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Morgan Stanley 22nd Annual Global Healthcare Conference

Sep 4, 2024

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Mute one?

Terry Rosen
CEO, Arcus

Oh, yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Mute one.

Terry Rosen
CEO, Arcus

Definitely. Definitely.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, great. Thanks so much. All right, this one's working. So thanks for joining us, everyone. I'm Terence Flynn, the US Biopharma Analyst at Morgan Stanley. Appreciate the opportunity to host Arcus this afternoon. We have Terry Rosen, the company's CEO, and Jen Jarrett, the company's COO. Just before we get started, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. Well, thanks so much for making the trip out here to the East Coast. Appreciate the time today. You know, I wanted to start off just on the pipeline assets that, again, we're expecting to see some more data out later this fall is AB521. I'll use that because I can't pronounce the drug name, but your HIF-2alpha inhibitor.

Maybe just help set the stage for us here as we think about, you know, the likely upcoming presentation here, in the fall.

Terry Rosen
CEO, Arcus

Thanks. So thanks, Terence, for inviting us. Thanks to all of you here and listening in. So Casdatifan is a HIF-2 inhibitor, also known as AB521. We also call it Cas. We've got a really exciting data set that will be coming later this year. We just found out it was accepted as an oral presentation, so we just can't say where yet, but at least we have that under our belt. In terms of what to expect, for those of you who have followed us, this is being developed right now in clear cell RCC. We did a dose escalation study after a healthy volunteer study, and then we went into a variety of expansion cohorts in clear cell RCC.

The first one that will be a focus at this presentation is a 100 mg cohort, and that's our go-forward dose that we'll be taking into phase III as well. We've qualitatively described the data publicly. We've compared there to the one marketed HIF-2 inhibitor, which is Merck's belzutifan. In terms of our upcoming data, that 100 mg cohort has just over 30 patients in it, will be focused on three key endpoints, primary rate of primary progression, ORR, objective response rate, and PFS. Now, just to set the stage, those data are out there for belzutifan. They're well-defined from its phase III trial, LITESPARK-005, and I can shoot those numbers at you.

The rate of primary progression, which clinicians, by the way, feels an Achilles heel of the drug, is 33%. So that 33% figure was actually worse than everolimus, which was the control in the registrational study. So that's a third of your patients that never even get, you know, to really get a shot. The ORR was just around 20%, and PFS was 5.7 months. So what should people expect to see from us? We're gonna have what's obviously a less mature data set. We're gonna have about 10 months of follow-up. Also, I'll remind people, our patient population is a little bit more advanced than the LITESPARK-005 population. But we'll have ORR data. We'll have a rate of primary progression.

The rate of primary progression is the one variable that you see earliest because you know it by the first scan, and we've already said we're substantially better than what was observed for belzutifan. And then finally, although we've got 10+ months of median follow-up, we will not have a mature PFS, but we will say something about PFS, and in fact, we'll also show swimmer lanes. It's gonna be a very rich data set. The final point that I'll make about the data set itself is that we have, for our dose optimization strategy, we do have a 50 mg cohort that lagged behind, or started after the 100 mg cohort, and it enrolled very quickly.

And despite not being very mature, it's a very positive data set, and we're gonna include some of the information about that 50 mg cohort, which is another 30 patients, plus or minus. The final point I'll make that's outside of the data set itself is that not only do we feel that we'll have a better molecule, and we believe we will show improvements relative to that belzutifan data set on all three of those endpoints, but our development strategy includes differentiation as well, where we think we'll be combining with a better TKI than Merck is. And we also have another study that we'll be starting, where we will be doing that in collaboration. We haven't announced that yet. That'll take us into a frontline setting.

So maybe they may come up more in the Q&A, but I'll stop there as a level-setting.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Terry Rosen
CEO, Arcus

Uh, introduction.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, that's great. One point you raised is just the later, more advanced population. So I was just looking back at my notes. So it looks like in their phase I, II trial, they had about 71% of patients receive both an anti-PD-1 and anti-VEGF agent previously, and their ORR, I think, was about 25% in the expansion cohort. So how does your group compare to that 71%, if I'm looking back at their, you know.

