10q10k10q10k.net

What changed in Arcus Biosciences, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Arcus Biosciences, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+486 added−455 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in Arcus Biosciences, Inc.'s 2025 10-K

486 paragraphs added · 455 removed · 338 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

128 edited+55 added−57 removed178 unchanged
Biggest changeThe key competitive factors affecting the success of all of our investigational products, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics (if required), the level of biosimilar or generic competition and the availability of reimbursement from government and other third-party payors. 9 Table of Contents Intellectual Property Our commercial success depends in large part on our ability to obtain and maintain patent protection in the U.S. and other countries for our investigational products, to operate without infringing valid and enforceable patents and proprietary rights of others, and to prevent others from infringing on our proprietary or intellectual property rights.
Biggest changeThe key competitive factors affecting the success of all of our investigational products, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of companion diagnostics (if required), the level of biosimilar or generic competition and the availability of reimbursement from government and other third-party payors.
We made certain covenants not to commercialize any anti-PD-1 antibody licensed or obtained by us after the date of the license agreement with WuXi Biologics other than anti-PD-1 antibodies licensed from WuXi Biologics, subject to certain exceptions as set forth in the WuXi Agreement.
We made certain covenants not to commercialize any anti-PD-1 antibody licensed or obtained by us after the date of the license agreement with WuXi Biologics other than anti-PD-1 antibodies licensed from WuXi Biologics, subject to certain exceptions as set forth in the WuXi PD-1 Agreement.
For example, the EU General Data Protection Regulation (the "EU GDPR") and the United Kingdom’s General Data Protection Regulation (the "UK GDPR" and, together with the EU GDPR, the "GDPR") applies to health-related and other personal data of individuals in the EU and UK, respectively.
For example, the EU General Data Protection Regulation (the "EU GDPR") and the United Kingdom's (the "UK") General Data Protection Regulation (the "UK GDPR" and, together with the EU GDPR, the "GDPR") applies to health-related and other personal data of individuals in the EU and UK, respectively.
If used to make critical treatment decisions, such as patient selection, the diagnostic device may be considered a significant risk device under the FDA’s Investigational Device Exemption (“IDE”) regulations, in which case, the sponsor of the diagnostic device will be required to submit and obtain approval of an IDE application and subsequently comply with the IDE regulations for the use of the diagnostic device in clinical studies.
If used to make critical treatment decisions, such as patient selection, the diagnostic device may be considered a significant risk device under the FDA’s Investigational Device Exemption ("IDE") regulations, in which case, the sponsor of the diagnostic device will be required to submit and obtain approval of an IDE application and subsequently comply with the IDE regulations for the use of the diagnostic device in clinical studies.
Further, with respect to domvanalimab, we remain eligible to receive up to $500 million in milestone payments. Preclinical Programs Under the Gilead Collaboration Agreement, Gilead has also received options to two oncology research programs (the "Oncology Research Programs") and up to four jointly selected research programs that target inflammatory diseases (the "Inflammation Research Programs").
Further, with respect to domvanalimab, we remain eligible to receive up to $500 million in milestone payments. Preclinical Programs Under the Gilead Collaboration Agreement, Gilead has also received options to two oncology research programs (the "Oncology Research Programs") and two jointly selected research programs that target inflammatory diseases (the "Inflammation Research Programs").
Unless an exemption applies, each medical device commercially distributed in the U.S. generally requires either FDA clearance of a 510(k) premarket notification, or approval of a premarket approval (“PMA”) application prior to commercial distribution. Most companion diagnostics require approval of a PMA.
Unless an exemption applies, each medical device commercially distributed in the U.S. generally requires either FDA clearance of a 510(k) premarket notification, or approval of a premarket approval ("PMA") application prior to commercial distribution. Most companion diagnostics require approval of a PMA.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected AEs, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory actions, such as: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on ongoing or planned clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory actions, such as: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or untitled letters; • clinical holds on ongoing or planned clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • mandated modification of promotional materials and labeling and the issuance of corrective information; 15 Table of Contents • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or • injunctions or the imposition of civil or criminal penalties.
Any product manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things: • record-keeping requirements; • reporting of adverse experiences associated with the product; • providing the FDA with updated safety and efficacy information; • therapeutic sampling and distribution requirements; • notifying the FDA and gaining its approval of certain manufacturing or labeling changes; • registration and listing requirements; and 16 Table of Contents • complying with FDA promotion and advertising requirements, which include, among other things, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the product’s approved labeling, limitations on industry-sponsored scientific and educational activities and requirements for promotional activities involving the internet.
Any product manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, including, among other things: • record-keeping requirements; • reporting of adverse experiences associated with the product; • providing the FDA with updated safety and efficacy information; • therapeutic sampling and distribution requirements; • notifying the FDA and gaining its approval of certain manufacturing or labeling changes; • registration and listing requirements; and • complying with FDA promotion and advertising requirements, which include, among other things, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the product’s approved labeling, limitations on industry-sponsored scientific and educational activities and requirements for promotional activities involving the internet.
Our issued patents and any patents that may issue in the future from our company-owned or licensed pending applications are projected to expire between 2036 and 2044, absent any patent term adjustments or extensions. The patent positions for biotechnology and pharmaceutical companies like us are generally uncertain and can involve complex legal, scientific and factual issues.
Our issued patents and any patents that may issue in the future from our company-owned or licensed pending applications are projected to expire between 2036 and 2045, absent any patent term adjustments or extensions. The patent positions for biotechnology and pharmaceutical companies like us are generally uncertain and can involve complex legal, scientific and factual issues.
With regard to a Fast Track product candidate, the FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
With regard to a Fast Track investigational product, the FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
There are many other companies that have commercialized and/or are developing immuno-oncology treatments for cancer including large pharmaceutical and biotechnology companies, such as AstraZeneca plc ("AstraZeneca"), BeiGene, Ltd. ("BeiGene"), The Bristol-Myer Squibb Company ("Bristol-Myers Squibb"), GlaxoSmithKline plc ("GSK"), Merck & Co., Inc. ("Merck"), Novartis Inc. ("Novartis"), Pfizer Inc. ("Pfizer"), Regeneron Pharmaceuticals, Inc. ("Regeneron") in partnership with Sanofi Pasteur, Inc.
There are many other companies that have commercialized and/or are developing oncology treatments for cancer including large pharmaceutical and biotechnology companies such as AstraZeneca, BeiGene, Ltd. ("BeiGene"), The Bristol-Myer Squibb Company ("Bristol-Myers Squibb"), GlaxoSmithKline plc ("GSK"), Merck, Novartis Inc. ("Novartis"), Pfizer Inc. ("Pfizer"), Regeneron Pharmaceuticals, Inc. ("Regeneron") in partnership with Sanofi Pasteur, Inc.
Violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to drug manufacturers may result in significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if the manufacturer becomes subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of operations.
Violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to drug manufacturers may result in significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private "qui tam" actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting obligations and oversight if the manufacturer becomes subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of operations.
As of December 31, 2024, our company turnover rate is lower than the industry average. While the competition for talent remains strong as the number of biotechnology and pharmaceutical companies headquartered in the San Francisco Bay Area remains high, we believe we can attract and retain the talent we need to be successful.
As of December 31, 2025, our company turnover rate is lower than the industry average. While the competition for talent remains strong as the number of biotechnology and pharmaceutical companies headquartered in the San Francisco Bay Area remains high, we believe we can attract and retain the talent we need to be successful.
The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA or BLA is submitted, the application may be eligible for priority review.
The sponsor of a Fast Track investigational product has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA or BLA is submitted, the application may be eligible for priority review.
Among the ACA provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the following: (i) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (ii) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; (iii) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; (iv) increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price ("AMP"); (v) expanded the eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, thereby potentially increasing manufacturers’ Medicaid rebate liability; (vi) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and (vii) established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Among the ACA provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the following: (i) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (ii) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; (iii) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; (iv) increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the Average Manufacturer Price ("AMP") for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the AMP; (v) expanded the eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, thereby potentially increasing manufacturers’ Medicaid rebate liability; (vi) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and (vii) established a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. 20 Table of Contents There have been legal and political challenges to certain aspects of the ACA.
For any other Inflammation Research Program option exercised by Gilead, the parties would have rights to co-develop and share global development costs and to co-commercialize and share profits in the U.S. for that program.
For any other Inflammation Research Program option exercised by Gilead, the parties would have rights to co-develop and share global development costs and to co-promote and share profits in the U.S. for that program.
It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMAs are subject to a substantial application fee.
It involves a rigorous premarket review during which the applicant must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. 16 Table of Contents PMAs are subject to a substantial application fee.
A sponsor may seek FDA designation of an investigational product as a “breakthrough therapy” if the investigational product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the investigational product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
A sponsor may seek FDA designation of an investigational product as a "breakthrough therapy" if the investigational product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the investigational product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
We will lead discovery and early development activities for all Oncology Research Programs and Inflammation Research Programs. 5 Table of Contents With respect to the Oncology Research Programs, Gilead has the right to exercise its option, on a program-by-program basis, upon our completion of certain IND-enabling activities for an option payment of $60 million.
We will lead discovery and early development activities for all Oncology Research Programs and Inflammation Research Programs. With respect to the Oncology Research Programs, Gilead has the right to exercise its option, on a program-by-program basis, upon our completion of certain IND-enabling activities for an option payment of $60 million.
An approval letter authorizes commercial marketing of the drug or biological product in the U.S. with specific prescribing information for specific indications. Even if an investigational product receives regulatory approval, such approval will be granted for specific indications and dosages and the indications for use may otherwise be limited, which could restrict the commercial value of the product.
An approval letter authorizes commercial marketing of the drug or biological product in the U.S. with specific prescribing information for specific indications. 11 Table of Contents Even if an investigational product receives regulatory approval, such approval will be granted for specific indications and dosages and the indications for use may otherwise be limited, which could restrict the commercial value of the product.
Substitution at the pharmacy level of biosimilar products deemed to be interchangeable is governed by state pharmacy law. Post-approval Requirements Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market.
Substitution at the pharmacy level of biosimilar products deemed to be interchangeable is governed by state pharmacy law. 14 Table of Contents Post-approval Requirements Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market.
Orphan drug exclusivity, however, could also block the approval of an investigational product for seven years if a competitor obtains approval of the same investigational product, as defined by the FDA, or if such investigational product is determined to be contained within the competitor’s investigational product for the same condition or disease.
Orphan drug exclusivity, however, could also block the approval of an investigational product for the approved orphan indication or use for seven years if a competitor obtains approval of the same investigational product, as defined by the FDA, or if such investigational product is determined to be contained within the competitor’s investigational product for the same condition or disease.
Expedited Development and Review Programs The FDA has various programs, including Fast Track, priority review, accelerated approval and Breakthrough Therapy, which are intended to expedite or simplify the process for reviewing investigational products designed to address serious or life threatening conditions, or provide for the approval of a such investigational products on the basis of an effect on a surrogate or intermediate endpoint.
Expedited Development and Review Programs The FDA has various programs, including Fast Track, Breakthrough Therapy, priority review, accelerated approval, and Commissioner's National Priority Voucher ("CNPV"), which are intended to expedite or simplify the process for reviewing investigational products designed to address serious or life threatening conditions, or provide for the approval of a such investigational products on the basis of an effect on a surrogate or intermediate endpoint.
If Gilead exercises its option at the earlier time point for the first two programs, we would be eligible to receive up to $375 million in regulatory and commercial milestone payments as well as tiered royalties for each optioned program.
If Gilead exercises its option at the earlier time point, we would be eligible to receive up to $375 million in regulatory and commercial milestone payments as well as tiered royalties for each optioned program.
In addition, orphan drug exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
In addition, orphan drug exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if a second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity within the relevant indication or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs relating to the approved indication or use of patients with the rare disease or condition.
All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. 20 Table of Contents Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor.
All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor.
A claim includes “any request or demand” for money or property presented to the U.S. government. For instance, historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.
A claim includes "any request or demand" for money or property presented to the U.S. government. For instance, historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.
The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years. For patents that might expire during the application phase, the patent owner may request an interim patent extension.
The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years. 13 Table of Contents For patents that might expire during the application phase, the patent owner may request an interim patent extension.
If an investigational product with orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the investigational product is generally entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same investigational product for the same disease or condition, except in very limited circumstances, for seven years.
If an investigational product with orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the investigational product is generally entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same investigational product for the same approved indication or use within the designated disease or condition, except in very limited circumstances, for seven years.
Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and on our website under the “Investors” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 26 Table of Contents
Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and on our website under the "Investors" tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 24 Table of Contents
We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we or our collaborators may develop. Our competitors also may obtain U.S.
We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we or our collaborators may develop.
Food and Drug Administration (the "FDA") or foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market.
Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and by creating a new manufacturer discount program. Further legislation or regulation could be passed that could harm our business, financial condition and results of operations.
The IRA also eliminates the "donut hole" under the Medicare Part D program which began in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and by creating a new manufacturer discount program. Further legislation or regulation could be passed that could harm our business, financial condition and results of operations.
We are an equal opportunity employer. As of December 31, 2024, among our employees, 56% were female and, among our leadership (which we define as employees at the vice president level and above), approximately 38% were female. As of December 31, 2024, 57% of our employees and 48% of our leadership identify as being from diverse racial and ethnic groups.
We are an equal opportunity employer. As of December 31, 2025, among our employees, 55% were female and, among our leadership (which we define as employees at the vice president level and above), approximately 38% were female. As of December 31, 2025, 58% of our employees and 48% of our leadership identify as being from diverse racial and ethnic groups.
We believe targeting CD73 could be a highly effective approach to inhibiting adenosine-mediated immune suppression by suppressing adenosine generation. We believe quemliclustat was the first small-molecule CD73 inhibitor to enter clinical development.
Further, we believe targeting CD73 could be a highly effective approach to inhibiting adenosine-mediated immune suppression by suppressing adenosine generation. 2 Table of Contents We believe quemliclustat was the first small-molecule CD73 inhibitor to enter clinical development.
The review process for both standard and priority review may be extended by the FDA for three additional months to respond to new information deemed a “major amendment” to the application.
The review process for both standard and priority review may be extended by the FDA for three additional months to respond to new information deemed a "major amendment" to the application.
Biosimilarity must be shown through analytical trials, animal trials, and a clinical trial or trials, unless the Secretary of Health and Human Services waives a required element.
Biosimilarity must be shown through analytical trials, animal trials, and a clinical trial or trials, unless the Secretary of the U.S. Department of Health and Human Services ("HHS") waives a required element.
