur even out past a year. So the responses occur at all sorts of different time points. The stable disease patients also continue to do very well. The question about DOR hasn't come up. But what I can say is we're not close to a DOR. So patients, once they can get past that initial scan, do very well, and that's why we're seeing the PFS we're talking about. But there's no generalities in terms of where those responses may occur.

And what I would emphasize to your question on deepening, even when we've seen patients that have generated their initial response out past a year, it's meaningful. So it isn't just that they were at a 29.6% tumor reduction and they went to 31%. These are genuine deepening of response.

And the way we interpret it is that I think people aren't used to looking at oncology mechanisms that have a relatively benign safety profile. And what I mean by that is they're not poisoning you while they're reducing the size of your tumor. So once these patients become stabilized and they become healthier and they become stronger, all those things kick in, including their own immune system, to help. And so that's why you may see patients that all of a sudden deepen, it may have not even always been a gradual deepening, they start to deepen later on. And you do have for this mechanism, what looks very IO-like in terms of the tail.

So patients that do well, do well and they do well for a long time. And that's one of the reasons we feel and I think justified by the data that the market is not only going to be driven by the number of patients, but by the durability of the treatment. And we've had a lot of patients, even a single agent in the late line out past 2 years, we think that the front line is going to be something where you can have patients going 3, 4, 5 years, and that gets the whole TKI sparing strategy that you're not just pushing off that TKI for a matter of months, but you're going to dramatically change the opportunity for that patient that first presents in so far as not having to go for TKI until many years later. But they'll still ultimately get whatever benefit you might get from the TKI, but you just flip around the paradigm of no longer requiring that at the outset to get the tumor under control, but they can get that years into their therapy.

Got it. If I may, I'm just going to squeeze in one more question.

Sure.

Okay. So you have said that STAR-121 will have a fertility analysis in the coming months. So if you choose to discontinue STAR-121 based on the results, what is the clinical impact? And what is the impact on your R&D spend?

So the clinical impact is we're already anticipating from an operational standpoint that that likely will occur, but we may see something that tells us to keep going. Impact-wise, operationally is fairly minimal because the study is basically fully enrolled. So that impact operationally would be that you won't be doing all that work leading up to the registration.

I'll let Bob comment on how we think about sort of the expense part of that.

Yes. I mean the vast majority of the expense that we see for especially any of our late-stage clinical trials really is incurred primarily through the enrollment cycle and as the primary portion of patient treatment is occurring. So when you get to the latter parts of the trial, and you've presumably seen that decrease in expense as an example, for 221 and 121 and other studies, when we get to the latter part of the life cycle of trials, the expense starts to drop off pretty markedly.

Our next question comes from Yigal Nochomovitz from Citigroup.

I just want to probe a little bit more in terms of the frontline strategy. So you've indicated that cas plus zim will be the backbone of this strategy. And then the question, of course, is whether the CTLA-4 comes into the mix. So with that in mind, I'm just curious, when you asked the oncologist, as you showed us this new market data, in that question, you didn't put in the question on cas plus zim. You put the triple. So I'm just wondering is the interpretation there that your base case is really to do PD-1, CTLA-4 CAS and that's where it's going to shake out? Or is there some reasonable potential that it could end up just being what you've identified as the backbone, cas plus zim?

I'll let Jen start on that. We'll see if I add anything on top of what she said.

Yes, I mean, I think you actually described it really well that right now, our base case assumption is that it would be cas plus ipi/nivo. And so right now, we're thinking of cas plus zim or cas plus anti-PD-1 really as a backbone and that we would likely build on that. We'll keep looking at the cas plus zim data the outlook over time. But yes, certainly, base case right now is cash plus ipi/nivo. And as we talked about today, that cohort is actually now enrolling and the idea is to generate safety data very, very quickly. And again, an early look at efficacy by looking at the rate of primary progression. And so what's also nice about this combination, as Terry was talking about earlier, because ipi/nivo has a relatively high rate of primary progression, if we see early on at the first scan that that rate of primary progression is coming down, that gives us a very early read on efficacy, which is nice to have.

So what I'll add, Yigal, and this actually it's come -- questions come up from investors, and it's a topic also with investigators. So the data that we've seen thus far, and obviously, we just -- they were early and we showed you the primary progression, but it's a good start. And the question sometimes does come up in the context of casdatifan, how much value does the anti-CTLA-4 bring.

So obviously, we're going to have an early data set. But the way we look at it is if you think about it, and this comes up, even though it wasn't a formal part of that analysis that Jen did, when you talk with investigators, including some of those who are aware of the anti-PD-1 early data more specifically, as you could imagine, anti-PD-1 plus CAS, if you could bring that into the front line from a patient standpoint, that would just be awesome. I mean to not have to go with anti-CTLA-4 and not have to go with TKI would be like it comes up sometimes like a vacation. So we are going to pay a lot of attention to that.

With that said, I'd like to also put the other conservative part of this that we think is important. We don't want to get too cute. So if that anti-PD-1, anti-PD-1, anti-CTLA-4 each on top of CAS looks similar or maybe like anti-PD-1 potentially could be there, we're still more likely than not to go for a 3-arm study where we would have anti-PD-1, anti-CTLA-4 CAS versus anti-PD-1 cas versus ipi/nivo. So we're not going to get too cute and outsmart ourselves just based on early data. But if it should, we're going to give anti-PD-1 CAS, it's shot at the limelight, if possible, because it would be great for patients.

Our next question comes from Jonathan Miller from Evercore.

I'll follow up on Yigal's question on the first-line setting. You say at least one Phase III starting this year. You're adding an additional undisclosed combo to ARC-20 in the first-line setting this year. The ipi/nivo combo is open. You just said it was sort of your base case, but you haven't committed to showing data for us ahead of making that Phase III decision. So I just want to get a sense for broadly speaking, how many first-line Phase IIIs are you thinking about in aggregate eventually? What are your plans for the adjuvant setting, which I noticed you didn't mention except saying that CAS belongs in all lines of therapy? And what are your current thoughts on partnering in RCC and beyond for CAS and whether that unlocks additional bandwidth to do some of these late-stage design?

Yes. So I'm just going to comment briefly and then turn it over to Jen to give a more fulsome answer on all of that. But I'll address the partnering part. From a partnering, all you should expect to potentially see and you probably will see are like clinical collaboration. So at this point, we feel -- we love that we basically own 100% of the casdatifan rights other than in Japan and a few other Southeast Asian countries. As you know, that gives us an enormous strategic optionality.

With that said, there are other mechanisms and settings that make sense. And since the casdatifan is a relatively rare beast, we feel like we're in a good position to do some smart clinical collaborations under good terms.

I'll let Jen comment more broadly, though, on the number of Phase IIIs we might do, how they're sequencing, when we'll disclose some data, et cetera, because we will obviously -- we won't make a decision without sort of giving a sense of what drove that decision. But go ahead, Jen.

Yes. So just on the Phase III front, obviously, we have TKI-1 that's enrolling. Our plan is to start one other Phase III study around year-end. That would be in the frontline setting and informed by this new cohort that we're adding that you referred to, Johnson, a cohort that's looking at CAS plus anti-PD-1 plus CTLA-4. So you could probably make an assumption that that first Phase III study would be looking at that triplet versus ipi/nivo. So that would probably be our base case assumption today.

We'll probably also add, as you were pointing out, another combination to ARC-20 to look at CAS plus anti-PD-1 plus another mechanism, probably something that wouldn't be a big surprise to a lot of people. I'd say as far as whether we took that into a Phase III is very TBD right now. I think right now, that first Phase III in the frontline setting that I mentioned is our top priority and what we'd really be focusing on from a resource perspective. But we're also interested in generating some other data with that other combination as well.

And then on the adjuvant setting, we'll see what the LITESPARK-022 data looks like. And I think right now, we probably view that as a lower priority relative to certainly frontline and maybe some other things we might do with CAS, including HCC, just given it's not a huge market, patients are on treatment for 12 months max. It's a very high bar from a safety perspective in the adjuvant setting just because these patients are doing pretty well and feeling well. So a lot of times, they don't want to be on therapy, they come off therapy. So like I said, we'll see their data. We're always evaluating it. We'll continue to evaluate and something that we might consider for the future.

I think the way -- and obviously, as the year goes along, we'll continue to share and probably into next year, we'll be sharing. Like our view is that HIF-2 inhibition is going to be used in every line in every setting of clear cell RCC. And our ultimate development strategy whether it's supportive studies, et cetera, is going to look like we're going to make sure we've covered everything with time. But from a prioritization standpoint, it's PEAK-1 frontline, potentially another one next year. And then we'll be surrounding those with other studies that make sense so that we're leaving no stone unturned in being able to be used and reimbursed, et cetera, in every line of therapy.

Yes. And we're continuing to look at clinical collaborations for that other new frontline option that we're thinking about. So not everything is on our dime. It's not all our resources, et cetera. So that's important to us as well.

Great. And if I could just squeeze in one more before we run out of time. On PRX2, you've mentioned a couple of times the potential for a safety delta on the basis of better potency and lower dosing. But are there specific safety signals that we should be looking at when we think about initial data here? And how much data from the initial cohorts, especially in healthy volunteers, will you need to be able to put some bookends around what that potential safety delta might look like?

Right. So I'm always saying that outside of oncology, you always one dose away from complete disaster. So the answer is that a well-run healthy volunteer study will give you some comfort, but you're always accumulating additional data. The thing to -- the default thing to always look out for, and I think that some of our competitors in the space sort of generate a little bit of a hint of this, when you're dealing with a very high exposure of any xenobiotic, you need to look at liver function, okay? And so you can go -- you can actually -- as our competitors have seen, if you go too high, you will actually start to see the liver complaining. And so we think that we'll be able to put way more daylight between our -- the amount of our drug required to elicit a similar pharmacology and levels where the liver is going to start to complain.

Our next question -- our last question, sorry, comes from Emily Bodnar from H.C. Wainwright.

I was going to ask if you could give us some updated expectations for the cas plus cabo data later this year, given now you have pretty mature monotherapy data with PFS of at least 12 months. So how are you kind of thinking about data for the full 45 patient data set? Hello?

There seems to be a connection issue. We'll be right back in just a...

Emily, could you please repeat your question?

Yes. Do you hear me?

Yes. Thank you, Emily.

Okay. Yes. I was going to ask if you could give us some more updated expectation through your cas plus cabo data later this year, given you now have pretty mature monotherapy PFS is over 12 months. So how are you kind of thinking about what the combo could look like in earlier line patients in that full 45 patient data?

Jen?

Yes. So as Terry said, when we present the data, the goal is to have 12 months minimum follow-up on everybody so that we may not have a PFS, but we'll be able to look at a Kaplan-Meier curve and at least make some educated guesses as far as where PFS could shape out or shape up. And so as you know, for cas mono PFS, we're seeing a range of 12 to 15 months. So we'll see what cas cabo shows. And right now, we obviously believe very, very strongly that we can be cabo alone because cas mono alone looks better than cabo. And so we'll build on both what cas mono looks like and what cabo mono looks like.

So yes, so we're excited to get those data out. And we think like the LITESPARK-011 data, it will also be very derisking for the PEAK-1 study.

The other nice thing about LITESPARK-011, just may be obvious, but it will give a good, call it, contemporary look at what cabo alone looks like because that's the control arm. So to the extent that thinking about benchmarks.

Yes. And what gives us obviously a lot of confidence in the cas plus cabo data in the PFS is, like I said, just what we're seeing with cas mono and the fact that cas mono looks better than cabo mono and we think may even look better than belz plus lenva, you'll see what the LITESPARK-011 data shows.

Thank you. We currently have no further questions, and therefore, concludes today's call. Thank you all for joining. You may now disconnect your lines.

Okay. Welcome back to the 44th Annual J.P. Morgan Healthcare Conference. My name is Matt Bannon. I'm a banker here at JPM. I'm very pleased to be introducing our next presenting company of the day, Arcus Biosciences. And on behalf of Arcus, we have the CEO, Terry Rosen. [Operator Instructions]. So without further ado, Terry?

Thanks. So good afternoon, everybody. Many of you are probably very familiar with Arcus and followed us for a long time. But hopefully, there are some new people. So what we thought we would do is start with a very brief overview of the company.

Arcus was founded about 10 years ago with basically a blank piece of paper with a notion of building an extraordinary small molecule group, great chemistry, medicinal chemistry capabilities. And as we sit here today, 10 years in, we have two late-stage oncology programs and an emerging immunology portfolio as well. So what we'll do today is spend it roughly half on each of those two topics. We'll talk about those late-stage Phase III oncology programs and then the emerging immunology programs.

One thing that those of you who followed us probably realize, we've had a history of running a lot of clinical trials and in fact, have been able to run a lot of late-stage clinical trials, large ones as well. And in parallel, maintain a very aggressive discovery research group, I think is somewhat unusual in this space. And we've been able to do that by leveraging partnerships. This is a very purposeful well-crafted strategy. Because of that, we are actually very well capitalized. We have $1 billion now. That $1 billion takes us into the second half of 2028, and the reason I emphasize the 2028 is, because that gets us comfortably on the other side of our initial Phase III readouts as well as proof of concept for some of the early immunology programs I'm going to talk about today.

This summarizes our current portfolio of molecules and programs. And I think the important thing to take away from here is these are all high-quality molecules. Basically, these are homegrown. We believe generally best-of-class. And I think those of you who've been in the weeds on, for example, our Casdatifan or Quemli program would say that, that discovery group that we put together really does have power and does produce best-in-class molecules, and the reason we emphasize that is because we optimize until we have a molecule that we believe has the profile that we want to have.

Our most exciting program, our highest valued program is Casdatifan. So many of you are probably here to hear about that here our latest on that program. So why is that? First of all, the target of Casdatifan, HIF-2 has been extremely well validated. It's basically completely de-risked biologically, clinically and commercially. Validated by what? By Merck's belzutifan. Belzutifan is currently selling at a run rate of about $800 million a year, and that's only in late-line setting. So that's the tip of the iceberg for the opportunity for this mechanism. Secondly, we've got a best-in-class molecule unambiguously. And that characterization comes from 120 patients. The 120 patients, I'll remind you, this is single-agent activity in a very late-line setting.

Also, this is just a two-horse race. So for the reason I was talking about before, Arcus tends to play in space where you're looking at targets that are notoriously difficult to drug, not impossible to drug, but difficult. So one of the consequences of this is you tend to have less competition. You don't have as many entrants. So basically, the competition here is going to end up being us and Merck. And probably the most important aspect of the value here is that Casdatifan is wholly owned by Arcus. So why is that important? Between that full ownership, that exclusive ownership and the data we have, it's totally transformed the company and give us enormous strategic optionality going forward.

This slide represents the value proposition for Casdatifan. Clearly, as I was talking about, there's huge opportunity here. The key point to take away is there's extraordinary differentiation between Casdatifan and Belzutifan. And this value proposition is based upon data. And so data is probably the bedrock for us of anything where we would like that value to be derived. So let me start on the right-hand side of this slide. HIF-2 is the first innovation in RCC in decades. In fact, it's certain that HIF-2 is going to become the backbone of any therapy in kidney cancer. And in Arcus with what we've done to-date, we're looking to establish Casdatifan as the, and I'll say the in all caps, the Standard of Care in the setting. So let me, before summarize this clearly has a large commercial opportunity and may not be fully appreciated, I say a little bit more about that, but it's a $5 billion opportunity.

The left-hand side summarizes those key data that I was discussing. And again, these are from 120 patients mono-therapy, single-agent activity in late-line patient population. So the bottom panel actually looks at the activity in humans against the key biomarker for HIF-2 inhibition, and that's the suppression of erythropoietin production. So just with your eyes, looking the lower curve is Casdatifan and the upper curve is Belzutifan, and you can see there's a huge difference. And what does this say?

So first of all, you see the ability of casdatifan it shows a greater deeper suppression of that production, but what's really profound is the durability of that suppression, so somewhat night and day. So that's the scientific smoking gun for the difference between the two molecules. But of course, the most important manifestation of that is illustrated in the upper curve, and that's looking at the median PFS in that late-line setting for those 120 patients, and what you see is that's over 12 months for casdatifan, and that compares to about 5.6 months for the same setting for belzutifan. So very, very clear differentiation.

Now what's interesting is not only does casdatifan look much better than belzutifan, but in fact, if you compare casdatifan to TKI and TKI is important because TKI is a current backbone in the treatment of clear cell RCC. Casdatifan is basically as good or better, and I think better is really more of the case, even independent of line of therapy. So if you look at the late-line Casdatifan data, which is really unprecedented in such a heavily pretreated patient population, you can see even if you compare to an early line TKI, the molecule is better. And the reason I'm emphasizing that, when I come back and talk about our development strategy, this is one key element that's important to grasp.

So let me turn to the development of Casdatifan. We have a two-pronged strategy. This summarizes our ongoing Phase III program called PEAK-1. PEAK-1 is our fast-to-market strategy. PEAK-1 is combining Casdatifan with the standard of care TKI in this setting, Cabozantinib. This study should enroll quickly. Generally, a study like this will take about 18 months to enroll, which is pretty good. Also, the approvable readout here is PFS. So clearly, that tightens things up as well. But also this program has a lot of tailwinds in terms of that enrollment. So the first is that every single patient is going to get standard of care. Because it's a 2:1 randomization, you've got a higher probability of getting standard of care plus a relatively benign from a safety standpoint, second compound that's been shown to give additional efficacy, and third and probably most importantly, because there's been such a dearth of innovation in this field, basically, your investigators all know about HIF-2 inhibition. They all know about casdatifan. They want to put patients in the study. It's a really good opportunity for patients.

So that's the first part of our strategy, fast to market. This one, I'm going to take a little bit more time on because it's really important. This is our strategy for moving into the front line. And this is something where we actually feel we can own the entire frontline. And so that's why I want -- this is an important thing we want to emphasize in 2026 because we're going to show our strategy and also how we're implementing. So the likely Merck regimen that's being developed here is lenva, belzutifan and KEYTRUDA. So it's TKI-containing. At Arcus, we have an opportunity, and I'll get to why because of the properties of the molecule to go after a TKI-sparing regimen. Now why is that important?

TKIs bring benefit, but they come with severe side effects and hence, have a major effect on quality of life. In fact, patients, physicians have been begging for TKI-sparing regimen. So this isn't some Arcus narrative, we're feeding to where the field wants to go. So if you look, I want to introduce the concept of primary progression. For those of you who live in this field, you know what that means. But what I want to emphasize what primary progression is, is when a patient is treated with a therapy and they just blow right through that therapy. They progress before they even get to the first scan. And that's devastating for the patient, it's devastating for the physician. So the reason TKIs are used is they actually minimize the rate of primary progression. So with that baggage, that's the benefit they bring.

And a way to think about a TKI, if you're not very familiar with them, it's sort of like chemo. It brings a benefit, but it's not something you really want to be taking if there's an alternative. And HIF-2 inhibition offers the possibility to actually drive the TKI to a much later line of therapy. And given the durability that we've been seeing with HIF-2 inhibition, you can imagine spending years before you ever have to take that TKI. So now looking at that left-hand panel, what we've done is we've summarized the rate of primary progression for every cohort where we've investigated casdatifan, including those that are ongoing. You're actually seeing real-time data, in some cases, even Spotfire data. And what you can see is that, that rate of primary progression is quite low. And what I would even highlight, especially because it's the most important combination in this arm -- in this panel is that Casdatifan plus Zim, that's Casdatifan plus anti-PD-1. And even that shows a low rate of primary progression. So the idea, and this comes back to where I was showing you that Casdatifan looks better than TKI is that you can replace TKI in the front line with Casdatifan and control that rate of primary progression.

The issue for Belzutifan in its monotherapy approval study late line, it had a 34% rate of primary progression. So what we have here is an opportunity to transform the field that doesn't bring any additional riskiness. It's simply inherent in the profile of the molecule. So a huge differentiation. What I show on the right-hand side is now the execution plan for this. So we have a number of cohorts that are running, a number that we will be starting. That's basically a bake-off as to what that frontline combination will be. The most commonly used regimen in the frontline right now is ipi/nivo.

The thing with ipi/nivo is, it has a relatively high rate of primary progression. So it's a perfect match for Casdatifan. So out of these regimens, it is a bake-off. But if I had to pick today, which one would be of focus, it's anti-PD-1, anti-CTLA-4 plus casdatifan. So the other piece about ARC-20 that I would emphasize is that it's extremely efficient platform study. From -- I will give you an example, when we generate data here, we can go very quickly from data, to registrational study. And in the case of PEAK-1, the first registrational study, it took us about a year to go from starting the Cas plus Cabo cohort here to the Cas plus cabo registrational trial.

So let me summarize the Casdatifan program before I move on to say we've got our front -- our first fast-to-market strategy, PEAK-1 is enrolling gangbusters already. Our intent is to enroll it by the end of this year. We've got our strategy to get to the frontline Phase III. Our plan is to execute that such that we can start that study by the end of 2026.

This gets to our other Phase III oncology study. This is looking at our small molecule CD73 inhibitor in frontline all-comer pancreatic cancer. We showed in early data, that we had a median OS in this setting, looking at quemli on top of the standard of care, which is gem-Abraxane of just about 16 months. If you compare to gem-Abraxane alone, which is the standard of care, that ranges anywhere from about 9 to 11 months historically. But in addition to that, we did an analysis using a synthetic control arm that was conducted in a blinded, very rigorous fashion and showed about 6 months improvement for the combination versus the standard of care alone. So this actually, as you might have expected, generated enormous enthusiasm in the investigator community and the corresponding registrational trial, PRISM-1 enrolled fully in 9 months. So that was enrolled as of September. We expect to readout from that in the first half of 2027. Obviously, this represents the first transformative opportunity in this all-comer frontline patient population in decades. So this could be a $4 billion-plus commercial opportunity.

What I want to turn now is transition to our immunology programs. So our strategy here is pretty simple. What we focused on, is settings where the target has been validated clinically and generally -- commercially as well by huge markets through biologicals. Nonetheless, with those biologicals, they may have limitations and they've been difficult to approach for the reasons I talked about with small molecules, but this fits perfectly into our space. So we're going after these highly validated targets, huge commercial opportunities playing to our strength in small molecule drug discovery.

What I'm going to focus on today are our first two entrants into the field, an X2 antagonist and a selective TNF receptor 1 inhibitor. So this gets at the X2 antagonist. It's to treat atopic skin diseases. There's one molecule in the clinic, one competitive molecule that showed some interesting proof-of-concept. We actually believe, like oftentimes the case, the first molecule rushed into the clinic may not have optimal properties. We have in hand a molecule that we think has both enhanced potency, but especially PK properties that will enable us to cover the target clinically, at dramatically lower exposures. We plan to introduce this molecule into the clinic this year. And given the proof-of-concept for this type of setting compared to a lot of the oncology settings is so quick. We actually think that we could get to proof-of-concept by the end of 2026, if not that early into 2027.

Now TNF antibodies are well known to everybody, huge commercial success, huge therapeutic success. And what's interesting, this fits exactly the type of paradigm that I was describing where you have this incredibly successful drug, but where there are limitations. So what's known intrinsically with the antibodies is they block both TNF receptor 1 and TNF receptor 2. Now the unfortunate thing is that blockade of TNF receptor 2 signaling, can actually lead to -- it's pro-inflammatory. So you can get this paradoxical inflammation, for example, Psoriasis. So the notion had been perhaps you could get a small molecule that selectively inhibited TNF receptor 1. Well, now that's not like a hypothetical, we and others have done that. As a matter of fact, there's one molecule in the clinic. Again, we believe it doesn't have optimal properties. We have a molecule that has enhanced potency and PK. And this is a program that we expect to enter the clinic by the end of 2026 or early 2027.

I want to elevate a second and just touch on the commercial opportunity and the huge needs in this area. Casdatifan in frontline, second-line kidney cancer, it's underappreciated, but that's a $5 billion market opportunity, and we'll be talking more about that as the year goes along. But the reason it's underappreciated is because it's not driven only by patient numbers, it's durability of treatment. These patients are going to be in HIF-2 inhibitors for years. Even in our late-line monotherapy study, we have patients that have been on study for over 2 years.

Obviously, the pancreatic area, huge opportunity, as I just described. And these immunology programs are all playing in the multibillion-dollar, even double-digit billion dollar opportunities. Also, there they have a nice advantage of early proof-of-concept in terms of tracking progress.

So I'm going to finish by looking at the milestones over the coming foreseeable future. We've broken this into 2 slides for a reason that, A, there's a lot of information and, B, they kind of have a little bit different message in each case. So 2026 is going to be a year of continued Casdatifan data. Those data are going to do two things. They're going to further de-risk our PEAK-1 study that's already enrolling gangbusters, and they're going to crystallize the strategy for that frontline Phase III study that we intend to start by the end of this year.

Secondarily, we're going to get our MRGPRX2 antagonist into the clinic. So in 2026, we'll have at least three data readouts with the first coming in February, next month, we'll be talking more about casdatifan, and you'll see a flow of information throughout this year as the program continues to advance.