Jennifer Jarrett
COO, Arcus

Yeah, so for that data set, so that was the phase I data set.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah. Yep.

Jennifer Jarrett
COO, Arcus

The distinction there is that enrolled both patients that had seen just PD-1, as well as patients that have seen both PD-1 and TKI.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Jennifer Jarrett
COO, Arcus

So the patients that are more relevant to us is that subgroup that saw both prior PD-1 and prior.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.. TKI, and you can see there that the ORR for that patient group was, I believe, 21%.

Okay.

Jennifer Jarrett
COO, Arcus

You know, it was a little bit elevated because they did have those patients that hadn't seen both prior PD-1.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah

Jennifer Jarrett
COO, Arcus

Or prior, TKI.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

The other thing to mention is LITESPARK-005 enrolled only patients that had just seen one to three prior lines of therapy, and ARC-20 and 100 mg cohort, patients could see any prior lines, and so that included patients that had seen four or more prior lines. We've said previously that we had 25% of patients in that 100 mg cohort that had seen four or more prior lines.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

So those are all patients that would have been ineligible for LITESPARK-005, just based on the number of.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

What is the patients that got both PD-1 and anti-VEGF?

Jennifer Jarrett
COO, Arcus

Everybody, so everyone.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

100%.

Jennifer Jarrett
COO, Arcus

Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

100%.

Jennifer Jarrett
COO, Arcus

So that's why when you look at that LITESPARK-001.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Jennifer Jarrett
COO, Arcus

Dataset, really the subgroup to focus on.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Jennifer Jarrett
COO, Arcus

Are just those patients that have seen both prior PD-1 and prior TKI.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Got both. Okay, so it's 100%, and then yours is fourth line versus third line.

Jennifer Jarrett
COO, Arcus

Right, exactly.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Got it. Okay, so those are the two differences. Okay. Okay, great. And then in terms of the 50 mg cohort, that, remind us, like, how much follow-up you'll have in that cohort, and then the reason you included them was because of Project Optimist?

Jennifer Jarrett
COO, Arcus

Yes. So we enrolled both a 50 mg and a 150 mg cohort, so sort of bookend on the 100 mg cohort that we're, that it's the dose that we're moving forward with, as part of align with the FDA to address Project Optimist. So that's why we did those cohorts. I'd say the 50 mg cohort is probably gonna have half the amount of follow-up, maybe even a little bit less than the 100 mg cohort. As Terry said, the 100 mg cohort will have about 10 months of median follow-up. So let's say, you know, it'll be, like, four months or so for the 50 mg cohort. But that cohort is looking very interesting and is maturing very nicely, so that's why we thought it would be helpful to include in this next data presentation.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, and then remind us the status of the 150 mg cohort?

Terry Rosen
CEO, Arcus

It just barely had completed.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Terry Rosen
CEO, Arcus

Enrollment.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Got it. So we shouldn't expect it?

Terry Rosen
CEO, Arcus

No, not till next. We will get that out there next year. I think there's gonna be a steady flow of data from our studies, but that just completed enrollment. And frankly, all of these enrolled gangbusters. It bodes very well for our future studies. If we open a new cohort tomorrow, would.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Terry Rosen
CEO, Arcus

Enrolling, like, metaphorically overnight.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah. Are you worried that the 150 mg, if it looks better than the 100 mg, and then you're already going forward in phase III, with, like, how do you kind of balance that trade-off, I guess.

Terry Rosen
CEO, Arcus

We're very comfortable that the 100 mg dose is the go-forward dose. I think what actually may be the way this all plays out is that the safety signal is the same across the three, and there'll be similarities. They're all very meaningful doses. So even 50 mg, if you were to compare from a pharmacodynamic standpoint, it's two and a half the PDE equivalent of belzutifan. And think about belzutifan was good enough to, you know, substantially change the standard of care. So we think that we're that 150 mg is gonna be on the asymptote of efficacy.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Okay, got it. And then remind us on the, I guess, the, the Gilead opt-in decision here, like, what the, you know, how much data, what the, the timing is, and then, you know, at least, you know, when we read the, about the debt facility with Hercules, you know, are there any implications for how to think about that in terms of, like, you know, funding phase three development, et cetera? But are those things linked together at all, or are these two separate.