As of December 31, 2024, we had 627 full-time employees, approximately 34% of whom hold Ph.D., M.D., R.N., or similar degrees and certifications. Of our employees, approximately 81% were engaged in research and development activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
As of December 31, 2025, we had 601 full-time employees, approximately 49% of whom hold Ph.D., M.D., R.N., or similar degrees and certifications. Of our employees, approximately 81% were engaged in R&D activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
Common Stock Purchase Agreement and Investor Rights Agreement In connection with our entry into the Gilead Collaboration Agreement, we and Gilead entered into a Common Stock Purchase Agreement (as amended, the "Stock Purchase Agreement") and Investor Rights Agreement (as amended, the "Investor Rights Agreement").
Common Stock Purchase Agreement and Investor Rights Agreement In connection with our entry into the Gilead Collaboration Agreement, we and Gilead entered into a Common Stock Purchase Agreement (as amended, the "Stock Purchase Agreement"), which expired in July 2025, and Investor Rights Agreement (as amended, the "Investor Rights Agreement").
In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. 19 Table of Contents The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (collectively, “HIPAA”), created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (collectively, "HIPAA"), created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The initial registrational pathways that we plan to pursue will focus on combination approaches that build on top of standard of care therapies, while also exploring opportunities for casdatifan to become a foundational standard of care.
The initial registrational studies for casdatifan will focus on combination approaches that build on top of standard of care therapies, while also exploring opportunities for casdatifan to become a foundational standard of care.
As of February 1, 2025, our patent estate includes over 800 pending or issued patents worldwide, including 32 issued U.S. patents directed to compositions of matter, pharmaceutical compositions and methods of use for our investigational products and research programs.
As of February 1, 2026, our patent estate includes over 850 pending or issued patents worldwide, including 41 issued U.S. patents directed to compositions of matter, pharmaceutical compositions and methods of use for our investigational products and research programs.
The process required by the FDA before a drug or biological product may be marketed in the U.S. generally includes the following: • Completion of certain preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices ("GLP") or other applicable regulations; • Submission to the FDA of an Investigational New Drug application ("IND"), which must become effective before human clinical trials may begin in the U.S.; • Performance of adequate and well-controlled human clinical trials according to Good Clinical Practices ("GCP"), to establish the safety and efficacy of the investigational product for its intended use; • Submissions to the FDA of a New Drug Application ("NDA") or Biologic License Application ("BLA") for a new product. • Satisfactory completion of an FDA inspection of the facility or facilities where the investigational product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practices ("cGMP"), to assure that the facilities, methods and controls are adequate to preserve the investigational product’s identity, strength, quality, purity, and potency; • Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA/BLA; and • FDA review and approval of the NDA/BLA.
The process required by the FDA before a drug or biological product may be marketed in the U.S. generally includes the following: • Completion of certain preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices ("GLP") or other applicable regulations; • Submission to the FDA of an Investigational New Drug application ("IND"), which must become effective before human clinical trials may begin in the U.S.; • Performance of adequate and well-controlled human clinical trials according to Good Clinical Practices ("GCP"), to establish the safety and efficacy of the investigational product for its intended use; • Submissions to the FDA of a New Drug Application ("NDA") or Biologic License Application ("BLA") for a new product. • Satisfactory completion of an FDA inspection of the facility or facilities where the investigational product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practices ("cGMP"), to assure that the facilities, methods and controls are adequate to preserve the investigational product’s identity, strength, quality, purity, and potency; • Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA/BLA; and • FDA review and approval of the NDA/BLA. 9 Table of Contents Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the investigational product or disease.
The GPDR imposes more stringent operational requirements on processors and controllers of personal data, including, for example, expanded disclosures about how personal data is collected, used and shared, limitations on retention of personal data, more stringent requirements pertaining to genetic, biometric and health data, mandatory data breach notification requirements, and higher standards for controllers to demonstrate valid consent for certain data processing activities.
The GPDR imposes more stringent operational requirements on processors and controllers of personal data, including, for example, expanded disclosures about how personal data is collected, used and shared, limitations on retention of personal data, more stringent requirements pertaining to genetic, biometric and health data, mandatory data breach notification requirements, and higher standards for controllers to demonstrate valid consent for certain data processing activities, as well as regulating cross-border transfers of personal data out of the EEA and the UK.
For each Taiho optioned program, Taiho is obligated to pay to us (i) an option exercise payment for each program that is between $3 million to $15 million, (ii) clinical, regulatory and commercialization milestones of up to $275 million and (iii) royalties on net sales in Taiho’s territories ranging from high single digits to mid-teens.
For each Taiho optioned program, Taiho is obligated to pay to us (i) an option exercise payment for each program that is between $3 million to $15 million, (ii) clinical, regulatory and commercialization milestones of up to $275 million except for casdatifan (the HIF-2α program) for which we may receive up to $317 million, and (iii) royalties on net sales in Taiho’s territories ranging from high single digits to mid-teens.
Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition.
Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same indication or use within the relevant disease or condition, or the same drug for a different disease or condition.
Department of Health and Human Services ("HHS"), such as the Office of Inspector General, the U.S. Department of Justice (the "DOJ") and individual U.S. Attorney offices within the DOJ, and state and local governments. These laws include, without limitation, the anti-fraud and abuse provisions of the Social Security Act and the false claims laws, each as amended, as applicable.
Department of Justice (the "DOJ") and individual U.S. Attorney offices within the DOJ, and state and local governments. These laws include, without limitation, the anti-fraud and abuse provisions of the Social Security Act and the false claims laws, each as amended, as applicable.
There have been legal and political challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
Taiho is also responsible for the development and commercialization of licensed products in the Taiho Territory. 6 Table of Contents WuXi Biologics License - anti-PD-1 Our PD-1 license agreement (the "WuXi PD-1 Agreement") with WuXi Biologics Ireland Limited ("WuXi Biologics"), which we entered into in 2017 as subsequently amended, provides us with an exclusive license to (i) develop, use and manufacture products that include an anti-PD-1 antibody, including zimberelimab, throughout the world and (ii) commercialize any such products, throughout the world except in Greater China.
WuXi Biologics License - anti-PD-1 Our PD-1 license agreement (the "WuXi PD-1 Agreement") with WuXi Biologics Ireland Limited ("WuXi Biologics"), which we entered into in 2017 as subsequently amended, provides us with an exclusive license to (i) develop, use and manufacture products that include an anti-PD-1 antibody, including zimberelimab, throughout the world and (ii) commercialize any such products, throughout the world except in Greater China.
However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. 15 Table of Contents The FDCA also provides three years of non-patent data exclusivity for an NDA, 505(b)(2) NDA or supplement to an approved NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages or strengths of an existing investigational product.
The FDCA also provides three years of non-patent data exclusivity for an NDA, 505(b)(2) NDA or supplement to an approved NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages or strengths of an existing investigational product.
In such a case, the clinical trial cannot be conducted in that member state. The Regulation also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU database.
The Regulation also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU database.
While there are several anti-CD73 antibodies in development, we believe that a small-molecule approach to CD73 inhibition could offer several advantages, including more complete inhibition of CD73 enzymatic activity, deeper tumor penetration, and potential for both intravenous and oral delivery.
We believe that a small-molecule approach to CD73 inhibition could offer several advantages over antibody approaches, including more complete inhibition of CD73 enzymatic activity, deeper tumor penetration, and potential for both intravenous and oral delivery.
We may incur significant costs to comply with such laws and regulations now or in the future. Rest of World Government Regulation In addition to regulations in the U.S., we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
Rest of World Government Regulation In addition to regulations in the U.S., we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
We endeavor to retain and motivate our employees by empowering them to make the decisions they are most qualified and best positioned to decide and by providing opportunities for growth and development, such as through our education reimbursement program.
We recognize that attracting skilled talent is only one part of the equation. We endeavor to retain and motivate our employees by empowering them to make the decisions they are most qualified and best positioned to decide and by providing opportunities for growth and development, such as through our education reimbursement program.
The federal false claims, including the federal False Claims Act (the "FCA"), impose significant penalties and can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal healthcare programs, including Medicare and Medicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
Additionally, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. 17 Table of Contents The federal false claims, including the federal False Claims Act (the "FCA"), impose significant penalties and can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal healthcare programs, including Medicare and Medicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
For our anti-PD-1 antibody, zimberelimab, multiple large pharmaceutical companies have already received regulatory approvals for their anti-PD-1/PD-L1 antibodies, including AstraZeneca, BeiGene/Novartis, Bristol-Myers Squibb, Merck, Pfizer in partnership with Merck KGaA, Regeneron in partnership with Sanofi Genzyme and Roche/Genentech, and there are also many other anti-PD-1 and anti-PD-L1 antibodies in clinical development.
To our knowledge, there are no approved CD73 molecules, and the most advanced is in Phase 3 development. 7 Table of Contents For our anti-PD-1 antibody, zimberelimab, multiple large pharmaceutical companies have already received regulatory approvals for their anti-PD-1/PD-L1 antibodies, including AstraZeneca, BeiGene/Novartis, Bristol-Myers Squibb, Merck, Pfizer in partnership with Merck KGaA, Regeneron in partnership with Sanofi Genzyme and Roche/Genentech, and there are also many other anti-PD-1 and anti-PD-L1 antibodies in clinical development.
Any investigational products that we successfully develop and commercialize will compete with new immunotherapies that may become available in the future. 8 Table of Contents We will compete in the segments of the pharmaceutical, biotechnology and other related markets that develop immuno-oncology treatments.
Any investigational products that we successfully develop and commercialize will compete with new immunotherapies that may become available in the future. We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop treatments for cancer and inflammatory and autoimmune diseases.
Our vision is to create, develop and commercialize highly differentiated therapies that have a meaningful impact on patients.
Our vision is to leverage our internal small-molecule discovery capabilities to create, develop and commercialize highly differentiated therapies that can have a meaningful impact on patients.
The FDA also may inspect foreign facilities that export products to the U.S. Other U.S. Healthcare Laws and Compliance Requirements In the U.S, our activities are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services (the "CMS") other divisions of the U.S.
Healthcare Laws and Compliance Requirements In the U.S, our activities are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services (the "CMS") other divisions of the HHS, such as the Office of Inspector General, the U.S.
Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about on-going or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted. 11 Table of Contents Clinical trials involve the administration of the investigational product to healthy volunteers or patients under the supervision of a qualified investigator.
Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about on-going or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted.
The Abmuno Agreement terminates on the latest of (i) the expiry of the last-to-expire Abmuno licensed patent that covers a product that contains an anti-TIGIT antibody, (ii) the date on which there is no longer an Abmuno licensed patent application that is still pending and has been pending for a certain period of time that covers a product that contains an anti-TIGIT antibody and (iii) 10 years from the date of first commercial sale.
This agreement terminates on the latest of (i) the expiry of the last-to-expire Abmuno licensed patent that covers a product that contains an anti-TIGIT antibody, (ii) the date on which there is no longer an Abmuno licensed patent application that is still pending and has been pending for a certain period of time that covers a product that contains an anti-TIGIT antibody and (iii) 10 years from the date of first commercial sale. 6 Table of Contents Manufacturing and Supply We do not own or operate, and currently have no plans to establish, any manufacturing or storage facilities.
Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of certain trials may be delayed until the new product or new indication being studied has been approved.
Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of certain trials may be delayed until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.
Because of the extensive time required for development, testing and regulatory review of an investigational product, it is possible that, before a product can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.
For example, third parties may have blocking patents that could be used to prevent us from commercializing or manufacturing our investigational products. 8 Table of Contents Because of the extensive time required for development, testing and regulatory review of an investigational product, it is possible that, before a product can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides.
In addition to the EDGE-Lung study described above, we are evaluating quemliclustat in the following studies: • PRISM-1 is a Phase 3 study in metastatic pancreatic cancer evaluating quemliclustat with gemcitabine and nab-paclitaxel (the standard-of-care chemotherapies used for advanced pancreatic cancer) against gemcitabine and nab-paclitaxel. • ARC-8 is a Phase 1b study in metastatic pancreatic cancer evaluating quemliclustat with gemcitabine and nab-paclitaxel (the standard-of-care chemotherapies used for advanced pancreatic cancer) with or without zimberelimab.
We are evaluating quemliclustat in the following study: • PRISM-1 is a Phase 3 study in metastatic pancreatic cancer evaluating quemliclustat with gemcitabine and nab-paclitaxel (the standard-of-care chemotherapies used for advanced pancreatic cancer) against gemcitabine and nab-paclitaxel.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.
Specifically, there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. In August 2022, the IRA was signed into law.
For the first two Inflammation Research Programs, Gilead has the right, on a program-by-program basis, to either (i) exercise its option upon our completion of certain IND-enabling activities for an option payment of $45 million or (ii) extend its option and exercise it following the achievement of a clinical development milestone for an option payment of $150 million.
With respect to the Inflammation Research Programs, Gilead will have an option to license each program at two separate prespecified time points, either (i) exercise its option upon our completion of certain IND-enabling activities for an option payment of $45 million or (ii) extend its option and exercise it following the achievement of a clinical development milestone for an option payment of $150 million.
In addition, for products being considered for Accelerated Approval, the FDA requires pre-approval of promotional materials within certain timeframes, which could adversely impact the timing of the commercial launch of the product. 14 Table of Contents Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biological product intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and making a product available in the U.S. for such disease or condition will be recovered from sales of the product.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biological product intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or if it affects more than 200,000 individuals in the U.S., there is no reasonable expectation that the cost of developing and making a product available in the U.S. for such disease or condition will be recovered from sales of the product.
If the Member States Concerned raise no objections, based on a potential serious risk to public health, to the assessment, SPC, labeling, or packaging proposed by the RMS, the drug is subsequently granted a national marketing authorization in all the member states ( i.e. , in the RMS and the Member States Concerned). 24 Table of Contents We will be subject to additional regulations with respect to any activities we conduct in the EU and the UK.
If the Member States Concerned raise no objections, based on a potential serious risk to public health, to the assessment, SPC, labeling, or packaging proposed by the RMS, the drug is subsequently granted a national marketing authorization in all the member states (i.e., in the RMS and the Member States Concerned).
Concurrent with clinical trials, sponsors usually complete additional animal safety studies and also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing commercial quantities of the investigational product in accordance with cGMP requirements.
In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. 10 Table of Contents Concurrent with clinical trials, sponsors usually complete additional animal safety studies and also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing commercial quantities of the investigational product in accordance with cGMP requirements.
These clinical trials, sometimes referred to as “Phase 4 studies,” may be used to gain additional experience from the treatment of patients in the approved therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.
These clinical trials, sometimes referred to as "Phase 4 studies," may be used to gain additional experience from the treatment of patients in the approved therapeutic indication.
Individual states in the U.S. have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and other transparency measures.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. 21 Table of Contents Individual states in the U.S. have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and other transparency measures.
We cannot predict, however, how changes in these laws may affect our future operations. 23 Table of Contents Other Regulations We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances.
Other Regulations We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future.
Other pharmaceutical companies have small-molecule programs against this target, of which we believe only Antengene Corporation Limited and ORIC Pharmaceuticals Inc. are in clinical development. To our knowledge, there are no approved CD73 molecules, and the most advanced is in Phase 3 development.