As you think about longer term, Arcus, it was transformational for us having the full rights to Casdatifan. It really just changed everything for the company. Having that wholly owned combined with the data, it was -- turned us into a new company. As I mentioned, that's because it just changed everything with respect to our strategic optionality. As we get through the data of this year and execute, next year, once again, I think it's fair to say we'll be a completely different company. When we're talking here next year, it will be yet another new company that you're looking at. So we'll be on the heels of two Phase III readouts in the oncology programs. We have the two immunology programs in the clinic with either proof of concept or approaching proof of concept.

What I'd like to emphasize is that we've got this diverse portfolio of programs. We're excited about them. But all that I've just described is based upon execution. We control our own destiny. This isn't nothing that's based upon hope. And the final piece with respect to that is, we're well capitalized. So we control our own destiny, not only in terms of what we have to do, but we have the capital to do it. As I mentioned earlier, we're well on the other side with our cash position to the readouts for all of this. So with that, I'll stop. I'll thank you all for joining today, and appreciate those of you who've been supporting us some as long as the full decade of our existence. So thank you very much.

Okay. Any questions from the audience? I guess to kick things off, Terry. So maybe just higher level, historically, you guys have been focused on oncology. Can you talk a bit more about the pivot to I&I? Would you call it the pivot? Or is it more just expansion of focus?

Yes. So I would actually not call it a pivot, I'd call it a very natural evolution for us. So from the very first days of Arcus, we invested heavily in immunology, biology because a lot of our focus was on immuno-oncology. So as you know, that involves immunology biology, even though it's a clinical endpoint. So it's very natural for us. We have a very strong immunology group that goes along with our chemistry group. And so we've been working for some time. And one of the things I didn't mention this portfolio that we have is very substantial. I argue that it's as good as many larger companies, but we tend not to talk about things when they're glint in our eye, but we like to have tangible matter.

So now as these programs are starting to enter the clinic, we are talking about them, but it was a perfect match of having that immunology-biology and having the small molecule expertise and be able to use these biologicals, which are just huge markets, huge opportunities, but still represent need and be able to approach those with oral small molecule drugs.

Got it. Another historical feature has been the Gilead collaboration, very involved with them. So going forward, now that the focus is on your wholly owned programs, how do you view partnerships going forward?

Yes. So as I mentioned in the early days of Arcus, our strategy was to leverage partnerships that always kind of gave us capital and shared risk. As we've become more independent, have more strategic optionality, what I would say, our focus from a collaboration standpoint, and you can expect to see us do more of this now, are more on things that look like the clinical collaborations that can actually continue to add value to what we're working on.

So for example, when you think about casdatifan, we really have pretty much a monopoly on that HIF-2 inhibition. Other than Merck, we're the only major HIF-2 inhibitor out there. So you can imagine other mechanisms, for example, that would make sense to combine with casdatifan. And those are the types of collaborations that we're more likely to engage in. So things that will continue to synergize from a value creation around the programs that we have internally.

Got it. Question right here.

So the question is more about your TNF, the small molecule TNFR1. And how does it kind of differentiate from the current other antibody in oral peptide? Especially the potency of small molecule normally plays kind of less effective as other modality.

Yes. So we're very confident -- and this is something that Arcus has, I think, very powerful history. You can -- if you went right down the list of our -- all the small molecules we've developed that when -- if we feel like we need to cover a target 90% at trough, we optimize until we have a potency and PK profile that will do that. So we have strong confidence already that we have molecules that we will be able to do that.

Terry, you talked a bit about the strategy in frontline for Casdatifan in RCC. You talked about the concept of primary progression. Is that a view that's shared by the field? And you had some data, so it's not just a view, but is that something that's shared and understood by the field? Or is there going to need to be some education there?

The field knows that. So I think it's -- we're educating investors as we try to explain more of the strategy and the plan, but that's a very key element. And if you look at the -- this particular field, that's why you see TKI usage in the frontline because, again, to have a patient progress before they even get to first scan is a devastating situation. It's just -- it's the last thing that anybody wants to happen. And so that's why that's such a profound opportunity. You've had TKIs living in that front line for so long, and interestingly enough, ipi/nivo has a relatively high rate of primary progression.

So ipi/nivo is the most commonly used regimen in the frontline. And that's because it gives the most cures. Ipi/nivo has the best OS, interestingly enough, has a relatively short PFS. So, on the other hand, has a rate of primary progression that's probably 20% to 25%. And so in patients that have a very rapidly progressing tumor, for example, that's where it doesn't get used. So the idea is when you can bring in a HIF-2 inhibitor, to combine a TKI with ipi/nivo would just be far too toxic. So you bring in something with a benign safety profile that addresses the primary progression, that would be a huge deal.

And one of the reasons I highlighted the Zim-Cas data is that foreshadows very well that even just with anti-PD-1 alone, we have a very low rate of primary progression. So the -- it's a very obvious situation to bring in something that has orthogonal biology, orthogonal AEs and combine it with a regimen that's CTLA-4, anti-PD-1, that could be a huge, huge opportunity for the field.

But the frontline has TKIs so frequently because of that. And everybody, the investigators, if you talk to investigators, there are some who would tell you, you shouldn't even be developing a TKI in the front line, knowing that you have the opportunity with a HIF-2 inhibitor and the idea is drive that TKI later. Patients do not want to go on TKIs other than the fact that they -- like just like it's almost like the same thought if someone told you're going to chemotherapy. They tend to think of a HIF-2 inhibitor almost as like a walk in the park because the only AEs that you really see from HIF-2 inhibition are on target. And the most common one is anemia, and it's very well managed. In this field, it's very well understood, especially since it's kidney cancer. So even a lot of patients presenting have some anemia. So it's really a great mechanism with minimal effect on quality of life.

Got it. Is there any potential for Casdatifan outside of RCC? So you've got it well covered there, but anything beyond kidney cancer?

Yes. So strategically, we're going to make sure to blanket clear cell RCC. So for those of you who may not be aware of the biology, probably 85% to 90-plus percent of clear cell RCC has HIF-2 as a driver. So that's why when you look at a waterfall plot from one of our studies, you see like basically just the vast majority of patients getting tumor reduction.

With that said, there are other settings where there's evidence that would make sense for a HIF-2 inhibitor. The most obvious one is HCC, liver cancer. So that's a place we may go. But what I want to emphasize, our focus right now is making sure that every single patient in their journey in clear cell RCC does get a HIF-2 inhibitor. But we do believe that Casdatifan is a drug. And so we will broaden with time. But in the near term, we're very focused on covering the clear cell RCC.

Got it. Questions? So I have to ask, I know there was the big Phase III trial, your TIGIT program. There's an update recently. Can you just summarize that for us? And how does that change -- how does the outcome change, your cash needs going forward?

Yes. So what you're referring to, is our readout for STAR-221, which was a Phase III study in GI cancer, our anti-TIGIT plus our anti-PD-1. Basically, we saw no benefit versus anti-PD-1, and this is with chemo alone. So I never like to pretend that I don't want to make lemonade out of a lemon, so very disappointing and somewhat inexplicable based upon earlier data.

Nonetheless, the consequence of that is that it was a very clean study. So the data were clean, the arms was well balanced. All the patient data were captured. So we were able to say, stop the study. So instead of -- we were fortunate that we didn't have to go to a final analysis. This was an interim analysis. And so actually, our cash needs ironically, are extended. So that's why we're currently -- our cash extends into the second half of 2028. On top of that, we have another study running in lung. We will be doing an analysis of that in this quarter. And if we can stop that, we're not good money after bad. We're data-driven, and we'll stop that and may further extend our cash runway.

What I'd like to emphasize, our portfolio -- we're a portfolio company. We have an internal discovery group. HIF-2 wasn't even around when we started that program. And so because of that, I think as a company, we didn't suffer much from that happening, disappointing for us, disappointing for patients. But operationally, if anything, it just extended our runway, enabled us to make sure that we have even more buffer in terms of our readouts and investment in Casdatifan and know that we have comfort zone in covering these immunology programs, which have huge opportunity. So while unfortunate, it's actually in principles to our benefit. It wasn't like we were dependent upon that to go out and raise money after you got halfway here stopping at the next gas station. So we feel pretty good about the overall circumstances and our cash situation is great.

Got one final question. Any from the audience? So just to close on a higher level, what do you think differentiates Arcus from other biotechs? And what, if anything, do you think The Street doesn't fully understand or appreciate about your company?

Great. So I'll answer the second one first because I'll be succinct, which isn't my strength. The market for Casdatifan is still something that it's not as recognized, how large that is. And the reason is because of that durability that I was talking about that really, you're talking about many years. You could imagine a frontline patient on study 3, 4, 5 years. So when we talk about that $5 billion market, I think that will become more recognized and it's very compelling and very -- it's not -- it's even fairly conservative.

In terms of the differentiation, what I would say is if you look in the era of 2026, it comes back to what I was discussing at the beginning, maybe a little bit more implicity. The fact that we've run all these late-stage trials, we're able -- we're in huge markets. We're competing with the Mercks of the world, the Genentechs of the world, AstraZeneca of the world. But at the same time, we have a very aggressive discovery portfolio. So casdatifan wasn't a glint in anybody's eyes when we were already moving towards late-stage programs, but now it's the core of what's going to enable us to become a long-term company. So having that discovery group, particularly with the small molecule expertise that is able to continuously replenish itself and have a portfolio that when we're successful, has new molecules coming behind it, I think in the current era is a highly, highly differentiated aspect.

And I think it's probably the most important from an operational standpoint in terms of building a company and having a portfolio of molecules and having one thing after another so that you're not in this binary card flip situation, is probably our biggest differentiator.

If no further questions, thanks so much, Terry.

Thank you, everybody. Appreciate it.

Well, here we are, another year, another conference. So welcome to the leadership team for Arcus, very familiar faces. Terry Rosen, the CEO; Jen Jarrett COO; Thanks. Hi, Pia and I'm Yigal Nochomovitz, I'm biotech analyst here at Citi. We've been covering Arcus now, long time. I think it's 6 years? I know it's since before the pandemic.

So well, why don't we just start. Obviously, all the focus is on the renal cancer asset, although there's some optionality, obviously, in some of the other areas too, we can talk about. So maybe we can just start, remind everyone what is the -- what we know about cas now? What are the key pieces of evidence that are supporting the advancement into the 2 Phase IIIs, which you've announced and then, maybe you can talk about those designs and the goals of those? You want to start with that.

A little bit of overview is [indiscernible]

Yes, there you go. We're good now. It should be working.

Okay. So as Yigal mentioned, a lot of focus for Arcus and about Arcus derived from casdatifan. And I'll start by just sort of highlighting why is that? And we have a very broad portfolio, and we have 3 programs in Phase III involving multiple studies. But casdatifan is probably the biggest value driver for Arcus and that's for a number of reasons. The first is we own basically 100% of the rights to casdatifan. Secondly, the molecule and the target have been validated, both biologically, clinically and then also commercially by belzutifan, Merck's HIF2 inhibitor.

So that molecule is already at a run rate of $700 million in annual sales. And that's only in very late line settings were it's used now. So that's the tip of the iceberg in terms of the opportunity. The third piece is that the Arcus molecule as Miguel had alluded to, we've shown quite demonstrably that it has a better profile than that of belzutifan. So if you couple the complete ownership with the high probability of technical success, the fact that we're Phase III. And then together, you put all of that, it gives us enormous strategic optionality for the entire company. And so having that program really becomes like the bedrock for everything else we're doing. So what are the key high-level observations that would enable the differentiation that we talk about from the Merck molecule.

So we have roughly 120 patients worth of data in the same setting later line where the Merck molecule has been approved in on every endpoint, whether you look at what -- it's composed of 4 cohorts, each of 30 patients, whether you look at the individual cohorts or you combine all of those cohorts to look at the 120 patients. All of those cohorts are very pharmacologically relevant doses. So that's why we did choose to look at them into 120 patients. But we also looked at the 30 patients to be sure that anyone else that wants to look at them that you're not obfuscating anything. Because that also includes a cohort of 30 patients that's using the 100-milligram tablet formulation, that's the go-forward Phase III dose of our molecule. But whether you look at the rate of primary progression, which is roughly half of that of Merck, between 15% and 20% versus 35%. If you look at the response rate, which is about 50% better, 30-some-odd percent versus 20% or PFS, which is the important that's the approvable endpoint where we're more than double.

So the belzutifan PFS is on the order of 5.6 months. We're at a PFS that's over 12 months. And so we're more than double that of Merck. So whatever endpoint you look at, whether in the individual cohorts or in the combined data casdatifan looks better. We've also presented early data from what our fast-to-market strategy that's in second line. It's in general, talk about the design but that's a study looking at second line clear cell RCC and it's basically cas plus cabo versus cabo, and we showed early data where we showed response rate data. And with only roughly 5 months of follow-up, we had a confirmed response rate of 46%. Merck did a similar study with bells plus cabo. And with 2 years of follow-up, they were a 31% response rate.

Next year, we'll be sharing data as we get to PFS, so we'll be able to compare there. So I think all of the data to date clinically point to a black-and-white differentiation between the 2 molecules. What I would emphasize, for those like ourselves, we like to see some scientific evidence that ties together with the clinical data, to make those clinical data more compelling in terms of your conviction that they represent truth, where you can see dramatic differences between casdatifan and belzutifan is when you look at what's considered the gold standard biomarker HIF2 inhibition that's the suppression of erythropoietin production.

So about 80% of your erythropoietin is under the control of HIF2. So it's a very easy biomarker to measure and what we've shown is not only do we have a much deeper or a deeper inhibition than that of belzutifan. But belzutifan loses that PD effect. These are data published by Merck after about 9 weeks on therapy. And we've shown that we still have robust inhibition of that erythropoietin production out past the year. So that's something that's very quantitative, it's very reproducible and that dramatic differentiation is what underlies the clinical data differentiation. Another important aspect of those data, and we'll be sharing more on this early next year, but we've also been able now with about 120 patients worth of data to show that the ability to suppress the production of erythropoietin, while erythropoietin doesn't drive the cancer, it's correlative. So the deeper you can suppress an individual's production of erythropoietin, the more favorable their outcome is, whether you look at response rate or whether you look at PFS. So we feel that's pretty compelling.

Just touch quickly on our other programs is introduction. The other program that's in Phase III is our anti-TIGIT program that actually involves 3 different Phase III studies. The reason we're so excited about that is the first one of those is going to read out in 2026. That's a study called START 221. It's an upper GI cancers. Not only is it going to read out. So that study enrolled about 1,050 patients. It was fully enrolled in June of 2024. But we just presented data from the Phase II correlative of that same dosing regimen, same patient population, where we show OS on the order greater than 2 years, whereas the standard of care in that setting, which is nivo chemo, but you also see similar data for Tisle chemo or for KEYTRUDA chemo is about 12 to 13 months, so almost 2x the OS. So that will be reading out later this year.

Also, the second Phase III study there, STAR 121, which is in the PD-L1 all-comer non-small cell lung cancer, probably the biggest part of KEYTRUDA's market 1,000-patient study that will be fully enrolled at the end of this year, and we're running a Stage III lung trial also in that where we're combining with durva and actually AstraZeneca is executing that third Phase III program is with our CD73 inhibitor. We just, as of September, fully enrolled almost a year ahead of schedule in 9 months, a study called PRISM-1. That's quemli, our CD73 inhibitor on top of gem-Abraxane, the standard of care there. So that was versus gem-Abraxane that was fully enrolled in September. The readout there is OS. For gem-Abraxane that's probably in the order of 9 to 10 months. So that's not that far off.

And finally, because we are an R&D centric organization. We have a very substantial discovery organization. In our investor event that we just did in October, we highlighted a group of immunology programs that we've been quietly working on. And the first one of those, which is an X2 inhibitor, we expect to enter the clinic next year. The final piece is we're well capitalized. We sit currently with over $1 billion in cash. So everything that we're talking about, we're able to execute. And our -- that cash covers well readouts for all of those programs, the initial Phase III readouts, including that PEAK-1 study that's in clear-cell RCC. Jen, do you want to comment on the design of the...

Sure. So the first Phase III study that we have ongoing for cash is combining cas with cabo and comparing that combination to cabo and IO experience clear cell RCC. So these are patients that got IO, either in the adjuvant setting, or in the frontline setting. So this is a very big patient population, a market opportunity. We're going right on top of the most widely used TKI in that setting cabo. It's used about 2.5 to 1x more than lenva in that setting. So the reason that we liked using cabo is that clinicians are so comfortable using that. When you're dealing with TKIs, TKIs do have a fair amount of toxicity. And so choosing a TKI, the clinicians are very comfortable using very comfortable managing toxicity and therefore, keeping patients on drug is super, super important.

And then cabo is also what we're using in the control arm. So using the same TKI and experimental arm and the control arm also just makes us a very clean study. And that is a key difference from the Merck study, which is similar LITESPARK-011, where they use lenva and the experimental arms, so they combine [indiscernible] with lenva, and they're using cabo in the control arm. So I don't think we'll have any contribution component issues, but there's a little bit of like if they show a benefit, which they seem to have shown with the combination with some of that coming from lenva. Is it from belz? So we feel like we have a much bigger study design. We expect to...

How are the investigators liking that they're enrolling that fast because they like it? They like that design, it's easy.

Well, yes, that's exactly where I was going. And so investors love the design, our expectation is that this study will enroll very, very quickly. If you look at the typical RCC study, either frontline or second-line study, they tend to enroll 15 to 18 months. There's no directly competing studies right now, which is really nice. RCC is a much less competitive space than a lot of other oncology market like [indiscernible]

We're using a 2:1 randomization. So that means patients are twice as likely to get an experimental arm versus the control arm. So both patients and clinicians love that. And then the third thing that's important is that belz is still not paid for in a lot of regions, including in Europe. So Europe is particularly enthusiastic about the study. I mean there's a lot of enthusiasm everywhere. But because there's so much awareness around belz in Europe and it's used for PHL, but it's not paid for yet in RCC, the only way to get access to HIF2 alpha inhibitor RCC is to put them in a clinical study.

So that's driving a lot of the enthusiasm for in Europe. So we do think that study is going very quickly. It's a PFS endpoint. So PFS for the control arm is probably around 9 months or so. So that should also enable us to get to a readout very, very quickly. So we're calling this our fast-to-market opportunity.

Did you give a time line for the...

We haven't. I'd say our goal is to get the study completed, enrollment by the end of next year. So that would be in that kind of 15-month window that is pretty consistent for other RCC studies. And then it's just going to come down to like the event rate. What we do have in ct.gov right now, is the primary completion date of April 2028. We definitely want to beat that. Our goal is to beat that.

Sounds like are some months are there.

Yes, we have all that. So I think as we get closer to the data, that start to get a sense for what the event rate looks like, then I think more specific guidance. Because obviously, the goal is to get to data.

So PFS is the critical. Is there an OS in there too?

We're looking at OS as the key secondary endpoint.

Is there a crossover or you want to do that?

No, no crossover. So OS is the key secondary endpoint. We had a discussion with the FDA, very, very comfortable with PFS as the sole primary, which is what, 80% to 90% of the RCC studies have had.

And you're just going to go to the prespecified number of PFS events. You don't have -- it's fast. They don't want to put interims in.

Right. So this is very [indiscernible] One thing we have said is there's no interim. So we're putting all of the alpha on that on that PFS endpoint. So not taking any risk there. So very excited about that study. The next thing is frontline. So we have a collaboration with AstraZeneca to combine cas with volru, which is their anti-PD1.

One other thing, sorry. So on the IO experience versus the -- so was it, you can just -- do you have a ratio? Or is it just you take you take in that population or...

Right. So our sense is, is that just based on what we see with that cas cabo cohort. About 20% of patients enrolled in cas cabo cohort had gotten adjuvant pembro. And that's pretty consistent with what we've seen in some other contemporary studies. We'll see what they got for LITESPARK-011. That will be an interesting data point to see what percent of patients have previously been treated in the adjuvant setting. But our expectation based on everything we know is that about 20% of our patient population is adjuvant pembro. And these patients -- because most of these patients either progressed while they're getting adjuvant treatment or right after their adjuvant treatment completed, they're considered to be resistant to pembro. And so that's why they're considered to look just like a patient that failed frontline anti-PD-1 therapy in the metastatic setting.

Okay.

And when we look at -- we talked about this, too. So when we look at those different patient populations in the cas cabo cohorts of patients that got treated with pembro in the adjuvant setting versus a patient that got treated in frontline metastatic patients, they performed very similarly.

Okay. And one other thing before we get to EVOLVE, just maybe comment a little bit on the data that's supported that they play well together, cas and cabo, just say if there's no issues there with this.

Yes, safety profile. I mean it's something else that we highlighted, the investor -- or I'm sorry, the ASCO event where this was presented. Safety profile actually look at the safety profile and think that it looks better than what you would expect with cabo mono. So I don't know if there's anything to that, but the data looks really good.

One of the things that we're keeping in close eye on which is super important is just the dose intensity because obviously, the goal is to keep patients on the highest dose possible of both drugs as long as possible. And the cas intensity is like 95%. I think cabo was 90%. So that's something that clinicians have been very impressed by because a lot of times when you combine 2 active anticancer drugs, you will see added tox and so you'll have to dose reduce or take patients off one of those therapies. So it's a very, very positive sign that we've been able to keep patients on either full doses or drugs after treatment.

Okay. So, and then EVOLVE?

EVOLVE as a clinical collaboration that we're doing with AstraZeneca in the frontline setting where we're combining cas with their anti-PD-1 CTLA-4-bispecific. Anti-PD-1, CTLA-4 is a very widely used regimen in the frontline setting. So that was what we loved about this collaboration with an opportunity to create, to kind of build on IO-IO in the frontline setting and add additional efficacy without the added toxicity and to avoid TKIs in the frontline setting, which is what people really like about using Anti-PD-1, CTLA-4 versus anti-PD-1 plus TKI, which is the alternative.

So we started this study a few months ago. It enrolled very, very quickly. We decided to pause enrollment and see how the patients already on treatment were doing because we saw some immune-mediated AEs, not unexpected at AEs just based on the fact that we're combining anti-PD1/CTLA-4.

So we're tracking those patients now, and then we'll make some decisions. probably late this year as to whether or not we want to modify the dosing regimen for or and then likely keep going there. So that's

Where did you get with the enrollment? Or did you... With the enrollment or deny...

We didn't say -- what I would say is enrolled quicker than we thought.

Whatever you saw on this AE , this was what you would have expected?

It definitely was not something that we would not have expected. It is a if you look at late

It definitely was not something that we would not have expected. It's classic. If you look at like...

What was the -- I mean, then it wasn't than it was in the...

Yes. So I think it just -- just based on the incidents, we just wanted to be careful conservative, given these are like novel metal drugs. And so we just decided like we have a decent number of patients on therapy. Let's pause not enroll additional patients, see how these patients do. And then probably modify how volru is being given. And if you look across their Phase III studies, the Phase III studies are all using like slightly different dosing regimens of volru.

So this wasn't totally unexpected. So we'll see how these patients do, probably make a decision on twealing the dosing of volru and then we can keep going here. In the meantime, we are adding some other cohorts to ARC-20, to look at cas with other regimens. So ipi/nivo will be one of those. And second half of next year, we'll make a decision on which of these regimens.

Wait, you said ipi/nivo separately? I didn't hear that.

So with ipi/nivo.

So it's triple?

Yes. So ipi/nivo plus cas, and this will be in ARC-20. One of the nice things about ARC-20 when we set that up is it's very easy to stick additional cohorts in there and evaluate other combinations. And so we're taking advantage of that and just decided like to be safe, let's just see what like cas, ipi/nivo looks like. And we'll probably look at some other things in the study as well, which we haven't talked about yet. And then second half of next year, we'll be in a position to start a Phase III study in the frontline setting and what we think is the best combination.

We should think of that as -- and this was like an intent all along is somewhat of a bake-off. So Jen did mentioned about like one cohort that we already have that's almost fully enrolled, is we have anti-PD-1 plus cas. And the idea there was cas was looking as good or better than TKI alone and then top of it had better AE.

So a big concept Jen alluded to, but I want to highlight is the whole TKI strategy, TKI free strategy, that's something that's feeding in what the investigators are quite enthusiastic about. And it's an opportunity. It's rare that you get call it dropped in your lap, an anticancer mechanism that essentially has AEs but no toxicity. So HIF2 inhibition, I've had investigators tell us that patients who experienced TKI and they go on HIF-2 inhibitor, they basically never want to go on TKI again. I think it's like a vacation.

So you can imagine -- and we're talking about the CTLA-4, PD-1 plus cas, PD-1 plus cas, you could imagine that you could get 2, 3, 4, 5, 6 years of therapy that's robust and then they'll get their TKI in the next regimen as opposed to giving them the TKI.

Are you giving serious consideration to just do PD-1 cas?

It's certainly in...

Why you see CTLA-4 is a tough target?

Because well, the interesting thing with -- and this is why we feel we should export and it's why we not only we -- it was our intent all along to not only investigate with volru, but ipi, anti-PD-1 as well, because it does turn out. The reason that's used in about 35%. So it's the most used regimen in frontline, and it's the highest probability to get a cure. So it has the most risk as you said, CTLA-4 is a tough therapy. So it will be part...

