Arcus Biosciences Aktie

Good morning. Welcome, everybody, to our casdatifan Investor Day. We will be sharing some exciting new data across first, second and late-line kidney cancer. Before we begin, I'd like to remind you, we'll be making forward-looking statements, and please review our SEC filings where the risk factors are laid out in detail.

Today, you'll be hearing from a number of members of our management team as well as our guest speaker, Dr. Rana McKay, who will be joining us virtually. After Dr. McKay's section, we'll stop for a short Q&A with her, and then we'll take more questions at the end after the full presentation.

So I'll turn it over to Terry to begin.

Thanks again for all of you who are joining us, including those of you who are online. We have a lot to share today. It's a pretty exciting day for us. Before we -- we're obviously here to talk about casdatifan, but before we jump into that, we just wanted to spend 2 minutes on the background of the company, even though it looks like a lot of familiar faces. For those who are out there and know less about the company, we just want to give you a drop of background.

So Arcus was founded in 2015. We've been around for about a decade. The company was founded with both a focus and expertise around small molecule drug discovery. We're a very R&D-centric organization. You can see we had that goal of advancing 1 to 2 molecules into the clinic each year. I think we've done a quite good job of that. We built up quite a portfolio of programs. casdatifan is sort of right down the middle of the fairway of -- really reflects the paradigm of Arcus. We have our molecule, quemli that's in front-line pancreatic cancer. We're actually doing an interim analysis of its registrational trial this quarter that will read out.

On the other end of the spectrum, we have a portfolio of very early programs that are just into the clinic or earlier. Those are mostly in the immunology area. The reason we point that out is because as casdatifan approaches commercialization, we feel we have a very sustainable pipeline to continue to grow the company with other molecules, both addressing similar opportunities and of similar quality.

So I'm going to use this slide somewhat as an executive summary as we talk about casdatifan. High level, you should think about what we're laying out for the day. I think when you -- the first thing that I wanted to talk about is our holistic approach here. So we recognized some time ago that casdatifan represented a true unique molecule dramatically different from belzutifan. And so when thinking about the opportunities, what we did is we looked across each line of therapy in clear cell RCC at what were the vulnerabilities of the standard of care. And I'm going to talk a little bit about that on the next slide.

But essentially, what we're going to lay out today is we -- the plans that we had, the data that we've generated and the plans we have going forward. But suffice it to say, I think when you walk out of this room that you will believe that casdatifan hands down is the best molecule, best drug in clear cell RCC bar none. We think you'll recognize that it does have a $5 billion to $10 billion commercial opportunity, and we have a lot of tailwinds in our development program. So essentially, we're going to talk about first line, second line and late line. What we're going to share today, it's not just totality of the data in each of those modules, we think you'll walk away thinking we have the best molecule to address each of those.

So for those who like the minimalist version where everything can be done in 5 minutes and feel like you have to be able to say everything in 5 minutes, this slide has it. So those are real curves. We'll be talking about more specific data as I go along. But what I want to do here is just lay out those vulnerabilities in each line of therapy. So when you think about the front line, the most commonly used regimen is ipi/nivo. So ipi/nivo has about 30% of the front-line market. The reason that ipi/nivo is used, number one is because it provides the best overall survival. So it's used 30%, why isn't it used 100%? And its limitations are very clear and very simple. Its rate of primary progression, which is almost 1 in 5 and then just PFS in general. Landmark PFS for ipi/nivo is 50% at 12 months. So 50% of the patients have progressed.

So the clear message, and this is a theme you're going to hear throughout the day, everything we're doing is highly aligned with how physicians want to treat clear cell RCC. So as we're going to change the paradigm, we're essentially going to give an umbrella of the casdatifan-based regimen on top of the regimens that they already like to use. So the idea on ipi/nivo's get that disease control to where it can take that 30% to maybe 50% or more conservatively.

Okay. The second line is a very interesting one. So second line has 2 vulnerabilities, 2 limitations. So the first one, we've now had LITESPARK-011 done. Merck with belzutifan is 0 for 3 on hitting overall survival. So one thing that we've been told in second line, if we could achieve an overall survival signal, that would be game changing. You essentially take the whole market.

Now the other thing about the second line is that includes a patient population that probably has the worst prognosis of any population in clear cell RCC. And that's the group of patients that come out of the front line having experienced a second-generation TKI. So I'll talk a little bit more about this in detail a little later on, but that's 60% of the patients coming into the second line, I don't think you'd say miscellaneous. So 2 clear simple opportunities, overall survival and then also it would be great to address that patient population that's very underserved by the second-generation agent. And what we're doing there is we're going on top of cabo. So just like ipi/nivo is most commonly used regimen in the front line, cabo is the most commonly used regimen in the second line. 40%. And in terms of monotherapies, it's actually 80%. So it's very favored by the clinical community.

Finally, the late line. You generally look at this late line as almost like a salvage therapy a new lease on life, extraordinary overall survival.

So a picture is worth 10,000 of my words, and I won't give you 10,000 words. This really -- everything that sort of describes casdatifan's advantages over belzutifan can be described as coming from this property of the molecule. So we have a better quality molecule. And the first thing that we recognize where you could really see dramatic difference is when you look at the effect of casdatifan on the biomarker for HIF-2 alpha inhibition in a human, and that's the ability to suppress erythropoietin. So not only does casdatifan more deeply suppress that production, but you can see it's incredibly durable as far as we know it goes on in perpetuity. Whereas the V-shaped curve, which was published by Merck, what you see is somewhere between 1 week and 13 weeks, you lose essentially all effect on the biomarker.

So the thing I'd like you to keep in mind is that whether you're taking those three 40-milligram tablets, your effect on erythropoietin production beyond that 13 weeks looks very minimal. I think that's particularly important when you start to think about biologies that are interacting when you're thinking about combination therapies. So the left-hand side will show more specific data but the left-hand side represents what we've shown with our late-line patient population about a year ago. So basically, much better data compared to belzutifan, about half the rate of primary progression, 50% higher ORR, a 2-plus fold improvement in PFS. And what we're going to show today is a very strong OS signal in that same population.

So the key point here, as I mentioned before, these 2 molecules are completely different. This is not an incremental difference. And what we will show you today as you see our data is that belzutifan doesn't define what HIF-2 alpha inhibition does. It defines what belzutifan does and essentially casdatifan squeezes all the water out of the stone of what you can get out of the true promise of HIF-2 alpha inhibition. I think when this target first came into recognition, there was a lot of hope. There was a lot of sort of promise as to what robust inhibition could deliver for patients. And I think what you're going to see today is how that manifests itself when the curve looks like the bottom curve.

So we've looked to be in the lead in science of HIF-2 biology and studying casdatifan. This highlights a recent Nature paper. And I just want to point out 2 key aspects of what we showed in this Nature publication. So the first one is we were able to correlate efficacy with pharmacodynamic biomarkers. So basically, what we showed was that you could correlate ORR or PFS with that ability to suppress erythropoietin production. So when you think about the previous slide, given that correlation, you can see how important those -- the difference between those 2 curves is.

The second thing that we showed is that patients that had higher HIF-2 alpha activity actually did better. So why is that important? Well, HIF-2 alpha activity is one of the most negative prognostics you can have in RCC or cancer for that matter. So what that tells you is it's not only correlative, but it's causative given that we're having the best effect in the patients that have the worst prognostic. This is another very important aspect of durable, robust HIF-2 alpha inhibition. So this is the spider plot for the 120-patient monotherapy cohort that we've been talking about. And I'd like this to kind of get imprinted in your head because I'm going to show 3 spider plots today, and they're just at various stages, but I don't really love the metaphor if you've seen this movie, but this movie tells you how the other spider plots are going to play out with time.

And so what you can see, and this is remarkable when you look at this mechanism. So keep in mind, this is a late-line patient population, third plus line of therapy and 25% or more that are fourth plus line of therapy. So if you look at that X-axis, you're out past 30 months. So what you can see is not only do you get early disease control rate of primary progression ORR, but these patients just go on and on, whether you're a yellow stable disease or whether you're a green or blue responder, all of these patients are getting tremendous benefit. If you look up there, 25% of the patients are still on therapy after 2 years. So basically, what you're talking about, this drives, obviously, patient life benefit, but also it drives hazard ratio for both PFS and OS. So very critical to see that basically, once a patient is on control, they're essentially go on and on.

I would emphasize, you can see this is out past 30 months, you're going to see like an amazing OS signal. When people first started to see this even a year ago, they suggested, hey, maybe you're going to see a strong OS. So this just calls out 2 particular patients to amplify the last point. So what you can see from these 2 patients is here are 2 patients that were stable disease and out past 2 years, they actually became confirmed responders. So again, it's a very, very durable mechanism of action. And it's probably no more benefit to these patients, but it just illustrates the point that you can even see deepening of the tumor response out past 2 years.

So I'm not going to say much about the slide. You're going to see it way too many times. Both Rana and Richard are going to comment on this. But as I was talking about, when we thought about our strategy, it's a very integrated strategy. These patients, some of them are going to be on therapy for over 10 years. So the sequencing of all of the different opportunities is a very critical aspect to how these patients are managed. And as I said, the way we thought about approaching this was to ensure that we're going to change the paradigm for treating clear cell RCC, but we're going to do it in a way that's highly aligned with how physicians want to treat clear cell RCC.

So the brass ring therapy, again, that we're building on. The reason I say it's brass ring, that's the ipi/nivo. So front line, it's the largest patient population. It's going to give the greatest durability. When I showed that spider plot, that also drives commercial opportunity. It's also -- there's no competition in the front line. So as most of you know, belzutifan failed in the front line. So our only competition in the front line is to improve upon ipi/nivo. The second line, as I mentioned, we're going on top of cabo. In late line, we're going on top of tivo. So these are 3 regimens that are all favored already by physicians. But essentially, what we're doing is putting an umbrella over them, where we're going to have a casdatifan enhanced opportunity for them to use those therapies.

So I'm going to switch now to -- I have about a half a dozen data slides. I'm basically going to steal all the thunder from Juan and Richard. And then they'll put a little bit more meat on the bones. Juan will talk more about the translational aspects of this. Richard will give you a few more details about the clinical aspects. And also, he'll tell you a lot more about the development plan.

So a year ago, I think it was basically in this room, this is the data set that we were focused on. If you look on the left, that was last year. On the right is the Merck data set. And now in the middle, we have similar maturity to that of the Merck data set. And I'll just run through this quickly. This is -- as I talked about before, you can see the confirmed ORR, it's about 50% better than what you see with belzutifan. The PFS is about 2x that. And very importantly, you see that progressive disease that's about 50%. That's hugely enabling. That's why we're able to go into the front line with, again, what physicians wanted to see was a TKI-sparing regimen, so building on top of ipi/nivo where you don't have the baggage of the TKI. So you've got the opportunity to give patients years of life before they ever see that TKI. So with that high rate of primary progression, that's why Merck always need to combine with a TKI to control -- to get that early disease control.