Jennifer Jarrett
COO, Arcus

Totally separate.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

Like, the debt opportunity was there. You know, we had a few different opportunities that came up, just a lot of interest, and it was there and low cost of capital, so we took the money. So it has nothing to do with the Gilead opt-in.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

And what we think is gonna happen there.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

So we did it because it was low cost of capital, it was there, it extends our runway, you know, into mid-2027 and potentially beyond, depending on how much of that facility we decide to take down, and then we only took down $50 million as a starting point. And then on the Gilead opt-in decision, we aligned with them on the amount of data that we need to have in that data package to inform their opt-in decision. Once we deliver that to them, they have, I think, between 50 to 60 days to make a decision. And then, as you pointed out, the guidance that we've been giving is that we expect that decision to be made either around year-end or early next year.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Great. Got it. Okay. Anything in terms of, I mean, they're, you know, obviously, they have a CMO transition going on. Maybe just any implications for you guys there, or is it, again, pretty steady state or just.

Terry Rosen
CEO, Arcus

It's very steady. So keep in mind, this collaboration has been very broad, only getting broader. There's literally hundreds of people at Gilead working on these programs operationally, our relationship with Dan and the people deeper in Merdad's organization, those of you who've met Bilal, quite deep. And even now, a whole lot going on with Johanna, as we transition to TIGIT and starting to think about and prepare for commercialization, co-promotion, et cetera. So our touch points in the organization are strong. Merdad's been great, but you know, it's really been pretty seamless, especially from a day-to-day standpoint.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Okay, great. And again, I guess going back to Cas and, you know, the PEAK-1 phase III trial, again, I think you wanted to elaborate a little bit, Terry, here, on kind of the choice of TKI, the design, and then anything else you can do to kind of, you know, speed up time to market there, as again, given kind of the lead time or Cas?

Jennifer Jarrett
COO, Arcus

Yeah, so we did discuss on our last earnings call that we are gonna be using Cabo as the combination partner for our first phase III study. That phase III study is called PEAK-1. So very simple in design. We'll be looking at Cas plus Cabo versus Cabo. The reason that we like the idea of going with Cabo is it is the standard of care in the setting that we're gonna be pursuing, which is IO experienced clear cell RCC patients. So that's a mix of patients that saw PD-1 in the adjuvant setting, as well as patients that saw PD-1 in the first-line metastatic setting and then progressed. So a very large patient population. As I said, Cabo is the standard of care. Clinicians are super comfortable with using it.

We don't have to worry about contribution of components 'cause we're using it in both arms, so for a whole bunch of reasons, you know, that felt like the best choice for us, in moving forward, but I know earlier today, Mike was up and talked about STELLAR-009 and the decision there, and you know, we're both sort of going in different strategic directions, but we have a good relationship with Exelixis. You know, we were glad that we had the opportunity to work with them. I'm sure we'll work with them on things in the future.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Maybe just 'cause, again, I was back to back all day, so I missed that. What was the.

Jennifer Jarrett
COO, Arcus

Oh, for STELLAR-009.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Jennifer Jarrett
COO, Arcus

So that was a study that we started sort of well over a year ago, where we're combining Cas with Zanza.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

Which is our next generation, Cabo.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

So that started several months ago. And we decided, as we've said, that we were gonna go with Cabo for our first phase III study. They're focusing on their own studies with Zanza, so, for those reasons, we just decided to make sense to continue investing money into this study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. And is there still an opportunity to look for a different combination as well in the first-line setting? I think that's something you had talked about on the.

Jennifer Jarrett
COO, Arcus

Yeah, so we have a plan there.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

You know, we'll be able to talk more specifically about that, you know, hopefully in the next few weeks.