So it's interesting because like the KOLs are saying no TKI, like let's keep it like a nice, very well tolerated. But then you kind of -- you would think that to be intellectually consistent, you're like, well, we don't want to do CTLA-4.

I had that same intellectual argument with myself. And I think the thing comes -- I mean it's interesting, Jen's pointed this a couple. The last ASCO, they were literally -- BMS gave a presentation. It was like the 9-year follow-up on ipi/nivo. So you can get some dramatic cure.

So you do have that -- I would love to see if you gave me the choice, I think I'd rather see anti-PD-1, HIF2 push the TKI out further. But if you could pull something off where HIF2 basically lower the rate of primary progression and enhance the efficacy of CTLA-4 PD-1, that would be that we want to.

So when will you have resolution?

Second half of next year. So the idea -- we're choosing this all is a bake-off and everything has been like working, if you're sort of think of it as a retrosynthesis, we're working backwards to have the data to inform that.

And not necessarily paying for, obviously...

Obviously, yes, there is a big cost income.

And then you do -- if it's just a PD-1, you're going to use it nivo? What are you...

Yes, In Phase I, but we'll say a lot more, I think, early next year exactly what we're planning on doing.

But our data set I would foreshadow today, so the study is up during clinicaltrials.gov is ZIM plus cas. It's almost fully enrolled. The early data looks good.

Okay. So for the purposes of this take off, you're using yours?

Yes, right.

But that wouldn't...

Right. It may be different. And so we are -- we will have an ipi/anti-PD-1, and we haven't decided if it will be nivo, zim, or an arm of each.

Okay. So that's important. We got that.

Exactly.

And then that will coincide pretty much with potentially almost having the... Sorry. No, we're my year, a year off, sorry -- it's the year.

So like one is the fast to market, the others capture that frontline, but their frontline durability we think that really could be something that you've got patients 4, 5 years. I mean, keep in mind, so this is a data point we like to point out, in our late-line monotherapy, cohorts. The one that's the furthest along, 40% or so of the patients were still on study after 2 years starting treatment. So you're getting that durability even in the later. That's what drives the concept of why for someone to take the TKI early in their therapy push that into a later line of therapy and let them have the quality of life.

What is the KOL you had at the lady from -- what was her view on which way to go for the frontline? Did you have a or see what -- did she like [indiscernible] ?

Yes, TKI is I perineal -- and like going back to your...

Right. So I meant like whether to do the triple like whether to do the bispecific or the...

She's involved with the bispecifics study. I don't think she has a strong view either. But we're excited about the combination. So we'll see where things go and start these other options and important thing is having options to make an educated decision.

The individual antibodies gives you a different flexibility with when you turn off the CTLA-4. So we'll see how that plays out.

Okay. Anything else you want to highlight on cas? I mean that's -- we covered a lot of territory there. Any other -- I mean any other updates from what you've already shown, I mean, we saw the update recently and you've shown the combo data, you've shown the doses, the different doses. We know the dose going forward. You've done the dose exploration.

Right. I think the update would be what we expect for next year very succinctly. Early in the year, we'll update on those monotherapy cohorts. We see a further refine durability PFS. We'll talk more about the biomarker correlation between erythropoietin suppression and clinical outcomes. Roughly in the middle of the year, we'll update on the durability of the cas cabo cohort. And then in the second half, you will share the data from that those -- the bake off. You'll see what drives our selection of at least one Phase III study with the intent to start that by the end of next year.

Okay. Now the one that's sort of -- obviously, everyone has written off, but I think... it's very interesting. So like what's your view here? I mean STAR-221, I mean, you have basically a very good setup, right? I mean...

So I'll describe it. So STAR-221 is our first anti-TIGIT trial that we'll read out next year. We and AstraZeneca are the only ones who have utilized an Fc silent configuration for the anti-TIGIT We, in a molecule domvamalinab, they have a bispecific that has Fc silent. Between the 2 of us, we've had 5 readouts.

Which is their Fc silent?

The bispecific.

It's that one.

Yes. It's that one, same. And they're running 11 Phase III studies with it including in the SKY-1 population, they started it after the failure of Genetec. But our data, we showed OS in the exact population, that's the STAR-221 population, an OS of just over 2 years where the standard of care, which is nivo chemo, but you all have the same data for Tisle chemo, the same data for KEYTRUDA chemo is about 13 months. So almost 2x the OS. We've also had a very positive readout in a randomized study in PD-L1 all-comer non-small cell lung drop.

So this study, which is event-driven, it enrolled 1,050 patients. It was fully enrolled as of June of 2024. It's going to read out sometime in 2026, and we think this will be the first time that you'll see a Phase III readout for Fc silent anti-TIGIT. All of our data to date they've only pointed to positive. So from an investor standpoint, I think we have like literally 0 built into our value from that.

Just remind everyone that just the trial design... Yes, just go through that.

And the hierarchical readout.

Yes. So it's pretty simple, which is like another simple study design, which is also like what we tend to do is like going on top of standard and using standard of care in the control arm. So we're looking at dom, zim, plus chemo versus nivo plus chemo. So nivo plus chemo is by far and away the most widely used standard of care in the frontline gastric setting. We're enrolling all-comer frontline gastric with the exception of HER2 -- sorry, HER2-positive patients. I know [indiscernible] just had a positive readout. That patient population is not included in the study.

For the primary endpoints, we're using test OS, which is really the gold standard from the FDA perspective. And we're using dual primary endpoint. So one primary endpoint is the entire patient population, so ITT. And then the other is looking at just the TAP 5, which is essentially your PD-L1 high patients. And that's about 48% of the STAR-221 patient population. So it's still a big percentage. It's not like we're looking at a sliver in that other endpoint. And so we can win on either of those to have a successful study. If you win on just one of those endpoints, let's say, you win on the PD-L1 high or TAP greater than 5 patient population, you can then recycle the alpha into the ITT. So it's a very simple...

That one is first? That's like hierarchical?

No, they're tested at the same time. And so that's why...

So ITT and this TAP 5..

In the TAP 5, yes, those are tested at the same time. If you hit on one but not the other, you can then recycle alpha from one of the endpoints to the other endpoint

If you hit on the TAP 5, wouldn't it be weird not to hit on the ITT. I don't know.

Not necessarily just because we think most of the benefit is probably going to be in the TAP positive. So either TAP greater than 1 or TAP greater than 5 patient population. So I think if you were to predict today, we would say that's the patient population that's most likely to benefit. So that's how we did it like we did, but we think there's some especially since the greater than 1 is like 80% of the patient population, there's still a decent chance we get...

Okay.

So also, as Terry said, no one is giving us value for it, which is fine.

Which people are -- do you know?

No. The reason we don't know is because it's the event rate. And the thing that for those -- like we're not being cute about it, but to give a sense of how it looks, we've actually shared Kaplan-Meier curves from a randomized data set in the high PD-L1 lung patient population. And what you have there is anti-PD-1 with an OS of about 2-plus years, just what you would expect in the anti-TIGIT arm of that anti-TIGIT plus anti-PD-1, the hazard ratio was 0.64. But if you look at the Kaplan-Meier curve, you'll get -- you'll understand when you see how flat it is that the event rate that was the Arc-10 study. We stopped at or are we in favor of...

You're saying you need a lot -- even if the hazard -- I mean, you can have a good hazard ratio, but still have not a lot of events if you have good data.

Exactly. So the thing is that until you hit the event...

You're tracking the pool.

We know the pool...event rate.

And you never said what, how many are...

No. And we don't ever comment on the stat plan and -- but -- we can't make a call as to when we would want to give guidance that's going to read out in what part of 2026. Maybe as we get into early 2026 as soon as we can, we will.

Okay. And then can you go through the argument about the Fc silent and the fact that, that -- what you said, but just to resay it. I think there's a lot about the immunity.

I'm going to explain this like clearly because it's going to finally matter. So in Fc-silent antibody, cannot have effector function. And Fc enabled may, but not necessarily have it. It turns out, in the case of anti-TIGIT that you actually see very strong effector function with an Fc enabled antibody. What is the effector function? Effector function means that the antibody not only binds that cell, but potentially it kills the cell.

And so what's driving that most likely is your peripheral T regulatory cells which are basically keeping your immune system in check. They're your peace keepers of your immune system are loaded with TIGIT. And about 80% of them are getting whacked by the Fc-enabled anti-TIGIT. Why is that important? Well, it causes immune AEs go look left and right with either the Merck molecule, [indiscernible] the Genentech molecule. And what you'll see left and right is that the immune AEs are dramatically higher in the study arm. Now the thing is it doesn't just cause immune AEs, but then that causes the patients in the study arm sometimes they have to go off therapy. So you lose efficacy as well.

With the Fc-silent anti-TIGIT antibody -- and by the way, this effect is even more profound in the presence in chemotherapy. With the Fc-silent anti-TIGIT, the mechanism, it's very elegant, it was worked out by Genentech, the blocking mechanism meds to none of that. So your safety profile, when you do anti-TIGIT, anti-PD-1 chemo versus anti-PD-1 chemo, the AEs look almost identical as if the anti-TIGIT wasn't there. So you're getting this blocking effect, which is central to the mechanism of basically activating the immune system selectively in the tumor to a very safe mechanism and that's the big difference. So sometimes I'm going to try to frame this, give people a metaphor in their mind.

The Fc-enabled anti-TIGITs are almost like you should think of them as an ADC that targets peripheral Tregs and blows them up. So you're getting this collateral activity that is nonbeneficial and, in fact, detrimental to your anticancer activity because I'm giving you these AEs and that's the big difference. Both we and AstraZeneca have seen similar data sets where the safety profile enables the study arm to not lose out because of AEs.

I wonder if an enterprising academic like ever took the data or someone at AstraZeneca or somewhere or one of the -- and took the data and impute out all the stoppages for all the AEs and try to see if they could recover like an actual therapeutic because that would be a good proof point for what you are saying.

One thing that was interesting, I mean this wasn't quite making point, but AZ did present some data, I think maybe at ASCO. And so they have a bispecific, they went TIGIT bispecific. And so what they did is they looked at the bispecific with their Fc silent TIGIT and then they created another bispecific with an Fc active TIGIT antibody. And they showed exactly what was referring to of Treg depletion, most importantly, maybe T cell depletion. So that was kind of an interesting experiment that they showed that it made that point, I think, very specifically like why you want to block TIGIT and not target TIGIT containing...

Anyway, so this is a silent catalyst here which is like a one of the...

By the way, the synergy on the catalyst is that if that hits the PD-L1 all-comer non-small cell lung trial, based on those good data, now we're going to start that. So that's probably the biggest component of KEYTRUDA's market. The 1,000-patient study with dom will be fully enrolled by the end of this year. So you're going to go from something that the world looks at is probability of technical success is 0 from an investor standpoint, not from our standpoint to like immediately overnight, I think particularly since we have the data and the PD-L1 highs that look quite compelling.

So you combine that with a chemo regimen from the upper GI cancer. Don't forget, you're treating biology, you're not treating organs. And so when you combine the lung data we have with a potentially positive STAR-221 readout, I think there'll be the probability that people start to ascribe to that lung trial being positive, which is a huge market will be dramatic. But we're at this point, we don't want to twist anyone's arm or we're comfortable with...

I mean that's still running. And we haven't heard much about it.

Because just we'll be fully enrolling okay.

So if STAR-221 hits, that will become very topical. And then, of course, it doesn't whatever. But if it hits, then when would you have that? When would you be able to say something like an endpoint on the lung trial? That's like 20 later, much later?

Keep in mind, standard of care is probably 2 years ago.

Why did you do -- the reason you did nivo and you did your.

Well, that's my standard of care.

No, I know that. But why didn't -- you didn't want to do nivo in the active arm. You wanted to use your...

Because it's a lot cheaper, cheaper and then we're pricing not on top of whatever nivo is priced like want to price...

Okay. Cool. Well, that was fun. All right.

And we didn't even get to quemli.

You talked about it at the beginning. Thanks, everybody, for checking in. Appreciate it.

My name is Pia Eaves, I'm Vice President of Investor Relations for Arcus Biosciences. Welcome to our October 2025 investor event. Thank you for joining us this morning.

Today, you'll hear from -- okay. Sorry. Our agenda is gone. There it is. Okay. Today, you'll hear from multiple members of our management team as well as 2 independent KOLs, Dr. Rana McKay as well as Dr. Bill Kaelin, who are preeminent experts in RCC and HIF-2 alpha biology.

We will also have 2 Q&A sessions, about 20 minutes each where we can take questions from the room. I will be running a mic around the room for that. If you are watching on the webcast and have a question, please feel free to e-mail me directly, and I will do my best to ask the question on your behalf or get back to you as soon as possible.

This event is being recorded. So please, if you're in the room, keep background conversation to a minimum and keep your phones on silent. And I'd also like to remind you that, as always, we will be making forward-looking statements. So please review our SEC filings that review the risks and uncertainties in excruciating detail.

And with that, I'll turn it over to Dr. Terry Rosen, our CEO, to begin.

Thanks, Pia. So thanks, everybody, for joining us today. The main event is casdatifan. Also, Juan is going to be talking about our I&I programs. But before we get started, I think most people here have been following Arcus for some time. We've been around for 10 years or so, but some people are newer. So we thought we'd spend about 10 minutes or so to just provide a little context say a little bit more about the company.

As you know, we're not a one-trick pony. It's not just one program, it's not just casdatifan. And in fact, we have 5 and soon to be 6 Phase III studies that are ongoing. Casdatifan, though, is the highest priority program. And if you'd ask why has casdatifan highest priority, it's a number of reasons. The first thing is validation. It's validated scientifically, it's validated clinically, and it's validated commercially, most notably by belzutifan, Merck's HIF-2 inhibitor. You'll know that, that's approved. It's approved just as a monotherapy in late-line settings. And even with that, it has a run rate already now about $700 million. That's really the tip of the iceberg in the field.

Secondarily, from Arcus's standpoint, we own casdatifan 100% so with that in mind, it gives us an enormous strategic optionality is particularly when you combine it with the rest of our portfolio. Perhaps most importantly, and I think as you'll really see today, the molecule has a best-in-class profile. So we feel we can fully leverage the opportunity offered initially by clear cell RCC.

I'd like to spend a bit of time on dom, our anti-TIGIT as well as quemli our CD73 inhibitor. So next week, you'll see our abstract published for ESMO. We have an oral presentation on dom from EDGE-Gastric. EDGE-Gastric is the Phase II study in upper GI cancers looking at dom-zim. Those will be the first time that we share overall survival data. I think what you'll find exciting about those data is that they foreshadow, what will be our first registrational readout next year from STAR-221, same setting, same combination was fully enrolled in June of last year. So we think those data are exciting. Again, they'll foreshadow the potential of what STAR-221 could deliver.

Now that's a very broad program. We also have our front-line non-small cell lung cancer, PD-L1 all-comers that's going to be fully enrolled by the end of this year, that will be 1,000 patients. Keep in mind that's going at the -- against KEYTRUDA, and that's probably the largest segment of the KEYTRUDA market. Finally, quemli, which is a little bit under the radar. That's our CD73 inhibitor. You'll recall that we reported overall survival data from our study of quemli on top of gem Abraxane pretty unprecedented, 16.4 months overall survival. Now that trial is fully enrolled in about 9 months.

So it was fully enrolled in September, about a year ahead of schedule Keep in mind that the OS for the standard of care, there's fairly dismal whether it is pancreatic cancer. So that should be reading out in the not too distant future.

Now I want to mention that today, for the first time, we'll be talking about our immunology programs. We've really been working in immunology since the outset of the company. These programs have finally reached the state of maturity where we're comfortable wanting to say something about them as we think about in 2026, our first molecule going into the clinic. And in fact, we expect in 2026 and 2027, that will -- those will be our INDs that are next to come.

The final point on this slide is the $900-plus million that we have. So that enables us to get through initial readouts from all of those late-stage programs that I just got done discussing, and it takes us through multiple value inflections for the company.

So today, we're talking about casdatifan. Why today? So we just did a data cut largely to provide the data that will underlie our first clinical publication on casdatifan. Now we've had a lot of tailwinds on this program. There's investigator enthusiasm for the target, there's investigator enthusiasm for casdatifan based upon the data that we generated to date. So we feel with our Phase III programs getting up and going, most notably PEAK-1 as well as our collaboration eVOLVE with AstraZeneca. These are sort of provide the tailwinds to the tailwinds we keep that momentum going. So what specifically are we going to talk about today?

So today, there's a number of firsts. We'll have 120 patients that represents our 4 monotherapy late-line cohorts, 50 milligram BID, 50 milligram, 100-milligram and 150-milligram once a day. Those latter 3 doses aren't random. There are project optimist doses. So what you've got is 3 doses that are at the upper end of the dose response curve. So we feel while we're going to break out the individual doses, so you'll see the 100-milligram tablet, the go-forward dose and formulation in Phase III, but we've also combined the data because we feel with 120 patients, that's a huge data set, and it gives you a sense of what truth is. So we'll have 120 patients.

The other first that we'll have today, you'll see our 150-milligram data. And now it's been about 8 months since ASCO GU. So we have much more maturity, so you get a chance to see how PFS is looking. And it's clear at this point that casdatifan has a black and white, best-of-class profile. So number one reason to get these data out is to drive enrollment as these Phase III studies get up and going. They're already doing -- they're doing well. Secondarily, as I mentioned, on I&I. The last 2 years, we've quietly been working -- our discovery effort has been about 50% on I&I. So what you'll see today are the most mature data. And in fact, we expect to take an inhibitor of MRGPRX2 or RX2 program into Phase I, and we'll talk about the advantage that we think we have.

What I want to emphasize is that you look at our -- as you look at the portfolio of I&I programs, which I think you'll be impressed by the breadth there are a lot like the HIF-2 inhibitor program, where there's a lot of validation, but there's not a good molecule yet. So we feel with our discovery organization, what we've built, that's playing to a sweet spot.

We wanted to assemble this little table here just because as an early-stage company embarking on PEAK-1, it's not our first global study. So when we talk about how one might think about our ability to enroll, we want to just put these out there. So STAR-221, the trial I already mentioned we enrolled over 1,000 patients in 18 months. As I just mentioned, we enrolled the quemli trial in 9 months. In fact, even ARC-20 is a global study. It's in 5 countries, we've enrolled over 240 patients, so we think holistically, we've got the experience and track record and understanding that we'll be able to enroll this trial. On top of it with extraordinary investigator enthusiasm and strong data going into the study we're going to be able to roll this in a very efficient and rapid manner.

This is another important aspect of Arcus and our ability to execute we've been well funded, and we've particularly been well funded by our collaborators, and that's been not only the capital, but also on the execution front operationally. So I would use as an example sort of almost forward-looking the eVOLVE study with AstraZeneca. So here, we have probably as good or better than anybody collaborator to run the eVOLVE program, that will be our study in front-line clear cell RCC. So you've got a great team executing it. We have experience with them from our Phase III studies with our anti-TIGIT. We're cost sharing, but we maintain 100% of the economics and commercial rights for casdatifan. So we think you couldn't come up with a more efficient way to execute an important study.

Similarly, with dom, Gilead has been a major player, both operationally and from a funding standpoint. And sometimes it gets lost, but Taiho has been a great partner in that as well. So Taiho not only executes the trials in Japan, but they pay for them. Taiho's also going to be making a decision very shortly within the next few weeks about potentially opting in to the casdatifan program. They'll be a valuable collaborator if they do so.

Finally, I'll point out on quemli, you'll recall that Gilead made an equity investment in Arcus in 2024. They have more than fully funded the quemli registrational trial. Now on the other part, sort of your numerator, denominator would like to emphasize is that our investment in dom-zim, quemli is really peaking this year. And in fact, next year, our investment in dom-zim is going to be probably on the order of 50% of what it was this year, and the majority of our clinical investment will be in casdatifan.

So as I suggested, it's that funding that's really enabled. When you look at the breadth of what we're doing and the depth of what we're doing, all of these programs are in major markets, huge medical need. We're competing with Merck. We're competing with Roche, we're even competing with our collaborator AstraZeneca, but we're able to do that because we're well resourced. I think this just emphasizes what may be obvious, these are all big markets. So if you just think about our initial 2 and we have bigger visions on this, our initial 2 forays into clear cell RCC. The front-line in second-line settings, probably about a $5 billion market opportunity. Dom-zim, between the upper GI and the non-small cell lung, obviously, that gets you into double-digit billions of dollars, and pancreatic cancer with the dearth of anything good is probably approaching a $5 billion market. So these are all huge market opportunities where we have a real opportunity for Arcus.

So now let me transition from an overview of the company, the overview of casdatifan. We thought we'd start with a bit of a review of the field to give a bit of context. So it was in the 1990s that what I'd call Nobel Prize winning quality biology on HIF-2 alpha was generated. In fact, we're fortunate enough to have one of those Nobel Prize winners, Bill Kaelin join us today to answer some questions about HIF-2. Now given that HIF-2 is a transcription factor, there wasn't sort of a mediacy that this would immediately lead to therapeutics because transcription factors are notoriously difficult to drug. However, there was some very elegant work done by structural biologists at the University of Texas House Western that actually revealed a potential small molecule binding pocket in HIF-2.

In scientists at Peloton, a company called Peloton, most of you are probably aware of them, came up first with a first-generation molecule, where they generated clinical proof of concept, then it came up with what was to become belzutifan, which was like a good but not great, and it's got a number of clear limitations that it's had all along, but that molecule was a good drug. Merck acquired Peloton, pre-Phase III for about $1 billion upfront and another $1 billion in contingent payments. So with the recognition of the limitations of belzutifan, we began work. We took casdatifan into the clinic in 2023. We stand here now, I think, poised with a very robust Phase III plan and beyond.

This highlights some aspects of our program. There's going to be a lot more depth there. So I'm just going to make a few points here. If you go to that second bullet, it kind of hits on some of the key points. When you think about belzutifan, we've got about twice the PFS, 50% higher objective response rate and they've confirmed response rate and it's all driven by probably the most important number, that's the 50% lower rate of primary progression.

As Jen is going to talk about, we have a clearly better. And Jen is going to spend some time. This will really be the first time that we're doing this. Since the program is so tangible now, I think she's going to do a good job of linking our development strategy together with the commercial strategy. So tie all of the story together holistically. And this is something that we believe will be growing to a $10 billion-plus market because one of the things that I think you'll be most impressed by is the duration of therapy. So when you take the patient population and you look at how long these patients are going to be benefiting from casdatifan, I think it's going to get you to some pretty big numbers.

I'd like to take -- I kind of go rapidly. I'd like to spend a bit of time on this slide because to me, this is one of the most important slides in the deck, and it's one of the most important sets of data because it really gets at the underlying advantages of casdatifan.

So the left-hand panel, we basically had those data even from our healthy volunteer studies. This relates to our PK and PD profile. So what's known about belzutifan is it has absorption-limited pharmacokinetics. So they would love to get more drug in than they get with their 120-milligram dose. However, as they go higher, they don't get meaningfully higher exposures. Now we get about the same level of suppression of the biomarker. So the gold standard biomarker here, I think you're all familiar with, is the suppression of erythropoietin production. So the casdatifan at 20 milligrams gets what Merck gets at their 120-milligram dose, except our clinical dose is 100 milligrams. So we're at fivefold the PD equivalent of the Merck drug.

Now if you go to the panel on your right, what you have are data that Merck published at the end of last year, along with Arcus data. So that blue curve, which is a time course for suppression of erythropoietin, the blue curve are Merck data. And what you can see is not only do they not get quite as deeper response, deeper suppression that casdatifan achieves, but they lose that effect on the biomarker roughly 9 to 13 weeks. What you can see is we maintain our effect out past the year. What's even more exciting and probably more important, and Juan is going to get into some real detail here, is now we've been able to correlate that ability to suppress erythropoietin production with clinical outcome. And that's whether you look at ORR or whether you look at PFS. That's extraordinarily important because when you think of these types of data, as you look at them, they're highly quantitative and highly reproducible.

So essentially, those data are your smoking gun that correlates with the very different clinical outcomes that we're seeing. So you can feel confident that those clinical data are meaningful. And you'll especially get that when Juan shares those data.

Our communication strategy on this program has been purposeful. It's been intentional. We recognize the enthusiasm for the mechanism. We recognize the advantages that we had with casdatifan. So we started presenting early. You see we've had multiple presentations, including most recently an ASCO presentation on our combination with cabo.

The thing I want to emphasize, though, is that we promised at the beginning that this mechanism would lead to improvement over time. Oftentimes, companies, people present data sets, and the data degrade. We promised that the data would get better. And I think today, we'll have the receipts on that.

So let me go to this slide, and let's focus on the today column in the 100-milligram once-a-day tablet that's our go-forward formulation. What you can see is -- just as we saw at the beginning, the rate of primary progression has been consistent. The confirmed ORR as we sit here today is 35%. What I can tell you is we've had 2 additional responses. And in fact, to emphasize, I make this point primarily to emphasize that the data continue to get better. Since the data cutoff, there's been another response. So these data even out at this time point continue to get better.