So while these data -- as always, this is a theme for this target and particularly for casdatifan, the data always get better with time. That was one of the first points that I want to illustrate when I showed you that spider plot. Similarly, you can see bits of improvement. But the real sort of home run now on this is the overall survival. So you could see the opportunity inherent in the spider plot. But basically, I'd emphasize that yellow oval, we're seeing a median OS of 3 years at this point.

When we saw these data, it kind of was mind-blowing that you're going from something that was -- if you look what belzutifan was, belzutifan showed a 5.6 month median PFS and basically did not improve upon the OS of everolimus. And here, you can see, if you look at the confidence interval, when we come back and look at this a year from now, it's going to be even better. Look at all the tick marks of patients still on. So 3-year overall survival. Importantly, this is really important. Juan is going to show you data where, as I mentioned in the Nature paper, where we showed that PFS and ORR were correlative with pharmacodynamic markers, we're going to show the same thing for overall survival.

So these are real, and they're highly likely to read through to other lines of therapy. And in fact, I'm going to show you in the second line, we're already seeing a strong OS signal. To put this number in context, in second line, cabo monotherapy has an OS of about 20-something months, low 20s, so almost the same as belzutifan in late line. So we're already doing better. The other thing I'll just tell you here, when I show you curves for the second-line cas/cabo, we've already put them on top of this OS in the late-line monotherapy PFS and those second-line data are looking better. So you can expect that the second-line data as they continue to mature, are going to mature similarly, and I'll show you the spider plot that points to that.

So now let's turn to the second line. So the first thing I want to do is briefly address the patient population coming into the second line. So as I mentioned, 60% of the patients that come into the second line have received the second-generation TKI and those patients have the worst prognosis of any patient group in this particular setting. Now for second, put casdatifan aside, and I just want to illustrate what Merck just recently published in the Lancet publication describing the patient population in LITESPARK-011.

And what you can see is there's a couple of unusual things about that. So first of all, they have 0 cabo patients, obviously, they have 0 lenvatinib patients as well. And then they have about 25% or more patients that received a first-generation TKI like sunitinib. That's very rare, particularly in the U.S., that's almost not used anymore. So the point we just want to make here is to illustrate that this patient population looks nothing like the real-world patient population that's delivering 60% of either axi, cabo or lenva priorly treated patients into second line.

So why is that important? Well, it comes back to what I mentioned about those patients who are underserved a little earlier. If you look at that upper blue box, lenva is the most notorious in that context. And basically, real-world data that were published this year illustrates if you got lenva/pembro in the front line and then you get cabo monotherapy, you're basically going to have 5% ORR, a median PFS of 4 to 5 months and change, and most devastatingly an 8-months overall survival. So keeping that patient population in mind, that's illustrative of differences in the patient population between LITESPARK-011 and the ARC-20 cas/cabo cohort as well as our PEAK-1 registrational trial, which is going to include plenty of those lenvatinib patients.

Now we actually felt for a number of reasons, Juan will share them that we had an opportunity to completely change the trajectory for those patients that had those second-generation TKIs, and I'll get to that in a few slides.

So what this actually shows now is the waterfall plot and the spider plot for those patients that received cas/cabo in ARC-20. And what I want to emphasize not only the depth of response, the number of patients still on study, but that spider plot should look really familiar to you. And basically, when you get casdatifan, if you get past that second scan, you're going to be very well served by the drug. You're going to be on it for a long time, whether you're a responder, whether you're a stable disease patient, you just get incredible durability. As I emphasize, all of these patients are contributing to the hazard ratio for both PFS and OS. And as Bob speaks to you and he'll be pretty conservative on our estimates, they're also contributing to the commercial opportunity.

So you can see, again, we have something that a year from now is only going to get better and all of that's contributing to the implied hazard ratio, the shape of that Kaplan-Meier curve.

So now this actually compares cas/cabo to belz/lenva from LITESPARK-011, and then you see the control arm of cabo from LITESPARK-011. So despite those patient population differences that we talked about, we're overlapping on our PFS curve. But what you can see is there's already a dramatic separation on overall survival. What you can see is that the curves are separating at 6 months. Now to just give this some context, if you look at the 2 lower curves, those represent the belz/lenva versus cabo from LITESPARK-011, and they actually did start to see some separation about 16 to 18 months out.

At this time point, when they had the same maturity data that we have now, belz/lenva had a hazard ratio on OS of 0.9. It actually improved over the ensuing year to their final analysis to about 0.85. So interestingly, they almost hit on OS. So given what you're seeing here, this is sort of the first piece of evidence to suggest in addition to what we've shown for the molecule as a single agent, casdatifan/cabo is going to hit on overall survival, and I'll show you more on this topic.

Now this emphasizes the point that we talked about those TKI pretreated patients. This is another one that probably had us just staring at the data. So the first thing is on the left, what we've basically shown are the PFS curves for patients that did receive a TKI in the prior treatment and those patients that did not receive a TKI in the prior treatment. What you can see is they're overlapping.

Now on the right-hand side, we've shown swimmer plots for the subpopulations. So those reds are all lenva patients. The yellows are other TKI patients and the blues are those patients that received IO that didn't receive a TKI. The remarkable thing about those lenva patients, recall the data that I said, those patients had 4 to 5 months expected median PFS, 8 months expected median OS. If you look at those -- that right-hand oval on the reds, that's out past 600 days, 20 months. So those patients that prior to casdatifan really in a devastatingly poor situation, now you've got basically looking just the same.

So if you look down those swimmer plots, what you basically see is all patients have equal opportunity when you come on to casdatifan. The second and probably most important aspect of this is those ovals that we've highlighted, all of those patients are going to continue to contribute to the PFS curve as well as then that PFS curve feeds into the OS curve, and this is just going to be a dramatic hazard ratio as you think about how this therapy will mature.

And this slide is meant to make the point of how our registrational trial is going to look. So what we have here is cas/cabo is the teal-colored curve. And what we've shown here are the corresponding PFS and OS Kaplan-Meier curves from every registrational trial that's involved cabo, including LITESPARK-011. And the important takeaway message from this is PEAK-1 control arm will be the first that ever includes meaningful levels of any second-generation TKI other than axi. Axi is probably the most gentle. So basically, what's absolutely the case is that the control arm for PEAK-1 should be -- it's going to be a worse population. It's going to perform worse than any of these cabo curves. And you can already see how strong we're looking. Again, I would emphasize, if you look at the OS curve, this is going to hit on OS.

And like I said before, when we look at this a year from now, those curves are only going to be more separate. You've got a lot of patients that are contributing to these curves.

Now I'm going to show you what's -- I think those last -- that last slide emphasize where you had a patient population that has the highest medical need. This is the brass ring patient population where the commercial opportunity is huge. So in the last 6 months, as we've been talking to people, everyone's been wondering what are we going to be able to show that tells them that we're going to be successful in the front line. And I think if anything has been a home run, these data are going to be a grand slammer. So what this shows is, again, same theme. We've shown you a waterfall plot. You see all those asterisks, all those patients are still on.

Keep in mind, this matures, this doesn't have a TKI in it. So this is basically casdatifan plus anti-PD-1 without the ipi. So ipi/nivo was 12 weeks of ipi/nivo and then it's nivo for the rest of the time. So this is just the cas/anti-PD-1 component. So the first thing you can see is waterfall, like we said in January, we didn't show it, but we said it looked amazing. It only looks more amazing now. There will be more responders. So we've had 2 more confirmed responders probably in the last month or 2. And you can see all of those patients with asterisk still on.

Secondarily, look at the spider plot. So think about -- basically, when you think about the spider plots I've shown you, they're nice in terms of predictability because we're going from patient population that's most advanced, single agent towards a healthier patient population in a therapy that includes an important combination. So again, a pretty amazing spider plot. If you look, you do not see 45-degree angles shooting up. So what does that tell us? Well, this is probably -- this is nice -- like if I was only going to have one slide today, it would be this slide. So what this shows you is basically how does casdatifan/anti-PD-1 compared to ipi/nivo.

So the middle curve on the right is from CheckMate 214 is control purpose, actually, and it's summarized in the far right column of my table, it's the lower curve on the Kaplan-Meier curves. That's pembro in the same patient population. So what you can see is pembro kind of gives you just what does anti-PD-1 alone do. You can see 30% rate of primary progression, 30% and change confirmed ORR and then it has a median PFS of about 7 to 8 months.

But the real takeaway is on the left-hand side of the table. So first off, remember, with ipi/nivo, you get about 1 in 5 patients are primary progressors. Now we had shared -- we saw a 7% rate of primary progression, 2 out of 30. We're already at a 50% -- a lot of people kind of during the course of the last 6 months said they'd love to see a 5 in the ORR. So for the ORR lovers, we're at a 50% confirmed ORR. We think that will continue to get better.

Most importantly, we -- the landmark data, so we knew we were going to have 11.5 months of follow-up with cas/anti-PD-1. We were excited about that because we know landmark PFS for ipi/nivo is basically 50%. So when we plant our PFS curve on top of CheckMate 214, you can see yet another set of curves where you can drive a truck between those 2 curves. And in fact, when you look at our 50% landmark PFS, it's 69% compared to that 50%. To put that 69% in context, it's a small print under the graph, it should be in big print. That's essentially -- it's better than what you get with anti-PD-1 plus TKI in the front line. So whether it's axi or cabo, and it's essentially the same as what you get with lenva, pembro.

So this builds on a theme that we've seen. We've said this to you a number of times. Every single time we've looked at casdatifan as monotherapy, it performs in terms of disease control and everything thereafter, like a TKI, but without the baggage. So what you're seeing here is a PFS curve that would be just as competitive with anti-PD-1 plus TKI, but without that TKI baggage. The other yellow oval that is important to highlight. So you've wondered, people have asked, we've been running a cohort of 30 patients for a safety data set of the triplet. This is ipi/anti-PD-1/cas. Richard is going to show you the safety data on that, but I'm going to give you this spoiler alert. It looks fine. As a matter of fact, that safety data set already fulfills -- we had our discussion with the FDA and EMA in terms of the safety data set that we need to start our registrational study at the end of this year, and we already have the data in hand that meets those specifications.

So what you also see, though, is out of the 25 patients that have made it the first scan, one primary progressor. So very consistent picture. We're delivering on both of what were those key things that investigators, not our narrative, what investigators wanted to see basically dramatic improvement in PFS and most importantly, dramatic improvement on the rate of primary progression, a very consistent feature of casdatifan. It performs just like a TKI, but it doesn't come with the baggage of TKI.