Other pharmaceutical companies have small-molecule programs against this target, of which we believe only Antengene Corporation Limited and ORIC Pharmaceuticals Inc. are in clinical development.
The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements. Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries.
The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements.
Anti-TIGIT Program TIGIT is believed to play an important role in suppressing the immune response to cancer. The primary ligand for TIGIT (T cell immunoreceptor with Ig and ITIM domains) is CD155, a protein that plays both inhibitory and stimulatory roles in regulating the activity of effector immune cells, such as T and natural killer ("NK") cells.
The primary ligand for TIGIT (T cell immunoreceptor with Ig and ITIM domains) is CD155, a protein that plays both inhibitory and stimulatory roles in regulating the activity of effector immune cells, such as T and natural killer ("NK") cells. TIGIT is an inhibitory receptor highly expressed on T cells displaying an exhausted phenotype, tumor-infiltrating Treg, and NK cells.
If any of our optioned investigational products obtain marketing approval, we expect to continue to use third-party manufacturers along with Gilead’s internal manufacturing infrastructure, as appropriate, to deliver commercial supply.
We rely, and expect to continue to rely, on third parties for the manufacture of our investigational products for preclinical and clinical testing. If any of our investigational products obtain marketing approval, we expect to continue to use third-party manufacturers and may also use Gilead’s internal manufacturing infrastructure for their optioned products, as appropriate, to deliver commercial supply.
Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.
Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize any investigational product that we successfully develop.
Licenses and Collaborations Gilead Collaboration Clinical Programs Under the Gilead Collaboration Agreement, Gilead obtained an exclusive license to develop and commercialize our anti-PD-1 program (including zimberelimab) in certain markets and time-limited exclusive options to develop and commercialize (i) any of our clinical programs existing at the time of entering into the Gilead Collaboration Agreement and (ii) any programs that enter clinical development during the 10-year collaboration term.
Gilead also has time-limited exclusive options to develop and commercialize (i) any of our clinical programs existing at the time of entering into the Gilead Collaboration Agreement and (ii) any programs that enter clinical development during the 10-year collaboration term.

… 160 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

130 edited+62 added−22 removed327 unchanged
Biggest changeOur partnership with Gilead poses a number of risks that could materially impact our operations and financial condition including, but not limited to, the following: • conflicts may arise between us and Gilead, such as conflicts regarding the combinations or indications to pursue or concerning the interpretation of clinical data, the commercial potential of any optioned investigational products, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration; • if our joint development program does not result in the successful development and commercialization of products or if Gilead terminates the collaboration agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration; • we will be heavily dependent on Gilead for its further development and commercialization of the investigational products from the programs that it opts in to; • we may not be successful in this collaboration due to various other factors, including our ability to demonstrate proof of concept in one or more clinical studies so that Gilead will exercise its option to these programs; • we have appointed three individuals that were designated by Gilead to our board of directors pursuant to the terms of the Investor Rights Agreement, and Gilead owns approximately 32.6% of our outstanding common stock as of December 31, 2024.
Biggest changeOur partnership with Gilead poses a number of risks that could materially impact our operations and financial condition including, but not limited to, the following: • conflicts may arise between us and Gilead, such as conflicts regarding the combinations or indications to pursue or concerning the interpretation of clinical data, the commercial potential of any optioned investigational products, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration; • if our joint development program does not result in the successful development and commercialization of products or if Gilead terminates the collaboration agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration; 34 Table of Contents • we will be heavily dependent on Gilead for its further development and commercialization of the investigational products from the programs that it opts in to; • we may not be successful in this collaboration due to various other factors, including our ability to demonstrate proof of concept in one or more clinical studies so that Gilead will exercise its option to these programs; • we have appointed three individuals that were designated by Gilead to our board of directors pursuant to the terms of the Investor Rights Agreement, and Gilead owns approximately 25.1% of our outstanding common stock as of December 31, 2025 and, as a result, may be able to exert significant influence over our company; • Gilead could independently develop, or develop with third parties, products that compete directly or indirectly with our investigational products if Gilead believes that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; and • it will be difficult for us to enter into new collaborations for any programs to which Gilead has option rights.
Even if we receive marketing approval for one or more of our investigational products, our commercial success is dependent on obtaining coverage and reimbursement approval for a product from a government or other third-party payor, which coverage may be delayed or may not be sufficient to cover our costs .
Even if we receive marketing approval for one or more of our investigational products, our commercial success is dependent on obtaining coverage and reimbursement for a product from a government or other third-party payor, which coverage may be delayed or may not be sufficient to cover our costs .
If we obtain approval of our investigational products and ultimately commercialize our investigational products in foreign markets, we would be subject to additional risks and uncertainties, including: • our customers’ ability to obtain reimbursement for our investigational products in foreign markets; • our inability to directly control commercial activities because we are relying on third parties; • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • import or export licensing requirements; 49 Table of Contents • longer accounts receivable collection times; • longer lead times for shipping; • language barriers for technical training; • reduced protection of intellectual property rights in some foreign countries; • the existence of additional potentially relevant third-party intellectual property rights; • foreign currency exchange rate fluctuations; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
If we obtain approval of our investigational products and ultimately commercialize our investigational products in foreign markets, we would be subject to additional risks and uncertainties, including: • our customers’ ability to obtain reimbursement for our investigational products in foreign markets; • our inability to directly control commercial activities because we are relying on third parties; • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • import or export licensing requirements; • longer accounts receivable collection times; • longer lead times for shipping; 49 Table of Contents • language barriers for technical training; • reduced protection of intellectual property rights in some foreign countries; • the existence of additional potentially relevant third-party intellectual property rights; • foreign currency exchange rate fluctuations; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
Failure to comply with privacy and data protection laws, regulations, or other obligations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.
Failure to comply with data privacy and data protection laws, regulations, or other obligations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.
The FDA or comparable regulatory authorities can delay, limit or deny approval of an investigational product for many reasons, including: • such authorities may disagree with the design or execution of our clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory authorities for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our investigational products; • the population studied in our clinical trials may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we may be unable to demonstrate that an investigational product’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our investigational products are acceptable or sufficient to support the submission of a BLA, NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere; 28 Table of Contents • such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our investigational products; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
The FDA or comparable regulatory authorities can delay, limit or deny approval of an investigational product for many reasons, including: • such authorities may disagree with the design or execution of our clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory authorities for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our investigational products; • the population studied in our clinical trials may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • we may be unable to demonstrate that an investigational product’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our investigational products are acceptable or sufficient to support the submission of a BLA, NDA or other submission or to obtain regulatory approval in the U.S. or elsewhere; • such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our investigational products; • such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or 27 Table of Contents • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
In addition, the FDA and other regulatory authorities may disfavor the use of open-studies, or otherwise not agree that the results from open-label studies, regardless of outcome, will support submission of an application for marketing approval in the indications we are targeting, and we may be required to conduct randomized trials evaluating our investigational products before we are able to able to obtain marketing approval of our investigational products, if ever. 31 Table of Contents Enrollment and retention of subjects in clinical trials is expensive and time consuming and can be made more difficult or rendered impossible by competing treatments, clinical trials of competing investigational products, geopolitical instability and public health epidemics, each of which could result in significant delays and additional costs in our product development activities, or in the failure of such activities.
In addition, the FDA and other regulatory authorities may disfavor the use of open-studies, or otherwise not agree that the results from open-label studies, regardless of outcome, will support submission of an application for marketing approval in the indications we are targeting, and we may be required to conduct randomized trials evaluating our investigational products before we are able to able to obtain marketing approval of our investigational products, if ever. 30 Table of Contents Enrollment and retention of subjects in clinical trials is expensive and time consuming and can be made more difficult or rendered impossible by competing treatments, clinical trials of competing investigational products, geopolitical instability and public health epidemics, each of which could result in significant delays and additional costs in our product development activities, or in the failure of such activities.
Our reliance on limited manufacturing arrangements increases the risk that we will not have and may not be able to obtain sufficient quantities of our investigational products for use in our clinical trials and, if approved, commercial activities. For example, WuXi Biologics, located in China, is currently our sole manufacturer of zimberelimab and domvanalimab.
Our reliance on limited manufacturing arrangements increases the risk that we will not have and may not be able to obtain sufficient quantities of our investigational products for use in our clinical trials and, if approved, commercial activities. For example, WuXi Biologics, located in China, is currently our sole manufacturer of zimberelimab.
The market price of our common stock has fluctuated and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • our operating performance and the performance of other similar companies; 54 Table of Contents • results from our ongoing clinical trials and future clinical trials with our current and future investigational products or of our competitors; • changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; • regulatory, trade or legal developments in the U.S. and other countries, including changes in tariffs or other trade restrictions and the changes in the structure of healthcare payment systems; • the level of expenses related to future investigational products or clinical development programs; • our failure to achieve product development goals in the timeframe we announce; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock; • the size of our market float; and • any other factors discussed in this report.
The market price of our common stock has fluctuated and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • our operating performance and the performance of other similar companies; • results from our ongoing clinical trials and future clinical trials with our current and future investigational products or of our competitors; • changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; • regulatory, trade or legal developments in the U.S. and other countries, including changes in tariffs or other trade restrictions and the changes in the structure of healthcare payment systems; • the level of expenses related to future investigational products or clinical development programs; • our failure to achieve product development goals in the timeframe we announce; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock; • the size of our market float; and • any other factors discussed in this report.
Most of our clinical trials are open-label studies and may be susceptible to bias. Most of our clinical trials, including our Phase 3 trials, are open-label studies in which both the patient and investigator know whether the patient is receiving the investigational products or either an existing approved drug or placebo.
Most of our clinical trials are open-label studies and may be susceptible to bias. Most of our clinical trials, including some of our Phase 3 trials, are open-label studies in which both the patient and investigator know whether the patient is receiving the investigational products or either an existing approved drug or placebo.
Sometimes, it can be difficult to determine if the serious adverse or unexpected side effects were caused by the investigational product or another factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications.
Sometimes, it can be difficult to determine if the serious adverse or unexpected side effects were caused by our investigational product or another product or factor, especially in oncology subjects who may suffer from other medical conditions and be taking other medications.
Risks Related to our Business Operations and Industry We expect to expand our business operations, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. We expect to grow our business operations, including adding employees in sales and marketing, if any of our investigational products receives marketing approval.
Risks Related to our Business Operations We expect to expand our business operations and, as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. We expect to grow our business operations, including adding employees in sales and marketing, if any of our investigational products receives marketing approval.
As a result, these stockholders, acting together, will have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them.
As a result, these stockholders, acting together, have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate actions might be taken even if other stockholders oppose them.
If any of our investigational products ultimately obtains regulatory approval, we, whether alone or in collaboration with Gilead for programs that we commercialize together, may not be able to effectively or successfully market the product due to a number of factors, including: • the imposition by regulatory authorities of significant restrictions on a product’s indicated uses, marketing or distribution; 39 Table of Contents • the imposition by regulatory authorities of costly and time-consuming post-approval studies, post-market surveillance or additional clinical trials; • our failure to establish sales and marketing capabilities; • the failure of our products to achieve the degree of market acceptance by physicians, patients, hospitals, cancer treatment centers, healthcare payors and others in the medical community necessary for commercial success; • unfavorable pricing regulations or third-party coverage and reimbursement policies; and • inaccuracies in our estimates of the addressable patient population resulting in a smaller market opportunity than we believed.
If any of our investigational products ultimately obtains regulatory approval, we, whether alone or in collaboration with Gilead for programs that we commercialize together, may not be able to effectively or successfully market the product due to a number of factors, including: • the imposition by regulatory authorities of significant restrictions on a product’s indicated uses, marketing or distribution; • the imposition by regulatory authorities of costly and time-consuming post-approval studies, post-market surveillance or additional clinical trials; • our failure to establish sales and marketing capabilities; • the failure of our products to achieve the degree of market acceptance by physicians, patients, hospitals, cancer treatment centers, healthcare payors and others in the medical community necessary for commercial success; • unfavorable pricing regulations or third-party coverage and reimbursement policies; and • inaccuracies in our estimates of the addressable patient population resulting in a smaller sales opportunity than we believed.
Despite the implementation of security measures, given the size and complexity and the increasing amounts of sensitive information that they maintain, our internal information technology systems and those of our third-party CROs and other third parties upon which we rely are vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyberattacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information and other assets), which may compromise our system infrastructure, lead to data leakage, impair key business processes or other critical business operations, delay our development programs, or result in the loss of assets or other liability.
Despite the implementation of security measures, given the size and complexity and the increasing amounts of Confidential Information that they maintain, our internal information technology systems and those of our third-party CROs and other third parties upon which we rely are vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyberattacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering/phishing and other means to affect service reliability and threaten the confidentiality, integrity and availability of information and other assets), which may compromise our system infrastructure, lead to data leakage, impair key business processes or other critical business operations, delay our development programs, or result in the loss of assets or other liability.
Both our current and our future unused losses (and tax credit carryforwards) may be subject to further limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "IRC"), if we undergo an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period.
Both our current and our future unused losses (and tax credit carryforwards) may be subject to further limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the "IRC"), if we undergo an "ownership change," generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period.
For example, in cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
For example, in cases where data from foreign clinical trials are intended to serve as the 33 Table of Contents sole basis for regulatory approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe adverse events. If such an event were to affect our supply chain, it could have a material adverse effect on our ability to conduct our clinical trials, our development plans and business.
Furthermore, integral parties in our supply chain are operating from single sites, increasing their vulnerability to natural disasters or other sudden, unforeseen and severe AEs. If such an event were to affect our supply chain, it could have a material adverse effect on our ability to conduct our clinical trials, our development plans and business.
Our or a third-party’s failure to execute on our manufacturing requirements on commercially reasonable terms and in compliance with cGMP or other regulatory requirements could adversely affect our business in a number of ways, including: • an inability to initiate or complete clinical trials of our investigational products in a timely manner; • delays in submitting regulatory applications, or receiving regulatory approvals, for our investigational products; • subjecting third-party manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease development or to recall batches of our investigational products; and • in the event of approval to market and commercialize an investigational products, an inability to meet commercial demands.
Our or a third-party’s failure to execute on our manufacturing requirements on commercially reasonable terms and in compliance with cGMP or other regulatory requirements could adversely affect our business in a number of ways, including: • an inability to initiate or complete clinical trials of our investigational products in a timely manner; 36 Table of Contents • delays in submitting regulatory applications, or receiving regulatory approvals, for our investigational products; • subjecting third-party manufacturing facilities to additional inspections by regulatory authorities; • requirements to cease development or to recall batches of our investigational products; and • in the event of approval to market and commercialize an investigational products, an inability to meet commercial demands.