Most importantly, though, we now can move on from ORR to median PFS. Durability is the approvable endpoint. This is what we really care about. And so we're at a stage today where you'll see data on median PFS, which I'll remind you, even though it has not reached, for a combined data set, it's fairly stable and it's over 12 months. And with the 100-milligram tablet, we have a median time on treatment of over 12 months. We are quite confident that the median PFS is going to be over 12 months for that tablet.

So this will be my last slide for now. I just want to emphasize, we do feel that we're poised to have the HIF-2 alpha inhibitor of choice. Not only does the molecule have across every endpoint, better properties, but we think we have a better development strategy. And even on the pill burden front, patient convenience, we've got a 1 tablet, great formulation, once-a-day drug. So we feel we're really well positioned.

So with that, I'm going to turn things over to Richard, and he's going to walk you through the data in quite some detail.

Let me take the clicker. Great. All right, thanks, Terry, and thank you all. I have the pleasure this morning of sharing some great data with you and updating you from what we've seen before.

Let me get to my slides. And I think this data really supports casdatifan as a best-in-class HIF-2 alpha inhibitor. At ASCO GU in February, we previously shared early data from 3 of the monotherapy cohorts from our ARC-20 study. That was the 50-milligram BID, 50-milligram QD, and 100-milligram QD cohorts. So today, I'll update you on those 3 cohorts where we now have 7 to 8 months additional follow-up. We'll also share the data from the 150-milligram cohort, and as Terry said, importantly, we've now combined those 4 cohorts to now have a data set of 120 -- well specifically 121 patients that we can look at, so we can interpret that, much more stable numbers, because we are no longer trying to interpret relatively smaller cohorts of 30 patients each.

So we'll focus today on the 100-milligram QD cohort because that's the dose going forward in Phase III or the pooled data set, which is the larger data set of the 4 cohorts with 120 patients. And you'll see we have a substantially higher tumor response rate compared to belzutifan. We also have a much higher or longer progression-free survival. We have a lower rate of primary progressive disease as well. So I think all this data, in every efficacy market we look at is favorable when you look at casdatifan compared to the only other drug in the class, which is belzutifan. So I think we have a lot of tailwinds going into our Phase III study PEAK-1 as well.

So a quick reminder here of the study design in ARC-20. We've enrolled over 240 patients now in the study overall. It had a dose escalation component and then 8 separate cohorts, about 30 patients each for expansion in different settings. So we're focused today on those 4 in the middle. These are late-line patients. That is all the patients previously have had a checkpoint inhibitor and a TKI. So late-line patients, about 30 patients each cohort, again, and this is monotherapy casdatifan data.

And since we're talking about potential best-in-class, that's basically the only other real molecule in the class is belzutifan. So many times when I compare our results, I'll said it against the belzutifan benchmark usually using LITESPARK-005 because it's the most contemporary study of theirs. But I want to be very clear, we're not cherry-picking. We aren't just picking LITESPARK-005 because of the results and that they had better results.

In fact, LITESPARK-005 is very consistent with all the other trials of belzutifan. When we look at the data sets from their earlier studies, again, looking -- trying to compare apples-and-apples with the patients that had prior checkpoint inhibitor and prior TKI, which is what we pulled out here. So for example, if you look at the second column on the right, the tumor response, it's very consistent across these data, 19% to 22% for tumor response rate. And the median progression-free survival is generally 5.5 months across 2 of the studies.

LITESPARK-013 had the longest progression-free survival of 7.3 months. But note that, that study only enrolled patients with 1 or 2 prior lines and about 30% of those patients did not have a prior TKI. But regardless, even the progression-free survival is generally 5.5 to 7.3 months.

So looking at the patients enrolled in ARC-20, they're very consistent with what you'd expect in a later line population in clear cell renal cell carcinoma. The distributions are consistent across the 4 cohorts that we enrolled, and you can look at the pooled and compare that to belzutifan on the far right, all very consistent data, typical of what we expect to see. Maybe I'll call out focus on the IMDC, for example, to show that, that also is very consistent with the patient populations we'd expect in a later line setting in this disease.

There might be just 2 differences when we look at our ARC-20 population compared to belzutifan. One is highlighted on the bottom here where we included about 25% to 30% of the patients having more -- 4 or more prior lines of therapy. So later patient population with regards to their treatment journey, and those patients would have all been excluded from the belzutifan trials.

The second is given the timing of the enrollment from our studies comparatively all of our patients or almost all the patients have either cabo or lenva, so the second-generation TKIs. In fact, about 85% of our patients had either cabo or lenva in prior lines. And that's probably different than the belzutifan studies, where a large number of patients have the first-line TKIs like sunitinib.

All right. So enough of a setup in background. We'll get to the good stuff, the efficacy shown here on this slide, and there's a lot of numbers, so I'll go a little bit slower here to walk you through the key elements. But you can see we do have the 4 cohorts presented and then all pooled. Again, I'll focus on the 100-milligram daily cohort in the first gold box and then all pooled in the second gold box. If you look at time to response in the 100-milligram cohort, the median time response is 2.6 months with a confirmed overall response rate of 35%. That compares to belzutifan, it's time to response is 3.8 months, and they had a 22% confirmed response rate.

Importantly, also in that first column, if we can look at the progressive disease rate in the 100-milligram daily cohort, and that was 16% and that compares to belzutifan's 34%. So again, more than half of a reduction in the rate of primary progressive disease. If we look at the 120 patients now as a combined cohort towards the right, again, the median time to response is much more rapid at 2.8 months and a 31% confirmed tumor response rate and the primary progressive rate is 19% and that compares to the 22% for belzutifan for a tumor response and 34% primary progression. So I think these data are very strong, clearly pointing to faster activity, more patients are able to stay on drug and avoid primary progression and it goes higher confirmed response rate.

Now I'd like to look at the data side by side as I do here with both a spider plot and a waterfall plot really tells the story of each of the patients. So on a spider plot on the left, each line represents a patient and their tumor volume. On the right side, the waterfall plot, each bar also represents a patient, and that's their best overall response for the maximum reduction in their tumor volume.

So let's start on the left, looking at the spider plot. You can see the patients with stable disease are represented in gold and the patients in blue are the partial responders the green triangle shows all the patients who remain on therapy, which you can see almost all patients continue on therapy. And what I also like to see when I look at the spider plot is what's the trend or the slope in these lines. Are the lines truly flat? Are they shifting upwards or drifting down, showing tumor volume. And I think you can look at this plot here for the 100-milligram QD cohort. And if anything, the lines continue to trend down even at 12 months of duration, they continue to trend down where the tumor volume continues to shrink over time.

On the right side, in the waterfall plot, you can see almost all patients do have reduction in tumor volume, whether that's stable disease or the responders. And you can see we've circled a number of patients in the middle there that are currently stable disease as far as the maximum response, but they're very close to that minus 30% threshold where they would then be determined as partial responders. And as we said, and you can look at the spider plot where these lines are continuing to go down over time, there's a very good chance that those patients that are stable disease and close to the line can cross the line and add to the responder rate.

And this slide is really to emphasize or highlight that duration or the improvement of tumor volume reduction over time. So the figure on the left is the waterfall plot we shared at ASCO GU for the 100-milligram cohort with about 5 months of follow-up. And on the right side is the current data with about 12 months of median follow-up. Now we've added that gold dash line at minus 50% just to make it easier to compare because now I'm talking about depth of response, how deep or how much is the tumor reduction. So that just is another extra anchor or reference point.

So I think if you compare the left to the right, you can see there are indeed deepening responses both for patients that were stable disease, and they're still continuing to become deeper responses in those patients, and those who started out as rapid responders, meaning they still had partial responses even within the first 5 months. Those tumors also continue to shrink and have deepening responses over time.

Now I'm going to click back to another look at the spider plots here on the left is the 100-milligram cohort I just showed. And you can see here, I've circled the stable disease patients because again, these are long-lasting stable disease, right? We're at 12 months, still very flat or possibly still a decrease in tumor volume. So that's the durability of the effect and the stable disease patients plus the responders are what contribute to the patients with progression-free survival, which is the endpoint for the Phase III study. So we look at both stable disease and responders and the duration, their long-standing effect is what's going to lead to the long progression-free survival for all these patients.

So on the right side, I showed the 50-milligram BID group, of note, that's obviously 50 BID is still 100 milligrams daily, just broken into 2. But I show that data because of the first cohort we enrolled, and so it has the longest follow-up. So the same story holds, these patients have long-standing, stable disease and long-standing benefit, whether it's stable disease or responders. You can see now we have a large fraction of patients that are well beyond 18 months of clinical benefit. And in fact, we're now approaching 2 years for this cohort of sustained clinical benefit.

One more way of looking at the same data. This is the 100-milligram cohort now in the swimmer lane plot which tells you a few different things because each of those tick marks or these colors are different effects of the measuring of the tumor volume. But importantly, you can see with the green arrows, we still have more than half the patients still on treatment, so still progression-free. And all the patients who've had tumor response or confirmed responses in that they've had multiple scans showing a significant reduction in the tumor volume.

And now for a new look at data, we got progression-free survival. This is the Kaplan-Meier curve for the 100-milligram QD cohort. First observation is this is a very flat curve, right? Going out a long period of time. We're now out at 12 months of median follow-up. And we have not hit a progression-free survival median. So we're very confident to say that PFS for this group when we get to a median will be at least 12 months because that's where we are in time today. So since we can't determine the median PFS yet, we can look at the 12-month landmark. So we have 60% of our patients at 12 months that are still progression-free. That compares to LITESPARK-005. If you look at the landmark of progression-free survival at 12 months in that study, and it was only 34%.

Now if we look at the pooled cohort of 121 patients, this is the Kaplan-Meier curve there. And again, you can see it's also still a long-lasting flat progression-free survival curve. We do have a median of 12.2 months, and that's with a median follow-up of 15.2 months. And I think it's important here to also look at these landmarks for the durability and what happens even beyond the median PFS. And you can see at 18 months, we still have 43% of the patients that are progression-free that will compare to the belzutifan LITESPARK study where their 18-month progression-free rate was 20%. So again, we have more than twice as many -- the percentage of patients progression-free at 18 months.

Now we looked at what might be driving these longer responses, both higher tumor ORR rates and also PFS. And so we -- most likely, it could be the favorable risk or the IMDC risk looking at favorable versus intermediate or poor but it's not. We have very much the same performance regardless of their IMDC risks score. So that's not the driver. Basically, all the patients are getting this type of enhanced benefit with regards to tumor response and progression-free survival. If we look at the ORR rate, for example, in all pooled group and a favorable risk that was 32%, and in the IMDC intermediate or poor group, the ORR rate is still 31%, so very consistent still regardless of that risks score. And looking at PFS for the favorable risk patients we can't yet determine the PFS, but in the intermediate or poor, that group has a 9.7-month median progression-free survival and that compares to the LITESPARK-005 study looking at the intermediate or poor risk patients from that study in which was 5.3 months.

And what I've shown so far now is we have a more rapid time to response, a higher overall response rate, a lower rate of primary progressive disease and a longer PFS compared to what we've seen with belzutifan. And happy to be able to say that it's not coming at the expense of increased safety risks. We see a safety profile very consistent with what's known from belzutifan across their studies.

So here, if we -- again, a lot of numbers are on the slide, so I'll focus on the 100-milligram QD cohort since that's what's going forward in Phase III. And if we look, for example, at the serious treatment-emergent adverse events or SAEs towards the bottom there, 31% of patients had SAEs. And as far as SAEs related to casdatifan, it was 6%. So that, again, compares to what we see in belzutifan with their 43% all-cause or 13% treatment related. So again, a very comparable safety profile with what we know based on the class or based on belzutifan results.

And here I'll highlight the one other slide about the safety of this molecule, the 2 known events of interest for HIF-2 alpha as a class, our anemia and hypoxia. Now anemia is easy to identify, of course, but also easy to manage these days with EPO, with bringing peripheral EPO or recombinant EPO, transfusions when needed. Patients can also have a slight dose hold or a dose reduction as needed. So if we look at the anemia, for example, that's related to casdatifan in that 100-milligram cohort, again, it's about 28% of those patients had high grade, but importantly, no patients discontinued treatment due to anemia. So that bodes well in what I said with the anemia is easy to manage for these patients, and they can stay on treatment for long periods of time.

Hypoxia is the other known on-target event of interest. And again, the data here for hypoxia is very consistent with that from belzutifan. And you can see the casdatifan-related hypoxia is very low, ranging from 3% to 10%. And in fact, only 3 out of 121 patients discontinued casdatifan due to hypoxia. So again, a very low rate of discontinuation associated with this event.

So I'll summarize here. Let me just verbalize for you the summary. So you don't have to read all the words on this slide, but I think we've been able to clearly show both across the cohorts individually, which are consistent, the 100-milligram QD cohort that's going forward dose, and the pooled data set now with 121 patients, the data are consistent with a higher rate of confirmed tumor responses a longer PFS. In fact, more than twice the PFS has been seen with belzutifan. These are long durable responses. And as Terry mentioned, importantly, the responses are coming faster, meaning the time to response is earlier and about half -- only about half the patients have primary progressive disease compared to belzutifan. So all that efficacy difference is coming is very consistent, but at the -- with the same safety profile as we see with belzutifan. So there's no increased risk and tolerability that we're seeing with this molecule by comparison.

So with that, I also have the pleasure now of introducing Dr. Rana McKay, who's been on a steering committee for our PEAK-1 and an adviser to Arcus for a long period of time. She is a professor of Medicine and Urology at UC San Diego. She is an author of many publications and an expert in treating patients with clear cell renal cell carcinoma as well as -- in addition to a winner of many awards for her treatments here.

And so I'll hand it off to Dr. McKay, who can talk about treating patients with renal cell, and she has a lot of experience, both with belzutifan and casdatifan to share with you. So thank you.

Thank you so much for that kind introduction, Richard, it's just really been a pleasure seeing the development of casdatifan.

We'll go to the next slide. So I'm Rana McKay, I'm a GU Medical Oncologist at UCSD. And I treat largely kidney cancer and prostate cancer with a very small smattering of bladder cancer patients in my practice largely about 50-50 split between prostate and kidney. And the typical patient that I see in the clinic that has renal cell carcinoma actually is generally older male individual that has been found to have a large renal mass either incidentally because they came in with needing to get imaging for something or have some hematuria and then got some imaging. And then at the same time, and it very found to have metastases, whether that be spread to lungs or other parts of the body and have tremendous experience with treating patients with belzutifan, both on trial and in clinical practice and casdatifan on trial as well.

I'll go to the next slide. So it's important to reflect on the RCC patient journey as it is today based off of the approved therapies that are available for patients. For those individuals that present with metastatic disease upfront, the 2 backbone strategies are either IO-IO or IO-TKI for these individuals, anti-PD-1 therapy is the backbone of all front-line treatments. There is a smattering of patients who are receiving IO therapy in the adjuvant setting and then going on to progressed at a later time point, but that's a very small proportion of patients.

And so when we think about IO-IO versus OI-TKI there's pros and cons of each strategy. With IO-IO, while the response rate is about 40% primary PD rate is about 20% with that regimen. It's been the only regimen that has shown long-term durability and likely about 1 in 5 patients will experience that long-term durability with a pure IO strategy. With the IO-TKI strategies, the response rates are quite high, greater than 50% across the board for the 3 life prolonging combinations. The primary PD rate is low on the order of around 10% or lower with a respectable PFS, but there's a question of long-term durability.

So when I have a patient before me in the clinic, I'm constantly asking myself, do I have to play the short game or do I have the luxury of playing the long game. And most patients want to play the long game if they get that chance. And so usually, unless somebody is having rapidly progressive disease, high burden of disease, I'm generally reaching for an IO-IO strategy as opposed to an IO-TKI strategy.

In the subsequent line setting, the standard of care continues to evolve largely including sequential TKI therapy what they have seen in the front-line space is switched around to the second line space. So for example, if somebody received lenvatinib in the front-line, they may receive cabozantinib in the second line setting.

And later on, for third line, this is where we also see belzutifan as a novel mechanism of action, alternate treatment option. I think in clinical practice; this strategy has kind of largely fallen into the later line setting given its alternate mechanism of action. However, I think one of the Achilles' heels of this regimen too is that primary PD rate, about 1/3 of patients are going to have no response at all at a time when you really can't afford to have them -- have no response at all. And so there is a lot of opportunity to improve upon that for patients throughout their treatment journey.

Next slide. So here, I want to highlight just level setting where belzutifan stands. Belzutifan has established itself as a standard of care in the third line for patients with clear cell RCC despite the fact that there are limitations, you've seen the data that have been presented, the response rates on the order of about 22%. The primary PD rate, which I referenced at around 34%, a primary PD rate that's even worse than everolimus, and then when we look at the PFS, it's sitting right around 50 -- 5.6%. It's the median is equivalent to that everolimus, but you can see that the curves cross and there's a little bit of a tail that emerges with belzutifan, which is why that data ended up demonstrating that there was statistical significance with that agent.

So I think there's a lot of opportunity, and this is really why I'm super excited about casdatifan because I think we can definitely build on what has been established with belzutifan.

So let's go to the next slide. I know that Richard had demonstrated these data, but I wanted us to take a look at this waterfall plot. And every single one of these patients, as Richard -- or every single one of these columns, as Richard said, is an actual patient. And you can see that the bulk of these patients have had some regression of their tumor. And even those patients that didn't actually achieve an objective response, you can still see that they're having regression. They just haven't hit that 30% threshold, and their primary PD rate is quite limited. So this is really fantastic, especially as we think about the ARC-20 100-milligram cohort, this is a refractory patient population that has seen multiple lines of prior therapy. And when we think about the PEAK-1 cohort, this has positioned -- the ARC-20 data or even later than what the PEAK-1 cohort would be.

And also to draw your attention to the PFS. And obviously, these data continue to evolve as we continue to follow patients over time. And now we have a follow-up of over a year. And what's striking is that the median has not yet been hit with 1 year of follow-up. So if you were to draw a line at these 12 months mark and draw it up to this curve like we haven't even hit the 50%. That's why it's not evaluable. And so I think this is really quite striking. PFS obviously, you have to interpret with caution in the context of a Phase I study. But we haven't seen PFS this long in this refractory patient population over a year PFS and later-line setting is really quite remarkable in this patient population. So I think we're super excited about that and that speaks to the low primary PD rate, the sustainable responses and even in stable diseases. Patients are driving benefit when their disease is stable.

All right. Let's take a look at the next slide. And just to level set, with the 12 months and likely greater PFS with casdatifan, this is just level setting where ARC-20 puts us against all the other later-line studies, both the Phase III studies and the Phase II of len-ev and also looking at CONTACT-03 and CANTATA looking at the control arm of cabozantinib in the context of those studies, you can see that across the board that PFS in later-line is ranging on the order from to upwards to 7 months.

The len-ev data here, these 14.6 months, this is a pure second-line population, and this does not reflect modern day practice. This study was done in 2013 and is a small Phase II with about 150 patients. And so if we look at the ARC-20, this is much heavier pretreated patient population. So super exciting to see that in the context of these data.

Let's go to the next slide. And I think what's also really exciting about casdatifan as we think about other TKIs, and we think about checkpoint inhibitors is the lack of overlapping toxicities with the TKIs and actually with I/O treatment. So the 3 key AEs, as you've heard about the anemia, which is actually now pretty well managed, I think, with belzutifan being the first kid on the block, clinicians have learned how to manage anemia, checking for baseline iron studies, B12, folate deficiency, those sorts of things, treating, watching the hemoglobin closely, utilization of ESAs to prevent hemoglobin decline.

So I think the that learning that has happened with belzutifan is, I think, only going to be expanded with casdatifan, hypoxia and fatigue, but patients don't experience these chronic TKI tox like the decreased appetite, diarrhea, nausea, rash, hand-foot syndrome that are just very -- can be very gnawing on any given individual. And then when we think about pairing with a PD-1 or CTLA-4 inhibitor, we think about the overlapping toxicities with regards to elevation of LFTs, colitis/TKI diarrhea, I think that it is an excellent agent and combination partner with not only TKIs but also checkpoint inhibitors.

Next slide. So super excited about PEAK-1 because it is evaluating casdatifan on top of the most widely utilized TKI, really globally, which is cabozantinib. Cabozantinib is the gold standard in IO-experienced clear cell RCC. It's very easy to titrate 60, 40, 20 milligrams. There is significant experience with managing the cabozantinib toxicity. There's been multiple registrational studies of its efficacy across the board and has tremendous utilization within the U.S. and outside the U.S. as well. And despite it being an excellent TKI, I think there is still opportunity for improvement the longer you can keep somebody's disease at bay, preventing them from progressing the better that you're going to do for them in the long term. And these are the level set data from CONTACT-03, METEOR, and CANTATA, and you can see PFS ranging on the order of 7 to 10 months across these different cohorts with cabozantinib.

And so I think there's tremendous opportunity to build upon that. And what we've seen already with casdatifan alone in the later line setting, hopefully, we can achieve that goal.

Next slide. So as you've seen, this is the schema for the PEAK-1 study that's really targeting IO-experienced clear cell RCC patients, and it does include patients who have progressed after adjuvant therapy. Patients are to have measurable disease, not having received prior cabozantinib or any HIF-2 alpha inhibitor. It's enrolling clear cell RCC patients. Patients will be randomized 2:1 to the combination of casdatifan plus cabozantinib at the 100-milligram dose versus placebo plus cabozantinib with a primary endpoint of PFS. This trial is actively enrolling patients, and we're super excited about the study. And I think the leg work that's been done in presenting the ARC-20 data and building up a drumbeat around this agent, and this trial is really going to promote accrual.

And quite honestly, when we think of the national -- international scale, there's very limited number of studies that are accruing in this context in -- on the international level currently in RCC.

Next slide. So just to kind of also highlight that our anticipation is that PEAK-1 is going to enroll pretty rapidly. You can see the months to enroll across the landmark, second-line and later-line studies. You can see the studies that were impacted by COVID, particularly CONTACT-03 and LITESPARK-005. But in general, just over a year to accrue in this context, a little bit longer in the first-line studies, those in general also tend to be a little bit larger trials if we think about their enrollment.

Next slide. And so we've chatted a little bit about the front-line treatment strategy and sort of the decision tree between IO-IO versus IO-TKI and how IO-IO was really associated with that long-term durability. However, 1 in 5 patients have primary disease progression and can't realize that long-term durability that's associated with IO. So there's tremendous opportunity to build in the front-line setting and also think about a TKI-sparing strategy in the front-line setting and I've highlighted the toxicity that's associated with TKI. Patients can be on therapy for quite some time in the front-line and that TKI tox can also be negatively impact their quality of life.

So there's really an opportunity with casdatifan and volrustomig, which is an anti-PD-1/anti-CTLA-4 inhibitor in the front-line setting to build upon the backbone that's already been established with nivo-ipi, and I think cas has the potential to reduce that high rate of PD, improved PFS with minimal added toxicity and hopefully improve long-term outcomes for patients. So super excited about the eVOLVE-RCC study.

Let's go to the next slide. And this is the schema for eVOLVE-RCC. It's a seamless Phase Ib/III designed to evaluate casdatifan plus volrustomig in the front-line setting for patients with advanced clear cell RCC having received no prior therapy. The Phase Ib will be looking at 2 different doses of volrustomig plus casdatifan with a primary endpoint of safety, and then we'll move seamlessly into the Phase III, whether be a 1:1 randomization to volrustomig plus cas, volrustomig monotherapy, we'll look at the contribution of components versus the standard of care, which is nivo-ipi with a primary endpoint of PFS and OS and currently the Phase Ib is actively accruing patients and super excited about this study as well.

Next slide. Cas is also being evaluated in other early line settings being looked at in the neoadjuvant setting through an IIT called NeoSHIFT. I think there's tremendous excitement about perioperative treatment for RCC. We now have the one and only life-prolonging adjuvant therapy with pembrolizumab, but we've certainly seen data evolving in the context of melanoma that timing does matter. And at least in the melanoma world, neoadjuvant therapy seems to be associated with improved outcomes compared to adjuvant therapy. So I think there's tremendous opportunity there.

Also, there's various cohorts within ARC-20 that are looking at front-line combinations of cas with IO. Also looking at cas monotherapy in the favorable risk population. And then in the post-IO/TKI-naive, cas is being looked out at a monotherapy there to delay TKI use. So I think we're going to learn a lot in the context of other studies that are being conducted in other cohorts within ARC-20 around placement of casdatifan across these different settings. Next slide?

Okay. Thank you. Thank you, Dr. McKay. We'll pause here for a Q&A session. If you have a question, please raise your hand, and I'll get you a mic. Please state your name and institution. And if you have a question for Dr. McKay, if we can get her video up, that would be great. Please do so. Please ask your question now because she will not be able to join us later and we can start with Yigal.

For Dr. McKay. I was wondering, given everything you know about casdatifan today and given that you use belzutifan, I'm wondering if you had casdatifan available, what would be your relative usage of 1 versus the other today in the third-line monotherapy?

Honestly, we always want to go with the best-in-class agent. We want to go with the agent that's demonstrated the greatest efficacy, manageable toxicity profile. So we certainly see that -- we've seen that evolution in the context of the TKIs. And as next-generation better TKIs have entered into practice, there's been adoption of those better next-generation agents. So I think this is the evolution of developing a best-in-class agent.

Next question from Li.