Terry Rosen
CEO, Arcus

That all will be happening. Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah. Okay, got it. Okay, and then what. As we think about, like, enrollment timelines for this kind of a study, I mean, is it fair just to look back at the Merck trials as kind of a benchmark or a proxy for-

Jennifer Jarrett
COO, Arcus

Yeah, we think maybe that. Y eah, we'll see. You know, like, enrollment's always hard to speculate on, but, you know, one of the reasons why we wanted to go with Cabo and use Cabo in both arms is we wanted to expedite enrollment. There's a lot of interest in this study already. I think we've been surprised by how much interest there is. We've seen how quick we've been able to enroll our expansion cohorts for Cas. As we mentioned at our last earnings call, we already have over 140 patients and growing, enrolled in that Cas monotherapy study, which is only in late line patients, which is pretty extraordinary. So, we're gonna do everything we can to get it enrolled as quickly as possible.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah. Okay. And I guess anything that, like, let's say, in the outside chance, Gilead doesn't opt-in, is there anything that would change in terms of your development program or timelines, or is that something that would be seamless in the event that they don't opt-in?

Terry Rosen
CEO, Arcus

Totally seamless. So both, the Casdatifan Cabo study has been built into our plans, presuming no opt-in, and this frontline study also built into the plan. And frankly, there's been other inbound interest in the program, and it's something also that given the opportunity there and the strong, strong validation, we'd love to have Gilead opt-in.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Terry Rosen
CEO, Arcus

It brings operational and capital contributions, but we tend to, like, basically, as a default, want Gilead opt-into everything. But if I had to pick one that we'd be comfortable executing alone with a 100% validated drug target and a very clear and straightforward as it gets pathway to commercial, this would be it. But we think we're all set.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Terry Rosen
CEO, Arcus

In either scenario.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Terry Rosen
CEO, Arcus

Seamless.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

So if they don't opt-in, would you guys more likely take this forward solo, or would you entertain those other inbound discussions?

I think we would definitely at least consider those, but it's one where we've obviously thought about and received all kind of inbound, you know, from various external constituencies about, like, "Wow, wouldn't you guys like to take that forward yourself?" It might be smarter still to have a partner. We'd have to consider exactly how that would play into things. But basically, the plan as it sits right now is all set with or without them.

Okay. Okay, got it. Okay, great. Maybe I don't know anything else on Cas we didn't touch on before we go over to Dom?

Jennifer Jarrett
COO, Arcus

No, I think that's pretty.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Great, great.

Terry Rosen
CEO, Arcus

Good question.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. So on, you know, on Dom and the whole, you know, TIGIT hypothesis, there's obviously been some updates from some of your competitors on their programs, you know, on the Roche side, and the Merck side both, relating to efficacy and then tolerability in some cases. So just remind us kind of, you know, differentiation of your asset, and then what gives you guys and Gilead the confidence to continue to kind of move forward and invest, you know, aggressively behind the assets?

Terry Rosen
CEO, Arcus

So we honestly couldn't feel better about where things stand right now, both based upon our own internal data set, as well as what's been happening externally. And largely, a lot of that relates to the differentiation between the Fc-enabled high anti-TIGITs outside of Arcus, and then Dom, which is the only Fc-silent anti-TIGIT in later stage development. And our primary confidence comes from our own internal data. So first, I'll mention ARC-7 data, which was the dataset we presented some time ago in front line high PD-L1 non-small cell lung cancer. One new piece of information is that we are submitting an abstract, so we have now mature data.

from the first part of what we were calling ARC-10, which was high PDL-1 phase III study, that for strategic reasons, we terminated in favor of the PDL-1 all-comer phase III study, STAR-121. But we had 100 patients from that early study, broken out as 40 patients on domzim, 40 patients on zim, and 20 patients on chemo. And we're submitting an abstract to share those data. It's a rich data set. It's a good data set. It's gonna be a very positive data set for anti-TIGIT. It'll be a positive data set for ARCUS as well.

So I would say it's even a stronger data set than the ARC-7 data set, and it's with two years of follow-up, and we will have OS for both domzim and zim, and we'll have hazard ratios as well. So I think you'll be able to tell a lot from that study about anti-TIGIT. So that's the first piece.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

That's just one thought there, 'cause I remember when ARC-7 and people were, there was a lot of hand-wringing over the kinda control arm performance.

Terry Rosen
CEO, Arcus

Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

And things like that. So do you think this will alleviate those questions?

Terry Rosen
CEO, Arcus

Yes.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Or, okay.