Our future capital requirements will depend on many factors related to the cost and timing of developing our investigational products, including: • the number, scope, rate of progress and costs of clinical programs and investigational products, as well as drug discovery, preclinical development activities, and laboratory testing; • the scope of any cost sharing arrangements with our strategic partners; 27 Table of Contents • the timing and amount of milestone payments and option fees we receive under the Gilead Collaboration Agreement and the Taiho Agreement; • the cost, timing and outcome of regulatory review of our investigational products; and • the cost associated with commercializing our investigational products, if they receive marketing approval.
Our future capital requirements will depend on many factors related to the cost and timing of developing our investigational products, including: • the number, scope, rate of progress and costs of clinical programs and investigational products, as well as drug discovery, preclinical development activities, and laboratory testing; • the scope of any cost sharing arrangements with our strategic partners; • the timing and amount of milestone payments and option fees we receive under the Gilead Collaboration Agreement and the Taiho Agreement; • the cost, timing and outcome of regulatory review of our investigational products; and • the cost associated with commercializing our investigational products, if they receive marketing approval.
The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our products candidates.
The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our investigational products.
Additionally, adverse developments in clinical trials of investigational products conducted by others or adverse events associated with commercial products offered by others may cause the FDA or other regulatory oversight bodies to suspend or terminate our clinical trials or change the requirements for approval of any of our investigational products, or otherwise adversely affect the clinical and commercial development of our investigational products.
Additionally, adverse developments in clinical trials of investigational products conducted by others or AEs associated with commercial products offered by others may cause the FDA or other regulatory oversight bodies to suspend or terminate our clinical trials or change the requirements for approval of any of our investigational products, or otherwise adversely affect the clinical and commercial development of our investigational products.
The timing for commencement, data readouts and completion of clinical trials can be delayed for a number of reasons, including delays related to: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • obtaining allowance or approval from regulatory authorities to commence a trial or reaching a consensus with regulatory authorities on trial design; • the FDA or comparable foreign regulatory authorities disagreeing as to the implementation of our clinical trials; • any failure or delay in reaching an agreement with Contract Research Organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • delays in identifying, recruiting and training suitable clinical investigators; • obtaining approval from one or more institutional review boards, or ethics committees at clinical trial sites; • IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes or amendments to the clinical trial protocol; • clinical sites deviating from the trial protocol or dropping out of a trial; • failure by our CROs to perform in accordance with GCP requirements or applicable regulatory rules and guidelines in other countries; • manufacturing sufficient quantities of our investigational products, or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials; • patients choosing an alternative product for the indications for which we are developing our investigational products or participating in competing clinical trials; • lack of adequate funding to continue a clinical trial or costs being greater than we anticipate; • subjects experiencing severe or serious unexpected drug-related adverse effects; • occurrence of serious adverse events in trials of the same class of agents conducted by other companies that could be considered similar to our investigational products; 30 Table of Contents • selection of clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; • or failure of our CMOs to produce clinical trial materials in sufficient quantities in accordance with current Good Manufacturing Practice (“cGMP”), regulations or other applicable requirements; and • third parties being unwilling or unable to satisfy their contractual obligations to us in a timely manner.
The timing for commencement, data readouts and completion of clinical trials can be delayed for a number of reasons, including delays related to: • inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials; • obtaining allowance or approval from regulatory authorities to commence a trial or reaching a consensus with regulatory authorities on trial design; • the FDA or comparable foreign regulatory authorities disagreeing as to the implementation of our clinical trials; • any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • delays in identifying, recruiting and training suitable clinical investigators; • obtaining approval from one or more IRBs, or ethics committees at clinical trial sites; • IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; • changes or amendments to the clinical trial protocol; • clinical sites deviating from the trial protocol or dropping out of a trial; • failure by our CROs to perform in accordance with GCP requirements or applicable regulatory rules and guidelines in other countries; • manufacturing sufficient quantities of our investigational products, or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up, including subjects failing to remain in our trials; • patients choosing an alternative product for the indications for which we are developing our investigational products or participating in competing clinical trials; • lack of adequate funding to continue a clinical trial or costs being greater than we anticipate; • subjects experiencing severe or serious unexpected drug-related adverse effects; • occurrence of serious AEs in trials of the same class of agents conducted by other companies that could be considered similar to our investigational products; • selection of clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; 29 Table of Contents • or failure of our contract manufacturing organizations ("CMOs") to produce clinical trial materials in sufficient quantities in accordance with current Good Manufacturing Practice ("cGMP"), regulations or other applicable requirements; and • third parties being unwilling or unable to satisfy their contractual obligations to us in a timely manner.
Lack of efficacy, adverse events, undesirable side effects, or other adverse findings may emerge in clinical trials conducted by third parties investigating the same investigational products as us in different territories or different investigational products directed to the same target as one of our programs.
Lack of efficacy, AEs, undesirable side effects, or other adverse findings may emerge in clinical trials conducted by third parties investigating the same investigational products as us in different territories or different investigational products directed to the same target as one of our programs.
In the future, we may seek to enter into acquisitions or additional licensing arrangements with third parties to expand our pipeline or that we believe will complement or augment our development and commercialization efforts with respect to our investigational products and any future investigational products that we may develop.
In the future, we may seek to enter into acquisitions or additional licensing or clinical collaboration arrangements with third parties to expand our pipeline or that we believe will complement or augment our development and commercialization efforts with respect to our investigational products and any future investigational products that we may develop.
The legislative and regulatory landscape for privacy and data security continues to evolve, and we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data security in the U.S., the EU, the United Kingdom (the "UK") and other jurisdictions.
The legislative and regulatory landscape for privacy and data security continues to evolve, and we expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy and data security in the U.S., the EU, the UK and other jurisdictions.
Our sensitive information could be leaked, disclosed, or revealed as a result of or in connection with the use of generative artificial intelligence ("AI") technologies by our employees, personnel, or the third parties upon whom we rely.
Our Confidential Information could be leaked, disclosed, or revealed as a result of or in connection with the use of generative artificial intelligence ("AI") technologies by our employees, personnel, or the third parties upon whom we rely.
If these relationships and any related compensation result in perceived or actual conflicts of interest, the utility of certain data from the clinical trial may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any NDA or BLA we submit to the FDA, or equivalent marketing application to other regulatory authorities outside the U.S.
If these relationships and any related compensation result in perceived or actual conflicts of interest, the utility of certain data from the clinical trial may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any 35 Table of Contents NDA or BLA we submit to the FDA, or equivalent marketing application to other regulatory authorities outside the U.S.
Any sensitive information (including confidential, competitive, proprietary, or personal data) that is inputted into a third-party generative AI platform could be leaked or disclosed to others, including if sensitive information is used to train the third parties’ AI model.
Any Confidential Information (including confidential, competitive, proprietary, or personal information) that is inputted into a third-party generative AI platform could be leaked or disclosed to others, including if Confidential Information is used to train the third parties’ AI model.
Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties 45 Table of Contents involved in developing our investigational products or as a result of questions regarding co-ownership of potential joint inventions.
Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our investigational products or as a result of questions regarding co-ownership of potential joint inventions.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.
If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened 45 Table of Contents and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.
These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business. Item 1B. Unresolved Staff Comments None.
These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business. Item 1B. Unresolved Staff Comments None. 58 Table of Contents
In addition, if we are able to raise additional capital, raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our intellectual property or investigational products.
In addition, if we need and are able to raise additional capital, raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our intellectual property or investigational products.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2 ⁄ 3 % of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. 56 Table of Contents In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chairman of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2 ⁄ 3 % of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications 44 Table of Contents and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. The U.S.
However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. The U.S.
There can be no assurance that we and our third-party CROs and other third parties upon which we rely will be successful in detecting, preventing or fully recovering systems or data from all breakdowns, service interruptions, attacks or breaches of systems that could adversely affect our business and operations and/or result in the loss or disclosure of critical or sensitive data or other assets, which could result in financial, legal, business or reputational harm to us.
There can be no assurance that we and our third-party CROs and other third parties upon which we rely will be successful in detecting, preventing or fully recovering systems or data from all breakdowns, service interruptions, attacks or breaches of systems that could adversely affect our business and operations and/or result in the loss or disclosure of Confidential Information or other assets, which could result in financial, legal, business or reputational harm to us.
Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information.
Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly 51 Table of Contents receive individually identifiable health information from a HIPAA-covered healthcare provider or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information.
A finding of infringement could prevent us from commercializing our investigational products or force us to cease some of our business operations, which could materially harm our business. In addition, we may find that competitors are infringing our patents, trademarks, copyrights or other intellectual property.
A finding of infringement could prevent us from commercializing our investigational products or force us to cease some of our business operations, which could materially harm our business. 42 Table of Contents In addition, we may find that competitors are infringing our patents, trademarks, copyrights or other intellectual property.
In addition, if the FDA or a comparable foreign regulatory authority approves our investigational products, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for our products will be subject to extensive and ongoing regulatory requirements.
In addition, if the FDA or a comparable foreign regulatory authority approves our investigational products, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import, export and recordkeeping for our products will be subject to extensive and ongoing regulatory requirements.
Any failure to develop, validate, obtain and maintain marketing authorization and supply for a companion diagnostic we need will harm our business prospects. 34 Table of Contents The design or our execution of our ongoing and future clinical trials may not support marketing approval.
Any failure to develop, validate, obtain and maintain marketing authorization and supply for a companion diagnostic we need will harm our business prospects. The design or our execution of our ongoing and future clinical trials may not support marketing approval.
Our contracts may not contain limitations of liability, and even where they do, 48 Table of Contents there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many immuno-oncology companies. Stock prices of many immuno-oncology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many immuno-oncology companies. Stock prices of many immuno-oncology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of 55 Table of Contents those companies.
We may incur additional ownership changes in the future in connection with any equity issuance, including any additional issuances to Gilead. If we experience any such ownership change, we may be limited in our ability to use our NOL and credit carryforwards and be required to make material cash tax payments.
We may incur additional ownership changes in the future in connection with any equity issuance. If we experience any such ownership change, we may be limited in our ability to use our NOL and credit carryforwards and be required to make material cash tax payments.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and success or failure of clinical trials for our investigational products or competing investigational products, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our progress towards the achievement of any product development goals or milestones we announce, including any delays or failures which lead to the suspension or termination of any clinical trial or development program; • the timing and cost of, and level of investment in, research and development ("R&D") activities relating to our investigational products, which may change from time to time; • option fees received by us in connection with option exercises by Gilead and/or Taiho pursuant to their respective option agreements and/or payments received by us from Gilead or Taiho in connection with the achievement of certain development and/or regulatory milestones; • amounts payable by us in connection with the achievement of development, regulatory and commercial milestones under our in-license and other strategic agreements; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional investigational products; • our ability to obtain marketing approval for our investigational products, and the timing and scope of any such approvals we may receive; • the changing and volatile U.S. and global economic environments , including the impact of tariffs, inflation and rising interest rates, and domestic or international political instability; and • future accounting pronouncements or changes in our accounting policies. 55 Table of Contents The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the timing and success or failure of clinical trials for our investigational products or competing investigational products, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our progress towards the achievement of any product development goals or milestones we announce, including any delays or failures which lead to the suspension or termination of any clinical trial or development program; • the timing and cost of, and level of investment in, R&D activities relating to our investigational products, which may change from time to time; • option fees received by us in connection with option exercises by Gilead and/or Taiho pursuant to their respective option agreements and/or payments received by us from Gilead or Taiho in connection with the achievement of certain development and/or regulatory milestones; • amounts payable by us in connection with the achievement of development, regulatory and commercial milestones under our in-license and other strategic agreements; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional investigational products; • our ability to obtain marketing approval for our investigational products, and the timing and scope of any such approvals we may receive; • the changing and volatile U.S. and global economic environments , including the impact of tariffs, inflation and rising interest rates, and domestic or international political instability; and • future accounting pronouncements or changes in our accounting policies.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that 57 Table of Contents it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits.
To satisfy these requirements, the FDA may recommend we conduct a clinical factorial study, designed to assess the effects attributable to each drug in the combination product. Moreover, the applicable requirements for approval of a combination therapy may differ from country to country.
To satisfy these requirements, the FDA may recommend we conduct a clinical factorial study, designed to 32 Table of Contents assess the effects attributable to each drug in the combination product. Moreover, the applicable requirements for approval of a combination therapy may differ from country to country.
For example, the approval of zimberelimab for the treatment of recurrent or refractory classical Hodgkin’s Lymphoma in China by Gloria Biosciences does not improve the chances of FDA approval for any BLA that we may submit for zimberelimab 40 Table of Contents in the U.S. in any indication.
For example, the approval of zimberelimab for the treatment of recurrent or refractory classical Hodgkin’s Lymphoma in China by Gloria Biosciences does not improve the chances of FDA approval for any BLA that we may submit for zimberelimab in the U.S. in any indication.
Current global economic conditions are highly volatile due to a number of reasons, including geopolitical instability, such as the military conflicts between Russia and Ukraine, the conflicts between Israel and Hamas, recent inflation that increased our operating expenses and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all.
Current global economic conditions are highly volatile due to a number of reasons, including geopolitical instability, such as trade war, the military conflicts between Russia and Ukraine, the conflicts between Israel and Hamas, 48 Table of Contents recent inflation that increased our operating expenses and disruptions in the capital and credit markets that may reduce our ability to raise additional capital when needed on acceptable terms, if at all.
We may be required to report Gloria Biosciences' adverse events or unexpected side effects to the FDA or comparable foreign regulatory authorities, which could, among other things, order us to cease further development of zimberelimab.
We may be required to report Gloria Biosciences' AEs or unexpected side effects to the FDA or comparable foreign regulatory authorities, which could, among other things, order us to cease further development of zimberelimab.
We performed an analysis under IRC Section 382 and 383 through October 31, 2020 with respect to our NOL and credit carryforwards. We concluded that an ownership change, as defined under IRC Section 382, occurred in previous years, but that such ownership change did not result in the expiration of our NOL or credit carryforwards prior to utilization.
We performed an analysis under IRC Section 382 and 383 through March 31, 2024 with respect to our NOL and credit carryforwards. We concluded that an ownership change, as defined under IRC Section 382, occurred in previous years, but that such ownership change did not result in the expiration of our NOL or credit carryforwards prior to utilization.
Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund R&D activities is subject to the political process, which is inherently fluid and unpredictable.
While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not directly regulated under HIPAA, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or 51 Table of Contents conspiracy principles.
While we do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not directly regulated under HIPAA, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles.
Our commercial success is dependent on obtaining coverage and reimbursement approval for a product from a government or other third-party payor, which is a time-consuming and costly process that could require us and any collaborators to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor.
Our commercial success is dependent on obtaining coverage and reimbursement for any product for which we receive approval from private or government third-party payors, which is a time-consuming and costly process that could require us and any collaborators to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor.