There's 2 baggage with the TKI. So the first is the quality of life. The second is, and you're going to hear this particularly when Juan speaks, TKI drives HIF-2 alpha activity. So that's why those TKI pretreated patients do so poorly in the second line. So sparing that patient a TKI has both a quality of life feature and a future feature in terms of driving their efficacy going forward.

So let me just elevate for a second here and summarize what I've shared. We've looked at the front line, we've looked at the second line. We've looked at the late line. We've contextualized our data with limitations in each of those lines. I think we've shown unequivocally that in each line, we dramatically address those limitations. Our second-line study, we expect to be fully enrolled by the end of this year. Our front-line study, we'll be starting it at the end of this year, and we're starting the work to enable that late-line Phase III study combining with tivo.

So I think you'll see some more meat on the bones. But I think when you put this all together, you see that not only do we, in fact, have the best drug for treating clear cell RCC, but it genuinely will be a $5 billion to $10 billion drug.

So the next thing I'd like to do is turn things over to Rana McKay. Rana is phenomenal clinician. She's worked with casdatifan. She's worked with belzutifan. As you can see, she's a leader in everything in her field. It says she's a rising star. I say she is a star. She's a super star. And the second thing I'd really point out in this world where you all the time, it's such a misnomer, you hear KOL. Rana actually has both -- most of them are just Os. She's emphasis on the K and the L. So we really appreciate having Rana here to share some perspectives on the current treatment paradigm and how she would expect that to evolve. So welcome, Rana.

Thank you so much for that really kind introduction. And it's really such a pleasure to be here with you all this morning, really showcasing the evolution of the data around casdatifan and the tremendous opportunities in renal cell carcinoma with this agent that we are all super enthused about really for our patients to ensure that they live longer and live better because that's really what's driving everything that we're doing here with the program.

Let's go to the next slide. And just to showcase the patient journey, I think Terry alluded to this as we talked about the different landscapes. The evolution of kidney cancer treatments have really changed with the introduction of IO therapy in the front line and in the front-line setting now we largely have 2 key options, an IO/IO option in the context of nivolumab plus ipilimumab, of which 30% to 40% of patients will receive that combination. And it is actually the most commonly utilized combination if we think of things at the regimen level or the combination of PD-1 TKI, which is the remaining share of individuals, but PD-1 therapy, anti-PD-1 therapy is the backbone of front-line treatment for patients with modern day RCC.

For the individuals that progress on to the second line, which is actually the bulk of individuals go on to develop the disease progression. So there's tremendous opportunity in the front-line setting. We are not curing the bulk of patients with metastatic disease and many go on to develop resistance, which is a huge vulnerability. The bulk of the options for patients that are IO experienced now includes either TKI monotherapy or recently TKI HIF-2 alpha inhibitor, which is really proof of concept to the strategy behind the PEAK-1 program and opportunities in the second-line space.

And then there are some individuals that -- many individuals that go on to develop disease progression that receive third-plus treatment options, of which we're basically cycling TKIs with TKI monotherapy. HIF-2 alpha monotherapy can also be introduced in that context, and we are seeing that there is growing utilization of belzutifan, which actually is a good thing as we think about the opportunities for casdatifan and MOA and developing a best-in-class HIF-2 alpha inhibitor.

Next slide. And now when we break it down into those individuals that are actually receiving TKI-based treatments, which we think there's tremendous opportunity here. When we look at the PD-1 -- anti-PD-1 TKI regimens in the front-line space, there's almost an even split between lenvatinib, nivolumab, cabozantinib and anti-PD-1 combined with axi, the bulk of which of that is pem/axi.

In the second-line setting, again, we see TKI monotherapy as the predominant backbone. And I think what's striking here is the astounding utilization of cabozantinib in the front line -- in the second-line setting. It is the go-to workhorse in the second line. People know it, people go to it, people use it, clinicians and practitioners alike. And then when we look at the later-line setting, tivozanib is an agent that can be utilized. Cabozantinib could also be utilized in that context later on or other TKIs. And I think what Terry highlighted really so beautifully in his talk is that across every single line here, there's also an opportunity for integration of casdatifan, targeting the vulnerable opportunities that are present in existing modern-day treatments.

Next slide. So we've chatted a lot about the front-line setting and what nivo/ipi brings to the table and what it doesn't bring to the table. As a regimen, it is one of the most widely utilized regimens for front-line RCC, particularly in the academic setting. And the tantalizing piece about the use of nivo/ipi is that in a small subset of patients, looking around approximately 1 in 10 patients, if you will, there can be long durable remissions that can be observed with nivo/ipi front line. And that is an opportunity that we want to continue to expand about.

Unfortunately, 1 in 5 patients develop primary disease progression and have no response to treatment. And that is the number from clinical trials. When we look at actually real-world data sets, that number is likely much higher. And so there's a huge opportunity. There's no biomarker that exists to try to identify who these individuals are. And so this is where cas can have a dramatic role with potentially reducing the high rate of primary PD and expanding the PFS in the front-line setting in the context that also spares a TKI. This is something that clinicians desire, patients desire and is a huge opportunity. And from the early data that we're seeing from ARC-20, even just with the cas/zim combination, we are already seeing progress being made in that space with the introduction of casdatifan in the front-line setting with decreasing primary PD rate and expanding the PFS rate. Obviously, the data will continue to evolve, but this is incredibly exciting, and we're incredibly excited about the triplet in this combination.

Next slide. So as we think about second-line opportunities, and I think this is the workhorse right now with the PEAK-1 study, cas/cabo really has the potential to improve PFS in potentially OS and provide dramatic benefit in TKI pretreated populations. What's striking about the data around cabozantinib is in the post-IO data sets from LITESPARK-011 from CONTACT-03, the performance of cabozantinib has been pretty consistent, right around 10.5 months for a median PFS in that context. When we also integrate all patients who have been exposed to a prior TKI, we do see reduction of the activity of cabozantinib. As is highlighted, the key here is CABOPOINT, where we see a drop-off in the PFS for those TKI exposed individuals.

So I think the opportunity here really lies in that the cas/cabo could improve upon this PFS. Cabo is the most commonly utilized, most commonly prescribed TKI in the second-line setting. So anchoring to that agent that clinicians know well and are utilizing very well, I think, is a really strong play. There's significant comfort with utilizing this drug, managing toxicities, but then also an opportunity to dramatically improve upon the benefit and potentially build with expanding the response rate, expanding the PFS and also the overall survival in this context.

Next slide. And then when we think about the late-line setting, where there's a tremendous opportunity as well and not -- with every line of therapy, there are patients that drop off and are not able to receive a subsequent line of treatment. I think there is a tremendous opportunity here as well. When we look at the drugs that are utilized, belzutifan monotherapy, tivozanib, other TKIs that patients may cycle through, the rates of primary progression are high and almost 1/3 of patients who receive belzutifan greater than that have primary PD in the later-line setting. And those are tough odds to stomach when you're facing potentially your last and final line of treatment potentially in RCC is that 1/3 likelihood that the treatment is not going to respond at all. And we're sitting on a PFS that's less than 6 months median with both tivozanib and belzutifan.

So there is tremendous opportunity to build upon this. Actually, the bar is quite low. And casdatifan, we view it as a best-in-class agent from the data that Terry has shown regarding the pharmacodynamic properties of the agent. So I think there's tremendous opportunity with the combination in the later-line setting.

Next slide. And this is that slide that I think Terry had alluded to that myself and Richard are going to really talk through. So there's a lot of opportunity to color the entire landscape of RCC treatments from front line, second line and third line with casdatifan combination treatment options that leverage the vulnerable opportunities of the already existing standard of care agents in this context. There's opportunities for a TKI-free regimen with PEAK-20 of cas/nivo/ipi that I think is going to potentially be a game changer in this context, lowering primary PE and expanding PFS. And basically, I love Terry's phrase of the benefit of a TKI without the baggage of a TKI.

Then there's also opportunities to combine with a TKI. There may be people that have rapidly progressive disease and need that dual inhibition where we look at PEAK-21 of cas/axi/PD-1 versus axi/PD-1. And then also thinking about novel combinations as we've seen many of the bispecifics entering into the testing landscape across the board. There's multiple agents, and I think tremendous opportunity there as well.

In the second-line setting, the most robust data coming from the ARC-20 combination and providing rationale for dual complementary targeting of the HIF/VEGF pathway with the combination of casdatifan and cabozantinib there. And that's going to be a tremendous opportunity there in the second line.

And then later line, thinking about PEAK-30, as I said, the bar is low with tivo monotherapy in the later-line setting and looking at a combination option in that context as well to decrease primary PD, expand PFS will be a tremendous win for our patients.

Let's go to the next slide. I think that is the final one.

Thank you, Dr. McKay. We'll pause here for a quick Q&A session with Dr. McKay. If you can please direct your questions to her to maximize her time. We'll take more questions with the management team at the end.

Dr. McKay, this is Daina Graybosch from Leerink Partners. I have a question about front line because we're going to go into ESMO and see the LITESPARK-012 data set. And in that abstract, my read similar to what we saw with COSMIC-313 is reduced treatment exposure of the -- all 3 drugs in the triplet may have contributed to the lack of benefit there. I wonder if you agree and as we see Arcus move into front line, if there's anything you can do in these trials to better keep patients on all 3 of the triplet therapies to avoid the negative outcomes we saw in LITESPARK-012.

Daina, thank you so much for that question. It's incredibly timely. I think it's very different when you have agents that have overlapping toxicity. And I think this is what was the Achilles' heel of 313, also 012. I think when you run into issues with hepatitis, you're not sure if it's IO mediated, you're not sure if it's TKI-mediated. Patients end up stopping both agents because you're kind of trying to tease it out. 313 was also a blinded study. And so you didn't know what patients were on and just stopped everything.

So I think that this is very different when you have a side effect profile that is very distinct and unique from that, that you experienced with the IO. So the IO-mediated itises that you see are -- we're not seeing hepatitis with casdatifan, pneumonitis, colitis, diarrhea, these things that we know happen with TKIs don't really happen with casdatifan. And so I think that is a real beauty of the agent.

The other thing that I will highlight is when thinking about a TKI-sparing regimen, the backbone of len/pem is a high bar actually in the front-line setting. And so I think that is also another reason why the 012 study failed because I think there are more vulnerabilities with nivo/ipi that can be leveraged with combination strategies when we're looking at the front line.

Li Watsek from Cantor. Dr. McKay, I have 2 quick questions. First, can you talk about your TKI sequencing decision, especially around lenva use in front line versus second line in light of like LITESPARK-011? And then for belz, how would you choose between TKI mono versus lenva plus belz in second line?