Li Watsek From Cantor. Congrats on the data. I guess just looking at 100 mg versus 50 mg BID looks like the data are perhaps better at the 100 mg dose. And when we look at the EPO suppression, PD biomarker looks like these 2 are pretty similar. So guys, do you have any thoughts on what might explain the better outcome for the 100 mg dose? And how much of that is driven by perhaps patient selection versus the dosing frequency that [ seen as ] here?

So I'm happy to take that. I think at this point, we would look at the 50 mg BID. As you know, it was also a different formulation. That was -- the reason we did that was almost more a proof of concept. There was -- this is when we had the 10-milligram capsule, so we don't want to give people 10 capsules at a time. But with that said, drug on board is very similar. So I think the way to look at it is just that it represents a 30-patient snapshot in time, we'll continue to generate more data with the 100-milligram tablet.

And when you really want to focus, again, like I tried to emphasize at the beginning, I think we will pay very close attention to the 100-milligram tablet, which will get more and more and more and more data. But at this point, probably truth if you were to sit here today, is more represented by the 120 patients than any of the individual 30 patients. They're all similar place on the dose response curve.

Peter Lawson from Barclays. I guess first question really for Terry, kind of why did this data get better over time, the different sequential cuts you had for cas kind of improved? And then kind of what gives you the confidence that the Phase III is going to kind of hold up versus what we've seen so far?

So your question exactly on the -- like we've...

You showed a date set of over time of cas and kind of evolving.

The reason we had the confidence in the beginning that seems to be playing out was both based upon what we know about the biology what we know about the safety profile and what we also learned from belzutifan. So if you start just with the belzutifan data, they actually had observed about 60% of their responses came in the first 6 months, then another 20% in the next 6 months and another 20% in the next 6 months thereafter. There's some element of that, that no doubt involves, in our case, we're able to hit the tumor harder, faster so we get more patients into sort of that conveyor belt of they've gained some benefit.

So what's become very clear and that's where you see that what we show with the stable disease patients that they go on long term, it looks very much like IO. And a big part of that is, in fact, that this mechanism, unlike so many in oncology is very well tolerated. So as the patients are fighting cancer, as the mechanism is kicking in, they're also not getting sicker because of the drug with time. So to some extent, that informs the continued benefit, the continuing strengthening of the patient. So we felt confident based upon the belzutifan data that, that would be the case. We recognize that we were benefiting more patients. So when Juan shows you the data with the EPO suppression, we really feel that we're benefiting essentially all patients where they have some HIF-2 component to driving their cancer. And that is roughly somewhere in the 80% to 90%. That's why you see that incredible disease control rate.

So between the safety and the efficacy in more patients, we expect that duration of therapy to just continue to get better. That -- I think the confidence for Phase III then comes from what we've already generated even in the early stages in our combination with cabo. The important thing there being that the AEs essentially didn't overlap. So it looked like you were getting cabo and it looked like you were getting belzutifan, but nothing synergistic and toxicity. And we, in fact, had a very early good response rate, and we'll see by ASCO next year, hopefully, we'll be at a stage where we can start to talk about durability there. But everything points to the same phenomena safe combination and this mechanism can kick in.

I'll make one last comment because it also applies to the -- as Rana was talking about our study with AstraZeneca, one of the reasons we got married was that what she mentioned. If you look at ipi-nivo, it's a great regimen in -- is the most frequently used in front-line. They still see 20%, 25% primary progression. So you bring in another mechanism, orthogonal biology that, by the way, is enrolling already ahead of schedule. So we think we can come in with a safe mechanism that not only brings the efficacy but enables more patients to get the full benefit because we think we can cut down on the rate of primary progression.

Daina Graybosch with Leerink Partners. For Dr. McKay and then secondarily for the company, too. We mentioned there's a lot of different ways that we're exploring placement of HIF-2 alpha for these RCC patients. I wonder if you have a hypothesis on where the ultimate best placement will be. And also what do we know about retreatment with HIF-2 alpha, so continuing it across lines and switching out the combination partner.

No, very good question. So I think when we think about where we place HIF-2 alpha inhibition, and we think about clear cell RCC and the fact that it's really the driving pathogenesis for clear cell RCC is its VHL mutation that ends up resulting in HIF-2 alpha accumulation. And when patients become resistant to VEGF-based strategies and develop alternate resistance pathways outside of that driver alteration. I actually feel that this drug is best positioned earlier on likely in a VEGF naive cohort or in a front-line cohort or even vocalized for people that have never seen prior therapy, just given the mechanism of action and the fact that you don't want to be having a content with mechanisms of resistance that are alternate that of like what your target is.

So with the question regarding retreatment, it's all going to be about timing and exposure and in what context that patient may be developing progression and meeting retreatment. If they -- if you're thinking about localized disease, and they had a response had a long durable rPFS or RFS recurrence-free survival, I would say for localized disease interval or EFS interval. And then at some time point x, they ended up recurring that maybe is beyond a year, then yes, I think we challenge is something that can be considered and discussed. But if that individual is progressing during or shortly after finishing a course of therapy, then you really have to think about rechallenging.

So Daina, a couple of thoughts under the umbrella of what Rana said. I think one thing we have -- probably haven't emphasized as much the data speak for themselves, but we should probably point out in our mind and based on the data, we actually think, for the first time now that we have some durability that casdatifan is looking better than TKI monotherapy. So one very informative cohort that I think we shared was that group of patients that now I think it's fully enrolled, if not, it needs another patient or so, we're treating patients with casdatifan monotherapy who basically have progressed on IO but haven't seen a TKI.

So I think we do believe in a real way in our development strategies geared this way to have a paradigm shift in this field. And it comes from -- Rana's one of the biggest sort of our ear on this about try to get -- drive the TKIs down in therapy and bring HIF-2 up earlier from purely a quality of life. And we think the [indiscernible] it's not just a nice to have. I think that the biology and the clinical push is taking us in that direction.

I'm going to make one comment on the retreatment because I think the most interesting -- we get questions, we would normally say you don't take -- treat patient with mechanism A and then tomorrow treat them with mechanism A when they progress. What would be interesting -- so in particular, when you see Juan's data, I think this speaks to this. So we believe that the delta in primary progression comes from hitting the target harder, faster. So what would be interesting is in that late-line patients that primarily progress on belzutifan, at some point, I think we need to take a look at taking those patients we probably haven't developed any resistance to HIF-2, but just needed to have it hit harder, take that group of, let's say, what's 35% of their patients, we would expect that about half of those patients should be susceptible to HIF-2 intervention, and that would be a very interesting patient population to explore with casdatifan.

Salim Syed from Mizuho. Just one quick clarification and then also just one on the revenue or the market potential that you put up. On the clarification, maybe, Richard, I think the waterfall plot had 28 patients just to confirm that 3 patients without scans or without scans that progressed, the delta well between the 20 and 31?

That's right. So -- and that we have the eligible population, which basically means they had a pre-scan and a post scan. But we included in the overall data set, call it 30 patients that may be a clinical progression even before a scan, we would still count them as progressors. But they didn't have a scan, so we can't show them on a waterfall.

Okay. And then just on the market potential. So those are the same numbers that you guys had, I think, in your 2Q deck the $2 billion and the $3 billion?

[indiscernible] where we just updated our DRG data. And so we now have the IO-experienced patient population at 21,000 and then first line at 24,000. We'll get to the dollars a bit more detail, but that is the change from the last presentation as the patient populations are a bit higher.

Thanks, Jen. Is it -- are you assuming a different PFS in those numbers? Or are you planning to update that as well just given?

Through all that in more detail, but we're assuming a longer PFS and time on treatment in the first-line patient population versus second line. Yes, in the current deck. And we'll go through some more precise numbers later.

We'll have a Q&A session later to cover. Any other questions? We have time for probably one more.

This is Karina for Asthika. I had a question for Dr. McKay. So since belzutifan's front-line LITESPARK-012 trial, it's evaluating a triple combo of pembro plus TKI. Do you think a similar triple study for casdatifan could be possible with the TKI as well beyond eVOLVE?

Yes. No, very good question. I think it's a way something worth thinking about and worth exploring what's the beauty about eVOLVE is that you are sparing the TKI and integrating the CTLA-4 inhibition, which what we believe is driving the long-term durability. So 012 is building on the backbone of len-pem. And everybody gets len-pem you either get len-pem plus a HIF-2 alpha inhibitor or len-pem plus a CTLA-4 inhibitor. But you don't get the pure dual IO combo. And so I think that's the beauty of eVOLVE. And I think what is going to be the differentiating aspect. And certainly, there's opportunity that to think about building with a TKI strategy, but then the question is about long-term durability.

Any other questions?

Li Watsek from Cantor. Maybe just a follow-up question on the front-line combo trial, just given what we have seen from COSMIC-313 obviously, that combination didn't show OS benefit and that was TKI combination. Maybe Dr. McKay can talk a little bit about your confidence about adding casdatifan to ipi-nivo?

Yes. So there was a lot of issues with the way 313 was designed. 313 was a blinded study. And the tox that was associated with cabo combined with the IO strategy, I think actually did, in fact, in the long run, end up affecting the impact of that trial. The average daily dose for cabozantinib in the context of that study when given with nivo-ipi was around 20 milligrams, where it was around 40 milligrams -- not 40 milligrams, but the placebo control arm didn't actually have the cabo arm obviously. So dramatically lower doses than what is the standard for cabozantinib.

And then when we think about the number of patients that we're actually able to receive all 4 doses of ipi, was dramatically decreased. And so I think even though the study was positive for PFS and actually met the objective of dropping down primary PD, many patients required dose reductions and dose modifications that I think ended up impacting the long-term efficacy of that combo, which we do not anticipate is going to happen. Like this is a beauty with belzutifan. It's not going to cause hepatitis. It's not going to cause colitis. It's going to cause anemia, which we know how to manage.

It's going to cause hypoxia, which we know how to manage. It's going to cause fatigue, which we know how to manage. And there isn't going to be this, "Oh my God, I have to stop both drugs because I don't know which is causing what" and have these long treatment holds like that's not going to happen. So this is what I think is going to be so great about eVOLVE. And what is also the Achilles' heel for 012, we're going to have to see what ends up happening because everybody got a TKI in 012.

We got time for one more question.

Daina Graybosch from Leerink again. I wonder if you could talk about PEAK-1, excluding prior cabo exposure, if that has any risks or benefit? Are we enriching in for a certain baseline prognosis by excluding that? And do we know what cabo looks like in that setting?

So we have to exclude cabo just because, obviously, we're including cabo for everyone on PEAK-1. So if they -- Dr. McKay said, if they just progressed on the prior line having prior cabo, then cabo now would be inappropriate for them.

It would be unethical, right? Because the control arm is cabo alone. You can't have had patients receive cabo.

Yes. So by nature, we have to do that, but we also think that there won't be a lot of patients who've had prior cabo post-IO treatment fundamentally, right? So this is usually where cabo is given is the patient population. So we're really going on top of where the patients would get cabo with the standard of care, and they all still get cabo as they would, and then we randomized on top of that 2:1 for casdatifan.

Last question, seriously.

I guess 2 for Rana, if I may. First, there have been questions on belzutifan when it may be generically available and the relevance of the Arcus program when that happens. I guess my question would be, belzutifan never attempted a PD-1/CTLA-4 plus HIF-2 trial. To what extent does that limit any utility of that considering Arcus will have that data from the ongoing eVOLVE study?

And then secondly, on eVOLVE itself, would you have wanted to have a fourth arm where a PD-1 plus a TKI is in there and you could speak to the tox differences on hemorrhage, on thrombotic events, et cetera, which it currently doesn't have. And then finally, would a PD-1 plus HIF-2 arm have made sense as well?

Okay. I'm going to try to remember those 3 questions. I think the first question was around the combination of PD-1 and HIF in the front-line setting is that sort of what I'm gathering. I want to keep in mind, there's the LITESPARK-022 which is the adjuvant study of pembro with or without belzutifan. And so I can't speak for others, but I suspect that there's some strategy around that to spare a PD-1/HIF front-line in the context of knowing that there's an adjuvant study that is testing that combination. So I hope that answered your question.

Maybe you can repeat that second one. I just want to make sure I get to your exact questions.

Just on eVOLVE.

Yes. I mean the beauty about eVOLVE is that you wouldn't want to leave out the CTLA-4 inhibition. There's like a lot of meat on the bone with CTLA-4 inhibition. Like that's like the long-term durable strategy that you've already set as your benchmark. And so I think to -- you want to build upon what you've already established as opposed to just were a better me too. Like you want to build upon like we've set this benchmark of PD-1 TKI. We've set this benchmark of PD-1/CTLA-4, and we want to build upon those benchmarks that have been set. And I think to add a fourth arm that we also have to be pragmatic and at the end of the day, there's going to be one winner. And so we need to sort of understand what that is going to look like.

And just to address the first part of your question, [ Umer ]. So first of all, belz, cas and [ LITE ]. So that goes into, I want to say, mid-2030s, maybe a little bit later, we're into the 2040s. And I think what's really important to keep in mind here is this is a more potent drug and much harder acting and faster acting. So clinicians are to want to use this drug in front-line, particularly given that we know the thoughts high primary progressive disease. So this isn't like drugs that are targeting specific mutation, and you might be fine keeping that is like your second-line drug or third-line drug but to us, I think people are really going to want to use cas first before belzutifan. So we think that belzutifan going up cas, which is not for a while, by the way, it's going to have very little impact on us.

The second part of your question on the -- then combining with anti-PD-1/CTLA-4. So in their study where they're combining with PD-1 plus lenva, they actually have a PD-1/CTLA-4 arm. They just decided to combine it with TKI, which we think was the wrong decision because of all the toxicity. And in fact, AstraZeneca was first combining volru with lenva, but because they saw so much toxicity, that's why they decided they wanted to pair HIF-2 alpha inhibition instead, and that's why they approached us. So they have not chosen to combine the anti-PD-1/CTLA-4 with HIF-2 alpha, they kind of ran a different study. And so I think that's the story.

All right. Thank you, everybody. Thank you, Dr. McKay for joining us. We're going to transition to the new EPO suppression data that Dr. Juan Jaen will present for us. You can come up to the front.

So what we've generated over the last half a year, a phenomenal amount of translational data. Today, I'm going to -- I'm only sharing the tip of the iceberg, specifically focused on the aspects of that analysis that I think provides a context for why numerically, we're seeing cas outperform belz. To the extent that Merck hasn't seen fit to share a lot of translational data as to what's happening in their tumors, primarily, we rely on the serum EPO change as to provide the benchmark that the bridging to what the two drugs are doing in this patient population. As you point out, in a couple of weeks, we have an abstract at the triple meeting.

It's a more in-depth analysis, more in-depth version of what I'm doing, still using an older clinical data set, 6 months older. But still, I think if you find what I'm going to share with you interesting and you should be looking out for that. The bulk of the analysis that we have performed so far, we're saving for some time early next year for publication of the monotherapy data. But if you ask the right question, I'll share some of that with you. As you know, HIF-2 alpha has a transcription factor. It regulates the expression of hundreds of genes in a cell-specific manner. EPO just happens to be one that we're very familiar with, and it's very easy to measure in the periphery.

This regulation is taking place in the healthy kidney as well as clear cell RCC. We noticed a while back that when looking at baseline samples from the patients, first 170-some patients enrolled in ARC-20, as you can see here, we saw that those baseline levels of serum EPO were significantly higher than what we had seen in healthy volunteers. We obviously went through and asked the obvious questions, is that because those people are more anemic or are they receiving ESAs? The answer is no to those very logical questions. There's something reflective of the biology of clear cell RCC that's driving these patients to present with higher levels of serum EPO.

The obvious question is, is some or any of that extra EPO spilling out from the tumor lesions. We started to get a glimpse of that by looking at a number of matched paired biopsies from our 20 patients receiving monotherapy. And so what I've illustrated here is data from a couple of such paired of matched biopsies shown you in the left, about a 20-fold reduction in the amount of EPO mRNA about 2 weeks into the beginning of treatment with Cas. And shown to the right, there are a couple of other well-understood, well-known target genes for HIF-2 alpha, PTHrP or the gene that controls for PTHrP and P1 protein production.

So very consistent downward, very quickly downward tuning down of HIF-2 alpha transcriptional activity, beginning to suggest what you might expect that at least a portion of that EPO that we measure in the periphery is the result of HIF-2 alpha inhibition in the tumor. Terry already showed you this graph, just a few more comments. As you can see in the Y-axis, what we're showing here are average maximal reduction in serum EPO. Merck described that maximal inhibition of about 63% actually represents a range of 18% to 100% reduction. So it's a very heterogeneous response that they're seeing. What we're seeing with our drug is a much tighter level of inhibition.

But still, you're looking at averages. Our median level of reduction is at 85% reduction, but we still see a range from about 50% to 100% as the maximal change. It's not entirely surprising, like I said, that not everybody is giving you 100% response given that you're looking at a combination of things that are coming from the healthy kidney and the same thing is coming out from the tumor lesion. You can also, as Terry pointed out, see a very sustained maintenance of this PV marker. If you could see the footnote, you would see that we've taken great care to censor any samples taken from patients that received an ESA within 28 days prior to the sample.

So that's a very easy source of confusion when you're doing this kind of analysis if all you are measuring is recombinant EPO administered to the patient to treat their anemia. So this is all clean of that. This in the next slide are probably the most important parts of this section. So what we've done here in this particular analysis is take the midpoint of 129 patients. Now this number is a little bit larger than what Richard alluded to because we've incorporated just to have the largest number of data points, eight subjects from the dose escalation part of the study that received monotherapy. So that's why the total -- the denominator here is 129.

And if you add up all the objective responses that I'm going to be talking about in a second, you see that there are four more than what you can count if you look at the dose expansion cohorts. So again, we picked up an additional eight patients for this analysis and an additional four responses from -- out of those eight. You can do this analysis, and we have done it in a number of different ways, looking at quartiles, looking at best cutoff for that EPO suppression. The simplest analysis, what I'm showing you here, the median cutoff, and we've defined patients as being deeper versus less deep from a perspective of maximal serum EPO changes.

You can see to the left, the deeper EPO changes that -- in that half of the population, we have a response rate -- confirmed response rate of just under 45% and a primary progression rate of just under 10%. On the other hand, if you look at the less deep half of the population, which still maintains that PD effect all the way out to a year, you see a diminished objective response rate of 20 -- just about 20% and a primary progression rate that begins to approach what we've been seeing all morning, the data from LITESPARK-005 with belz. So in other words, our worst half is somewhat similar to what you've seen for the totality of patients treated with the 120-milligram dose of belz.

Our other half is obviously driving much greater benefit. In my summary slide, I'll try to provide a summary statement about what we think the underlying biology is here. Still, our worst half is just as good as the totality of the belz benefit. At the end of the day, response rate is just an intermediate assessment of -- or to set an expectation about what we're going to see from a PFS standpoint. So the same separation of those 129 subjects that received monotherapy into deeper versus less deep EPO responders. You see here that in the better half of the population, we have a median PFS just under 15 months.

And in the less deep population, which is clearly numerically different, less benefit than in the deeper responders, it's still just under 10 months, still better than the 5.6 months, 5.7 months that we've been talking about from LITESPARK-005. So the take-home message here is not that we intend to select patients based on this marker, it's simply that the clinical benefit that we're seeing holistically, it's perfectly lining up with the underlying biology, what's happening in the tumor, what we measure in the periphery is a really good window into what's happening in the tumor. So to sum it up, I won't read the first bullets, what I just said.

One of the things that I haven't shared you -- shared with you actual numerical data to support. So I'll just give you the conclusion for now, the second bullet, is that there's a strong relationship between the amount of EPO mRNA that we find in tumor biopsies, the amount of EPO that we can measure in the periphery and a relationship between the baseline level of EPO, the maximal extent of EPO decrease and clinical outcomes as defined by best overall response, rate of primary progression and now for the first time, seeing a correlation with median PFS.

So we think that this really demonstrates the relevance of tumor HIF-2 alpha biology and what we can measure in the periphery and what we can compare across molecules and trials with what belz can do. The ability of cas to hit the target harder may explain that numerically better clinical outcome profile that Richard described for you.

So some of the stuff that I'm not showing you that you can look forward to, we've developed a HIF-2 alpha immunohistochemistry assay that lines up very well with what everything I just said about tumor EPO mRNA. We've developed a transcriptional measure of how much HIF-2 alpha activity there's in tumor lines up beautifully with the degree of clinical benefit that we see associated with cas treatment. And we're also starting to get insights into how HIF-2 alpha biology modulates the response of clear cell RCC patients to IO and anti-angiogenic TKIs lays a really strong foundation for the Phase III studies that we're launching.

Great. That's a great segue. The next segment will be a panel conversation. We are joined today by Dr. Bill Kaelin online. We can get his video up. And Jen will moderate the conversation. Juan, if you could please stay up in front as well, that would be great.

So I want to thank Bill for joining. Probably most of you have heard a lot about Bill over the years, Dr. Kaelin. I've been hearing about Dr. Kaelin since probably 2004. So he's been around for a long time. He was one of the preeminent scientists out there. And he just in the last few years, won a Nobel Prize for his work on HIF and HIF-2 alpha. So we're really, really fortunate to have him here today.

He's also been an amazing adviser to Arcus, a lot of other companies in the HIF-2 alpha field, and he's been super, super helpful to us. So I'm going to ask a few questions. And the first I'm going to ask, and Rana touched on this a little bit earlier, but there appears to be consensus that the majority of clear cell RCC tumors are associated with mutations in the VHL gene. What is your latest thinking on this point?

Yes. So I'm a bit of a lumper rather than a splitter. I look for commonalities. It's certainly the case that the vast majority of clear cell renal cell carcinomas have inactivated the VHL gene either because of mutations or hypermethylation. And I think the actual numbers, whether it's 70%, 80% in terms of mutation frequency depends a little bit on the technology used to detect the mutations as well as my pathology colleagues tell me how much one is including tumors that actually have a mixed histology, meaning regions that look clear cell and regions that look like non-clear cell.

And certainly, if you enrich for true clear cells, the percentages go even higher. But certainly, again, I'm a lumper rather than the splitter. Certainly, when we look at transcriptional profiles, the vast majority of what we call clear cell renal cell carcinoma has a signature consistent with HIF activation.

So sounds like based on that, that a significant percentage of patients with clear cell RCC should benefit from HIF-2 alpha inhibition.

That's our working assumption. Now it turns out if you look at some renal cancer cell lines that have VHL mutations, some are HIF-2 dependent and others are not, and we're trying to understand that better. But mind you, these are often from patients who had metastatic disease or maybe late lines of therapy. We're very encouraged from the experience with belzutifan in the VHL population that most clear cell tumors initially are HIF-2 dependent.

Great. So what other tumor-enhancing pathways may be relevant alongside HIF-2 alpha?

Well, I'm sort of a dyed-in-the-wool cancer geneticist. So I try to let the mutations in different cancers inform what pathways and processes they really care deeply about. So for example, you probably know that many clear cells also have mutations that directly or indirectly activate the PI3K/mTOR pathway. So we're thinking about that. Many clear cells have mutations in 1 of 2 epigenetic regulators, namely PBRM1 or BAP1, but we're not smart enough yet to know how to translate those mutations into therapeutic targets. We're still learning the biology there.

Great. Anything, Juan, you want to add or...

No, I mean [indiscernible].

Exactly. So in Arcus' first Phase III study, PEAK-1, they are combining with cas with cabozantinib. And what thoughts do you have on combining HIF-2 alpha inhibition therapy with TKIs and specifically with Cabo?

Well, I think it's certainly the case that HIF-2, amongst other things, is driving the production of VEGF, but we also know that not all the VEGF in the tumor comes from the cancer cells themselves. So I could certainly see benefits of trying to block VEGF that's coming from the host, if you will, rather than the cancer cells and getting an even better local inhibition of VEGF. And I would also point out that we now know that VEGF not only promotes angiogenesis but at least according to some is also an immunosuppressant. So I like the idea of trying to hit VEGF maybe a little bit harder. And I think in terms of other targets such as MET, I think there's credible evidence that MET may play a role in clear cell renal cell carcinoma as well.

Interesting. So when you think about HIF-2 alpha as a mechanism, and we've been showing some data earlier. I think it's consistent with this where it can be a little bit slower to kick in, in patients versus what you expect with like chemotherapy and TKIs, but a lot of patients do get to responses and then these responses are very, very durable. I'm just curious as to what you think the biological underpinning for that dynamic is.

Yes. I remember when this observation was even being made early on with belzutifan and people sort of were up in arms about this, why is it so slow? And my response as a former clinician was as long as the tumors are shrinking, I'm happy. And frankly, I think people's expectations were overly influenced by what we've come to expect with either classical cytotoxics or with kinase inhibitors that rapidly induce apoptosis or program cell death in the laboratory. I think this is a very different mechanism. Certainly, in the laboratory, HIF-2 inhibitors don't induce rapid cell killing.

We do see this much slower response where the cells stop proliferating. And we imagine that part of what we might be seeing in the clinic is you've arrested the growth of the cancer cells enough that maybe things like the immune system can now start to kick in such that the equilibrium now favors regression rather than tumor growth. But I actually think it's very heartening that if you watch these patients over time that more and more of them seem to hit for RECIST criteria responses. And as you say that frequently the responses can be durable.