Many of these laws are discussed in detail above under “Item 1. Business—Government Regulation—Other U.S. Healthcare Laws and Compliance Requirements”. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform.
Many of these laws are discussed in detail above under "Item 1. Business—Government Regulation—Other U.S. Healthcare Laws and Compliance Requirements". The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform.
We also expect our non-U.S. activities to increase over time. We expect to rely on third parties for research, preclinical studies, and clinical trials and/or to obtain necessary permits, licenses, patent registrations, and other marketing approvals.
We also expect our non-U.S. activities to increase over time. We expect to rely on third parties for research, preclinical studies, and clinical trials 54 Table of Contents and/or to obtain necessary permits, licenses, patent registrations, and other marketing approvals.
Our revenues to date have been primarily from upfront and milestone payments, R&D support and clinical materials reimbursement from our strategic partners. For the years ended December 31, 2024 and 2023, we had net losses of $283 million and $307 million, respectively. As of December 31, 2024, we had an accumulated deficit of $1.1 billion.
Our revenues to date have been primarily from upfront and milestone payments, R&D support and clinical materials reimbursement from our strategic partners. For the years ended December 31, 2025 and 2024, we had net losses of $353 million and $283 million, respectively. As of December 31, 2025, we had an accumulated deficit of $1.5 billion.
We are aware of several pharmaceutical companies developing products in the same class as our investigational products, some of which are further along in development than our corresponding assets. See “Item 1. Business—Competition” for additional information regarding our competitors.
We are aware of several pharmaceutical companies developing products in the same class as our investigational products, some of which are further along in development than our corresponding assets. See "Item 1. Business—Competition" for additional information regarding our competitors.
In Canada, PIPEDA and various related provincial laws, as well as Canada’s Anti-Spam Legislation ("CASL"), may apply to our operations. We also target customers in Asia and may be subject to new and emerging data privacy regimes, including China’s Personal Information Protection Law ("PIPL"). We may also be subject to new laws governing the privacy of consumer health data.
In Canada, PIPEDA and various related provincial laws, as well as Canada’s Anti-Spam Legislation ("CASL"), may apply to our operations. We also target customers in Asia and may be subject to new and emerging data privacy regimes, including China’s Personal Information Protection Law ("PIPL").
In particular, the EEA and the UK have significantly restricted the transfer of personal data to the U.S. and other to countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
In particular, in the EEA and the UK the GDPR restricts the transfer of personal data to the U.S. and other to countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
See “Item 1. Business—Competition” for additional information regarding competing programs. Geopolitical instability and public health outbreaks may also have an adverse impact on our clinical trial operations.
See "Item 1. Business—Competition" for additional information regarding competing programs. Geopolitical instability and public health outbreaks may also have an adverse impact on our clinical trial operations.
One 42 Table of Contents aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
One aspect of the determination of patentability of our inventions depends on the scope and content of the "prior art," information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.
Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies caused by funding shortages, staffing limitations or policy changes could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business.
Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and product candidates and, resultantly, on our business, financial condition, prospects and results of operations.
Such a loss of patent protection could have a material adverse impact on our business and our ability to commercialize our technology and investigational products and, resultantly, on our business, financial condition, prospects and results of operations.
For example, since a key element of our strategy is the development of intra-portfolio combinations, regulatory authorities may disagree that we have sufficiently demonstrated the contribution of each investigational product or other agent in our combination trials to any observed therapeutic effects and require further studies to further characterize the activity of each component within the combination.
For example, since we utilize intra-portfolio combinations, regulatory authorities may disagree that we have sufficiently demonstrated the contribution of each investigational product or other agent in our combination trials to any observed therapeutic effects and require further studies to further characterize the activity of each component within the combination.
In the U.S., numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our collaborators.
In the U.S., numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws, that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our collaborators.
New or increased tariffs, export controls or other trade barriers could result in higher prices for the materials we use and the investigational products we are developing and could materially impact our supply chain and manufacturing costs.
New or increased tariffs, export controls or other trade barriers could result in higher prices for the materials we use and, if any of our investigational products are approved, could materially impact our supply chain and manufacturing costs for such products.
Based upon shares outstanding as of December 31, 2024, our executive officers, directors and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially owned approximately 54.4% of our common stock.
Based upon shares outstanding as of December 31, 2025, our executive officers, directors and the holders of more than 5% of our outstanding common stock, in the aggregate, beneficially owned approximately 39.5% of our common stock.
The EU General Data Protection Regulation (the "EU GDPR"), the UK General Data Protection Regulation (the "UK GDPR" and, together with the EU GDPR, the "GDPR") and Canada’s Personal Information Protection and Electronic Documents Act ("PIPEDA"), or the applicable provincial alternatives, impose strict requirements, including the obligation to appoint data protection officers in certain circumstances, rights for individuals to be “forgotten” and to data portability, and the obligation to make public notification of significant data breaches.
The GDPR and Canada’s Personal Information Protection and Electronic Documents Act ("PIPEDA"), or the applicable provincial alternatives, impose strict requirements, including the obligation to appoint data protection officers in certain circumstances, rights for individuals to be "forgotten" and to data portability, and the obligation to make public notification of significant data breaches.
Other states are considering and may adopt similar laws. In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the U.S. or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the U.S. or other countries. Certain jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
Depending on the data from our clinical trials, we may utilize diagnostic tests, during our clinical trial enrollment process to help identify patients with characteristics that we believe will be most likely to respond to our investigational products.
Depending on the data from our clinical trials, we may utilize diagnostic tests, during our clinical trial enrollment process to help identify patients with characteristics that we believe will be most likely to respond to our investigational products, which may be incorporated into future Phase 3 trials to help identify eligible patients.
We also cannot predict the likelihood, nature or extent of government If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.
As we continue to develop our investigational products and initiate clinical trials of additional investigational products, serious adverse events, undesirable side effects or unexpected characteristics may emerge causing us to abandon these investigational products or limit their development to more narrow uses or subpopulations in which the serious adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
As we continue to develop our investigational products and initiate later phase clinical trials of our investigational products or initiate clinical trials to evaluate different combination regimens involving our investigational products, serious AEs, undesirable side effects or unexpected characteristics may emerge causing us to abandon these investigational products or limit their development to more narrow uses or subpopulations in which the serious AEs, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
As a result, comparing our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.
The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.
We could in the future be subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of former employers or competitors.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties. We could in the future be subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of former employers or competitors.
We seek to protect our proprietary position by filing patent applications in the U.S. and abroad related to our novel discoveries and technologies that are important to our business, however, we cannot predict: • if and when patents may issue based on our patent applications; • the scope of protection of any patent issuing based on our patent applications; • whether the claims of any patent issuing based on our patent applications will protect our investigational products and their intended uses or prevent others from commercializing competitive technologies or products; • whether or not third parties will find ways to invalidate or circumvent our patent rights; • whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; and/or • whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose.
We seek to protect our proprietary position by filing patent applications in the U.S. and abroad related to our novel discoveries and technologies that are important to our business, however, we cannot predict: • if and when patents may issue based on our patent applications; • the scope of protection of any patent issuing based on our patent applications; • whether the claims of any patent issuing based on our patent applications will protect our investigational products and their intended uses or prevent others from commercializing competitive technologies or products; • whether or not third parties will find ways to invalidate or circumvent our patent rights; • whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; and/or • whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose. 41 Table of Contents Obtaining and enforcing patents is expensive and time-consuming and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
The law is complex and is still being interpreted and implemented by the FDA. As a result, any such processes could have a material adverse effect on the future commercial prospects for our biological products. Zimberelimab and domvanalimab are biological products and we may develop additional biological products in the future.
The law is complex and is still being interpreted and implemented by the FDA. As a result, any such processes could have a material adverse effect on the future commercial prospects for our biological products.
Other potentially significant negative consequences associated with adverse events include: • institutional review boards, ethics committees, or safety monitoring committees may recommend that enrollment or dosing be placed on hold or that additional safety measures be implemented for ongoing clinical trials; 32 Table of Contents • we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; • regulatory authorities may withdraw or change their approvals of a product; • regulatory authorities may require additional warnings or contraindications on the label or limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; • we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies; • we may be required to change the way a product is dosed, distributed, or administered, or conduct additional clinical trials; • we may be subject to limitations on how we may promote the product; • we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to subjects or patients; and • a product may become less competitive, and our reputation may suffer.
We may also be required to engage in similar actions, such as patient education, certification of health care professionals or specific monitoring, if we or others later identify undesirable side effects caused by any product that we develop. 31 Table of Contents Other potentially significant negative consequences associated with AEs include: • IRBs, ethics committees, or safety monitoring committees may recommend that enrollment or dosing be placed on hold or that additional safety measures be implemented for ongoing clinical trials; • we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; • regulatory authorities may withdraw or change their approvals of a product; • regulatory authorities may require additional warnings or contraindications on the label or limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; • we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies; • we may be required to change the way a product is dosed, distributed, or administered, or conduct additional clinical trials; • we may be subject to limitations on how we may promote the product; • we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to subjects or patients; and • a product may become less competitive, and our reputation may suffer.
Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.
Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition. 43 Table of Contents We may not be able to protect our intellectual property rights outside of the U.S.
Accordingly, we cannot assure you that we will not in the future identify one or more material weaknesses in our internal control over financial reporting, which may have a negative impact on our ability to timely and accurately produce financial statements, may result in a material misstatement of our Consolidated Financial Statements or may negatively impact the confidence level of our stockholders and other market participants with respect to our reported financial information. 57 Table of Contents Ensuring that we have adequate internal controls over financial reporting is a costly and time-consuming effort that needs to be re-evaluated frequently.
Accordingly, we cannot assure you that we will not in the future identify one or more material weaknesses in our internal control over financial reporting, which may have a negative impact on our ability to timely and accurately produce financial statements, may result in a material misstatement of our Consolidated Financial Statements or may negatively impact the confidence level of our stockholders and other market participants with respect to our reported financial information.
We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop immunotherapies for the treatment of cancer, which is highly competitive with rapidly changing standards of care.
We compete in the segments of the pharmaceutical, biotechnology and other related markets that develop drugs and biologics for the treatment of cancer and inflammatory and autoimmune diseases, which are highly competitive with rapidly changing standards of care.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific 43 Table of Contents personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.

… 134 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+3 added−3 removed5 unchanged
Biggest changeGovernance Our board of directors considers cybersecurity risk management as part of its general oversight function. The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.
Biggest changeGovernance Our board of directors considers cybersecurity risk management as part of its general oversight function and has delegated to the Audit Committee oversight of cybersecurity risks, including oversight of management's implementation of our cybersecurity risk management programs. The Audit Committee receives periodic reports from management, specifically our Chief Information Officer (“CIO”), on our information security program and cybersecurity risks.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, please see “Risk Factors - Our internal information technology systems, and those of our third-party CROs and other third parties upon which we rely, are subject to failure, security breaches and other disruptions, which could result in a material disruption of our investigational products’ development programs, jeopardize sensitive information, prevent us from accessing critical information or result 58 Table of Contents in a loss of our assets, and potentially expose us to notification obligations, loss, liability or reputational damage and otherwise adversely affect our business.” in Part I, Item 1A herein.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, please see "Risk Factors - Our internal information technology systems, and those of our third-party CROs and other third parties upon which we rely, are subject to failure, security breaches and other disruptions, which could result in a material disruption of our investigational products’ development programs, jeopardize sensitive information, prevent us from accessing critical information or result in a loss of our assets, and potentially expose us to notification obligations, loss, liability or reputational damage and otherwise adversely affect our business." in Part I, Item 1A herein.
This function helps to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example deploying automated tools in certain environments, subscribing to and analyzing reports and services that identify certain cybersecurity threats, conducting scans of certain aspects of the Company’s threat environment, evaluating certain threats that are reported to us, conducting internal and external audits and internal threat assessment of certain environments, engaging third parties to conduct threat assessments, and conducting vulnerability assessments.
We monitor and evaluate our threat environment using various methods including, for example deploying automated tools in certain environments, subscribing to and analyzing reports and services that identify certain cybersecurity threats, conducting scans of certain aspects of our threat environment, evaluating certain threats that are reported to us, conducting internal and external audits and internal threat assessment of certain environments, engaging third parties to conduct threat assessments, and conducting vulnerability assessments.
We have also taken certain measures to mitigate cybersecurity risks, including, for example, cybersecurity awareness training for employees and management, periodic testing through simulated “phishing” campaigns (and require remedial training based on results) and the adoption of an incident response plan, vulnerability management policy and business recovery plan.
Further, we take certain measures to mitigate cybersecurity risks, including, for example, cybersecurity awareness training for employees and management, periodic testing through simulated "phishing" campaigns (and require remedial training based on results) and the adoption of an incident response plan that includes procedures for responding to cybersecurity incidents, a vulnerability management policy and a business recovery plan.
Depending on the nature of the services provided, and the sensitivity of the Information Systems and Data at issue, and the identity or experience of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and we may impose contractual obligations related to cybersecurity on the vendor.
Depending on the nature of the services provided, the vendor's criticality to our operations and the vendor's respective risk profile, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and we may impose contractual obligations related to cybersecurity on the vendor.
We have engaged third-party providers to periodically assess certain of our internal controls and procedures for information security.
We also engage third-party providers, where appropriate, to periodically assess certain of our internal controls and processes for information security.
Our Security Committee is comprised of key management stakeholders and experts and is chaired by our Chief Information Officer, who has over 20 years of strategic and operational IT/cybersecurity leadership experience and multiple cybersecurity certifications, from leading security organizations such as (ISC)2, Cloud Security Alliance, Cisco Security, Microsoft Security.
Our CIO has over 20 years of strategic and operational IT/cybersecurity leadership experience and multiple cybersecurity certifications, from leading security organizations, such as (ISC)2, Cloud Security Alliance, Cisco Security, Microsoft Security.
Under this framework, our information security function, led by our Chief Information Officer, helps to identify, assess and manage the Company’s cybersecurity threats and risks.
Under this framework, our information security function, led by our Chief Information Officer, helps to identify, assess and manage the Company’s cybersecurity threats and risks. Key elements of our cybersecurity risk management program include but are not limited to the following efforts.
We use third-party service providers to perform a variety of functions throughout our business, such as CROs and contract manufacturing organizations ("CMOs"). Under our information security function, we perform risk and security assessments for certain of our vendors that involves a review of the vendor’s written security program.
Under our information security function, we perform risk and security assessments for certain key vendors that involves a review of the vendor’s written security program.
Removed
Furthermore, our information security function works with a security committee (the “Security Committee") to prioritize our risk management processes, mitigate cybersecurity threats that are more likely to lead to a material impact to our business and evaluate material risks from cybersecurity threats against our overall business objectives.
Added
We conduct assessments to help identify and assess material risks from cybersecurity threats to our critical systems and information.