Yes. Very good question. So I think in my context, I tend to be a dramatic user of nivo/ipi. I want my patients, if they are able to experience a long durable remission, if they have the opportunity to experience that. For those individuals that have really rapidly progressive disease and really need a TKI, they're either in visceral crisis, have high volume of lung, liver, what have you metastases that really need a TKI cannot afford them to have that 1 in 5 primary PD rate. I'm predominantly using lenvatinib/pembrolizumab in the front-line setting. And so when I do use a TKI in the front line, it tends to be lenvatinib. We've seen really high response rates with that combination, low primary PD. So for the person who needs it, that's the combination that I go to.

Cabozantinib is my go-to second-line agent. And I think that by using either nivo/ipi or len/pem front line, I think it opens up the opportunity for cabozantinib second line. And so I think the data around monotherapy use versus the combination of belzutifan plus lenvatinib, I think a lot of it is TKI toxicity, what's the fitness of the patient. And that regimen was just recently approved about a month or so ago. And so I think it's just being kind of considered in practice and trying to identify who is the right individual for that. But generally, my TKI sequencing is lenvatinib front line, cabozantinib second line. And then depending on the fitness of the patient, belzutifan and the underlying kind of distribution of metastases, even profiling, selection of either belzutifan or tivozanib in later line.

Jon Miller from Evercore ISI. You just mentioned that you're enthusiastic user of ipi/nivo in the front line, but it remains a minority regimen. In your opinion, what does it take to drive use in the first line off of TKIs? And is there a realistic possibility of expanding TKI-free regimen use with HIF-2?

Absolutely. I think if you decrease the primary PD rate, you will increase utilization of nivo/ipi. People don't want to get burned. They want to start somebody on a regimen, and they want them to do well at their first scan assessment and not have to be faced with making a treatment decision or having the patient have primary PD. Primary PD is not a good thing, and it can taint an individual's experience with utilizing that agent.

And so I think if we can decrease the primary PD rate with a well-tolerated agent with non-overlapping toxicity with the backbone of nivo/ipi, that's going to be a huge win and it's going to drive up utilization. And as individuals are utilizing belzutifan in late line, it's not great monotherapy. And it's -- again, that primary PD experience is going to taint utilization. I think to integrate it in the front line and a TKI-free sparing strategy will be a win.

This is Tara Bancroft from TD Cowen. So I'm wondering -- If I could build upon one of the previous questions of when making prescribing choices, would you base your choice more on hazard ratio or absolute numbers, like which numbers actually matter most to you? And also then in those considerations, when you're comparing data sets, how much would you consider baseline differences in the different patient populations that are enrolled? Like what -- how important are those nuances to you in prescribing?

To me, they're very important because I'm very granular, very detail oriented. And I think -- thinking about broadly how a community oncologist may like interpret the data, I think there's a lot of education. I think it's all the above. It's not just the hazard ratio because the hazard ratio is reflective of, well, what is the performance of your control arm. And if your control arm is underperforming or overperforming, that is basically going to be an interpretation of the haz ratio.

Yes, absolute numbers matter, but it's a combination of the 2. I think the absolute numbers can be -- you have to think about the patient population when you look at that. If there's more favorable risk patients that have low-volume disease, that don't have an intact primary, your objective response rate is going to be automatically higher. We see that. The likelihood of somebody achieving an objective response that has an intact or like a complete response with an intact primary is incredibly low when they still have their primary intact. So these are all the things that I think matter. All these trials are different. They enroll different populations.

And I think the other thing, too, is we also have to think about the timing of when the trial is enrolled. 214 was the first foray of challenging the standard of care of sunitinib front line with nivo/ipi being utilized in a large Phase III in RCC. And there's a learning curve that happens with actually being able to familiarize yourself with how to treat AEs, how to manage AEs. And if you actually look at contemporaneously these trials that we're enrolling later on, people learn how to use the medications and how to use combinations and how to mitigate tox. And we learned how to adjust and modify the criteria and management algorithms. And so I think that these are all really important things when we are considering interpretation of the data.

Dr. McKay, Charles Zhu from LifeSci Capital. I have one question here. Based on your experience as well as any available clinical literature out there, how would you describe patient outcomes segmented by whether or not they're able to receive all 4 doses of CTLA-4 during the induction phase relative to those who received 3 or fewer cycles?

Yes. Very good question. And actually, that's to say we don't know the right number. The question to ask is why are the patients not able to receive those regimens? And is it truly driven by an irAE that we think could potentially be suggestive of an enhanced effect to treatment. So I don't know that whether patients received 1 to -- I think the dichotomy is kind of in the 1 to 2 versus the 3 to 4. But it all depends on what is the reason that the treatment was stopped. Was it for an irAE? And how was that irAE treated with steroids or other agents that could potentially blunt the activity of the immunotherapy.

So this is why it's actually really critical to not have overlapping tox because if you're stopping that, you've got hepatitis that comes on from a TKI that has a long half-life and you wait a couple of days and still have high LFTs and nobody feels comfortable with that and then you're layering in steroids or tacrolimus and other things like that, that are basically blunting the immune response, that's not a good thing.

Salim Syed from Mizuho. One from us on the second-line data granularities here. Just we're getting some questions just on the 14.5 months median PFS that was presented today. I was wondering if you could put that into context. I think some people were expecting a slightly higher number for that cas/cabo second line, especially when you look at the late line 13 months median PFS. I'm wondering if you could put that into context for us, especially as it relates to the OS data that was presented today where we are seeing separation earlier than what we saw in LITESPARK-011 and over LITESPARK-011, belz/lenva. How do you put this into context of your overall thinking here?

And then second to that, could you comment on just your thoughts around HIF-2 alpha having a greater contribution on the back part of the curve versus a TKI?

Yes, very good question. So I think regarding the 14 months, first off, I'll say this is a very respectable and very encouraging PFS that we're seeing greater than a year in the second-line setting in a very heavily pretreated patient population with multiple prior exposures. So I am certainly not discouraged by that. And when we think about the bar for approval and the bar for utilization, as we stated from cabozantinib is sitting in that 8- to 10-month range depending on degree of TKI exposure. So I think that's actually quite encouraging.

I think the latter part of your question around integration of HIF-2 alpha. I think post -- we're seeing post VEGF progression, there's upregulation of the pathway and casdatifan really has the tremendous opportunity to overcome that expression and pathway upregulation probably much better than we're seeing from our pharmacodynamic studies than belzutifan, quite obviously, it dramatically suppresses EPO and blunts the pathway. And so I think the complementary aspects of VEGF and HIF in this context and specifically with cas is going to be a really good thing in the second line.

Dr. McKay, this is Jane from Goldman Sachs. And I'm asking this question on behalf of Rich. So my question is, how do you think cas will translate in a TKI-containing regimen first line, given the first-line data here is without TKI? Is there anything you see from the second-line cas plus cabo that could be read through? So basically, is there any concern for using a first line in a TKI-containing regimen with axi based on TKI combo data in second line? Is there anything you see in the first line presented today?

Yes, very good question. I think the thinking here is in every way that a clinician could think about utilizing a modern-day regimen, there is an opportunity with cas being added. That's really the take-home message. And while we haven't shown you today the combination of a front-line regimen that includes cas with a TKI with a checkpoint inhibitor, I think that is the strategy. The strategy is targeting in every way that a clinician may think about, okay, I'm going to use nivo/ipi for this. Well, I'm going to add cas to it. I'm going to use IO TKI for this. Well, there's an opportunity to potentially test cas in addition to that. I'm going to use cabo second line or I'm going to use a TKI second line, okay, add cas to that. I'm going to use TKI monotherapy later line. I'm going to add cas to that. The data is pretty dramatic and robust that across the board with an agent like cas who works pretty well or beautifully is a HIF-2 alpha inhibitor and is likely best-in-class agent of combining.

We'll take one last question.

This is Supawat Thongthip from Truist Securities. Dr. McKay, just as a clarification to your earlier comment. So with belz and lenva now approved, if cas and cabo were also approved, what would drive your choice between the 2? Would it be primarily the profile, the PFS and OS profile we've seen today or the ease of integrating cas plus cabo given that cabo is already a backbone?

And secondly, what do you think of PEAK-1's probability of success having seen the results that we've seen today?

Yes. Very good question. I actually think that it's a little bit the latter and for like the fact that cabozantinib is already being widely utilized as the go-to second-line agent, like METEOR really set the bar high. It was actually one of the first studies ever in kidney cancer on its first analysis to improve all 3 objectives of objective response rate, PFS and OS, statistically significant improvement across all 3 of those parameters.

The utilization of cabozantinib in the later-line setting is anchored in high-level Phase III data. There is no data for lenvatinib monotherapy. The best data that we have for lenvatinib utilization later line is from 150 Phase II trial of lenvatinib/everolimus. And so -- and lenvatinib in people's experience and in the data has a lot of toxicities that's associated with it. And so I think to anchor with an agent that has a really high bar with regards to the rigor of data that led to its utilization and also comfort and ease of use is going to really be an excellent thing.

So I think that the data here really, I think, foreshadow what we hope to see in PEAK-1. I am incredibly optimistic about the study being positive from the data that we've shared with you thus far and being integrated into the landscape.

Thank you, Dr. McKay, for your time today. We'll let you get on with the rest of your day. I know there were some more questions in the queue, but the management team will take questions at the end. So I really appreciate you joining us today, and we'll let you get to it. Thank you.

The next section, Juan will talk about the translational science.

Thanks, Rana. Good morning, and thank you for your attention. I'm going to take about 10 minutes. My job today is to walk you through a couple of key points. The first one is I'm going to link the biology, the PD changes associated with cas treatment with every relevant clinical endpoint in our combined 121 patient late-line monotherapy cohorts.

So I'm going to link the PD changes with primary progression. I'm going to link the changes. I'm introducing a new PD marker today. I want to change -- link both of them with objective response rate with PFS and with OS. And the reason that I think the monotherapy cohorts are the ideal place to do this is because we have one single agent. We don't have confusing multiple mechanisms of action, potentially pushing some of these PD markers in opposite directions.

So HIF-2 alpha regulates probably hundreds of genes, many of which are relevant for clear cell RCC biology. EPO doesn't really play a particularly important pathological role, but it has the advantage that it's something that we can measure easily in the periphery, and it gives us a really good integrated sense for how much HIF-2 alpha activity a particular patient is experiencing and the changes associated with HIF-2 alpha inhibition.

I'll remind you that at the approved dose of 120 milligrams, belz reaches a maximum level of inhibition, the median being -- has been described more than once around 64%. Terry already alluded to the published data whereby the EPO levels in serum revert back to baseline after about 3 months.

In the case of cas, we can reach that level of 60-some percent reduction in EPO at a dose of 20 milligrams daily as we continue to go up in dose. And the figure to the left represents an integrated assessment of maximal level of EPO reduction as a function daily dose of cas. By the time we get to 50 milligrams daily, we pretty much reach the maximal level of inhibition and it doesn't get any -- in a meaningful way any higher. We've gone all the way up to 200 milligrams in the dose escalation. Not only do we achieve, in general, a higher level of EPO reduction with a median of 84%, 85%, that PD effect is sustained for the duration of treatment, as Terry reminded you that is shown here for the 100-milligram cohort, but pretty much the same for any of the other dose levels.