And so building on that point a little bit, the other thing that we've noted is you don't see resistance like you do with the typical anticancer drug, and we see really, really durable responses and stable disease. So why do you think you don't see resistance developing like you'd expect with other anticancer drugs?

Yes. Well, clearly, in late lines of therapy, the early indication you can see de novo resistance, if you look at some of the early experience with belzutifan, and we and many others are trying to figure that out. And similarly, although, as you know, there have been case reports of resistance related to mutations in HIF-2 alpha, or its partner ARNT. I think in general, we don't understand acquired resistance very well here either. I think we and others have looked to see whether any of the obvious candidates matter such as mutations, and I just mentioned a moment ago, genes such as PBRM1 and BAP1, but that doesn't seem to be the answer. So I hate to tell you we're a bit ignorant here, but we're still learning.

A good answer. We don't see resistance like you expect with other drugs. What do you expect to see in patients based on line of therapy? And we obviously started in late line. The plan is to move into earlier lines. Do you expect that patients will do better if they're treated with HIF-2 alpha inhibitors like cas in earlier lines of treatment?

Well, certainly, medical oncology -101 is that most cancer drugs work better in the front lines of therapy where hopefully, you have lower tumor burdens, hopefully, you have less intratumoral heterogeneity and in particular, hopefully, you haven't been selecting for all sorts of resistance mechanisms through earlier lines of therapy. What I think is very unique here and very exciting is something I alluded to a moment ago.

Even though it's not a perfect experiment, I think the experience treating 61 patients with Von Hippel-Lindau disease who had measurable kidney tumors that had never been treated before with belzutifan strongly, again, supports the notion that if we can get these drugs into earlier lines of therapy, they'll be far more active. And so again, I told you I'm a lumper rather than a splitter. I think in those 61 VHL patients, all of the patients had some measurable tumor shrinkage, I think save two where there was simply no change.

Have any questions from the audience? Please [indiscernible] as well.

Great. I'm now going to switch gears a little bit, sorry, someone probably had a question. I put one more in just -- which may be a good segue to questions. But Juan just presented some data that was linking suppression in EPO levels to outcomes. And just would love to get your thoughts on that data. Is that what you would expect? What does that data tell you about casdatifan in particular?

Well, I used the expression medical oncology -101 a moment ago, so I'll use it again. I think medical oncology -101 is, in general, hitting the target harder and longer generally translates into more efficacy. Of course, you eventually can run into issues with tox. But in general, the ability to hit a target harder and longer is a very good thing in oncology. And so I think the data that we just saw from Juan are actually quite compelling. Now some in the audience might be thinking, well, how do you know that the decrease in EPO isn't simply a reflection of a decrease in viable cell number.

In other words, in that scenario, it would be a bit circular to say this predicts for response, a cynic might have said, well, maybe it's the consequence of the response. But if you were looking closely, and of course, Juan and I have discussed this with his team at length, and they've already been doing a lot of good work here. The decrease in EPO is occurring very quickly. So I think this is more consistent with a pharmacodynamic effect where you're looking at how hard you're hitting the target and not simply, well, of course, the EPO is going down because the tumor is responding. I think the EPO fall is probably happening too quickly for that latter explanation.

Daina Graybosch from Leerink Partners. I think there's some evidence on HIF-2 alpha that it might drive expression of retroviruses. I think Dr. Kaelin, you did that. That might be what the immune system is recognizing. If it inhibits HIF-2 alpha, do you have any risk of limiting the immune response sort of in humans?

Yes. So I think that is a theoretical, and I'm going to underline theoretical and put it in bold concern here that in the simplest view, maybe down regulating the expression of endogenous retroviruses would decrease the recognition of the tumors by the immune system. But the reason I put that caveat of theoretically is, first of all, HIF-2 turns on a number of genes, some of which you might argue would be pro-immunogenic. I would include the endogenous retroviruses there, but some would be anti-immunogenic. I mentioned VEGF a moment ago, but there are others.

So I don't even know what the net effect would be of suppressing HIF-2 in terms of the immune response with respect to HIF-2 target genes. Then you throw on top of it that HIF-2 probably has some effects on the tumor microenvironment and the immune cells themselves. So for example, HIF-2 is expressed in tumor macrophages. So I'm not smart enough to say the net effect of blocking HIF-2 here with respect to the immune system. And then finally, as you probably know, I'll now do medical oncology -101 a third time, the benefits of combining two drugs that have distinct mechanisms of action are often profound because of the heterogeneity within tumors.

So I can imagine some tumor cells being perhaps more sensitive to HIF-2 blockade and others within the tumor being more sensitive to, for example, an immune checkpoint inhibitor. So I'm aware that it's a theoretical concern, but I think the clinical experiment has to be done. And I'm not smart enough to tell you the outcome other than I just love the idea of combining two active agents that have distinct mechanisms of action. So only kicking and screaming when I decide that you can't do this because of the ERV story.

What about -- maybe I'll ask one more question, and then I'll see if anyone else in the audience. But along the lines, I'm talking about HIF-2 alpha as a transcription factor and all the different pathways that can be activated. Like what other tumor types do you think HIF-2 inhibition could have potential in and other diseases even beyond cancer where HIF-2 alpha inhibition may have activity?

Well, first of all, genetics never lies. And so you would have predicted from the patients with Von Hippel-Lindau disease that a HIF-2 inhibitor would be active in paraganglioma. And I think that's certainly going to prove to be the case. Certain neuroendocrine tumors, such as so-called pNET tumors in the pancreas as well as the blood vessel tumors called hemangioblastomas. So I understand all of those are relatively uncommon diseases. But again, the genetics is not going to lie there. I think these are tumors that are HIF-2 dependent or going to be HIF-2 dependent.

After that, it gets a little more complicated because a lot of common cancers, cell lines don't express -- and by common cancers, I am meaning lung cancer, colon cancer, breast cancer. A lot of those lines don't express high levels of HIF-2. In fact, some of them don't express HIF-2 at all. And when probed genetically, they don't depend on HIF-2. So that's looking for cell intrinsic HIF-2 dependence. So I'm not sure there are going to be any other common cancers where there's going to be cell intrinsic HIF-2 dependence.

But as I sort of alluded to a moment ago, HIF-2 does play roles in the immune system, including in tumor macrophages. It also plays roles in the host, such as tumor-associated fibroblast. So I'm not smart enough yet to tell you what other common cancers this drug will be active in. Then we may have to do some empiricism here, frankly, because I'm not sure the laboratory is going to come to the rescue and tell you in a timely manner, this is the place to go. So again, I think right now, it's what I would have predicted based on Von Hippel-Lindau disease.

And any other diseases beyond cancer?

No, in terms of -- I think there's a fairly strong -- thank you for reminding me. I think there's pretty credible evidence that HIF-2 plays a role in pulmonary arterial hypertension, which is, of course, a terrible, terrible disease. Now given that hypoxemia is one of the complications of a HIF-2 inhibitor, I don't know whether one would be able to thread the needle here in patients who already have lung compromise from pulmonary arterial hypertension. But the preclinical studies, I think, are quite provocative that a HIF-2 inhibitor might be helpful here.

Great. Thank you, Dr. Kaelin, for joining us today. We really appreciate you taking the time. It's great to see you. We will now take a short break. I'd like to get us back on time if we can. We have some lunch outside. If we can get back into this room and seated by noon, that would be lovely.

Thanks, Kaelin. Bye-bye.

Thank you. Thank you.

[Break]

Let's get started.

Okay. So we're getting started again. I'd like Richard to come up and review the Casdatifan development strategy, and then we'll have Jen present.

All right. Thank you. So we'll talk about our late-stage development strategy and start off, there'll be a few slides that overlap with what Dr. McKay showed, but I can go through it again, and there'll be time for some more questions later if needed. But excited for our PEAK-1 study. It's our first Phase III study for patients who've had prior PD-1 or prior PD-L1 therapy. This is really in the sweet spot where cabo is currently used as we discussed briefly earlier. So all patients will get cabo and then they'll get randomized 2:1 for Casdatifan versus placebo. So really, that's two key features that actually start out with being an attractive trial for patients and the physicians, which is it's standard of care.

They just tell the patients are getting standard of care, everyone gets cabo. And then the mismatch randomization, meaning 2:1 to add cas to it is also a feature that's desirable for the patients and the investigators to offer. Importantly, the primary endpoint here is progression-free survival. So we put all of our statistical power onto that endpoint, which gives us more probability of success versus splitting it between PFS and OS in regard to the statistics involved. And of course, the PFS endpoint is a much more near-term endpoint from a pure time line perspective than waiting for OS. So those are the kind of key features here.

I think this really differs substantially from, say, the Merck strategy where they're in current clinical trial in the same space being a post-IO setting, where they're combining belz with lenva but comparing to cabo. So there, you still -- they still have the TKI plus belz in the investigational arm, control arm being cabo, I think adds a lot of heterogeneity or noise to the experiment. And so that just changes their probability of success just from that aspect. You've seen this is our ARC-20 design, but I'm going to share with you some of the data we just shared a few months ago at ASCO, just to remind you of the data that we have that's really created the tailwinds for us going into this trial.

And so we do have an arm in our ARC-20 study that's for cas plus cabo in the post-IO setting. We did a data cut for safety with 42 patients enrolled in that cohort, and we shared that, like I said, just at ASCO in June of this year. And at that early cut with 42 patients for safety, we did have 24 patients that were evaluable for efficacy. So I'll share that as well. And by the definition of evaluable for efficacy, it means either the patients were on study for at least 12 weeks. So they had the opportunity for two scans and hence, the opportunity to have a confirmed response because I really am focused on confirmed responses. So that's just the minimum time necessary to have the ability to have two scans.

However, I'll be clear, any patient that progressed and didn't get a scan or second scan because of progression, they were included in this as well. They were not eliminated from that analysis. This is the waterfall plot for these patients, and you can see almost all patients again had reduction in their tumor volume. And keep in mind, this is a very early look. So median time of follow-up here is just over 5 months. And again, it takes 3 months to get your two scans. So these are basically all patients who had tumor reduction in their second or third scans basically on average. And you can see 46% of the patients had a confirmed tumor response even this early in the study.

As before, I like the spider plot, so I have to share one of those as well, though you can see, again, similar to what I showed this morning for the monotherapy, now in combination therapy, you again see the rapid reduction in tumor volume, meaning by the first scan, it's generally going downwards. And as you go out over time, again, general slope is very flat or slightly downwards. So even as patients continue on beyond the 3, 4 and 5 months shown here, we can see that the tumors are maintaining control, still drifting towards tumor reduction. So we expect this to be a long-lasting and durable story or picture just like we showed with the monotherapy earlier this morning.

And as we briefly touched on the real power or capability outside of the monotherapy, we've shown is its ability to combine with other therapies because it doesn't have overlapping toxicities. I think Terry showed that earlier and then it was discussed by both Rana as well. So here is the data for the patients we look to say, well, how many patients stay on drug. That's really the only way they can get to therapy or derive benefit is staying on the treatment. So are patients able to stay on treatment and particularly stay on both treatments, which only really happens if you don't have overlapping toxicity.

So here, you can see the data for those patients leading to dose reduction, not even discontinuation, but anything leading to dose reduction. And you can see, as we showed this morning, really the anemia and hypoxia are the two on-target effects of casdatifan that leads to dose reduction. The others are really associated with cabo. There's not much overlap. The only one with potential overlap is fatigue, still predominantly attributed to cabo, more so than casdatifan. But only two patients did discontinue treatment with either product and no patients discontinued both products. So that also bodes well for a combination therapy.

They can hit the tumor, hit it hard, be prolonged staying on both therapies. And potentially, if you have to come off of one, you're still on the other therapy. So the other study which Dr. McKay presented, which I would like to highlight. I'm very excited for this study is our frontline study. Again, this is to be TKI-free. We strongly believe that the best place for casdatifan and the HIF-2 alpha inhibitors are early, not just because you get higher tumor responses, as even Dr. Kaelin said in general or oncology-101, earlier usually leads to higher responses, but just the overall safety and tolerability of the product makes it a preferable therapy for choice for a long-standing treatment.

So we think this combination with volrustomig, the AstraZeneca bispecific with -- for PD-1 CTLA-4 is a great combination. It is being executed or run by AstraZeneca as the sponsor of the trial. It's a seamless Phase Ib/III study. The Phase Ib is actively enrolling. Here, we're testing two different dose levels of volrustomig. All patients get 100 milligrams daily of casdatifan in both those arms. So we'll do a safety evaluation very quickly, pick the dose of volrustomig to go forward and then seamlessly continue enrolling globally in this trial into the Phase III. The Phase III does have three arms to be randomized, but I'll be really clear, 3A, which is volrustomig plus casdatifan is being compared to 3C ipi/nivo, the standard of care.

That's where the statistics are going. That's the primary analysis is evaluating 3A versus 3C. 3B, the volrustomig monotherapy is there really for health care agency interactions where we have to evaluate composition of components as well. And then excited to add to our development program to really continue exploring casdatifan's capabilities, again, early and TKI free. So we're looking at -- we are enrolling three new cohorts into ARC-20 to look at casdatifan in these settings, and we'll see how that can potentially inform further development activities.

So first, we have monotherapy for frontline patients that have favorable risk disease. And then the second cohort is an all-comers frontline for -- so all-comers meaning intermediate and poor IMDC risk patients as well. And that's casdatifan plus [indiscernible]. So that, again, is just going to be the checkpoint inhibitor plus cas in TKI free. And then lastly, we're also looking at the post-IO setting and looking -- based on the data we showed you this morning, what does cas monotherapy do post IO because we do see these results being very comparable to what a TKI does. But again, compared to a TKI, a much more favorable safety profile, and we are seeing very long PFS even monotherapy.

So those are three new cohorts that are currently enrolling. And my last slide is we will have a continuous stream of information for you next year as well. We'll start with additional analyses from the data sets we looked at today, and we're working on a manuscript. So these will be available in the first half of next year. Then midyear, we look to update you on the Cas-cabo cohort from ARC-20. We showed you the data at ASCO just a couple of months ago, and I just went through a few highlights from that just now.

So we'll have, in essence, another year of follow-up. So we'll present that data sometime midyear. And then these three new cohorts I just spoke about for ARC-20, first-line and post-IO setting, we share -- we'll hopefully share that data with you later next year as those data become available. And then lastly, for the eVOLVE study, the Phase Ib portion is enrolling. It should enroll quickly, and we'll be able to share that data later next year as to what happened in that Phase Ib portion of the study and what's the go-forward dose going into Phase III. And with that, I'm going to hand it off to Jen.

Thank you, Richard. And now I'm going to talk a bit about how we're going to translate this development strategy into what we think is a multibillion-dollar market opportunity for casdatifan. So I'm going to start with a slide that a lot of you have seen from us before. And what this slide shows is market share by product and by line of treatment. So left-hand side is frontline, right-hand side is second line. And I want to make two important points on this slide. So the first point is when you glance at the slide, it makes it look like the RCC market is highly fragmented. But in reality, there's only 2 classes of therapies that are approved and used today in RCC.

There's IO, that's anti-PD-1 or anti-PD-1 and CTLA-4 and then there's TKIs. There's four different anti-PD-1s or PD-L1s that are approved and then there's six or seven different TKIs. And it's really that high number of TKIs that are approved that gives that appearance of the RCC market being highly fragmented. In contrast, the HIF-2 alpha inhibitor space, we only expect there to be two HIF-2-alpha inhibitors that are approved for the foreseeable future. That's all that's in development right now. So there's going to be much less fragmentation and splitting of share in the HIF-2 alpha inhibitor market.

The second point that I want to make, if you look at our development plan and our near-term studies, PEAK-1 and eVOLVE, they're going after the two largest segments within each of these markets. So if you look at the second-line RCC market, we're going on top of cabo. Cabo currently has about 30% share of the market. It's about 2.5x its next closest TKI, len-everolimus, which you can see a little bit below, which is that 13% bar. And then if you move over to the first-line bar, you can see, again, we're going right on top of the most widely used standard of care, in this case, anti-PD-1 plus CTLA-4, which has over 30% share.

And we also believe, and I think Rana affirmed that earlier today in her discussion that this is the fastest-growing segment of this market because both clinicians and patients prefer to avoid TKIs if they can in that frontline setting. So just to spend another moment on our development strategy and how it's different than what Merck is doing, and Richard touched on some of these points on his presentation. But in the post-IO setting, us and Merck are both combining with TKIs, which is the standard of care in that setting. The major difference between what they're doing with belz, what we're doing with Cas, is our choice of TKI.

So they are combining with lenva, which is the TKI that they own. We are combining with cabo, which as I just talked to you through, is the most widely used TKI in the second line setting. I was actually just going back and looking at the prior therapies that the patients had gotten in ARC-20. So that was that 121 patient data set, 80% of those patients had actually gotten prior cabo. In contrast, only 25% had gotten prior lenva. So it just shows you how much cabo use there is out there and how it is a preferred TKI. The two primary reasons why we think clinicians like cabo over lenva is, first of all, we do think it's a better tolerated TKI. We've heard that repeatedly for clinicians.

Interestingly, one of the toxicities that you see more of with lenva than cabo is fatigue, and that is the one overlapping toxicity that we think we'll see with TKIs and HIF-2 alpha inhibition. So we like the fact that with cabo, there does seem to be less fatigue. The other thing that people like about cabo versus lenva is it's much easier to dose and to choose the right dosage. So lenva is available in dosages from 4 mg all the way up to 22 mg. So one of the things that we hear from clinicians, including -- we've heard this from Rana a lot, is that a lot of clinicians don't know how to dose lenva and what the right starting dose to use is. In contrast, cabo, most clinicians start at 60 mg.

And then if you do see toxicity, dose reduced to 20 or 40, but it's much simpler than lenva. And then when you go to the frontline setting, our development strategy is even more different. And here, we are leapfrogging what Merck is doing, which is combining with anti-PD-1 and TKI. So again, they still have a TKI in the combination. In contrast, as we've talked about a lot today, we are combining with anti-PD-1, CTLA-4. So we are going for a TKI-free regimen in the frontline setting combining with IO-IO, and we think that gives us a huge advantage in the frontline setting.

Now I want to spend a few more moments on this because I think the study that we're doing with AstraZeneca, eVOLVE-RCC02 is probably the least appreciated aspect of our development program. So first of all, this is a true clinical collaboration with AstraZeneca. So a lot of times, companies will announce clinical supply agreements, and they try to address them up as clinical collaboration, but they're really only getting free drug supply. This is very different. In this case, AstraZeneca, which is obviously a world-class drug developer in oncology, is operationalizing the study. So that means a lot less resources for us, and we are sharing the cost of the study.

So they are making a huge investment in this study alongside us. So we love the fact that they are all in on this study. They have been a great partner. We've actually worked with AstraZeneca for many years now. We are collaborating with them on another study called PACIFIC-8. So it's a team that we know well. And like I said, they're equally excited about this study. On the choice of volru, we actually spent a lot of time as a company thinking about the right anti-PD-1, CTLA-4 combination. So this wasn't something that we just jumped into because AZ was there. We talked to a lot of clinicians about their thoughts on volru, how it compares to ipi/nivo, other anti-PD-1, CTLA-4s that are out there.

And what we're hearing very consistently is that there's a lot of excitement for volru in the clinician community. And so we felt like this was the right combination partner for us for Cas. So now I'm going to segue a bit into actual numbers and to try to help you guys all build your models. And so here, we show the largest tumor types in the U.S. by incidence, the SEER data. I'm sure you guys have all seen this data. RCC is actually the seventh largest tumor type by incidence in the U.S. It's kind of neck and neck with bladder and just a little bit smaller than melanoma. So it is a very, very large tumor type. Two things that I want to point out.

First of all, when we go through these numbers on the next few slides, we're only talking about the metastatic setting right now. But we think that there's a really big opportunity, as Rana was talking about earlier, in even earlier line setting, so pre-metastatic. And so we're very excited about this IST that we'll be doing with Toni Choueiri at Dana-Farber. It is a large IST where we'll be looking at anti-PD-1 plus cas in the neoadjuvant setting, so pre-nephrectomy. And we have designed the study so that it could potentially support guideline inclusions in the future. So it will be a large, randomized study.

The second point I want to make here about RCC relative to these other tumor types, and you guys all follow these other tumor types very closely, but it's a very clean competitive landscape in RCC relative to these other tumor types, particularly if you look at breast and prostate and lung, which are becoming very, very fragmented. In RCC, there's no chemotherapy. There's no ADCs. There's no targeted therapy. There's very few bispecifics. So we feel very, very good about our opportunity in RCC because it is such a clean market and such a clean competitive landscape.

And this is one of the reasons why we think the PEAK-1 study will enroll as quickly as we do and why most RCC studies have enrolled so quickly. There's just so little competition out there for patients right now. So dollar-wise, what does this mean? The RCC market today is almost $10 billion in just the major markets. So this is U.S., Japan and the five largest countries in Europe. So this doesn't even include places like China, South America, other European countries, et cetera. So obviously, a very, very large market. It's also expected to grow to $13 billion just in the next few years. A lot of that growth is coming from that turquoise bar that you can see on the top.

That bar represents HIF-2 alpha inhibitors, and this is data that's straight from DRG. So you can see there is a lot of expectation around the HIF-2 alpha inhibitor class. One very important point that I want to make, this is consistent with what I was saying a few slides back, there's really only two classes of therapies that are approved in RCC. And you can see these very clearly on this slide. So you have IO, which is that blue bar, TKIs, which are those yellow bars. Each of those bars are about $4 billion in sales. So a very simplistic way to think about the market opportunity for HIF-2 alpha inhibitors is to think about that $4 billion, and there's no reason why HIF-2 alpha inhibitor should be less than $4 billion.

On top of that, because this mechanism is so well tolerated and because we are getting this really long duration of treatments, we think that we can grow the market beyond that $4 billion, and I'm going to talk a little bit more about that in these next few slides. And so we're going to start here and how we are estimating our time on treatment for our Cas. So here, we show the median PFS for prior RCC studies in second line and frontline, we're using median PFS as a proxy for time on treatment, as I'm sure you guys all do. And when we look at the bars under second line, obviously, the best proxy for us right now is the belz plus cabo PFS. This is from LITESPARK-003, where they showed a 13.8-month PFS.

We obviously expect to do a little bit better. We're not going to show you the precise number, but you can probably make an educated guess in terms of what we'd ideally like to see in PEAK-1. If you go further to the right and you look at the first-line patient population here, we're obviously building on nivo plus ipi. With nivo plus ipi, we currently see about 12.5 months PFS based on CheckMate 214. And we expect to build on this even further because it is the frontline setting. And I think consistent with what Bill was saying earlier, he does expect cas to be even more additive in these early line settings.

So again, we're not going to show you the exact number that we're assuming for median PFS and time on treatment here, but it's a very nice number. And now just translating all of this into dollars, and I'm going to start actually talking about belzutifan today. So belzutifan, as Terry pointed out earlier, is doing about $660 million in run rate sales, which is amazing. There's a lot of companies that would be very happy to have a drug with $650 million in sales. They're only about 1.5 years into the RCC launch. The reason though it is not greater than this is that its use is almost entirely restricted to the third line setting. And so that setting has a patient population of about 15,000.

The time on treatment, we're estimating to be about 5.6 months based on the PFS that they showed in LITESPARK-005. When we talk to clinicians, they are telling us this is very consistent with what they're seeing in the real world. And then there's a slide earlier that showed belz is having about 40% share. So you can run the math on those numbers, you'll get very close to that $650 million. We are not going in that third line setting. We are focusing on earlier lines. So specifically the second line and frontline as we've been talking about. So if you look at the second-line market today, or IO experienced patient population, today, we're getting to 21,000 patients.

So to Salim's question earlier, we actually did just get some updated research from DRG, the numbers are even higher. And keep in mind that 21,000 includes not just patients that progressed getting treated in the first-line metastatic setting, but these are also patients that got adjuvant pembro and progressed that would also be eligible for PEAK-1. So it's a very large patient population. We talked a little bit on the prior slide about what we might be assuming for median PFS here, and then we're assuming belz like pricing, and that gets you to about a $2.5 billion opportunity for this setting alone for HIF-2 alpha inhibitors. As you go to the right, to the frontline setting, obviously, patient population a little bit bigger.

We're assuming an even longer time on treatment. And here we get to a $2.8 billion opportunity for the HIF-2 alpha inhibitor class. So this, to me, is a really important point to make. So here, we show the Kaplan-Meier curve for PFS for the 50 mg BID cohort. We didn't show it in the clinical data section because we wanted to save it for here. But what you can really see in this cohort, and this is a cohort as a reminder, we have the longest follow-up. We have almost 2 years median follow-up in this cohort is that really long flat tail, which is very IO like. So you have about 40% of patients, actually over 40% of patients on treatment beyond 18 months and then a lot of these patients are getting close to 2 years of therapy.