Removed
The Security Committee is responsible for helping to integrate cybersecurity risk considerations into our overall risk management strategy and communicating key priorities to relevant personnel, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Added
Furthermore, our information security team works with a security committee (the "Security Committee") to manage our cybersecurity risk management processes, our security controls, and our response to cybersecurity incidents. We use third-party service providers to perform a variety of functions throughout our business, such as CROs and CMOs.
Removed
The audit committee receives periodic reports from our Chief Information Officer concerning significant cybersecurity threats and risk and the processes we have implemented to address them. Under our incident response plan, certain incidents would also be reported to the board.
Added
In addition, management updates the Audit Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant. 59 Table of Contents Our CIO chairs our Security Committee, which helps to identify, assess and manage our material cybersecurity threats and risks.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeItem 2. Properties As of December 31, 2024, our corporate headquarters, which includes executive offices and research and development and business operations, consist of approximately 151,000 square feet of leased office and laboratory space in an office park in Hayward, California. We also lease approximately 109,000 square feet of office space in Brisbane, California.
Biggest changeItem 2. Properties As of December 31, 2025, our corporate headquarters, which includes executive offices and R&D and business operations, consist of approximately 151,000 square feet of leased office and laboratory space in an office park in Hayward, California. We also lease approximately 109,000 square feet of office space in Brisbane, California.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeRegardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. Item 4. Mine Safety Disclosures None. 59 Table of Contents PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. Item 4. Mine Safety Disclosures None. 60 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−1 removed3 unchanged
Biggest changeThis graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. $100 investment in stock or index Ticker 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Arcus Biosciences, Inc.
Biggest changeThis graph shall not be deemed "soliciting material" or be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. $100 investment in stock or index Ticker 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Arcus Biosciences, Inc.
Performance Graph The following graph compares the cumulative stockholders returns for the past five years through December 31, 2024 for (i) our common stock, (ii) the Standard & Poor ("S&P") Biotechnology Index and (iii) S&P 500 Index, assuming $100 invested on December 31, 2019, and reinvestment of dividends if paid.
Performance Graph The following graph compares the cumulative stockholders returns for the past five years through December 31, 2025 for (i) our common stock, (ii) the Standard & Poor's ("S&P") Biotechnology Index and (iii) S&P 500 Index, assuming $100 invested on December 31, 2020, and reinvestment of dividends if paid.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Stockholders Our common stock trades on the New York Stock Exchange under the symbol “RCUS.” As of February 7, 2025, we had 34 stockholders of record as reported by our transfer agent.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Stockholders Our common stock trades on the New York Stock Exchange under the symbol "RCUS." As of February 6, 2026, we had 34 stockholders of record as reported by our transfer agent.
Removed
RCUS $ 100 $ 257 $ 401 $ 205 $ 194 $ 147 S&P Biotechnology Index SPSIBI $ 100 $ 148 $ 118 $ 88 $ 94 $ 95 S&P 500 Index S&P 500 $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 Issuer Purchases of Equity Securities None. Item 6. Reserved 60 Table of Contents
Added
RCUS $ 100 $ 156 $ 80 $ 76 $ 57 $ 90 S&P Biotechnology Index SPSIBI $ 100 $ 80 $ 59 $ 64 $ 65 $ 88 S&P 500 Index S&P 500 $ 100 $ 129 $ 105 $ 133 $ 166 $ 196 Issuer Purchases of Equity Securities None. 61 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+27 added−34 removed21 unchanged
Biggest changeNon-Operating Income, net Non-operating income, net consists primarily of interest earned on our investments in fixed-income marketable securities, interest expense on our loan financing with Hercules, and non-cash interest expense incurred under the effective interest method on our liability for sale of future royalties to BVF. 64 Table of Contents Results of Operations The following table summarizes our results of operations (in millions): Year Ended December 31, 2024 Change Year Ended December 31, 2023 Change Year Ended December 31, 2022 Revenues: License and development service revenue $ 222 178 % $ 80 8 % $ 74 Other collaboration revenue 36 (3) % 37 (3) % 38 Total revenues 258 121 % 117 4 % 112 Operating expenses: Research and development 448 32 % 340 18 % 288 General and administrative 120 3 % 117 13 % 104 Impairment of long-lived assets 20 * — * — Total operating expenses 588 29 % 457 17 % 392 Loss from operations (330) (3) % (340) 21 % (280) Non-operating income, net 48 23 % 39 179 % 14 Loss before income taxes (282) (6) % (301) 13 % (266) Income tax expense (1) (83) % (6) * (1) Net loss $ (283) (8) % $ (307) 15 % $ (267) * Not meaningful Total Revenues The increase in Total revenues for 2024 as compared to 2023 was primarily driven by increased revenues from license and development services due to a cumulative catch-up to revenue in the first quarter 2024 of $107 million as a result of the Third Gilead Collaboration Agreement Amendment based on the updated transaction price and measure of progress for the partially satisfied performance obligations; and Taiho's exercise of its option for the license of quemliclustat for the Taiho Territory of $15 million, which was recognized as revenue upon the delivery of the license in the third quarter of 2024.
Biggest change("BVF"). 66 Table of Contents Results of Operations The following table summarizes our results of operations (in millions): Year Ended December 31, 2025 Change Year Ended December 31, 2024 Change Year Ended December 31, 2023 Revenues: License and development services $ 221 — % $ 222 178 % $ 80 Other collaboration 26 (28) % 36 (3) % 37 Total revenues 247 (4) % 258 121 % 117 Operating expenses: Research and development 523 17 % 448 32 % 340 General and administrative 110 (8) % 120 3 % 117 Impairment of long-lived assets — * 20 * — Total operating expenses 633 8 % 588 29 % 457 Loss from operations (386) 17 % (330) (3) % (340) Non-operating income, net 33 (31) % 48 23 % 39 Loss before income taxes (353) 25 % (282) (6) % (301) Income tax expense — (100) % (1) (83) % (6) Net loss $ (353) 25 % $ (283) (8) % $ (307) * Not meaningful Total Revenues The decrease in Total revenues for 2025 as compared to 2024 was primarily driven by (i) lower revenue from the Taiho Collaboration (with $7 million in 2025 as a result of the casdatifan option exercise and amendment compared to $15 million in 2024 as a result of the quemliclustat option exercise) and (ii) lower revenue from the Gilead Collaboration based on timing and extent of our progress.
Risk Factors.” General and Administrative Expenses General and Administrative ("G&A") expenses consist principally of personnel-related costs including payroll and stock-based compensation for personnel in executive, finance, human resources, information technology, business and corporate development, and other administrative functions. Shared facility expenses are allocated to functional groups proportionally based on usage.
Risk Factors." General and Administrative Expenses General and Administrative ("G&A") expenses consist principally of personnel-related costs including payroll and stock-based compensation for personnel in executive, finance, human resources, information technology, business and corporate development, and other administrative functions. Shared facility expenses are allocated to functional groups proportionally based on usage.
In addition, under our arrangements with WuXi Biologics, Abmuno, AstraZeneca and BVF, we may incur additional clinical and regulatory milestone payments based on the development progress of our investigational products. We may also be required to pay royalties in the event of a successful product launch and our receipt of commercial revenues.
In addition, under our arrangements with WuXi Biologics, Abmuno and AstraZeneca, we may incur additional clinical and regulatory milestone payments based on the development progress of our investigational products. We may also be required to pay royalties in the event of a successful product launch and our receipt of commercial revenues.
For each program to which Gilead exercised or exercises its option, the parties will co-develop globally and co-commercialize the program in the U.S., subject to certain exceptions, and Gilead will have the right to commercialize the program outside of the U.S., subject to the rights of our existing partners in certain territories.
For each program to which Gilead exercised or exercises its option, the parties will co-develop globally and co-promote the program in the U.S., subject to certain exceptions, and Gilead will have the right to commercialize the program outside of the U.S., subject to the rights of our existing partners in certain territories.
Therefore, we are unable to predict the timing or the final cost to complete our clinical programs or validation of our manufacturing and supply processes and delays may occur due to numerous factors. Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in “Item 1A.
Therefore, we are unable to predict the timing or the final cost to complete our clinical programs or validation of our manufacturing and supply processes and delays may occur due to numerous factors. Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in "Item 1A.
Until such time that we can generate significant revenue from sales of our investigational products, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including existing or potential collaborations with other companies or other strategic transactions. See “Item 1A.
Until such time that we can generate significant revenue from sales of our investigational products, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including existing or potential collaborations with other companies or other strategic transactions. See "Item 1A.
Non-Operating Income, net The increase in Non-operating income, net for 2024 as compared to 2023 was primarily due to higher interest income resulting from increased investment yields and higher average portfolio balances as compared to the prior year, driven by $320 million received from Gilead in the first quarter 2024 under the amended Stock Purchase Agreement.
The increase in Non-operating income, net for 2024 as compared to 2023 was primarily due to higher interest income resulting from increased investment yields and higher average portfolio balances as compared to the prior year, driven by $320 million received from Gilead in 2024 under the amended Stock Purchase Agreement.
Revenue related to 63 Table of Contents access rights is recognized over the period of access, and revenue related to discovery and early development activities is recognized as the performance obligation is satisfied. Operating Expenses Research and Development Expenses Our R&D expenses consist of costs incurred in connection with the R&D of our pipeline programs.
Revenue related to access rights is recognized over the period of access, and revenue related to discovery and early development activities is recognized as the performance obligation is satisfied. 65 Table of Contents Operating Expenses Research and Development Expenses Our R&D expenses consist of costs incurred in connection with the R&D of our pipeline programs.
We have a liability for sale of future royalties which consists of the current balance of estimated contingent milestone and royalty payments under the BVF agreement. See Note 16, Fair value measurements, in Part II, Item 8 for further discussion.
We have a liability for sale of future royalties which consists of the current balance of estimated contingent milestone and royalty payments under our agreement with BVF. See Note 16, Fair value measurements, in Part II, Item 8 for further discussion.
See Note 5, Revenues, in Part II, Item 8 for further discussion of the amount and timing of revenues recognized from our license and collaboration agreements. 65 Table of Contents Research and Development Expenses We group all of our R&D activities and the related expenditures into categories as described below: Included as of December 31, 2024 Category Description Program-Level Expenses Key Clinical Trials Late-stage development programs R&D expenses incurred related to a Phase 3 clinical program intended to result in registration of a new product.
See Note 5, Revenues, in Part II, Item 8 for further discussion of the amount and timing of revenues recognized from our license and collaboration agreements. 67 Table of Contents Research and Development Expenses We group all of our R&D activities and the related expenditures into categories as described below: Included as of December 31, 2025 Category Description Program-Level Expenses Clinical Trials Late-stage development programs R&D expenses incurred related to a Phase 3 clinical program intended to result in registration of a new product.
Accordingly, we recognized a cumulative catch-up to revenue of $107 million based on the updated transaction price and measure of progress for the partially satisfied performance obligations.
Accordingly, we recognized a cumulative catch-up to revenue of $143 million based on the updated transaction price and measure of progress for the partially satisfied performance obligations.
We expect to incur substantial expenditures in the foreseeable future for the development and potential commercialization of our investigational products and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing or aggregate amount of costs for our development, potential commercialization, and internal research and development programs.
We expect to incur substantial expenditures in the foreseeable future for the development and potential commercialization of our investigational products and ongoing internal R&D programs. At this time, we cannot reasonably estimate the nature, timing or aggregate amount of costs for our development, potential commercialization, and internal R&D programs.
These expenses include preclinical and clinical expenses, payroll and personnel expenses, including stock-based compensation for our employees in R&D, laboratory supplies, product licenses, consulting costs, contract research, and depreciation. Shared facility expenses are allocated to functional groups proportionally based on usage. Under certain collaboration agreements we agree to share R&D expenses with our partners.
These expenses include preclinical and clinical expenses, payroll and stock-based compensation for our personnel in R&D, laboratory supplies, product licenses, consulting costs, contract research, and fixed asset depreciation. Shared facility expenses are allocated to functional groups proportionally based on usage. Under certain collaboration agreements we agree to share R&D expenses with our partners.
In the first quarter 2024, we further amended and restated the Stock Purchase Agreement and sold 15.2 million shares of our common stock to Gilead at a purchase price of $21.00 per share for total gross proceeds of $320 million.
In 2024, we amended and restated the Stock Purchase Agreement and sold 15.2 million shares of our common stock to Gilead at a purchase price of $21.00 per share for total gross proceeds of $320 million.
A hypothetical 10% change in the updated standalone selling prices or the updated measure of progress as of the modification date related to Third Gilead Collaboration Agreement Amendment would have changed the cumulative catch-up to revenue recognized during the current year to date period by as much as $3 million or $32 million, respectively.
A hypothetical 10% change in the updated standalone selling prices or the updated measure of progress as of the modification date related to Third Gilead Collaboration Agreement Amendment would have changed the cumulative catch-up to revenue recognized during the current quarter and year to date period by as much as $3 million.
This includes all unallocated program-level expense not directly attributable to a specific clinical trial once a molecule enters into one or more Phase 3 clinical trials. domvanalimab zimberelimab quemliclustat** PACIFIC-8 STAR-121 STAR-221 PRISM-1 ARC-10* Early-stage R&D and preclinical programs R&D expenses incurred for activities ranging from early-stage R&D and preclinical to Phase 2 clinical trials.
This includes all unallocated program-level expense not directly attributable to a specific clinical trial once the related program enters into one or more Phase 3 clinical trials. casdatifan** quemliclustat** domvanalimab zimberelimab PEAK-1 PRISM-1 STAR-121 PACIFIC-8 STAR-221* ARC-10* Early-stage development and preclinical programs R&D expenses incurred for activities ranging from early-stage development and preclinical to Phase 2 clinical trials.
Impairment of Long-Lived Assets Impairment charges consist of impairment of right-of-use assets resulting from updated plans in the first quarter 2024 for a portion of our office space.
Impairment of Long-Lived Assets Impairment charges consist of impairment of right-of-use assets resulting from updated plans in 2024 for a portion of our office space.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
In the third quarter 2024, we obtained a $250 million term loan facility from Hercules Capital, Inc. ("Hercules"). Under the terms of the term loan facility, $50 million was drawn at closing and an additional $100 million is committed and fully available at Arcus's sole option in minimum increments of $25 million.
In 2024, we obtained a $250 million term loan facility from Hercules. Under the terms of the term loan facility, $50 million was drawn at closing, $50 million was drawn in the second quarter 2025 and an additional $50 million is committed and fully available at our sole option in minimum increments of $25 million.
Recent Accounting Pronouncements See “Recent Accounting Pronouncements” in Note 2 to our Consolidated Financial Statements in Item 8 for a discussion of recently adopted accounting pronouncements.