This is a graphical illustration of where each one of the 121 patients is represented by one bar. What we've done is illustrate each patient's maximal reduction in serum EPO levels and color-coded to illustrate best overall response. What you can see very clearly is that there -- well, maybe you can't see it on these screens, but if you turn around, you can very easily see that there are way more blues and greens towards the right than towards the left. Patients with better objective responses tend to be associated with deeper EPO reductions. The dash line running horizontally represents the median of 84%.

You've seen versions of the figure shown here to the left, the PFS comparison. This is simply updated with the latest clinical data cut. There's no attempt to do any kind of patient selection here. All we've done is to split the population down the middle using the median of 84%. You can very clearly see that those patients that experience greater than the median in terms of maximal EPO reduction tend to have a longer PFS than those in the lower than the median have.

The representation to the right, still immature because many of the patients are still alive, fortunately. But it shows you a similar segregation when you look at the OS curves. Patients with deeper EPO reductions tend to live longer. Now this is, I think, remarkable. This PD effect is first noted a couple of weeks into treatment and sustained, but nevertheless, it starts to be detectable right at the beginning of treatment is reading through to a clinical outcome 2, maybe 3 years later.

Now if you're not convinced of that relationship, I'm going to introduce PAI-1 as another marker of systemic HIF-2 alpha activity. In this case, we could spend an hour talking about the potential pathological role of this protein and may be more than just a PD marker. But for today's update, we'll just use it as just another independent measure of systemic HIF-2 alpha activity. Illustrated here and going back, combining both the EPO and PAI-1 relationship between the extent of reduction of these markers and the best overall response. And you can see here that similarly to what we've shown previously for EPO shown here now for PAI-1 is the patients with an objective response tend in general to have deeper PAI-1 changes than those with stable disease or those with primary progression.

In the case of PAI-1, the average or the median level of reduction is 45%. That tells you is that -- and it's independent of cast dose. What that's telling you is that when it comes to systemic circulating PAI-1, about half of it is transcriptionally regulated by HIF-1 alpha, the other 50% of that protein is obviously regulated by other pathways. When we do the same median split and look at the deeper versus less deep reduction in PAI-1 levels, you see something very similar to what I showed you a second ago. Patients that experienced a deeper reduction tend to have longer PFS and longer OS than those in the lower half. Again, not an attempt to select patients, just an attempt to link biology the efficacy or the activity of cas with the clinical outcomes.

Now here, this is, I think, one of my favorite slides. What we've done here is said, let's now make an attempt to identify a natural breaking point. Let's identify that 15-or-so percent of the patients that have a lower level of reduction on either biomarker or both. And let's separate them. When we do this, a couple of things happened. First of all, you see the majority, that darker upper curve that contains about 80-ish -- 80-or-so percent of the total population does pretty darn well. You also noticed that it barely has any primary progressions left in it. If you look on the other hand to the 3 curves towards the lower part of the figure, those represent patients that are in the worst 15 or so percentile of either biomarker or both. And you see what we've done is essentially taken out all of the primary progressors out of the 121 patient pool.

So what this is telling us is that those patients roughly -- and this ties in with some of the work that we published in the Nature paper, where we define high HIF-2 alpha activity in different ways. We did it using immunohistochemistry, the amount of protein. We did looking at the transcriptional signature of HIF-2 alpha. There's always -- we always come back to the same place, roughly 15% to 20% of tumors that don't appear to have a lot of HIF-2 alpha activity, and they really don't care that much about cas intervention. The other 80% of the population that has meaningful levels of HIF-2 alpha tend to do pretty darn well.

So before I move on to the second part of my update, which is introducing the concept of adaptive HIF-2 alpha activity. I'd just like to recap what I hopefully have convinced you, given the limitations of time, there's a link between the extent of HIF-2 alpha inhibition that we can achieve with cas as measured by 2 completely independent circulating PD markers. There's a relationship between the rate of primary progression, objective response, PFS and OS. So the numbers that Terry -- the curves that Terry showed and Richard is going to come back to are clearly reflective of biology and the strength of HIF-2 alpha inhibition that CAS is able to reach.

Now shown here, I'll remind you that the figure to the right is taken from a Merck poster. It's breaking down in this case, we could have done something similar with the LITESPARK-005 data, except that the LITESPARK-013, the Phase II data was broken down more granularly. And what you can see here, the 3 curves represent the number of prior TKI regimens that those patients that were treated with belz had experienced. You can see that there is a very clear degradation of belz performance as a function of prior TKI treatment and as a function of the number of TKI regimens.

If you look at our monotherapy data shown in the left of the slide, you see that there's absolutely no daylight between patients that received 1 prior TKI, 2 prior TKIs or 3 prior TKIs. We think this is a reflection of both the biology that sets in as a result of the treatment with a TKI, but also the strength of HIF-2 alpha inhibition associated with cas.

We're working on a paper that should be submitted pretty shortly here that pretty much integrates a whole bunch of data that leads us to propose that anti-angiogenic treatment results in an increase. I won't call it upregulation because we don't think it's necessarily transcriptional. There's just an increase of HIF-2 alpha activity in tumors that have been treated with anti-angiogenic agent. So the evidence comes in 2 forms. In the tumor, we see increased protein stabilization. We've developed probably the world's most sensitive and specific immunohistochemistry assay for HIF-2 alpha and HIF-1 alpha for that matter. So we see increased levels of HIF-2 alpha protein. We see increased transcriptional signature of HIF-2 alpha in patients that have received prior TKI treatment.

In the periphery, we see increased levels of EPO and PAI-1 in patients that have received TKI within approximately about 8 months -- I'm sorry, 6 months. There's sort of a window of time after which the prior TKI exposure is no longer clearly detectable in the periphery.

This is my last slide, just trying to introduce the concept. It's not really all that complicated. We all know that patients -- the first -- clear cell RCC is a tumor that comes into existence under the pretense of being hypoxic when in reality it's not. So that translates into a tumor that's probably one of the best vascularized solid tumors that there is. And there -- the first time they see a blood supply drying agent, the TKI, they do relatively well. You dry up the blood supply, tumor shrinks. There's no doubt about it. And the problem is what happens after that true hypoxia sets in. Evolutionarily, the tumor and the non-tumor cells are preprogrammed to respond, among other things by relying on HIF-2 alpha activity for survival. That probably means that outside the tumor, there's an upregulation of HIF-2 alpha, but also the tumor may undergo selective pressure to identify clones that are perhaps more dependent on HIF-2 alpha, better able to thrive through a condition of true hypoxia.

Now the model explains why after a pretty good response on the first round of TKI treatment, you really don't do very well on second and third TKIs. Whatever benefit you're getting from the second or third line of TKI may have just as much to do with a non-VEGF inhibitory activity of that TKI, probably not getting much from an anti-angiogenic effect after the first round. But secondly, you've now set in motion something that if you're a borderline HIF-2 alpha inhibitor, it's not particularly good. You now have a bigger foe to fight against. There's more HIF-2 alpha activity. And so how well you do with your HIF-2 alpha inhibitor probably depends on how strongly that HIF-2 alpha inhibitor is able to fight against that increase that adaptive HIF-2 alpha activity.

We think this explains why belz is so dependent or performance is so degraded by prior TKI treatment, while cas appears to be unaffected by that. I don't want to leave you with the impression that cas works better in prior TKI-treated patients. It's simply it does well against people that have never seen a TKI and it performs -- the data supports that it performs just as well in patients that have seen multiple rounds of TKI treatment.

So with that, I'll turn it over to Richard.

Great. I was told I should try and be brief. We've been here for a long time, so I'll try and move fast, but there's a few key points I'd like to make. So here we go.

You've seen this before, it's the development plan, but it's really important to understand, and Dr. McKay, I think, highlighted that when you see a molecule with the impact of casdatifan, it really needs to be developed and available to all patients with clear cell RCC. And I mean all patients in the front line and subsequent lines of therapy. So as we put together the development plan, it is to add casdatifan to the preferred existing regimens across each line of therapy in the front line. The key here is to be TKI-free. And we know that the physicians and it's good for the patients, they can now live 5 to 10 years and hopefully longer survival with adding casdatifan. So they have to decide what to use in the front line, also thinking about what they'll use in subsequent lines of therapy and being TKI-free with long-term survival, that's the ipi/nivo regimen.

And the only reason it's not used by far more is the liability of that primary progression, as Dr. McKay said, where 1 in 5 patients actually show progression at the first scan, which is very disheartening for the patient and the treating physician. So the key here is to meaningfully reduce that rate of primary progression, which would drive the ipi/nivo plus cas use far higher even than it currently is. And then importantly, there are going to be patients that are highly symptomatic, so they do need a TKI upfront for early inhibition there. And that we have selected axitinib and PD-1 as the partner for casdatifan. And axitinib was deliberately selected because, let's say, as a kinder, gentler TKI from a tolerability perspective for the patient. And that's because it's a much more selective anti-VEGF TKI, so better tolerated. And that theme will continue.

But importantly, we also have 3 different partnerships for additional potential frontline treatment of patients. That's our partnerships with BMS, Pfizer and Summit, all testing their VEGF/PD-X bispecific with casdatifan in frontline patients. So those will be additional frontline opportunities.

Quickly moving to the second line. Everyone is familiar with PEAK-1, our cas plus cabo versus cabo. I think very high probability of success. And the key here is we selected cabo again, deliberately, because it's by far the most -- the preferred choice in TKIs in the second-line setting. So very easy for the prescribing physicians who already use cabo predominantly in that space to just add casdatifan to the current algorithm.

And then lastly, look at the later lines heading there, we're combining cas with tivo. That's again a very selective, very well-tolerated TKI. And we think that combination will take over all of the monotherapy use in the third line and be the dominant regimen in the late line as well.

So quickly, this is our ARC-20 study. It's our Phase II with multiple expansion cohorts that generates all the data that we've talked about today. This is for data in the monotherapy as well as many different combination therapies, again, across first line, second line and late line. We have over 300 patients that have been on casdatifan and over 200 patients that will be discussed and described today in the data sets we're sharing.

So quickly, I'll talk about the late-line setting, with our -- as you've seen, an unprecedented overall survival. You've seen this before. So just to highlight the keys here is we actually at the 24-month or 2-year landmark have 2/3 of the patients still alive and surviving. And I think what's more amazing is, as Terry said, that 3-year landmark here is about 50% for the median, still alive at 3 years. This is late line. I'll remind you, this is generally a median of fourth-line use, meaning the patients had a median of 3 prior lines coming into this cohort.