Terry Rosen
CEO, Arcus

I think that domzim will look quite good, and I think zim will not only look good in terms of how it compares to domzim, but when people do what we don't recommend doing, but when they go and compare across trial, there'll be no hand-wringing about zim's performance as an anti-PD-1, as well. Coming back to our other data that you know gives us extraordinary confidence is the Arcus gastric data. That's in the upper GI cancers, where we just reported out thirteen-month median PFS. That, I'll remind you, the standard there is nivo chemo that has PFS on the order of seven months.

We'll be reporting out later next year, OS data for that study, and I can tell you with 18 months of follow-up, more than well over 50% of the patients were still on study, and keep in mind, OS for the standard of care there is, 13 months. Now, those are our near-term data. ARC-10 has a data set coming out in high PD-L1 lung. We expect, given that, they started a phase III study and that was, you know, together with Glaxo, that that's gonna be another positive data set. AstraZeneca has, recently shared, early data with their bispecific anti-PD-1, anti-TIGIT, where their anti-TIGIT is Fc-silent. That looked quite positive. So we think the data supporting efficacy looks awesome.

Then coming to your point about the negative releases that were put out by Merck and Genentech, we think that feeds right into what we've been discussing all along, the T-reg depletion associated with the Fc-enabled anti-TIGIT and the corresponding induction of immune-associated AEs. While none of the three datasets. So let me remind you what they were. Merck put out a press release about their phase III adjuvant melanoma study. They put out a press release about their small cell lung cancer study, and Genentech had one relating to their PD-L1 all-comer, non-small cell lung, which was atezo, Tirago, and chemo. Now, interestingly enough, that study suffered from another confounding issue in that their control arm was Keytruda.

So in the absence of data, it's tough to tease out just everything that was going on there. But what I'll note is that in the Merck releases on each of those studies, they pointed out that they had issues with immune AEs in the study arm that was causing disproportionate dropouts and affecting efficacy. And keep in mind, Merck is doing a co-form of Keytruda plus Vibo, so if they see any AE, they have to take the patient off of both drugs. So we think our strategy of the Fc-silent anti-TIGIT, and we'll ultimately be doing a co-administration, not only giving flexibility, but you know, that's not only better from a safety standpoint, but that safe translates into improved efficacy because you're not losing patients due to AE.

So, that part of the differentiation we think we're feeling really good about. And in fact, I would just point out that since I was talking about esophagogastric, the upper GI cancer study, the corresponding phase III study, called STAR-221, was fully enrolled over 1,000 patients as of the end of June. And the way this is playing out, it's not inconceivable that that could actually represent potentially the first anti-TIGIT approval, given that in the GI setting, the standard of care has an OS on the order of, like, 13 months versus in non-small cell lung cancer, where you're in 20+ months. So we're really excited about the entire field, and we know that's a show me to the investor community, but we feel like we're very well positioned to do well.

And I think the ARC-10 data will inspire confidence in everybody in both the mechanism and domvanalimab as a best-in-class anti-TIGIT.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Great. Just remind us, have you said where is the ARC-10 venue gonna be different from the Cas venue, or are they gonna be the same venue?

Jennifer Jarrett
COO, Arcus

It will be different. That's, yeah.

Terry Rosen
CEO, Arcus

It will be different, but we're just.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Got it.

Terry Rosen
CEO, Arcus

We're just submitting the abstract as we speak.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, got it. Okay, but that's still the ARC-10 is still by year-end?

Terry Rosen
CEO, Arcus

Yeah, the intent is.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Terry Rosen
CEO, Arcus

By year-end.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Okay, got it. And then, you know, one other question just on the STAR-121 phase III lung cancer trial, that's your, your all comers trial you talked about. Just any update on kind of enrollment progression and, and how to think about timing of data there?

Terry Rosen
CEO, Arcus

As of right now, it's fully enrolled. We haven't said anything about timing. We would leave that at this point still, for people to. They can do their own back calculations, given what's known in that setting. So that's a PD-L1 all-comer.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yep, yep.

Terry Rosen
CEO, Arcus

Uh, study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. All right, and the control arm there is Keytruda.