Recent Accounting Pronouncements See "Recent Accounting Pronouncements" in Note 2 to our Consolidated Financial Statements in Item 8 for a discussion of recently adopted accounting pronouncements. 72 Table of Contents
This includes all unallocated program-level expense not directly attributable to a specific clinical trial unless the related program has entered into one or more Phase 3 clinical trials. quemliclustat** etrumadenant casdatifan AB598 AB801 ARC-7 ARC-8 ARC-9 ARC-20 ARC-25 ARC-26* ARC-27 EDGE-Lung EDGE-Gastric STELLAR-009* VELOCITY-Lung VELOCITY-HNSCC Compensation and personnel costs Internal costs, such as salaries, non-cash stock-based compensation, and other personnel expenses for our R&D employees. — — Other costs Facilities, depreciation, and other external costs that are not recorded at the investigational product level. — — Partnership reimbursements Reimbursements from our collaboration partners for shared costs incurred by us and recognized as a reduction in R&D expense. — — * Study discontinued or completed ** Quemliclustat moved from early-stage development and preclinical program to a late-stage development program in the third quarter 2024 The following table summarizes our R&D expenses by category (in millions): Category Year Ended December 31, 2024 Change Year Ended December 31, 2023 Change Year Ended December 31, 2022 Late-stage development programs $ 252 50 % $ 168 35 % $ 124 Early-stage R&D and preclinical programs 132 3 % 128 (12) % 145 Compensation and personnel costs 178 16 % 154 18 % 130 Other costs 51 (2) % 52 4 % 50 Partnership reimbursements (165) 2 % (162) 1 % (161) Total research and development $ 448 32 % $ 340 18 % $ 288 The increase in R&D expenses for 2024 as compared to 2023 was primarily driven by higher costs to support our expanding late-stage development program activities, driven by higher enrollment in our Phase 3 studies for domvanalimab and the initiation of the quemliclustat Phase 3 trial PRISM-1, and the timing of our manufacturing activities.
This includes all unallocated program-level expense not directly attributable to a specific clinical trial unless the related program has entered into one or more Phase 3 clinical trials. casdatifan** quemliclustat** etrumadenant AB598 AB801 ARC-7* ARC-8 ARC-9* ARC-20 ARC-25 ARC-26* ARC-27 EDGE-Gastric* EDGE-Lung eVOLVE STELLAR-009* VELOCITY-HNSCC*** VELOCITY-Lung Compensation and personnel costs Internal costs, such as salaries, non-cash stock-based compensation, and other personnel expenses for our R&D employees that are not allocated to specific programs or trials. — — Other costs Facilities, depreciation, and other external costs that are not recorded at the investigational product level. — — Partnership reimbursements Reimbursements from our collaboration partners for shared costs incurred by us and recognized as a reduction in R&D expense. — — * Study discontinued or substantially completed ** Moved from early-stage development and preclinical to a late-stage development program: quemliclustat in the third quarter 2024 and casdatifan in the third quarter 2025. *** Head and Neck Squamous Cell Carcinoma ("HNSCC") The following table summarizes our R&D expenses by category (in millions): Category Year Ended December 31, 2025 Change Year Ended December 31, 2024 Change Year Ended December 31, 2023 Late-stage development programs $ 274 9 % $ 252 50 % $ 168 Early-stage R&D and preclinical programs 141 7 % 132 3 % 128 Compensation and personnel costs 180 1 % 178 16 % 154 Other costs 55 8 % 51 (2) % 52 Partnership reimbursements (127) (23) % (165) 2 % (162) Total research and development $ 523 17 % $ 448 32 % $ 340 68 Table of Contents The increase in R&D expenses for 2025 as compared to 2024 was primarily driven by (i) higher late-stage development costs, driven by increased enrollment and clinical activities in our Phase 3 studies for casdatifan and quemliclustat, partially offset by lower costs for our Phase 3 studies for domvanalimab, and (ii) higher early-stage development costs, driven by our Phase 2 studies for casdatifan.
We do not allocate all our costs by investigational product, as a significant amount of R&D expenses include internal costs, such as payroll and other personnel expenses, and certain external costs that are not recorded at the investigational product level.
We do not allocate all our costs by investigational product, as a significant amount of R&D expenses include internal costs, such as payroll and other personnel expenses, and certain external costs that are not recorded at the investigational product level. In particular, with respect to internal costs, several of our departments support multiple R&D programs.
General and Administrative Expenses The increase in G&A expenses for 2024 as compared to 2023 was primarily driven by the increased complexity of supporting our expanding clinical pipeline and partnership obligations. Our growing headcount and our stock awards drove an increase in employee compensation costs.
The increase in G&A expenses for 2024 as compared to 2023 was primarily driven by the increased complexity of supporting our expanding clinical pipeline and partnership obligations. Our growing headcount and our stock awards drove an increase in employee compensation costs. The overall increase in G&A expenses was partially offset by income from subleases of space in our Brisbane office.
Cash Flows The following table summarizes our cash flow activities (in millions): Year Ended December 31, Net cash provided by (used in): 2024 2023 2022 Operating activities $ (170) $ (306) $ 438 Investing activities (84) 194 (413) Financing activities 277 33 33 Operating Activities Net cash used in operating activities for 2024 was $170 million as compared to net cash used in operating activities of $306 million for the same period in the prior year.
Cash Flows The following table summarizes our cash flow activities (in millions): Year Ended December 31, Net cash provided by (used in): 2025 2024 2023 Operating activities $ (482) $ (170) $ (306) Investing activities 66 (84) 194 Financing activities 488 277 33 Operating Activities Net cash used in operating activities was $482 million for 2025 as compared to $170 million for 2024.
We also have clinical collaboration agreements with AstraZeneca for the Phase 3 PACIFIC-8 trial evaluating domvanalimab and durvalumab in Stage 3 NSCLC and for a Phase 1/1b study evaluating casdatifan and volrustomig in IO-naive patients with ccRCC. We are also party to an agreement with BVF Partners L.P.
We also have clinical collaboration agreements with AstraZeneca for the Phase 3 PACIFIC-8 trial evaluating domvanalimab and durvalumab in Stage 3 NSCLC and for a Phase 1b/3 study evaluating casdatifan and volrustomig in IO-naive patients with ccRCC.
Cash used in investing activities for 2022 was primarily due to net purchases of marketable securities of $404 million as we invested a portion of the $725 million received from Gilead in 2022 under the Gilead Collaboration Agreement.
Cash used in investing activities for 2024 was primarily due to net purchases of marketable securities of $78 million as we invested a portion of the cash received from Gilead under the amended Stock Purchase Agreement.
The change in operating cash flows is primarily due to the receipt of the $100 million option continuation payment from Gilead in the third quarter 2024, the $87 million under the Third Gilead Collaboration Agreement Amendment in the first quarter 2024, and the receipt of $45 million in total from Taiho for development milestones and its opt-in on quemliclustat, partially offset by higher R&D expenditures.
The change in operating cash flows is primarily due to the receipt of $232 million in collaboration payments in 2024 ($100 million option continuation payment from Gilead, $87 million under the Gilead Collaboration amendment, and $45 million from Taiho for development milestones and opt-in payments). The change was partially offset by higher R&D expenditures in 2024 compared to 2023.
Financing Activities Cash used in financing activities for 2024 was due to net proceeds of $228 million from issuance of our common stock to Gilead under the Third Stock Purchase Agreement Amendment, net proceeds of $47 million from our borrowings under the Hercules Agreement, and net proceeds of $2 million for stock issued under our equity award plans.
Cash provided by financing activities for 2024 is comprised of net proceeds of $228 million from issuance of our common stock to Gilead under the amended Stock Purchase Agreement, net proceeds of $47 million from our borrowings, and net proceeds of $2 million for stock issued under our equity award plans.
The capitalization of R&D expenses may materially impact income tax expense in future years. Liquidity and Capital Resources Our cash and investments are held in a variety of interest-bearing instruments, including money market funds, U.S. government treasury and agency obligations, investments in corporate securities and certificates of deposit.
Liquidity and Capital Resources Our cash and investments are held in a variety of interest-bearing instruments, including money market funds, U.S. government treasury and agency obligations, investments in corporate securities and certificates of deposit.
Our G&A expenses also include professional fees for legal, consulting, and accounting services, rent and other facilities costs, fixed asset depreciation, and other general operating expenses not otherwise classified as R&D expenses. We do not receive significant reimbursements of these costs through our collaboration with Gilead.
Our G&A expenses also include professional fees for legal, consulting, and accounting services, rent and other facilities costs, fixed asset depreciation, and other general operating expenses not otherwise classified as R&D expenses. We do not anticipate significant changes in our G&A expenses in the near term.
("BVF") to support the discovery and development of compounds for the treatment of inflammatory diseases. Financial Overview Since commencing operations in 2015, we have devoted substantially all of our efforts and financial resources to building our research and development capabilities, advancing our investigational product pipeline, and establishing our corporate infrastructure.
Financial Overview Since commencing operations in 2015, we have devoted substantially all of our efforts and financial resources to building our R&D capabilities, advancing our investigational product pipeline, and establishing our corporate infrastructure.
Material Cash Requirements We expect to incur substantial expenditures in the foreseeable future as we expand our pipeline and advance our investigational products through clinical development, the regulatory approval process and, if approved, commercial launch activities.
Material Cash Requirements We expect to incur substantial expenditures in the foreseeable future as we invest in our pipeline, and advance our investigational products, including casdatifan and quemliclustat, through clinical development, the regulatory approval process and, if approved, commercial launch activities. See "Contractual Obligations and Commitments" for more information regarding our cash requirements from known contractual commitments.
Cash provided by financing activities for 2022 was primarily due to net proceeds of $23 million for stock issued under our equity award plans and $10 million received under the BVF agreement. Contractual Obligations and Commitments We have cash requirements to pay third parties under various contractual obligations as discussed below.
Cash provided by financing activities for 2023 is comprised of net proceeds of $25 million from issuance of our common stock, primarily due to stock purchases by Gilead, and proceeds of $8 million for stock issued under our equity award plans. Contractual Obligations and Commitments We have cash requirements to pay third parties under various contractual obligations as discussed below.
Of the $320 million equity investment, $87 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment.
Of the $320 million equity investment, $87 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment. See Note 3, Related party - Gilead Sciences, Inc., in Part II, Item 8 for further discussion.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Annual Report titled “Risk Factors.” Overview We are a clinical-stage biopharmaceutical company focused on creating best-in-class therapies.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Annual Report titled "Risk Factors." Overview We are a late clinical-stage biopharmaceutical company focused on developing differentiated molecules for patients with cancer and inflammatory and autoimmune diseases.
The increase in Income tax expense for 2023 as compared to 2022 was primarily due to an increase in taxable income compared to the prior year. The Income tax expense for each of the years shown considers the impact of the capitalization of R&D expenses for income tax purposes due to changes in U.S. legislation.
The Income tax expense for each of the years shown considers the impact of the capitalization of R&D expenses for income tax purposes due to changes in U.S. legislation. The capitalization of R&D expenses may materially impact income tax expense in future years.
Net cash used in operating activities for 2023 was $306 million as compared to net cash provided by operating activities of $438 million for the prior year.
Net cash used in operating activities was $170 million for 2024 as compared to $306 million for 2023.
In 2023, we entered into an equity distribution agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200 million.
Risk Factors" for a discussion of the factors that could impact our liquidity. In 2023, we entered into an equity distribution agreement pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $200 million. See Note 15, Stockholders’ equity, in Part II, Item 8 for further discussion.
A second tranche of $100 million will be available to support strategic initiatives, subject to future approval by Hercules. See Note 13, Long-term debt, in Part II, Item 8 for further discussion.
Additional tranches totaling $100 million will be available to support strategic initiatives, subject to the achievement of certain clinical and regulatory milestones. See Note 13, Long-term debt, in Part II, Item 8 for further discussion.
The increase in Non-operating income, net for 2023 as compared to 2022 was primarily due to higher interest income resulting from increased investment yields as compared to the prior year. Income Tax Expense The decrease in Income tax expense for 2024 as compared to 2023 was primarily due to a decrease in taxable income compared to the prior year.
Income Tax Expense The decrease in Income tax expense for 2025 as compared to 2024 was primarily due to a decrease in state income tax compared to the prior year. The decrease in Income tax expense for 2024 as compared to 2023 was primarily due to a decrease in taxable income compared to the prior year.
Under the Gilead Collaboration Agreement, Gilead obtained an exclusive license to zimberelimab and time-limited exclusive options to all of our then-current and future programs during the 10-year collaboration term. The agreement was amended in 2021 (the "First Gilead Collaboration Agreement Amendment"), under which Gilead obtained rights to an additional four of our investigational products: domvanalimab, etrumadenant, quemliclustat and AB308.
In 2020, we and Gilead entered into the Gilead Collaboration Agreement, as amended, under which Gilead obtained an exclusive license to zimberelimab and time-limited exclusive options to all of our then-current and future programs during the collaboration term.
Actual results may differ from these estimates under different assumptions or conditions. 69 Table of Contents While our significant accounting policies are described in the notes to our Consolidated Financial Statements, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's significant judgments and estimates.
While our significant accounting policies are described in the notes to our Consolidated Financial Statements, we believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's significant judgments and estimates. 71 Table of Contents Revenue Recognition Standalone selling price As part of the accounting for contracts with customers, we develop assumptions that require judgment to determine the standalone selling price of each performance obligation identified in the contract.
Our growing headcount drove an increase in compensation and personnel costs, including a $3 million increase in non-cash stock-based compensation.
Increases in compensation and personnel costs were due to an increase in headcount, including a $3 million increase in non-cash stock-based compensation. Our partnership reimbursements were relatively flat compared to the prior year.
Impairment of Long-Lived Assets The increase in impairment expense for 2024 was due to our sublease of a portion of our office space, resulting in an impairment charge of $20 million, compared to no similar impairment in the prior year.
Impairment of Long-Lived Assets The impairment expense for 2024 was the result of our sublease of a portion of our office space.
Under the Investor Rights Agreement, as amended, Gilead has the right to designate three individuals to be appointed to our board of directors. As of December 31, 2024, Gilead held approximately 32.6% of our outstanding common stock.
The Investor Rights Agreement was amended in 2022 and amended and restated in 2024 and provides Gilead with the right to designate three individuals, which they have exercised, to be appointed to our board of directors. As of December 31, 2025, Gilead held approximately 25.1% of our outstanding common stock. 64 Table of Contents Taiho Pharmaceutical Co., Ltd.
As of December 31, 2024, Taiho has licenses for the Taiho Territory to (i) etrumadenant (the adenosine receptor antagonist program); (ii) zimberelimab (the anti-PD-1 program); (iii) domvanalimab and AB308 (collectively, the anti-TIGIT program); and (iv) quemliclustat (the CD73 program).