Not sure why it won't advance. So safety, we've shared the safety before. It generally looks like the safety profile of belzutifan. But -- and we've described it before, but now we have a much longer follow-up and the safety profile has not changed despite having a much longer follow-up now.

So late-line setting. Again, unfortunately, for patients, there are 3 different monotherapies that are used or available. None of them have a PFS of even 6 months, and none have shown an overall survival benefit. So we think this is a very real opportunity to add cas to tivo and to take over the entire third-line regimen, and we can meaningfully improve both PFS and OS for these patients.

And we strongly believe this because of these data here, we overlaid our cas monotherapy, again, basically median of fourth line, and that's compared to TiNivo-2 in the gray, those are patients that received tivo monotherapy in the second or third line. That trial enrolled both second and third-line patients. Not hard to see the very clear difference in PFS on the left, but also a very clear difference in OS on the right. So these are the monotherapy. So now adding tivo and cas compared to tivo, should only further separate the curves.

So we are enrolling now an arm in ARC-20 that is a randomized arm, cas plus tivo versus tivo, and this arm is enrolling all patients that have had prior HIF-2 or prior belzutifan experience. And our Phase III trial will enroll all comers that will be patients that have had or have not had prior HIF-2 experience.

So quickly moving to the second line, cas plus cabo. We think this is really positioned to be the regimen of choice, particularly because we started with cabo, which is the TKI of choice. You've seen this from Terry, the PFS on the left, OS on the right, where we meaningfully beat all prior benchmarks for cabo. And that's why we have such strong expectations and high probability of success, since PFS is the primary endpoint of the trial, but I also think we can very meaningfully beat OS on the right. Keep in mind, LITESPARK-011 had a hazard ratio of 0.85, so they almost had significance. So we only have to be a little bit better than what they were, in order to achieve significance, and that would be a complete game changer. From a safety perspective, so far, the experience really is looking like cabo's safety profile plus the anemia and hypoxia associated with the potent HIF-2 alpha inhibitor.

So the trial, you've seen before. This is now enrolling. It enrolled very well. And in fact, we're going to complete enrollment in the next few months. It enrolled really to expectations. It's cas plus cabo versus cabo in a 2:1 randomization. And importantly, all the statistical power or alpha is on PFS as a sole primary endpoint. And then the other reason that we can probably win on overall survival is we then recycle the alpha, so the statistical test of OS has all the statistical power recycled from PFS to OS, so we don't have to split our alpha. So we have to be slightly better than 0.85, and we have more power or full power because all the alpha will be allocated to OS.

So move to the front line where we've seen now the unprecedented early data, and you saw this, and I'll just highlight again that the main reason ipi/nivo is not the regimen for every patient is the risk or concern of primary progression. And you can see we have 2 cohorts now in ARC-20. cas plus zim, so without ipi, with 11.5 months median follow-up. And we have cas plus zim plus ipi that recently fully enrolled, and that was for a safety set for the FDA and EMA. And I think Terry said, we have all the data now and it's packaged up, ready to go to the agencies to start our Phase III trial. But you can see now we have 2 separate cohorts, both showing single-digit primary progression. So that's going to be a meaningful element there that will really drive adoption. And I think enrollment in this trial is going to go very fast.

You can also see the confirmed response rate of 50%. That's quite high, particularly compared to ipi/nivo. And on the right, you've already seen how the separation of curves there are with the primary endpoint is progression-free survival. So that's where we are to win on this trial. And then, of course, ipi/nivo already has the advantage on overall survival compared to all the other regimens.

So importantly, there was a comment or a question earlier about the safety, this could be, I think, clearly, the first triplet that shows high tolerability for the patients. It really does look like ipi/nivo, that's the immune AE profile plus the hypoxia and anemia associated with HIF-2 alpha inhibition. We don't have the overlapping toxicity. And as Dr. McKay said, predominantly, that's the GI toxicities and liver hepatitis, colitis, pneumonitis, et cetera. None of that is associated with HIF-2 inhibition. So we've had a dose intensity-wise, about 78 -- well, exactly 78% of the patients that have been on the trial long enough to get through 4 cycles, meaning more than 12 weeks on the study. 50% of them did receive all 4 cycles of ipi along with the zim. And then an additional 28% got 3 of the 4 cycles. So quite high utilization to get, as Dr. McKay has said, and that's, I think, how we all think about when we prescribe ipi/nivo, the goal is to get them through at least 2 and ideally 3 or 4 cycles of ipi.

And at that point, all the patients are off ipi, and they'll just be on the PD-1 plus cas. And as I just showed you, our cas plus zim, we've gone out now 11.5 months of median follow-up. So we're very confident and comfortable with that safety profile. Otherwise, the immune-mediated events that we're seeing are very consistent with ipi/nivo, both in frequency, severity, but also timing, and that's the important thing is, when do these happen, and they've been happening very consistently with what we see generally with ipi/nivo. So as expected, cas doesn't change the immune-mediated events.

So the frontline trial is cas plus ipi/nivo versus ipi/nivo. It's an all-comers from an IMDC perspective. And another important point, the PFS is the sole primary, so all the statistical alpha is on PFS. And as you can imagine, if we meaningfully reduce primary progression, that instantly elevates the PFS curve by that magnitude, and that will carry forward. So high probability of success on hitting on PFS. And then after the first 4 cycles of ipi is depicted on the bottom for the continuation of the trial, which can go years, it's really a test of cas plus nivo versus nivo.

So with that, I'll hand it off to Bob.

Thank you, Richard. So we've got a chance to share a lot of data today, and we think that a clear picture has been painted, and we believe that's the best therapeutic for the treatment of clear cell RCC in terms of casdatifan.

When you look at each of the key therapeutic attributes, we think that picture becomes super obvious. So let's start off with disease control. And Dr. McKay mentioned the importance of disease control and giving a patient an opportunity to succeed in each line of therapy. In our late-line monotherapy, our disease control is on par or better than a TKI monotherapy in any line of therapy. That's really been the gold standard when you think about disease control historically, and I think we showed you a lot of spider plots today across different lines of therapy. And you saw that sort of consistent theme around disease control, which we think is quite impressive for casdatifan.

Moving to survival, both OS and PFS. We've showed really exciting OS data, obviously, in the late line and it's emerging very nicely as well in the second line, alongside very compelling PFS in every setting. Importantly, we've talked about the tail of the Kaplan-Meier curves here, and we think that that's going to continue to show through as all of our data matures over the coming years.

Finally, tolerability is important. Dr. McKay talked about the ability to combine casdatifan without overlapping toxicities across treatments. And we think that's very unique, having a treatment like casdatifan that doesn't have that overlapping toxicity.

So Terry and Richard have already reviewed this slide. I just want to make sure that everybody is left with the impression that we are laser-focused on the first 2 commercial opportunities for casdatifan. First of all, PEAK-1 is poised for success, and that's a $2 billion opportunity. And then perhaps even more importantly, we have a clear line to success in the frontline with the ipi/nivo combination, where we have a $4 billion-plus commercial opportunity. The plan obviously lays out additional opportunities both in the front-line and the late-line as well.

So let me talk about how that development plan then translates into the commercial opportunity with a little bit more specificity. So starting with the second line, and this is important, I think Dr. McKay underscored this, we're building on the physician-preferred regimen in the second line. In fact, when we spoke to 50 physicians and ask them a question, "Would they utilize the newly approved LITESPARK-011 regimen or cabozantinib monotherapy?" 50% of those physicians told us they were going to stick with cabozantinib monotherapy. And that's because of their preference for cabozantinib. And we think that's really important in terms of how we've built that regimen in the second line.

In the front line, this is the largest commercial opportunity with no HIF-2 alpha competition. In PEAK-20, as Richard highlighted, we're combining with the regimen and Dr. McKay made this point, physicians reach for to provide patients with the best opportunity for long-term survival. The weakness here, obviously, is disease control, where 50% of patients do not stay on therapy beyond a year. We've shown you data to support our belief that casdatifan can address that key weakness in the front line and that it can be the dominant regimen in the front line, which is a $4 billion opportunity.

In addition to PEAK-1 and PEAK-20, we're also exploring opportunities that regimens that address the VEGF pathway in the frontline, axi and the PD-X/VEGF bispecifics and a compelling combination with dominant later line share in tivo. I think one of the themes that continues to emerge in our data across lines of therapy is the incredible durability of casdatifan. And we think that, that introduces a huge upside to the overall commercial opportunity and duration of therapy. And we think that story will continue to play out over the next few years.

So with that, I'm going to turn it back to Terry to wrap up, and then we can take your questions.

Thanks, Bob. Thank you all again for your attention, and we look forward to the Q&A. So I just want to close -- I'm not going to go through these in detail. You can look at them, but we have a lot of milestones coming over the next few years. And I'll just bucket them we're going to continue, as you've seen, we've done medical conference after medical conference after medical conference, we'll be continuing to do that. We do that not only to share the data with you, but to generate that sort of investigator enthusiasm. We work I think with amongst the best investigators in this field, and we feel it's important to get all of our data out there.

So what you're going to see is the data that we share today. Obviously, as they continue to mature, we'll be sharing them on a fairly ongoing basis, and we'll continue to publish as Juan was mentioning. I think then the next probably most important aspect, Richard talked about fully enrolling PEAK-1 that's coming shortly, starting PEAK-20. That's going to enroll gangbusters. And as Richard suggested, not only it's going to enroll quickly, but it's going to read out quickly given that primary endpoint of PFS.

And then you should expect to see a continuous flow of information around these other studies that we're doing. We barely touched on it. But obviously, everyone was looking at all the various ESMO abstracts. You saw the exciting data with the anti-PD-1/VEGF bispecific. We think that could end up being an important basically version of TKI anti-PD-1 without the baggage of the TKI. So we're well positioned to have the one reagent that has the monopoly and I think there's a large number of those bispecifics and we're working with 3 of them, and we'll be executing the study that's in collaboration with Summit. So we're confident in how that will get done and enrolled.

So I think the next part that's other separate bucket is our studies with tivo, our studies with axi, our studies with the bispecifics and you'll see a continual flow of information. So I just would finish by summarizing bring you back, elevate a second, I think our data show that not only across all lines, but in each line, we have the opportunity to completely win. The other thing that should not be lost on you, and this is something that Bob -- why, I would say everything he talks about is the conservative end of things.