And keep in mind, the median PFS for this cohort, as you remember, several months ago, and it hasn't changed is 9.7 months. So clearly, with this kind of curve, 9.7 months is probably not the right proxy to be using for time on treatment. So we could argue that you should be using a time on treatment that's several months higher than that 9.7, just given that long fat tail that you're seeing. For each additional month that you assume for time on treatment for the major markets alone, we get to $150 million to $200 million incremental revenue. So we think that this is a huge potential source of upside relative to the slide that we showed you just before this.

So how are we going to convert cas plus cabo to a multibillion-dollar market opportunity. And to us, it's very easy. We think the value prop is pretty exceptional. And so the first step is obviously just converting those cabo users to cas plus cabo. So there's 30% of patients that are getting cabo today based on the better efficacy with very similar safety that we expect to see in PEAK-1. Next is converting those other bars. So patients that are getting TKI mono, PD-1 plus TKI or even belz plus TKI to the cas plus cabo regimen.

And then finally, in terms of really optimizing the revenue opportunity for cas plus cabo, we do think that we can maximize and extend the time on treatment based on all the things that I talked to you through on the prior slide. Another thing that really helps is just how well tolerated cas is. And so even with TKIs, patients tend to have drug holidays. Even if a patient is doing well on a TKI, they may switch to another TKI just because they're getting TKI-related toxicities. So the fact that cas is so well tolerated is really going to allow us to maximize the time on treatment. And then last, longer term, we think the opportunity is much bigger than just PEAK-1.

And so we talked a lot about eVOLVE, which we think is a multibillion-dollar opportunity in the front line. That study is -- the Phase Ib portion is going exceptionally well. It's already enrolling well ahead of expectations, which is very, very unusual for an oncology study. And then as Richard was just talking about, we are also starting to look at cas in some other early line settings where the goal is really to displace TKIs in early settings. And then last, longer term, we do think that there's a potential for casdatifan in other tumor types, other diseases. Right now, we have our hands full with RCC. And with a $5 billion market opportunity, we want to make sure we get every dollar of that.

But we are starting to think about longer term what else we might want to do with Cas. So just to wrap it up and before I turn it over to Juan to talk about our implant portfolio, I just want to hit on three key points. First of all, I think the data that we showed you today makes the case very, very clearly that cas is a best-in-class HIF-2 alpha inhibitor. And in fact, we don't even think of belz as the competitor anymore, we think TKIs are. And as Rana pointed out earlier, this is the longest PFS that has been seen for any second line plus TKI study, not just for belz, but for any TKI out there. So that is something that's really, really exciting for us. Second, we believe that we have a better development strategy.

We just talked you through that. We feel like we have the better TKI. We like the fact that we're going TKI-free in the front line. So we're super excited about our development strategy. We believe it is differentiated. And then the third point is our goal is to take as much share as we can get. And we should get well more than 50% share of the HIF-2 alpha market. It's only us and Merck. There are no other competitors on the horizon. So very, very unique oncology market, and we are laser-focused on really maximizing the opportunity that we have with casdatifan and that starts with PEAK-1. So with that, we're going to switch gears and go to implant.

Great. So my job now is to simply introduce you to a small number of very advanced programs in the inflammation space and to give you a sense for what might transpire over the next 12, 15 months out of this. As Terry pointed out a couple of times, our group -- our discovery group really started as an immunology-focused organization. As you know, the first few years of our existence, we worked primarily on immuno-oncology targets, reflecting that strong immune expertise. And so 2 or 3 years ago, we simply decided to shift the clinical focus, but not so much the type of discovery organization that we have built.

We decided to pursue a two-pronged strategy, looking for small molecule improvements upon cytokine targeted therapeutics that already have well-established clinical value and utility. And in parallel with that, we decided to work on pathways that revolved around two critical front-end defense, immune defense cell types that have been historically understudied in the pharmaceutical industry. So we decided to pursue things to modulate mast cell biology as well as neutrophils.

As I think those of you that know our organization, we love biology, but we hate the inherent risk associated with translating novel biology into clinical trials. So we tend to prefer to let other people sort through all the science that doesn't translate into the clinic. At the end of the day, humans are not mice. So we'd like to let other people do a little bit of a heavy lifting. We're very good at spotting. I think the HIF-2 alpha story is a good example of that. I could mention TIGIT, AXL, wait for other people to do the heavy lifting, spend their money, illustrating where there might be an opportunity to come in and do better.

The reality is the clinical proof of concept is hardly ever if ever generated by best-in-class molecules. That's just not how it works. So with that as the backdrop, I'll tell you about a couple of things that we're really excited about. These are the five most advanced programs in the immune inflamed space. I'm going to have one slide each on the first three, which are more or less listed here on this table in order of maturity and readiness for the clinic. I fully expect that over the next few months, we'll select at least or development candidates against at least three of these, most likely the Top 3, a fraction of which we'll probably advance into the clinic next year.

We make that decision as to the timing and priority, urgency of moving things into the clinic, taking into account in real time the competitive landscape that the medical need exists at that time and obviously, competing priorities within the portfolio. So I'm going to be talking to you today a little bit more in detail about X2. So molecule TNF modulator and RCC R6 program. The other 2 are very exciting. One of them is an antibody program against CD89 which we think has a lot of potential against a subset of patients with RA and a small molecule CD40 ligand disruptor. So very much along the same vein as the anti-TNF program, but at an earlier stage of maturity.

You see there's a wide spectrum of clinical -- potential clinical utilities ranging from allergic conditions like AD or CSU, all the way up to the big chronic autoimmune conditions. So X2 is one of 2 main modulators of mast cell biology. As you know, mast cells represent one of the frontline defense against infections. Mast cells to live in skin, lungs, the gut places where they're waiting for some out of place foreign agent that they can literally self-explode against and kill in the process. There are 2 main known mechanisms that trigger a mast cell to explode the granulate with a more scientific term. ITE, of course, we're familiar with that. That is relevant when being exposed to environmental antigens or food allergens.

But there's also over the last few years, a second, we hope, equally important mechanism in which endogenous substances like substance P, activate this GPCR called MRGPRX2, that also leads to the granulation of those mast cells. It may play more of a role or an important role in itching and pain sensation relative to the IgE mechanism. Very recently, the clinical proof of concept has been generated by our main competitor, a company called Evommune. With an agent that I think is, on the one hand, really exciting because it's the first translation of the preclinical to the clinical observations.

On the other hand, we think it's an agent that in typical form leaves something to be desired, and we think we can come in and do better. It's a molecule that has shown signs of activity in chronic inducible urticaria, a very easy place to move into to generate proof of concept upon which to build in some of the other indications that I've mentioned.

They're reaching with a high dose that they evaluate, they're reaching plasma levels that we calculate to be north of 20 micromolar. There were some LFT signals associated with that. The twice-daily administration of 50 milligrams twice a day, which would give you an exposure just a little bit under what you get at 300 appears to be clinically active as well. But we think that those exposures are really not the kind of exposure that you should be building a program around by contrast, our leading compound. We refer to this 102, it demonstrates in under fully physiological conditions, we tend to run all of our programs that under fully handicapped conditions, whether it's human blood or serum. In this case, we use serum. As you know, small molecules have a nasty tendency to binding specifically to all kinds of proteins and lipids. And so the potency that you generate in the lab hardly ever predicts the true potency in a whole organism.

So that particular compound in 100% human serum can block 90% of substance P activity at double digit nanomolar just below 15 nanomolar with the kind of human PK that we project for that, we should be reaching therapeutically relevant concentrations with the Cmax of a little more than 200 nanomolar. So that's almost 100-fold less than the 20 micromolar that I mentioned that the competitor reached. So we're very confident or excited about the prospects of this molecule as we advance it towards the clinic.

The second most advanced program is our small molecule TNF alpha disruptor. The commercial and clinical value of anti-TNF biologics can that be overestimated. However, something that's perhaps less known is that TNF alpha signals through 2 different receptors. Receptors 1 and 2. Receptor 1 is a bad one, is the one that drives inflammation. Receptor 2 is the one that TNF relies upon to begin to orchestrate their recovery from that acute inflammation. This is fairly typical in inflammation. As the marines land and start destroying things, the bridge builders are right behind, they start to lay the foundation for the recovery operation. In the case of anti-TNF biologics, those agents block both the good and the bad signal. The beauty of these small molecules is that they only disrupt the ability of TNF to buy into it to the bad receptor R1, leaving the R2 biology intact.

There's very, very clear preclinical evidence that we can recapitulate all of the anti-inflammatory benefit of anti-TNF biologics with the small molecules with none of the bad R2, receptor R2 mediated biology. In a mouse for example, where you're -- and we hope this will translate into the clinic, what you're treating RA, IL-17 levels in serum are going up. Tregs are starting to shift from being inhibitory in nature to be pro-inflammatory and start to develop a Th17 profile. All under control of the HER2 receptor. So we're very much looking forward to translating that preclinical biology into the clinic. Similarly to the previous program, our main competitor here Sanofi. They just reported on an early Phase II study in psoriasis. The good news is that they're seeing clear evidence of clinical benefit. The bad news is that they're dosing twice a day, personally because of the LFT and QTc prolongation observations at the next dose up at the once-daily dosing. So again, for us, it's an opportunity to come in with a better compound and hopefully, steal their launch.

And finally, the last program that I want to be commenting on today is our CCR6 program. CCR6 is the signal, the chemokine receptor. The certain inflammatory cells be utilized to find their way into psoriatic skin. And so the therapeutic hypothesis here is that by blocking the recruitment of not just Th17 cells but also gamma delta T cells and other inflammatory signals not only will we be able to recapitulate the therapeutic benefit associated with IL-17 blockade, but also some of the other pro-inflammatory cytokines like TNFR1 gamma, TNF-a that come on the back of these inflammatory cells would be alleviated if you prevent these cells from coming into the tissue.

Our only competitor here -- not the only one, that most relevant one would be Pfizer. They just started a Phase I healthy volunteer study with a small molecule CCR6 antagonist. And here, what we are counting on is the fact that historically, the chemokine space is complete with clinical failures in our estimation because of underdosing of borderline molecules. So if you look through the whole history of clinical trials run with chemotactic inhibitors. The only positive outcomes you will find are the ones that are associated with my group at a previous company that reflected the knowledge that we generated about the potency and dosing requirements for effective blockade of immune cells recruitment or inflamed tissue. So we're counting that when the time comes, we'll have that competitive advantage relative to Pfizer.

So with that, I'll stop, and I think we're all going to take questions.

Yes. So this concludes the bulk of the content for today. So we'll take questions on casdatifan as well as the I&I portfolio. I'll ask Jen and Terry to kind of come up to the front so that they can answer questions.

Emily Bodnar from H.C. Wainwright. I guess maybe I'll ask one on cas and one on the immunology side. Maybe if you could discuss the neoadjuvant trial a little more. I'm curious you talked a bit about how HIF-2 alpha is slower to lead to responses compared to some other therapies. So how do you kind of see that playing out in the new adjuvant space where typically treatment is like 4 to 8 weeks? And maybe also just discuss how many patients might be eligible for new adjuvant treatment.

Yes. So I can start. I think one of the aspects of cas that got Tony to excited about this IST, is that much faster time to response and the greater and faster tumor reduction that we seem to be seeing with cas versus belz. So we do think that there's likely going to be tumor shrinkage, especially given -- keep in mind, like what we've been showing you is data from patients that have had 3 prior lines, 4 prior lines, 5 prior lines, et cetera, that yes, for patients that have not been pretreated, we do expect that there could be meaningful tumor reduction and that it could really impact the nephrectomy, the ability to minimize what you need to do with a nephrectomy and then the long-term outcome.

And I think because as Bill was saying, HIF-2 alpha is such a key pathway in clear cell RCC pathogenesis. I think that's the other reason why they were excited about hitting that pathway early and prior to surgery. We are also combining with PD-1, so also using the benefit of ramping up the immune system prior to surgery. So that should provide some benefit as well. And what's nice about this is there's nothing that's used today for neoadjuvant. It's not like other settings, like lung, et cetera, where you do tend to have a lot of pretreatment in the new adjuvant setting like in this case patients just go to nephrectomy. So this is a completely new opportunity for Cas, and we're running the study, so it's randomized so that we'll get some really meaningful data out of it. So it's an exciting opportunity.

And maybe a question on the X2 inhibitor. Maybe just discuss how you think about that pathway versus BTK inhibitors, which are the other oral therapy that's approved for CSU?

So I think it's primarily an argument about safety, okay? The X2 does not play any normal role. You're not going to be missing a single B cell or a mast cell as a result of this, you're literally going to be blocking something I didn't mention is that our understanding is that the ends of peripheral sensor in neurons start putting out a lot of these substances that are sort of interacting sort of in a 2-way communication with the mast cells in the skin.

So inflammation is triggering the sensation of itching and pain, the nerve endings themselves are putting signals that are enhancing that signal in leading more mast cells to degranulate and keep driving the process forward. There's nothing that's going to happen as a result of a complete shutdown of X2 signaling other than a widening of that tissue cycle.

If you have a question, please raise your hand.

Yes. Just 2 questions. First, can you just share your early thoughts on pricing strategy, just given Cabo may go generic around 2030, does that give you guys more pricing flexibility? And second is, can you just comment on the potential to get a broad label on TKI to combine with any TKI, not just Cabo or have you heard any feedback from the position that once we get results from TKI they might just use to combine with cas with TKI.

So for pricing strategy, right now, we're assuming that pricing is essentially equivalent to belzutifan, maybe a tiny bit below. We also plan to use flat pricing, which is how cabo and lenva price, which means that the 100 mg tablet would be priced the same as 50 and 25, so patients dose reduces to 50, the price for that 50 mg tablet would be the same as 100 mg.

As far as being on top of the generic TKI definitely helps. So yes, that is one of the things that we liked about combining with cabo versus maybe a TKI that is going to have a much longer patent life than cabo because obviously, the price of cabo is going to drop quickly.

To your last question, I mean it's a very good question. I don't see that happening as much. I think first one is because cabo is like deep preferred TKI. So it's not like there's a lot of clinicians out there got like I'm dying to use lenva, I am dying to use axi, wish I could combine cas with one of those. But I do think clinical practice, it could happen, especially if like you start with cabo, maybe get some cabo-related toxicities, and it's like maybe you want to switch axitinib.

I do think because of TKIs, the safety profiles are all different. They're all hitting different kinases. So they're not interchangeable like maybe PD-1 could be. So I think it will happen a little bit but maybe not as much as you might think. One thing that I do think is going to happen, which I think is very interesting. And it goes back to what some of what Bill was saying, and Terry was saying about the importance of keeping the patient healthy, but where the TKI is really helpful and right to make this point, too, is like patients that have high disease burden, rapidly growing tumors is like really pulling everything down and getting tumors to shrink very, very quickly.

So I actually think what I think can happen is not so much like switching out different TKIs, but maybe you have a patient on cas plus cabo for 6 months. And then you can wean them off of cabo for a while and maybe tumors are growing a little bit, you get them some more TKI. But I think that is actually maybe a more interesting longer-term opportunity versus like swapping out different TKIs is like can you actually remove the TKI, maintain the patient on just cas.

I think it's a lot -- what Jen just spoke about, the TKI is highly analogous to like chemo in certain regimens. And I think that notion of hitting it early and then weaning off like people often talk about with immunotherapy chemo and maybe not hasn't been explored as much as it should be, but I think this situation is we have a similar notion where then you -- especially if we can demonstrate how well patients can do on a monotherapy early out as well.

Daina Graybosch with Leerink Partners. I have a couple of related questions on PEAK-1. I wonder if you can tell us how many interim PFS analyses you've built in and assuming FDA will ask for an ad hoc OS look for project endpoint as a safety endpoint. How mature will OS be at the NM or final PFS analysis?

Aren't really talking about the statistical plan in that way. But as far as OS goes, OS is a prespecified key secondary endpoint. So we're collecting that in all the ways necessary and expected. So we expect the OS data at the time of the PFS data, for example, that's positive for submission, we'll have adequate OS data at that point in time to satisfy a full approval. It would be -- I don't expect it to be an early approval, but it would be a full approval at that point.

But I think PFS standpoint, having it still primary is a key difference between what we're doing and what Merck is doing because they have dual. We're not sure why they did dual. Like most of RCC settings have been approved just on a PFS standpoint. But because of that, they probably chopped up their alpha a bit more, and they may be waiting for OS right now, which may be why their timing has been pushed out.

Any other questions?

I guess what are your expectations on the [ 012 ] trial, especially as it relates to their ARM A versus ARM B, which is PD-1 plus LENVIMA plus HIF-2 versus IO-IO LENVIMA?

So what we're hearing anecdotally. So this is the Merck Phase III study that [ Umer ] is referring to that's evaluating cells plus pembro plus len versus their anti-PD-1 CTLA-4 plus len versus, I forgot what's the other? And I think just len, pembro, len, sorry. So what we have been hearing for the group line is that, that triplet is giving patient a decent amount of toxicity. And there was a slide in Rana's presentation. This is -- so this is belz plus pembro plus lenva. I mean, I think there are anti-PD1/CTLA4 plus len, they would be shocked if they don't see the same problem that AZ, which is too much toxicity just anti-PD-1 plus CTLA-4 plus TKI, there's going to be too much toxicity for a lot of these patients. For that front -- but for that first combination, back to the slide that Rana had on overlapping toxicity, anti-PD-1 and TKI has a decent amount of overlapping toxicity, more than people probably appreciate hepatitis, colitis, GI, rash, et cetera.

And even though HIF-2 alpha inhibition doesn't bring a lot of toxicity, it may bring just to not that it sort of pushes over the edge. So what we're hearing on that triplet is just concerns about the toxicity. And we definitely think with our anti-PD-1 CTLA-4, which by the way, they don't seem to be making a really big investment in which probably tell you something combining debt with TKI is going to give a lot of talks. So like we said, that's what AZ tried to do with volru and len and the reason they want to combine with cas is because they were seeing too much toxicity.

So we'll see what that study shows. I mean, if it's successful, it kind of doesn't matter honestly for us because as we talked about, our strategy is different, and we're going TKI-free. And so we think for anybody that prefers a TKI regimen, which has Rana talked about, we think as most clinicians, we think they're going to prefer our combination.

So Jen just so we're all on the same page. You're saying because of tox on the 2 TKI -- so if 2 plus TKI plus PD-1 arm, too much tox. So it may not necessarily outperform because you may not be under [indiscernible]?

Exactly, yes.

Are you also saying that PD-1 CTLA-4 lenva could outperform that one?

So anti PD-1 plus CTLA-4 -- no , I don't think it will. I think because, like I said, like AZ ran that combination, volru plus lenva. The reason they are not taking that combination forward is because they saw too much toxicity. That's why they decided that HIF-2 alpha inhibition was a much better combination partner. That's why they actually approached us was because of the tox that they saw. So I would be surprised if that combination does anything. I mean, so probably honestly regretting having that combination in the study. It just created a much bigger study than they needed to run and a lot more expensive study.

I may just add to that. I'll remind you that a bispecific, which the reason why we think volru may be effective and safer is that it's the PD-1 arm is pulling in CTLA-4 biology presumably into tumor draining lymph nodes. That's not the same thing as a co-formulation of a PD-1 and anti-CTLA-4, where you're trying to achieve this convenience, I guess, which I think is what Merck is using in that trial, co-formulated pembro plus CTLA-4.

And if it's successful, like I said, it doesn't really matter for us. I mean we -- great for patients and because our strategy is so different and because we're combining with IO-IO, we think patients and clinicians will prefer the TKI free regimen.

Just [indiscernible].

Maybe finally on the X2, one, is it your base case that it works in CSU only? Or do you see utility and atopic derm as well.

I think chronic inducible urticaria is a really easy way to generate clinical proof of concept. It's very predictable. You literally induce the disease with a 5-pin scratch, and you know within a few days, whether your drug has biological activity. The standard path would be to follow that up. The general wisdom is that there's no market in chronic inducible urticaria. It's an intermediate step towards chronic spontaneous urticaria. And in parallel with that, I think, at the right moment, you start to evaluate atopic dermatitis, which is the second equally obvious place for X2 biology. Again, you can follow the road map to illustrate the places where mast cell biology is pathologically relevant.

Are there any other questions. If not, I'll ask Terry to...

Go ahead, one more.

This is [indiscernible]. There's actually [indiscernible] study, IHC study Anderson and RCC looking at ivonescimab, which is a PD-1 and VEGF. Could that be potentially combined with casdatifan?

You mean with HIF alpha with cas? Yes. Let's say with the cytokine. Yes. Yes. So it's something -- I think the challenge with that is -- it's just a tough Phase III study to run because anti-PD-1 VEGF bispecifics are not approved in the frontline nor and there's very little use of [ atezo avastin ] these days. So I just think the Phase III study would be very complicated. And so I think that's why poly anti-PD-1 plus TKI combo is like a better. But that's something we've definitely thought about and could be something we do in the future.

Last call for questions, please. Okay. Well, I'd like to ask Terry to wrap up with some closing remarks.

Two quick size. And we know it's been long. Hopefully, it's been interesting. We tried to put a lot of meat in there. We appreciate you guys coming by and everybody on online as well. So it doesn't seem like there's anything happening, there we go. So this is just maybe make a few key points. You heard a lot today and a lot about casdatifan. But to bring it all together, I would emphasize the points that you've probably heard this start middle no at the end. We believe at this point, we can clearly say black and white casdatifan is the better molecule, and we do think this is going to be a 2-horse race.

Obviously, you see that the profile is driven by the lower rate of primary progression. We have confirmed objective response rate that's probably going to approach 40%. Most importantly, the PFS looks like it's going to well exceed 12 months. So even when you look at our landmark PFS, I think that becomes another important thing to recognize because that starts to tie in what Jen was speaking to that duration of treatment, patients that get any benefit get long benefit so that, hence, what we were.

Literally, when we started this program, we had our first at board meeting in January 2024, that Achilles heel of the high rate of primary progression that Rana talked about what was highlighted for us. And fortunately, hitting the target harder matters. I'll steal Bill. He's got to know about I'll steal his oncology 101 for a chemist oncology 101 is well over my head. So bottom line, we think we have the improved molecule. Secondarily, we think because it's a 2-horse race because there's nothing else out there. We believe we're going to be able to execute our trials as well, and we believe that we're going to be able to expand that market so that we get that duration of therapy in the AUC that's created with the number of patients.

Finally, I don't think it could be overstated the clear, apparent trend that we look better than TKI monotherapy because I think that provides the genuine clinical, scientific rationale for a complete paradigm shift for what we've been discussing today, you want to get away from like everything. People want to get away from chemo, they want to get away from TKI. When you think about patients, efficacy is everything, but if you can actually flip things around and get the efficacy and improve the quality of life and bring HIF-2 inhibition up to the front and push TKI down, there will be a great benefit to patients. So we think we've provided compelling data today, and you'll continue to see more data throughout next year has been outlined by others.

Coming back, bigger picture to Arcus next week, you'll see our overall survival data from edge gastric -- there will be an oral -- the abstract will be out next week as I suggested that we feel really foreshadows the potential opportunity in upper GI cancers with TIGIT. But beyond that, recall that you're not treating a tumor, you're treating biology and our STAR-121 on first non-small cell lung cancer PD-L1 all-comer study will be fully enrolled with 1,000 patients by the end of this year. So we'll see how that goes. This has been an interesting field. We're excited that we're finally getting to the point where the data will speak for themselves. Also importantly, as I mentioned, when you look at our cash position, the investment in TIGIT, the investment in quemli have maxed out. Next year, we'll be spending less than 50%.

So importantly, these dollars fund us through multiple value inflection points. All 3 of these late-stage programs, most importantly, PEAK-1. So we've got HIF-2 inhibition, you've got TIGIT, and you've got CD73 all covered with the cash we have.

So with that, we think we'll be having a steady cadence of data then we'll be having a steady cadence of Phase III readouts for the foreseeable future. We thank you all for joining today and look forward to continuing dialogue with quality. Thanks very much.

Great. Good morning. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. Biopharma Analyst. I'm very pleased to be hosting Arcus this morning. Joining us from the company, we have Jennifer Jarrett, the company's COO and Richard Markus, the company's CMO. Thank you both so much for being here. Really looking forward to catching up.

Before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

With that, I thought maybe, Jen, just give us kind of an overview of strategic priorities for the company as we head into 2026 here, and what you and the team have been focused on and then we'll dive into the pipeline.

Sure. Well, thank you, Terrence. So first of all, I'd just start with a very, very high-level overview of Arcus, and then I'll get into what our top priorities are right now. So Arcus is very unique for a smallish biotech company. So we have 3 different programs and 5 Phase III studies, all targeting very, very large tumor types, including gastric, lung, pancreatic cancer and renal cell carcinoma.

One of the reasons -- probably primary reason we've been able to pursue so many different Phase III studies in parallel is because of the funding that we've received from our partners, specifically Gilead, AstraZeneca and Taiho. And in fact, we're only having to operationalize 2 of those 5 Phase III studies. So that gives us a huge advantage from operationalization perspective.

From a priority standpoint, probably priority #1, 2 and 3 right now is execution of the global Phase III program for casdatifan. Casdatifan is what we believe is a best-in-class HIF-2 alpha inhibitor there's only one HIF-2 alpha inhibitor that's approved and in development today, other than ours. That's Merck's belzutifan, which has had a very, very successful launch so far in RCC.