Terry Rosen
CEO, Arcus

The design there, it's Keytruda chemo versus dom zim chemo, and we also have a one to four zim chemo to just provide a qualitative comparison between zim chemo and Keytruda chemo in the same study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, and you haven't, I mean, assume, like all oncology trials, it has an interim built into it, but I'm guessing you're not going to comment.

Jennifer Jarrett
COO, Arcus

Not going to comment. Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. All right. So stay tuned. Okay. All right. The other one you mentioned, on, you know, I guess there's a lot to unpack there, but just the co-formulation. I mean, again, I hear your point on the discontinuations due to immune AEs, but how do you think about the kind of commercial. Like, let's say both products get to market ultimately, in lung cancer, all comers, what are kind of the puts and takes of a co-formulation versus a separate two-vial strategy?

Jennifer Jarrett
COO, Arcus

From an administration and convenience perspective, that's the only thing that really matters. They end up being pretty much the same, because what we'll end up doing is we will co-package them, and then they will be mixed into the same vial. So, like, from a patient perspective, the amount of time that they're actually spending in the chair, which is most important, it shouldn't be much different, if at all. So we actually don't think there's much difference. We've actually done a lot of research early on as we were trying to figure out if we should go co-form or co-admin or what our strategy should be.

The feedback that we got from payers was that they actually don't like the co-forms, because they see co-forms for exactly what they are, which is extending the patent life of a drug that's lost their patent life. So for all those reasons, you know, we decided to go the co-admin route and feel very good about it.

Terry Rosen
CEO, Arcus

I mean, the other piece about that is the physicians also prefer that because obviously it gives them the flexibility with both agents in terms of if they want to titrate one or the other.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yep. Okay. Okay, understood. You know, one other just on the kind of commercial side, there's obviously a number of other agents in late stage development for lung cancer now in terms of, you know, TROP-2, B7-H3. You mentioned the, you know, the AZ bispecific. So as you think about, you know, that market, is this likely going to become, then I guess even LAG-3 now, you know, Bristol announced their LAG-3 today. So how do you think about, like, fragmentation of that market, and where does.

Jennifer Jarrett
COO, Arcus

Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

TIGIT kind of fit into that kind of a landscape?

Jennifer Jarrett
COO, Arcus

I mean, we probably saw TROP-2 as more of a threat a year ago, like, you know, everybody. And, you know, I think based on everything that we're hearing today is I think the expectation is a lot lower, that TROP-2s will move into frontline or will be heavily used in frontline, that they'll probably be more of a second line treatment option. You know, LAG-3, TBD. You know, we've seen zero data in frontline lung. I think, I forget what BMS's strategy, I think, is to go after the.

Terry Rosen
CEO, Arcus

The 49.

Jennifer Jarrett
COO, Arcus

Yeah, I don't know how they came up with that grouping, but, but there's nothing, you know, on the horizon at this point that we see as being, like, a huge competitive threat. I think the ADCs were probably the things that we were keeping the closest eye on, and then KRAS will keep an eye on as well, although I think it's still, again, like TBD, as to whether or not KRAS inhibitors can be able to combine with chemo, and then if they're active enough on their own, where they can actually displace chemo. So we actually feel, I think, better and better about our competitive position, not just versus other modalities and other mechanisms of action, but even within the TIGIT field.

I think a year ago, we felt like Merck was a big threat and a big competitor, and I feel like, every day that passes, we feel probably more and more confident with where we are, and that, you know, we may even have a shot to be first to market now in lung.

Terry Rosen
CEO, Arcus

The one comment I would add to that. You know, obviously, we all know that cancer is all about efficacy, and safety is relevant, but it is about efficacy, but when you think about dom, when you're going on top of anti-PD-1 chemo, you're essentially bringing no additional baggage. So you're taking something. Anti-PD-1 chemo is really good in frontline non-small cell lung cancer, and you're going to be enhancing that. So we feel that's a very good value proposition across the broader field. You know, really good place to start with the Keytruda chemo being so entrenched.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah. Okay. Okay, got it. And I guess one other one in lung is the, I guess there's this phase II VELOCITY-Lung study that Gilead's conducting, like a-

Jennifer Jarrett
COO, Arcus

Right. So they're operationalizing that and paying for that.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

So, um.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

So you guys don't have visibility in terms of that data?