So this is a therapy. When you think about HIF-2 alpha drives this cancer in all of these patients that basically we're seeing efficacy, so whether it's 80% to 90% of these patients. It also may even be induced in those patients where the TKI is bringing some benefit, and they were either lower HIF-2 alpha activity or no HIF-2 alpha activity. So extraordinarily important in the setting. And the other thing to keep in mind, there is 0 evidence of any meaningful resistance development to HIF-2 alpha inhibition. So we believe that you will be able to sequence, casdatifan with the other agents for the duration of their therapy. So when we talk about backbone, A lot of this discussion is sequencing this, sequencing of that. We actually believe all the evidence and we'll be generating more evidence ourselves, that you will be able to have a backbone therapy of casdatifan, much like you see bev in colorectal cancer, where patients will benefit from casdatifan throughout their 5 to 10, hopefully plus 10-plus years on treatment.

So I'm going to stop there. Thank you all again. Thank the presenters. Thank Rana and her absence. I think Rana did a fantastic job of both laying out the current treatment paradigm, how it may evolve and we'd rather have her answering the questions from you guys than us. So I appreciate that, and we'll be happy to take some questions now.

All right. [indiscernible] question.

Will someone speak up? One person, raise their hand. Everyone will jump in.

Thanks very much, Terry. This is Yigal Nochomovitz at Citi. I'm wondering if you showed the data for OS for front-line broken out by TKI versus no TKI in prior therapy. I know you showed the PFS broken out. I assume it was consistent on OS.

So in the front line?

Yes. In the second line. Second line with prior TKI versus no prior TKI. Did you show the OS broken out by those?

Yes, we need much more longer follow-up with OS really...

But we are already seeing the same type of separation. But to Richard's point, they're simply not mature as you might imagine, it's very early.

Okay. And then I'm just curious, with regard to the spider plots on HIF-2 alpha, maybe Juan can answer this. I gather the results would be similar based on the baseline HIF-2 alpha as well as the HIF-2 alpha expression. Do you look at that as well?

Do you want to comment on that?

Can you repeat that...

Just I was curious if the spider plot conclusions regarding HIF-2 alpha expression were consistent when you looked at the baseline HIF-2 alpha data as well.

Yes, the thing with baseline HIF-2 alpha assessment is that we don't have a sample for each one of those 121 patients. So when you start to get away from the PD marker, you're interpreting 40 samples as opposed to 121. But yes, generally -- and again, we published this, when you look at baseline HIF-2 alpha protein levels or transcriptional signature, evidence that HIF-2 alpha is firing. The correlations, the relationship that I've described using the PD markers all hold up.

Okay. And then just the last one is, obviously, you have amazing data with the single-digit primary progression, but is there any rationale to do a biomarker strategy to even lower that so that you just don't treat people that have extremely low HIF-2 alpha driving the tumor and that's not really necessary.

I can take that. I think the short answer is no because even those with low still have benefit from cas. It's just those with higher HIF-2 or higher EPO, well, we can cover it with casdatifan. But even in the less deep suppression, that's say, stronger -- we have stronger responses than belz would have. So I think it still treats everybody.

You can just grab that from Yigal...

Terry Flynn from Morgan Stanley. I guess the first one is just for Richard. You mentioned in PEAK-1 that OS was powered for 0.85. Just wondering if that's similar for PEAK-20? I know primary is PFS, but just can you tell us anything about the OS stats? And then Bob, you mentioned a doc survey, 50% staying on cabo in light of the recent approval, but did you ask about future cas and like what uptake would look like of those that are staying on cabo versus the LENVIMA, WELIREG regimen?

Yes, sure. So let me, I guess, clarify a little bit. So we've said, LITESPARK-011 had a 0.85. So we just have to be a little bit better to have a meaningful impact, both statistically and clinical impact there. And we are well powered because we'll have all our statistical power will go from PFS to OS. So while in LITESPARK-011, they split their alpha accordingly. So I think we have both ways to win there on -- or both ways to improve and win on OS, which I think is like the game changer, right?

I think it's -- for those of you who didn't catch that, I think that's a really important point about the stat plan in terms of not splitting the alpha and basically getting 100% of the alpha to go on to OS. So not only do we look like we're having a better OS signal, but I think we're well positioned statistically.

The way our survey was structured wasn't -- hopefully, it's picking up, there we go. The way our survey was structured wasn't to ask follow-up questions. I think Dr. McKay made a particularly important point, which is that physicians are very aware of the weight of evidence for cabozantinib monotherapy in the second line, and it's their preference to go with that regimen. I think that's what's driving.

So there's 2 pieces that drive probably the feedback when we did talk to a few of the physicians afterwards. One is the level of comfort with cabozantinib, and that is probably the primary driver. The secondary driver is that they didn't hit on overall survival. I think if they had hit on overall survival, there might have been a chance that you would see more uptake despite the fact that there's a hesitance to use lenvatinib. But separately, we have asked physicians the question that same group of physicians, if we delivered a profile like what we believe we can deliver with casdatifan plus cabozantinib, would you use it and the vast majority of those physicians indicated they would.

Alethia Young, William Blair. Two questions. I wanted to follow up on Yigal's question. But I wanted to ask it explicitly about third line and clarify that in your active dose, the 100, did you see kind of a similar trend versus the entire group on the 121 group where you saw 35 months? And then I have a second question.

So survival for the 100...

Yes. So the data for the 100 is even less mature than the aggregate data, but it's trending very nicely.

I think it might be in the deck. It's in the back of the deck. I mean, on the surface, it may look better. We've tried to emphasize that we believe truth is best represented by the full 120 patients, but the 100 look -- if anything, it looks better.

Yes. Okay. And then the next one, the kind of 2 situations. Obviously, there's the question as to whether PEAK-1 is going to hit. And then obviously, there's commercial question around whether that regimen is going to be competitive because people like cabo. So I think we kind of know the competitive line. But on the trial itself, can you just talk a little bit about the evolution of TKI using cabozantinib and kind of how that might play out? I think you guys assumed 10 months roughly or so as a comparator, but just maybe give us a little bit more color. And then also tie that into how it seems that obviously, with whatever is happening with EPO suppression that you kind of have longer -- your responses get better over time. Your PFS gets better over time.

Yes. I think the clear -- the trial design assumes, I'd say, even a relatively conservative estimate for cabo's performance. So we expect it to perform well by all prior benchmarks, and we're still very well powered to have a win over that. So I think reality and as we've seen going forward as we expect the cabo arm to perform less well than we assumed some of the models, if you will, because of all the prior lenva and second-generation TKIs for the patients coming into our trial. But from a trial design perspective, we were pretty conservative to assume cabo would perform based on prior benchmarks, on the higher end of the prior benchmarks. So I think it's a very high probability of success that we would win on PFS from that.

Li Watsek from Cantor. I have 2 questions. First, for the PEAK-1 trial, do you guys have any sense in terms of percentage of patients that might have prior lenva exposure or prior next-gen TKI exposure? Any reason to believe that number may look different relative to ARC-20?

Yes. I think the number would be similar to ARC-20 because they're enrolling near term, let's say, to each other. The only thing we exclude by design, of course, is cabo, right? So I think there's going to be very little first-gen TKI, there will be some because it's a large global study. So there's still some first-gen use, but it will -- the TKI part will be predominantly axi and lenva. And my guess is they'll be somewhat split between the 2, depending on what part of the world, lenva is not everywhere in the world compared to axi. So I think axi will still probably be more than lenva by trend from that standpoint as a global trial. And I still think that the IO use and TKI use will be maybe roughly equivalent at the end of the day from a split. But we're still enrolling it, so I can't say definitively, but we're getting close to enrollment.

Okay. Great. And then second question is around the front line. Just from a mechanistic point of view, can you talk a little bit about your conviction level for the IO-IO combination versus TKI regimen-based combinations in light of LITESPARK-012? And then also, I wonder if you can comment on the biological interplay between IO versus TKI with cas. I mean you shared some pretty interesting data of the impact of TKI on the HIF-2 activity. I wonder if you have to look at IO's impact on HIF-2.

So I'll speak at least to the first part, and then I'll speak a little second that one. We see the opportunity for casdatifan much the way Rana talked about it, given the orthogonal profiles of the AEs, we see it as being quite well matched to also go with an axi type of treatment. So the reason we picked axi is for the reason that when Richard described it as kinder, gentler, so we see that our therapy is dominated by the HIF-2 alpha activity and perhaps there's a spark almost like with chemo that the TKI would bring to that. So we want a TKI that does no harm. Axi is selective. It's well used. It's time tested. It's a gentler TKI. And we feel like all the benefit that you get with cas, we know you basically can even get benefit with monotherapy Casdatifan that it will enhance the TKI.

The other aspect of this, and this is an important part. When we talked about the OS signal, you're actually -- the OS benefit is likely coming from both directions when you combine with the TKI. And then I'm going to come back to LITESPARK-012 in this context. So if you think about it, those patients that come into the second line, for example, and I'll apply it to the first line. The patients that come into the second line, they basically those that had a TKI, that had their HIF-2 alpha activity dramatically increased by the prior TKI treatment. So what you saw, and we didn't overstate it, but basically, you bring those patients back as if they hadn't been treated with the TKI.

Now the secondary piece is that while they're on the TKI plus the casdatifan, same thing is going on that would have been going on in the front line, the TKI is causing a push for that tumor that's already addicted to HIF-2 alpha to become even more dependent on HIF-2 alpha. But having casdatifan that's there for the entire ride, those patients then move to their -- when they progress on that other TKI as they go on to their next line of therapy, they're in a much better position than if you think about a situation where you didn't have a TKI or if you had belzutifan, so like think about lenva plus belzutifan, then think about that biomarker curve.

So as you're tending to lose your effect on HIF-2 alpha with time, now those patients are starting to look like naked lenva treated patients. So as they go into the later line, and basically that's -- so you're affecting the OS in both directions.

Now coming to the front line, the reason and we've been saying this for probably 6 months when we heard about the LITESPARK-012 failure is we attribute that to nothing to do with biology. We attribute it to the shorter effect of belzutifan. So if you think about it, that was a perfect storm for not having a strong hazard ratio. You have the toxicity that's obvious even before we see the data just from the abstract. It's dramatic. When you think about, you had a 37% rate of discontinuation from -- already known for lenva/pembro that was reproduced in this study. And then the combination drove it up to 50%. So that's the first thing.

The second thing is your for 24 months now, let's say, if you took a median PFS, you're driving increased HIF-2 alpha activity. And then you've got a molecule that's falling off in the HIF-2 alpha activity, however you want to define that somewhere fairly early on. So all those things conspire to be -- that it's more the molecule than the biology. So we think the biology is going to be just great. And for the reason Rana suggested, we have very strong advocacy from the physicians that even if you drive with cas, ipi/nivo to greater than 50%, certain physicians are still going to want to reach, particularly with fast-growing bulky tumor for TKI, and they should have a casdatifan inclusive regimen. Otherwise, I don't think there's anything biologically related to the immunotherapy alone, but Juan can comment on what is known...

So we have baseline information on over 200 patients, not just the monotherapy ones. So we can interrogate baseline characteristics, looking back at no prior therapy or IO only. And so I can clearly state that no therapy doesn't look any different than IO only in terms of how much HIF-2 alpha is there at baseline.