Today, it is only approved in late-line RCC for our first 2 Phase III studies, we are going to be targeting earlier line settings, so specifically the second-line setting or IO-experienced RCC; and then first-line RCC in collaboration with AstraZeneca.

We've now presented data from about 90 patients for CAS monotherapy, which showed clear differentiation relative to belzutifan in every efficacy measure that we reported on. So that was primary progressive disease, ORR and PFS. We have data coming in October that we'll be presenting at an investor event on 120 patients where we'll have about 8 months more follow-up versus the last data presentation at ASCO GU.

We've now started our first 2 Phase III studies, as I mentioned earlier. The first is a study called PEAK-1 that is evaluating CAS plus cabo and IO-experienced RCC. That's about a $2 billion market opportunity, in G7 countries alone. And then the second Phase III program, which we're running in collaboration with AstraZeneca is actually set up as a Phase Ib Phase III study.

So we've just started the Phase Ib portion with them, and that is evaluating CAS with AstraZeneca's type anti-PD-1 CTLA-4 bispecific antibody in first-line clear cell RCC, and that's a $3 billion-plus market. So we think these two settings alone can be about $5 billion in G7 countries. So that is priority #1, 2 and 3, as I said.

Our next fourth priority is getting to the Phase III readout from our two most advanced Phase III studies. The first, is a study called STAR-221, which is evaluating domvanalimab, our Fc-silent anti-TIGIT antibody in combination with anti-PD-1 in chemo, in first-line gastric cancer. We are running that study in collaboration with Gilead. That readout is expected in 2026. That's about 1,000-patient study.

And then the other study where we could get to Phase III data as soon as late next year, is our PRISM-1 study, where we're evaluating quemli, our small molecule CD73 inhibitor in combination with chemo in first-line pancreatic cancer. That's about a 600-patient study.

So one really important thing to mention with both those studies. Those are 2 Phase III studies, both of which are completed enrollment, the first STAR-221. We completed enrollment on in only 18 months and even more impressively for PRISM-1, we completed an enrollment in just 9 months. So that's shown as we're going into PEAK-1 our first Phase III study for casdatifan that we've been able to execute on two very large global Phase III studies in oncology. So very different than a lot of biotechs, which out of the gates are having to run a big global Phase III study for the first time. So we have a lot of experience already.

The next priority that I want to mention is we have some really active discovery efforts in inflam. We've now been working on these for almost 3 years. So we're not just re-purposing some oncology molecules, we have been working on for inflam. These are all best-in-class and/or first-in-class opportunities. We'll have the first disclosure on these programs at our investor event in October. And then the last thing that I want to mention from a priority standpoint is we are very, very focused on capital preservation. We're very fortunate today to have over $900 million in cash from our balance sheet as of the last quarter.

And we want to make sure that, that capital lasts as long as possible. So we've paused a few things that felt a little bit less strategic and important and we're really focused on conserving capital anyway we can as a company.

Okay. Great. I know we're going to dig into a lot of these. But maybe first, just another high level one. Obviously, there's been a lot of focus on kind of some of the changes at the FDA, et cetera. I know you guys mentioned you've a lot of upcoming pivotal programs, ongoing pivotal programs.

What's been your view on kind of interactions with the agency? Is it steady state? Are there any changes? Any slowdowns, acceleration? How would you frame that for investors?

Yes. I think the change in the FDA really hasn't had any effect on us. We've had good communication with them, clear communication with them and being in the oncology space is really still, I'd say, steady as it was -- as it goes. And our study designs, also, I don't think are controversial in any way being randomized, double-blind type studies, et cetera. So I think we're very comfortable and confident still in what we've put in place and the reception it should get at the health authorities.

Yes. Okay. Great. Maybe moving on to cash, just given Jen, this 1, 2 and 3, as you said in terms of priority, I know you mentioned you have 90 patients and you are going to get another 30 patients. It sounds like in this next update and longer follow-up.

So maybe remind us kind of what the data was that we saw already as we look ahead to this next set of data, and then the Welireg or Belzutifan, the Merck program, just remind us of kind of the relevant benchmarks as we look for this next data update from the fuller data set here in October?

Yes. So this next data set, as you pointed out, there will be 120 patients. So all 4 of the monotherapy cohorts that we're evaluating casdatifan and late-line clear cell RCC. These are all patients that received at least 1 anti-PD-1 therapy and one TKI. So a very advanced patient population. It is -- look at the data. We'll have about 8 months more follow-up versus the last data presentation so its quiet a bit more follow-up. As a result, we'll be able to provide a lot more PFS information relative to what we provided the last time around at ASCO GU in February. So what you should expect to see is updated safety and ORR data, further the 120 patients.

And then whatever we can share on PFS. So the last time we presented data in February, we only had 1 median PFS [indiscernible]. That was for the 50 mg BID cohort. That was the first cohort to complete enrollment. So it's this next look, we may not still be a median PFS for some of these cohorts. This is obviously a very good thing, but we'll show the Kaplan-Meier curve, so we'll start to get people a sense for where the PFS' could come out for these other cohorts.

The other thing that I think will be very interesting for people to see is that first cohort to enroll the 50 mg BID cohort. We now have a lot of patients that have been on therapy nearly 2 years. So you'll really start to see the tail of that we'd expect to see with HIF-2 alpha in addition. And you can see the percentage of patients that have now been on treatment close to 2 years. And obviously, that translates into very, very meaningful clinical benefit for patients as well a very large revenue opportunity for us as you think about the time on treatment.

To your question on the benchmarks, so belzutifan across all of their studies. So this isn't just Phase III study. They've shown an ORR in the range of 18% to 22%. Looking at a similar patient population, actually, in a lot of cases, a little bit of a less advanced patient population than what we're looking at. As a reminder, at the last data presentation for the 100 mg QD cohort, which is our going-forward dose and formulation. We showed a 30 -- oh sorry 33% confirmed ORR and we showed a higher ORR all 3 monotherapy cohorts relative to that belzutifan benchmark.

The other two efficacy measures that we reported on were primary progressive disease in PFS. For primary progressive disease in LITESPARK-005, the Phase III study for belzutifan. They saw about a 35% primary progressive disease rate. So these are patients that are progressing on or before the first scan, so patients that never even get a chance to benefit. So far, we've been showing a primary progressive disease rate in the teens, so about half of what's been showed for belzutifan.

And then for PFS, Merck reported a 5.7 month PFS in LITESPARK-005. They also had another smaller data set that was just presented earlier in the year, similar patient population for belzutifan, and they showed almost exact same PFS so about 5.6 months.

In contrast, when we presented the data in February, we showed a 9.7-month PFS for that 50 mg BID cohort. And then we also showed the 50 mg QD cohort and you can see that clearly, like we were going to be beyond 9.7 months PFS for that cohort. So we're significantly beating all of the efficacy benchmark data for belzutifan.

And just remind us the Phase III dose that you're using here because, again, you've had 4 doses we're going to see and what's the right one to look at for the Phase IIIs?

Right, so 100 mg QD tablet is the going-forward dose in formulation. So the 4 cohorts that you'll be seeing are, first of all, that 50 mg BID-cohort, that was the first cohort to enroll. We only had capsules -- 10 mg capsules at that point in time. So that's why we had to split it up into BID. So patients are really taking 5 large capsules per dose. And then we had 2 dose optimization cohorts, so a 50 mg QD and 150 mg QD. So we've been able to check the box on the dose optimization requirement and then last with that 100 mg QD tablet dose in formulation, which is the going-forward dose in formulation for our Phase III studies.

And you still feel good about that choice of dose given the more maturing data that you're seeing?

100%. Yes. I think when people see the data, I think they will feel very, very good about the 100 mg QD. I think what's also important because the 50 QD, also looks very, very good. There are going to be patients that get dose reductions because of anemia and hypoxia, which were the 2 on-target toxicities that you see with HIF-2 alpha inhibition if you look at the belzutifan studies, they have about 30% dose reductions due to these on-target AEs.

If you do have to dose reduce from 100 mg to 50 mg, patients are clearly getting a very, very efficacious dose of CAS, which is different than belzutifan and if patients have to go from 120 to 80, which as I said, about 1/3 of the patients seem to do, they're definitely losing efficacy. So we think this is another big advantage for us.

Okay. And that's built into the protocol already in Phase III, the dose reduction?

Yes. We have very strict guidelines.

Okay. Great. All right. And then I guess the other opportunities that you're doing, the combination with cabo, you had some data at ASCO. Maybe there, just talk about it? I know you did a lot of work on dose selection there. Maybe just give us an update on kind of what the key findings were for that study because I know that informed your PEAK-1 Phase III program.

Yes. So that was evaluating 100 mgs of CAS, same dose of CAS with 60 mgs of cabo, which is the approved dose of cabo. So very importantly, from the data set that we presented at ASCO, we showed that you can safely combine those two drugs. The safety profile looks very good. Only two patients had to discontinue, one therapy, no patients discontinued both therapies, which is very important because at all points in time, patients were getting at least one treatment, and then we reported a 46% confirmed ORR, even though it was an early look. That compares to a 31% confirmed ORR that was reported in a similarly designed study for belzutifan plus cabo.

Okay. And then on PEAK-1, again, I know you mentioned here the design is IO-experience population. You're going combo versus cabo mono. Again, any more details in terms of powering assumptions that you can share on the trial?

Yes. So the CAS cabo study versus cabo alone is the key registration study. It's randomized placebo controlled, and the key endpoint is PFS. So that's accepted endpoints in this population globally. So we are on good grounds there. And it also, of course, moved the time line in significant amount by looking at PFS versus OS. But that said, we do have OS data being collected. It's a prespecified secondary endpoint, so it will satisfy all the health authorities requirements when we look at the OS data that's available, but the PFS is the registration endpoint. And I think that's also in our favor.

And what kind of effect size are you guys looking for in the study?

So we can say that cabo alone generally will have a PFS in the kind of 9- or 10-month range would be the assumption. We expect to be significantly and clinically greater than that.

I mean it's 20%, the minimum bar usually in oncology that...

Yes, we haven't really come out with where the study design is on -- but I'd say it's a well-powered study for clinically meaningful benefits.

Yes. Okay. And what maybe just talk through like how site activation is going, enrollment? I mean, Jen, you kind of alluded to some of this in your prepared remarks. But maybe just any update there. And then I think the competitive study that some people are focused on is the Welireg study in terms of time line. So how are you stacking up in terms of time lines relative to that study?

Yes. I mean I'll talk to the start up and PEAK-1, and you can just talk about the other if you'd like. But in active start-ups globally, it's going well. I think the study design is quite readily understood and available from a health authority perspective, no real pushbacks from the health authorities around the world for that study. So I also think from a patient and investigator perspective, this is a really desired study design and combination.

And by the way, it's 2:1 randomization as well for the CAS cabo group. So that also is in favor, I think, to facilitate enrollment. So I do think the start-up should go well. And as Jen said earlier, we've done this before. and beat most normal time lines, I'd say in this. So we're hoping to replicate that a third time, but I think the start-up should go well and the patient recruitment obviously should go well given the study design.

And just the fact that we've now had 3 medical conference presentations for casdatifan has really driven awareness of the program in the clinic community even in the patient community, you go can to these patient chat rooms. There's a lot of discussion around casdatifan, and one of the reasons why we did want to get this data out in October versus sit on it for 4 months, is that we have people lined up and running. And eVOLVE is now up and running and just to create even more awareness around the opportunity with casdatifan.

And then to your second question, the study that most people are focused on that's somewhat competitive, what we're doing with CAS is a study called LITESPARK-011, that Merck is running where they're combining belzutifan with their TKI, which is lenvatinib. We think that we have a better combination and development strategy for a whole bunch of reasons and just to get through a few of those.

With their study, they are, as I said, combining Belz with Lenva, but they're using cabo in the control arm. So they're using a different TKI in the experimental arm and the control arm, which definitely made things more complicated.

We actually think cabo is a better TKI, both from a tolerability and an efficacy standpoint. If that's true, it's really going to work against the Belz plus Lenva arm. Belz is actually, a lot of people don't realize. It's not really used today as a monotherapy. It's used in combination with Everolimus. So it's a little bit unclear exactly how Lenva mono performs relative to Cabo mono.

Some of the other key difference between what they're doing and what we're doing is not just one primary endpoint of PFS. Our understanding is that they have PFS and OS as dual primaries. So they did some interim analysis probably looking or will do looking at PFS, but they've had to split out their alpha because of that versus because we have one full primary endpoint of PFS, we've been able to put all of our alpha on that endpoint.

And because we think there's potentially now waiting on OS, that allows us to close the gap in time lines because we had that PFS endpoint. So we definitely think we have a better strategy, a better combination partner, and we're really able to close the time lines.

I know historically, like and everyone's focused on PFS going all the way back. So why do you think they took that strategic decision to use OS as a co-primary?

So, OS can be helpful with reimbursement in Europe, which may have been one reason which is why we have it as a key secondary endpoint for our study, which we think is more than sufficient. Maybe it's also just because HIF-2 alpha inhibition is very much like IO where you have this long tail effect, and you do tend to see benefit in survival. So they may have thought maybe at the time like that may have been a safer endpoint for them. I think they probably would think differently now.

And in fact, in second line RCC it's been very difficult to hit an OS endpoint. There's only one second line RCC study that's hit an OS end point, which is METEOR. But because these patients tend to go on so many subsequent therapies, it tends to be a bit harder to use OS as an endpoint in second-line disease.

And you would anticipate you'd have data before them, I guess, given that you have a PFS endpoint?

Probably still after, but we think not long after yes. So we feel like very good about like our combination, our strategy. The other thing is I think just going on top of cabo versus lenva gives us that big advantage. As I said, a lot of people think cabo is a better tolerated and better overall TKI relative to Lenva. If you look at cabo use versus Lenva use in the U.S., about 2.5:1 outside the U.S. and some of the major European countries it's as much as 10:1.

So clinicians have a lot more experience with cabo. The other thing that we like about cabo relative to Lenva, especially since we're combining it with another anticancer agent is cabo is much more easy to dose. It's only available in 3 dosages, is 20, 40, 60. You typically start with 60, each dose reduces toxicities.

In the case of Lenva, the dosages are from 4 all the way to 22 or 24 mg a lot of clinicians claim that they're not even sure exactly how to dose Lenva in every Phase III study, they've used a slightly different dose. So we think there's a lot of advantages to us going with cabo versus a different TKI.

Okay. Great. The other combination you mentioned was with the Astra PD-1 CTLA-4 here. So maybe just talk to us like why was that an interesting combination to pursue? And then what are the data shown? And I know this is your first line kind of approach.

Yes. So I think we're quite excited about this study, especially it's a frontline study now. And the real concept here is to be TKI-free in the front line and push to the TKI associated toxicities towards later lines. So Volru, like you said, a bispecific CTLA-4 PD-1. And the study design, again, is a Phase Ib/III design. So it's seamless to go from a Phase Ib to III on a global scale. The Phase Ib part is looking at our CAS 100 mg our standard go-forward dose daily with 2 different doses of Volru, just as mostly a safety run in, think of it that way and pick the Volru dose that best combines with CAS. And then we go straight into the Phase III, which is Volru plus CAS compared to ipi/nivo as the primary comparison for registration, which again ipi/nivo now is probably the dominant first-line and preferred first-line therapy, again, because it's TKI free.

So that's covering about 30% of the front line and growing as opposed to going the other direction. So like using cabo in the second line, which is a dominant second-line current therapy. This is a dominant first-line therapy, and we're adding tests. So that's really the Phase III registration design. There is a third arm of Volru alone, but that's just for competition of components. The main statistical comparison is CAS plus Volru compared to ipi/nivo.

Yes. And remind us how large and how long is that run-in or lead-in phase going to be? And then what triggers the Phase III -- move to Phase III I guess.

Yes. The -- we said we have data probably second half of next year from the run-in part or safety parts. And meanwhile, the Phase III is being prepped globally, so we'll be able to just go straight into that -- take the dose.

Okay. And is it more -- I mean, I'm assuming you're going to collect efficacy data, but is it more of a safety check the box and you'll see pretty limited -- you'll see some ORR data or something like that?

Yes. It's mostly a safety check. Just two different doses of Volru. We expect the CAS to be able to combine well with Volru. We don't expect any overlapping toxicities, but it is still a safety check.

Okay. And does that have a dose reduction as well for CAS? Can you go from 100 to 50 if needed?

Yes, we'll have the same kind of concepts available for patient management, especially because we expect patients to be on therapy for a long time, like years. So we do have safety management.

Okay. Great. And then I guess, just as you think about the asset, Jen, you kind of framed out the commercial opportunity here in various lines based on the 2 studies that you're pursuing right now. What's the latest thought on kind of partnership? I know you guys have -- are taking this forward solo right now, but how are you thinking about that, especially as you think about like that first-line investment?

Yes. So what I think is really nice about how we're running eVOLVE is that AstraZeneca is actually the one running eVOLVE. So it is part of the clinical collaboration with AstraZeneca, which is really, really attractive for us. They're actually operationalizing the study, so that obviously saves us a lot of resources are paying for about 50% of the study. So it's a really, really capital and resource efficient way for us to pursue the frontline and they've been a great partner, we know them well. So it's been a great collaboration so far.

So in some ways it's like a partnership. What's nice is we retain all of the economic and commercial rights. So that makes a huge difference if you think about it from an NPV perspective, if you're paying half of the steady cost that retain all of the upside.

So I think for now, we're probably more interested in doing those types of things, but there's interest for sure in the asset, and we'll see how things play out over time. I think for now, PEAK-1 is kind of well underway. We've got a good strategy for front line. So we feel very good about where we sit today, but you don't see what happens longer term. So what is nice in RCC is we see with like [indiscernible], I mean they've been a great case study for us. And -- they have made cabo -- talk about the dominant TKI in the RCC market and I think it proves a biotech can very effectively go after that market, and do it on their own if they want to.

And just remind us, like from a commercial footprint perspective in the U.S., that'd be like 100, 150 reps roughly?

Yes probably not even 100, probably a little bit less than that. It's a pretty concentrated market as geo-oncologist. So as we think about a partner, what could be interesting is as we think about further expanding the development program for CAS, even though we're going after like sort of the lion's share of the market, there are some other things that we could do, especially other tumor types we may want to pursue. And so partner could potentially be helpful there.

Okay. And last, just remind us of the IP, like how far out you guys go on CAS?

I want to say it's 2041, 2040. So this is homegrown, molecule and so lots of IP life left.

Okay. Great. Maybe just pivoting over to dom here. I know there's been a lot of ups and downs in the TIGIT space over the last, I mean, 18 months, 2 years or so. And so you spoke to some of this in terms of the differential on Fc regions. Just remind us kind of why you're still confident here in the program because I think from an investor side, I'd say that people are probably a little bit more skeptical would be my guess right now.

Yes. So the key difference from -- of our antibody compared to the prior 18 months, as you said, ours is Fc-silent as opposed to Fc-active. So what that functionally does in addition to hitting the TIGIT receptor and blocking that is ours will not deplete the T-cell. T-effector and T-regs while an Fc-active will.

And so if you do deplete those, especially like T-regs, you could get more immune-mediated adverse events, but then these two patient discontinuation from therapy, which obviously then doesn't allow the therapy to work, as well as depleting T-effector cells. So by being Fc-silent, we don't have those two detriments to the therapy. And our data has been quite consistent so far. We have it in gastric and in lung, both with consistent results.

And interestingly, AstraZeneca still has a very robust program also with an Fc-silent antibody, and their results are also very consistent with ours, are happy to say ours will read out before theirs, but that also adds to the confidence seeing that it's not just a onetime, one study aspect that we've seen our results.

And you mentioned, again, gastric, lung, kind of 2 focal indications here. I know you'll have some updated gastric data from Phase II at ESMO next month. And so maybe just help frame for kind of the prior data we've seen a similar question as before with CAS like what's going to be incremental in terms of either patients, follow-up, et cetera?

Yes, big data. So we've had EDGE-Gastric data before. And by the way, the EDGE-Gastric population here is really the same population as our STAR-221 that's going to be reading out for the Phase III registration. Before we've had PFS data and the PFS data is, in essence, overlapped with what was otherwise OS data for comparators, and we'll be coming out with our OS data now, and that's the biggest new reveal, let's say, at ESMO would be the OS data, which hopefully will show what we can do in the STAR-221 study.

Yes. And I think just looking at my notes, PFS, I think you're at 12.9 months in the intent-to-treat population, 13.8 in the PD-L1 high population. And then so maybe just remind us like what the PD-1 chemo typically does? I think it's somewhere in that same range?

It's on the same kind of 13, maybe 14 months range. That's right.

For OS.

For OS, sorry, right.

So you would expect your OS data to...

Exactly be greater than our PFS data. That's exactly right.

Okay. Understood. And then anything else that you think is going to be notable? Or is OS going to be the key thing this presentation or anything else that's going to be -- that we should think about?

I think the biggest part will be the OS I think everyone wants to see is what is the efficacy of this therapy and how will it compare or has it compared to otherwise with the control arm equivalent in the standard of care.

Okay. And then maybe just on STAR-221 is the pivotal trial. You mentioned very similar population to EDGE-Gastric. Just remind us, the design here and then timing of data?

Yes. So the -- it's our dom and zim, our PD-1 plus chemo, basically compared to PD-1 and chemo with the standard of care of the control arm randomized study. And it's fully enrolled. It was enrolled by June of 2024. So we're now watching the study and counting the events because it's events driven, but you can do the math. We're more than a year out from when the last patient was enrolled already. And so it's a venture and so all we can really guide to is next year as far as when to expect data.

One other thing, just to remind people, so it's an OS primary endpoint. But we're looking at the both at the TAP greater than 5, which is essentially PD-L1 high and ITT separately. If you hit on one of those endpoints, you get to recycle the alpha into the other endpoint. It's kind of like a -- call it a two-ways to win site design.

The other thing that we actually added later is if one of those hits -- sorry if it's TAP greater than 5 hits, there's a hierarchical analysis looking at TAP greater than 1. So we're really trying to fall for the broadest patient population possible with that design. And then one last thing to point out, some of you are familiar with the lung cancer market.

In gastric, it's much more skewed towards high PD-L1. So in our STAR-221 study, actually, a little over 45% of the patients were TAP greater than 5 or -- and we think probably over 80% or so were PD-L1 positive or tap greater than 1. So TAP greater than 5 and TAP greater than 1 both capture a significant percentage of the gastric cancer patient population.

Okay. Got it. So you cover the landscape. And just remind us, you provided some numbers for CAS, but just as you look at that gastric opportunity, I mean, what's the size of the market, roughly?

TAP greater than 5 would be about $3 billion in G7 countries. So another very big sizable opportunity. In another market, like RCC, where there's just like very little competition, which is one of the reasons why we've been able to enroll STAR-221 so quickly. There was really no competitive studies out there, and so we think that's a real opportunity for the anti-TIGIT classes and works.

Okay. Great. And then dom STAR-121, which is the lung cancer trial. Just any update on enrollment progress in that study and how to think about the data timing?

Yes. STAR-121 is enrolling well, and we expect it to be fully enrolled by the end of this year. And then again, it will be a matter of time. It will be certainly beyond that of STAR-221 just looking at gastric versus lung cancer in addition to when the enrollment completes. But we can't really give guidance yet on to when the 121 readout would be, but it will be fully enrolled, or we expect it to be fully enrolled this year.

Yes. Okay. And so that's probably beyond '26? Right, if you look at timing of like what the control arm is, et cetera.

Fair. Yes, but it's hard to say like I said, it's been running for a long time for a while now, but it's lung cancer, so we'll see where we go.

Okay. Got it. as you think about -- I mean, lung cancer, to me, it seems like you have a lot of companies still pursuing kind of first-line options. Do you see this as potentially becoming the new standard of care is this the market that's going to get increasingly fragmented? Like how do you guys see that market playing out on the forward because I think there's still some uncertainty in terms of what it ultimately shapes up?

Yes. So we changed our primary endpoint from -- it was an ITT focus end point to greater than 1. So we're definitely positioning dom-zim for the PD-L1 greater than 1 or PD-1 positive patient population. Where we actually think there's a little bit less competition. I think the ADCs and like CTLA-4s tend to be more targeted at the PD-L1 low or negative patient population for KRAS, a lot of that patient population again, tends to overlap more with PD-L1 low. I think there's still some questions about whether or not KRAS can move in the frontline and how combinable it is both with anti-PD-1 and chemo.

So even though there's a lot out there, which is why I would say, take a little bit longer to enroll, the study is positive. We actually feel very, very good about the potential for that molecule to take significant share of that PD-L1 greater than 1% patient population. There's obviously the anti-PD-1 DIGESTS out there. We'll see on that so far, we have not seen anything that would tell us that that's going to be a better combination versus anti-PD-1 data looks probably not quite as strong as ours based on the Phase III data that we presented.

We haven't seen any -- they've been a slightly bigger patient population. So we'll see. And lung is so big. I mean that is $10 billion-plus market that there's also room for a few different players.

Okay. Well, great. Thanks so much, Jen and Richard, really appreciate the time and best of luck.

Thank you.

Thank you.