Jennifer Jarrett
COO, Arcus

No, I mean, we've been kind of hearing year-end.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah.

Jennifer Jarrett
COO, Arcus

So.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

Yeah.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, but that's a Gilead-run study?

Jennifer Jarrett
COO, Arcus

It's a Gilead-run study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

You don't have access to the data then, real time, like.

Jennifer Jarrett
COO, Arcus

We do not see that data real time.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

We're not paying for that study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Yeah

Jennifer Jarrett
COO, Arcus

So.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Okay, understood. All right, then maybe just hopping back to gastric. So you know, Terry, you mentioned the 221 study that could be the first TIGIT approval here. So maybe just again remind us of the commercial opportunity in gastric, kind of how to frame that out here. Obviously, we know lung really well, but gastric is maybe one of those that's more a little bit below the radar.

Jennifer Jarrett
COO, Arcus

Yeah, so it's about 27,000 patients in the U.S. alone, and then obviously much bigger when you go outside the U.S. So we think that translates into about a $3 billion market, maybe more. The other interesting thing, since there's an upcoming ad comm, just to talk about, you know, greater than one PD-L1 status, less than one, et cetera. The gastric cancer space is much more heavily skewed towards PD-L1 one or CPS greater than five and greater than one. So, somewhere between 40%-50% of the patients are CPS greater than five, probably 80% are CPS greater than one. So, you know, CPS greater than one captures a very, very significant portion of that patient population, of that $3+ billion patient population.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

And that's that, so you're enrolling CPS over one?

Jennifer Jarrett
COO, Arcus

It is an all-comer study.

Terry Rosen
CEO, Arcus

It's an all-comer study.

Jennifer Jarrett
COO, Arcus

And then as a reminder, we're doing dual primary endpoints, so we're looking at CPS greater than five, and then we're looking at all-comer. So if we hit on either of those endpoints, we win.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay.

Jennifer Jarrett
COO, Arcus

And, you know, if we hit on one of the endpoints, we can also roll the alpha over to the other endpoint, which is nice. So it's a really well-designed study. You know, as we talked about earlier, over 1,000 patients enrolled, so very well-powered. So we talked about the opportunity, and, you know, just really nothing from a, you know, sadly for patients, other than the anti-claudins, there's really nothing else out there from a competitive standpoint.

Terry Rosen
CEO, Arcus

Then there's no other registrational trial ongoing in that, in the anti-TIGIT space yet.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay. Maybe in the last minute, just anything else in the pipeline that we should have on our radar before the end of the year?

Terry Rosen
CEO, Arcus

Give Jen the last word.

Jennifer Jarrett
COO, Arcus

I mean, really, it's been the year where we're trying to keep everyone focused on Cas and Dom. Those are going to be the two big readouts.

So, you know, starting in a few months with the Cas, Cas data presentation, which is going to have a lot in there. We're super excited about that. Also very excited about the DOM presentation, and then next year, there'll be a lot more Cas data to come, just as we start to read out from these additional cohorts. So those are the two big things to highlight. You know, Quemli, we'll start the phase III study there by the end of the year. You know, that will also enroll very, very quickly. Just a huge amount of interest in the study, not a lot out there in pancreatic cancer, and then just the next program to keep an eye on will be AXL.

We actually have a poster coming for our AXL program, also at an upcoming conference, and then that will start moving into expansion cohorts next year. So, yeah, that could be more CAS-like, just in terms of getting, you know.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Right.

Jennifer Jarrett
COO, Arcus

Sort of earlier signs of efficacy and a faster path to a phase III study.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Okay, great. Well, thank you so much, Terry, Jen.

Terry Rosen
CEO, Arcus

Thanks.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Appreciate it.

Jennifer Jarrett
COO, Arcus

Thank you.

Terry Rosen
CEO, Arcus

Appreciate it.

Terence Flynn
US Biopharma Analyst, Morgan Stanley

Thank you.

Terry Rosen
CEO, Arcus

Thank you.

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