And now asking the question, your other question was in reverse, does HIF-2 alpha inhibition impact the response of the tumor to an anti-PD-1 or an IO regimen. Aside from the clinical data that you just saw, we have a whole bunch of additional measures of cytokine changes occurring that have been described in the context of pembro or nivo, we'll be showing at triple meeting that we see similar things in our combination of cas with zim. We also have a whole bunch of clinical data leading to the conclusion that HIF-2 alpha inhibition should not impair the responsiveness of the tumor to an IO regimen.

So in both directions, I think they're fairly independent. There are some data out there that -- from some of our collaborators showing that the best predictor of a rapid response in a front-line patient treated with IO only is mRNA levels of EPO, presumably HIF-2 alpha indicating, which ties in very nicely with the fact that we sort of seem to take the head off those primary progressors. Presumably HIF-2 alpha may be a key driver of nonresponsiveness to IO only.

Jane asking for Richard Law from Goldman Sachs. So if you only compare the second-line cas/cabo PFS curve for patients without the 7 -- sorry, for without those 7 prior lenva patients, and then compare those to LITESPARK-011 belz curve in a more comparable population, how would the PFS curve look compared to belz plus cabo -- sorry, yes, belz plus lenva. And then a follow-up question, is that in PEAK-1, since you allow lenva, how much worse do you believe the cabo control will look relative to the cabo arm in the LITESPARK-011?

Do you want to take all of that?

Sure. Yes. So I think the key really is that we see -- what we see is with our drug, with patients who had lenva in the prior or they had axi in a prior, we just don't have a cabo in a prior by definition, basically look the same. So cas is able to overcome whatever, I'll call it damage the prior lenva is doing with regards to that enhanced HIF-2 activity. So I think when we -- if conceptually, you remove that 7 patients from the TKI prior profile, then we're predominantly going to be in axi profile. But the axi profile looks very consistent with or without the lenva subjects. And I think that's going to be very different. And like you said, the cabo control arm. We know that cabo following lenva does very poorly on a PFS and sadly on OS. Probably because of that HIF-2 driver that lenva really stimulates. So the cabo control arm, I'd say, would perform on the lower end of any prior benchmark for those patients that had prior lenva by comparison, even though, like I said before, we assumed cabo would perform on the higher end of the prior benchmarks and we'd still win.

I believe that actually in our deck, I think we showed the 7 lenva patients broken out as silly as it is, Juan told me that silly to put it as a Kaplan-Meier curve, we wanted to illustrate the point and...

That's on Slide 84...

And secondarily, we did do -- to your question, just in general, we pulled the 7 out to look at the curve without those 7. And not surprisingly, it looked essentially the same. Those lenva patients performed quite well.

Charles Zhu from LifeSci Capital again. I had another question on your frontline triplet safety. So on Slide 62, you highlighted, for example, you had a few cases of hepatitis colitis, so on and so forth. I wanted to ask, what's your true denominator here? Are all 31 patients in the ITT truly safety evaluable? And how should we think about when irAEs tend to occur, especially as patients receive subsequent cycles of ipi?

Yes. No, it's a good call out because, as I pointed out, maybe 18 out of the 30 had made it past the 4 cycles. The safety data includes all of them. So even if they were in their second cycle and they had an event, they were captured there, because the average or median time to these immune-mediated events were kind of in that 10- to 12-week frame. So it's very typical that we'll have someone that followed the third course of ipi. And that's why if they got 3 and not 4, they probably had an immune-mediated event, and so we didn't get the fourth. Other immune events happened after the fourth or fifth cycle later on. And those are, I think, very typical time frames for an ipi/nivo immune-mediated hepatitis colitis picture.

You're very patient in a public setting. I didn't know they are public. I saw you...

Jon Miller from Evercore again. I have a question for the first line as well. Specifically on the doublet arm, which shows really nice looking PFS, but you have a lot of favorable risk patients in that population. Obviously, CheckMate-214 didn't have it in that benchmark. We know favorable risk patients do a lot better on TKI, maybe not as much or have any difference at all for ipi/nivo. How does risk status impact cas efficacy? And do you expect to -- how do expect it to play out in the first-line trial?

Yes. Well, we broke them out -- there's a slide somewhere in there that we broke out the tumor responses by favorable versus intermediate and poor. And to me, they basically look the same cas and zim performed the same. And so if you want to be, I'll call it, a skeptic and carve out the favorable and just focus on the intermediate and poor risk cas plus zim still looks better than the comparison group from CheckMate and their intermediate and poor, because you can break out their data as well. So I think breaking it out by favorable -- compared to favorable or intermediate and poor. We look better on either of those fronts. And then, of course, in the Phase III study will stratify by favorable intermediate or poor. It's an all-comer, but we'll make sure that the risk stratum are equal in the Phase III trial to make sure that they're balanced for that comparison.

Yes. Strategically, obviously, as you know, like ipi/nivo ended up just logistics timing, everything and intent is used primarily in the intermediate or poor, because of the great PFS you get in favorable risk with the TKI, but the intent here obviously is to have it sort of be an all-comers population. But just for the record, the one -- in that data set, the one complete response that we've seen to date is in the poor.

And maybe I'll just quickly add that I know the approval originally was just intermediate and poor and not favorable. But the broad use today is across the spectrum, and that's probably why as we enrolled this cohort and enrolled it fast, we have the distribution because the patients and physicians do like to use ipi/nivo regardless of the IMDC risk, and that's a global, Europe, the same. There's a lot of use across all risk factor, all risk groups despite the initial interpretation which has evolved over time to appreciate its use across every group.

It was interesting. It was subtle, but you remember when the question came up to Rana about her use of TKI and she emphasize, she's almost like 100% ipi/nivo and a lot of the academic centers more and more go in that direction where they basically want to get that OS. So obviously, bringing cas in and lowering that rate of primary progression would be a big help.

But there's a disconnect between what they're doing, and what she's doing in the academic setting and what the broader community is using were the very, very, hesitant to give up [indiscernible] especially, my sense is, especially...

That's why we need data to turn it around, exactly.

I'm Priyanka from JPMorgan. So it was mentioned that in frontline, there was no overlapping tox with the zim/ipi combo. So as we're thinking about the registrational data set and given that these patients will be in the combination for a longer time, how does the anemia and hypoxia-related side effects, how do you think those could drive physician prescribing choices for casdatifan in front line versus second line?

Yes. I think the -- I'll call it beauty of this combination as a triplet is it's barely a triplet, if you will, right? Meaning the first 4 cycles or up to the first 4 cycles is all 3. And then after that, it's really cas plus PD-1 or in this case, nivo. And we're very comfortable with that profile. Like I said, in our cas/zim group, we now have nearly a year of median follow-up. So we have a lot of experience there.

The anemia and hypoxia, we see that occurring regardless of line of therapy. It's clearly HIF-2 driven. I'll say that I'll expect all patients to have anemia to some degree when they're on casdatifan, especially in a prolonged use. So we tell all the investigators, physicians just expect it, look for it, treat it fast using ESA if your institutional allows an ESA, erythropoiesis-stimulating agent. Otherwise, if they get an anemia, it depends on the degree and if they're symptomatic, they'll get a transfusion, but they stay on cas. That's the key is we haven't seen discontinuations of casdatifan due to the anemia.

Hypoxia occurs at similar rates as belzutifan. Again, that's considered on target. But again, that's kind of regardless of the combination partner, meaning zim and PD-1 versus cabo from that standpoint. And hypoxia is obviously not a desirable event, but the higher-grade hypoxia is still quite low in occurrence. And that will drive patients to take a holiday or lower the dose of cas, but they generally are staying on cas even with the events of hypoxia. That's the AE that they'll end up lowering down to 50 milligrams maybe. But the key, as you saw in the PD data, even at 50 milligrams of cas, that's a more potent HIF-2 inhibitor than the commercial dose, 120 milligrams in belzutifan. So I'd say even though they dropped it down, they're still on conceptually full strength in inhibition of HIF-2.

Last couple of questions.

I'm Supawat from Truist. Thanks for the rationale for why cas plus cabo could extend OS despite somewhat similar PFS. I'm just curious if you have post-progression data in subsequent therapy or post-progression data in ARC-20 to support the hypothesis. And related to that question, now belz and lenva been approved. Just curious if it's use -- potential use in progressor in the PEAK-1 study might alter or influence the OS outcome in PEAK-1.

Sorry, can you restate that last part?

So presumably, that belz and lenva now approved, and I was wondering if it could be use, for example, in the cabo arm, control arm in PEAK-1 and may change how the OS hazard ratio might look?

Yes. So the cabo arm in PEAK-1 is exclusively cabo, right? So there'll be no len/bel patient coming in.

There's no prior HIF-2 alpha exposure a lot in that study.

Yes, so there's no -- yes, that's exclusion. So you're saying what will happen after PEAK-1 progression, kind of patient after -- so sure, after progression on PEAK-1, a patient could go on belz, for example, if they were on the cabo arm, if they didn't have the treatment arm, that will be up to the physicians as to what to give. Now it's a global study, and belz isn't really available outside the U.S. for these patents from an access and reimbursement perspective. So I would expect the majority in either arm really to go on to an alternative TKI probably, or they can go on len-ev, if they haven't had len before. So I don't expect much len/bel anywhere in PEAK-1, and it will be len-ev, tivo or in the U.S. that could get belz if they were on the cabo arm.

Last question.

Daina Graybosch from Leerink Partners. I'm wondering if BMS is contributing to funding PEAK-20 and whether you allow patients to receive subcutaneous nivolumab, particularly when you go down to the doublet with cas?

I can comment on the financial arrangements first. So we haven't disclosed the financial arrangements, but I would just comment, and we said this previously that if you look at the totality of our collaborations with BMS, with Pfizer and with Summit, the aggregate of those is very financially attractive to Arcus. And in the aggregate, we're spending less than we would have spent on one arm for ourselves.

I was asking about PEAK-20...

Oh, sorry, for PEAK-20. Okay. Yes. No, and we haven't disclosed anything there yet.

But the trial, just to be clear, if anything there that would just relate to some sort of supply. So there's no collaborative aspect of PEAK-20 with BMS. It would just -- if we did something, it would involve the -- just supply.

And we're planning on IV use, not subcu use, open minded, but just for consistency in a global trial, which is very important that everyone knows how to use it, and we're picking centers that obviously have a lot of experience with ipi/nivo, but predominantly, that experience is IV, and so we're sticking with what they know.

Okay. Thank you, everybody, for joining us. We'll end the webcast now. And we're happy to take questions one-on-one afterwards.

I'll thank everybody too. We really appreciate the engagement and not just today but on an ongoing basis. So thank you very much.

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.