As of December 31, 2025, Taiho has exercised its option to our: (i) HIF-2α program (including casdatifan); (ii) anti-TIGIT program (including domvanalimab); (iii) anti-PD-1 program (including zimberelimab); (iv) CD73 program (including quemliclustat); and (v) adenosine receptor antagonist program (including etrumadenant). The five-year term expired in September 2022 and Taiho retains option rights to our CD39 program (including AB598).
The level of our future R&D investment will depend on a number of factors and uncertainties, including the breadth of the joint development program agreed to with Gilead for the optioned programs, the outcome of our efforts, and the amount of cost reimbursements or milestone payments we receive from our collaborators.
The level of our future R&D investment will depend on a number of factors and uncertainties including the breadth of our clinical programs, the outcome of our efforts, and our collaboration activities.
In February 2025, we issued through an underwritten offering, 13.6 million shares of our common stock at a price of $11.00 per share, for total gross proceeds of approximately $150 million, before deducting underwriting discounts, commissions and offering expense.
In 2025, we issued, through two underwritten offerings, 29.4 million shares of our common stock for total gross proceeds of approximately $438 million, before deducting underwriting discounts, commissions and offering expense. See Note 15, Stockholders’ equity, in Part II, Item 8 for further discussion.
Sources of Liquidity To date, we have financed our operations primarily from the sale of our equity securities, upfront or milestone payments from our research, collaboration and license agreements with our strategic partners including Gilead and debt financing. We will need substantial additional funding to support our continuing operations and pursue our development strategy.
Based on our existing business plan, we believe that our cash, cash equivalents, marketable securities as of December 31, 2025 will be sufficient to fund our planned level of operations until at least the second half of 2028. 69 Table of Contents Sources of Liquidity To date, we have financed our operations primarily from the sale of our equity securities, upfront or milestone payments from our research, collaboration and license agreements with our strategic partners including Gilead and debt financing.
Cash provided by financing activities for 2023 was due to net proceeds of $25 million from issuance of our common stock, primarily due to stock purchases by Gilead, and proceeds of $8 million for stock issued under our equity award plans.
Financing Activities Cash provided by financing activities for 2025 is comprised of net proceeds of $429 million from issuance of our common stock through two underwritten offerings and our at-the-market facility, net proceeds of $49 million from our borrowings, and net proceeds of $10 million for stock issued under our equity award plans.
Based on our existing business plan, we believe that our cash, cash equivalents, and marketable securities as of December 31, 2024, which together with the proceeds from our equity financing in February 2025, we believe will be sufficient to fund our planned level of operations for the foreseeable future and provide funding to our initial pivotal read-outs for domvanalimab, quemliclustat and casdatifan including STAR-221, PRISM-1 and PEAK-1.
As of December 31, 2025, we had $1.0 billion of cash, cash equivalents and marketable securities. Based on our existing business plan, we believe that our cash, cash equivalents and marketable securities will be sufficient to fund our planned level of operations until at least the second half of 2028.
In 2017, we entered into the Taiho Agreement pursuant to which Taiho was granted time-limited options to exclusively license for the Taiho Territory the development and commercialization rights to each of our programs that arose over a five-year period ending in September 2022.
In 2017, we entered into the Taiho Agreement pursuant to which Taiho obtained an exclusive option to in-license the development and commercialization rights to programs for which IND-enabling studies had begun during a five-year term. These rights are geographically limited to the Taiho Territory.
In the first quarter 2024, we entered into the Third Gilead Collaboration Agreement Amendment, which we determined was a change in scope and price of the original contract and we accounted for this contract modification as both a modification of the existing contract and the creation of a new contract.
In the second quarter 2025, Gilead terminated its rights to etrumadenant (the adenosine receptor antagonist program). We determined that this was a significant reduction in the scope of the arrangement, which met the definition of a contract modification. We accounted for this contract modification as both a modification of the existing contract and the creation of a new contract.
In the first quarter of 2024, we further amended the Gilead Collaboration Agreement (the "Third Gilead Collaboration Agreement Amendment") to provide that (i) Gilead is required to pay the $100 million option continuation payment due on the fourth anniversary of the Gilead Collaboration Agreement, which was received in the third quarter 2024 and (ii) we would fund certain activities, including the Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer .
In 2024, we further amended the Gilead Collaboration Agreement to provide that we would fund certain activities, including the Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer. Concurrent with the Gilead Collaboration Agreement in 2020, we also entered into the Stock Purchase Agreement and Investor Rights Agreement. The Stock Purchase Agreement expired in July 2025.
Furthermore, we and Gilead agreed to collaborate on two oncology research programs, for which we will lead discovery and early development activities.
Gilead currently has exclusive licenses to three programs—our TIGIT program, including domvanalimab, our PD-1 program, including zimberelimab, and our CD73 program, including quemliclustat. Furthermore, we and Gilead agreed to collaborate on two oncology research programs and two jointly selected research-stage programs that target inflammatory diseases. In each case, we will lead discovery and early development activities.
Our partnership reimbursements were flat compared to the prior year despite the increases in gross costs, due to increases in Gilead-led activities and programs fully funded by us. 66 Table of Contents The increase in R&D expenses for 2023 as compared to 2022 was primarily driven by higher costs to support our expanding late-stage development program activities, including standard-of-care therapeutic purchases, partially offset by lower clinical manufacturing costs due to the timing of activities.
The increase in R&D expenses for 2024 as compared to 2023 was primarily driven by (i) higher costs of our late-stage development activities, driven by our Phase 3 studies for domvanalimab and the initiation of the quemliclustat Phase 3 trial, and (ii) the timing of our manufacturing activities.
Our vision is to create, develop and commercialize highly differentiated therapies that have a meaningful impact on patients.
Our most advanced molecules are in Phase 3 registrational studies for various cancer indications and we expect our next wave of clinical-stage molecules to come from our inflammation and autoimmune disease programs. Our vision is to leverage our internal small-molecule discovery capabilities to create, develop and commercialize highly differentiated therapies that can have a meaningful impact on patients.
As a result, Gilead has no future rights to casdatifan and we retain full global development and commercial rights, subject to Taiho’s option right for the Taiho Territory. • In February 2025, we issued through an underwritten offering, 13.6 million shares of our common stock at a price of $11.00 per share, for total gross proceeds of approximately $150 million, before deducting underwriting discounts, commissions and offering expenses. • In October 2024, we entered into a clinical collaboration with AstraZeneca to evaluate casdatifan, our investigational HIF-2α inhibitor, in combination with volrustomig, AstraZeneca’s investigational PD-1/CTLA-4 bispecific antibody, in IO-naive patients with ccRCC.
Significant Developments The following is a summary of significant developments affecting our business since the filing of our Annual Report for the year ended December 31, 2024: Corporate Developments • In November 2025, we issued through an underwritten offering, 15.8 million shares of our common stock at a price of $18.25 per share, for total gross proceeds of approximately $288 million, before deducting underwriting discounts, commissions and offering expenses. • In October 2025, Taiho exercised its option for an exclusive license to casdatifan, an investigational small-molecule HIF-2α inhibitor, in Japan and certain other territories in Asia (excluding mainland China).
Removed
Using our robust and highly efficient drug discovery capability, we have created a significant portfolio of investigational products which are in clinical development, with our most advanced molecule, an anti-TIGIT antibody, now in multiple Phase 3 registrational studies targeting lung and GI cancers.
Added
In exchange, Taiho will make an option exercise payment to us along with milestone payments upon the achievement of clinical, regulatory and commercialization milestones, and, additionally pay royalties on net sales.
Removed
Our deep portfolio of novel small molecules and enabling antibodies allows us to create highly differentiated therapies, which we are developing to treat multiple large indications. We expect our clinical-stage portfolio to continue to expand and to include molecules targeting immuno-oncology, cancer cell-intrinsic and immunological pathways.
Added
HIF-2⍺ Program (casdatifan) • In October 2025, we presented data for our HIF-2α inhibitor, casdatifan, across all four monotherapy cohorts (n=121) of the Phase 1/1b ARC-20 study in late-line metastatic kidney cancer, most of whom had progressed on at least two prior lines of therapy, including both an anti-PD-1 and a VEGFR TKI.
Removed
Significant Developments The following is a summary of significant developments affecting our business since the filing of our Annual Report on Form 10-K for the year ended December 31, 2023: Corporate Developments • In February 2025, we announced that Gilead's time-limited exclusive option rights to our HIF-2α program (including casdatifan) have expired.
Added
At the time of data cut-off (August 15, 2025), median PFS ("mPFS") was 12.2 months for the pooled analysis with 15.2 months of median follow-up and for the 100mg QD cohort (the Phase 3 PEAK-1 dose and formulation) mPFS was not reached with 12.4 months of median follow-up. No unexpected safety signals were observed.
Removed
AstraZeneca will operationalize the study. • In July 2024, Taiho exercised its option for quemliclustat, our investigational small molecule CD73 inhibitor, for the Taiho Territory, and in October 2024, opted to participate in the global Phase 3 trial of quemliclustat, PRISM-1, and became obligated to reimburse us for their portion of the global study costs.
Added
In February 2026, we presented updated data for the 100mg QD cohort, at 17.9 months of median follow-up, cORR increased to 45.2% with a mPFS of 15.1 months.
Removed
As a result, Taiho will operationalize the Japanese sites for the global Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer.
Added
The mPFS for the only approved HIF-2α inhibitor (Merck’s belzutifan, based on its Phase 3 registrational trial LITESPARK-005), was 5.6 months. • In October 2025, we announced eVOLVE-RCC02, a Phase 1b/3 study sponsored and operationalized by AstraZeneca, evaluating casdatifan plus volrustomig, AstraZeneca's investigational anti-PD-1/CTLA-4 dual checkpoint inhibitor bispecific antibody, in first-line, metastatic ccRCC, has paused recruitment. ◦ The Phase 1b portion of the study has recruited rapidly and in the context of this rapid enrollment, following observations of potentially immune-mediated AEs, none of which exceeded Grade 3, a decision was made to temporarily pause recruitment, while continuing to treat participants already enrolled into the study.
Removed
In February 2025, Taiho dosed their first patient in Japan for PRISM-1. • In January 2024, we amended the Stock Purchase Agreement with Gilead, pursuant to which Gilead made an equity investment of $320 million through the purchase of our common stock at $21.00 per share.
Added
No grade 4 or 5 events were observed and the majority of AEs were grade 1 or 2. ◦ We and AstraZeneca will continue to monitor these participants to further characterize the safety profile of the combination with longer follow-up.
Removed
HIF-2⍺ Program • In February 2025, we presented clinical data from three monotherapy expansion cohorts of ARC-20 in a rapid oral session at the 2025 American Society of Clinical Oncology ("ASCO") Genitourinary Symposium.
Added
These data, along with any discussions with health authorities, will inform next steps for the study. • In June 2025, we presented initial data from the ARC-20 study evaluating casdatifan plus cabozantinib that showed that nearly half of patients with metastatic cancer had a confirmed response: ◦ Treatment with casdatifan plus cabozantinib, a TKI, showed a confirmed overall response rate of 46% in patients who reached a minimum of 12 weeks (two scans) of follow-up, 63 Table of Contents ◦ The combination had a manageable safety profile, and there was no meaningful overlapping toxicity for the two drugs.
Removed
At the time of data cut-off (January 3, 2025), observations from the expansion cohorts included: ◦ A 9.7-month mPFS was reached for the 50mg twice-a-day (BID) casdatifan monotherapy cohort; mPFS was not yet reached for other cohorts. ◦ Confirmed objective response rate ("ORR") ranged from 25% to 33%, with 2 of the cohorts exceeding 30% (including one partial response that confirmed after the data cut-off). ◦ Rates of primary progressive disease (progression at or before their first disease assessment) ranged from 14% to 19%.
Added
TIGIT Program (domvanalimab) • In December 2025, we announced the discontinuation of the Phase 3 STAR-221 study, conducted in partnership with Gilead and Taiho, evaluating a domvanalimab-based combination in upper gastrointestinal cancers due to futility: ◦ The decision was based on the recommendation from the Independent Data Monitoring Committee ("IDMC") following its review of data from an event-driven, pre-specified interim analysis of OS. ◦ At the interim analysis, the domvanalimab-based combination did not improve OS relative to that of nivolumab plus chemotherapy.
Removed
Most patients (81-87%) experienced disease control with either a partial response or stable disease and were still on treatment. 61 Table of Contents Anti-TIGIT Program • In November 2024, we presented results at the Society for Immunotherapy of Cancer ("SITC") annual meeting from Part 1 of ARC-10, a randomized study evaluating domvanalimab plus zimberelimab in PD-L1-high NSCLC, which showed: ◦ A 36% reduction in risk of death (hazard ratio=0.64) was observed for domvanalimab plus zimberelimab compared to that of zimberelimab alone. ◦ Zimberelimab reached a median overall survival of two years, and the median overall survival for domvanalimab plus zimberelimab was not reached. ◦ Treatment-related adverse events leading to treatment discontinuation were low (10.5%) for the combination of domvanalimab and zimberelimab. • In June 2024, we presented updated data at the ASCO Annual Meeting from Arm A1 of the Phase 2 EDGE-Gastric study which showed 12.9 months mPFS for domvanalimab plus zimberelimab and chemotherapy in first-line upper GI adenocarcinomas, which exceeded historical benchmarks for anti-PD-1 plus chemotherapy.
Added
The safety profile for the domvanalimab-based combination was similar to that of nivolumab plus chemotherapy, and there were no new safety findings identified. ◦ Both the STAR-221 and the Phase 2 EDGE-Gastric studies will be discontinued. • In the first half of 2026, we and Gilead expect to conduct a futility analysis of STAR-121, a Phase 3 study evaluating domvanalimab plus zimberelimab and chemotherapy in 1L non-small cell lung cancer.
Removed
Adenosine-Pathway Programs • In October 2024, we initiated PRISM-1, a Phase 3 trial of quemliclustat combined with gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in pancreatic cancer. • In June 2024, we presented data at the ASCO Annual Meeting from ARC-9, a randomized Phase 1b/2 study evaluating etrumadenant plus zimberelimab, FOLFOX chemotherapy and bevacizumab ("EZFB") versus regorafenib in third-line metastatic colorectal cancer ("mCRC"). ◦ Results showed 19.7 months median overall survival for the EZFB arm and EZFB significantly reduced the risk of death by 63% and risk of disease progression by 73% compared to regorafenib.
Added
Adenosine-Pathway Program (quemliclustat) • In October 2025, we announced that we completed enrollment of PRISM-1, a Phase 3 trial of quemliclustat combined with gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in first-line metastatic pancreatic ductal adenocarcinoma, within 12 months of study initiation. • In July 2025, we announced that quemliclustat, an investigational small-molecule CD73 inhibitor, was granted orphan drug designation by the FDA for the treatment of pancreatic cancer.
Removed
This is the longest median overall survival reported in third-line mCRC to date in a randomized trial. Strategic Partnerships Gilead Sciences, Inc. In 2020, we and Gilead entered into the Gilead Collaboration Agreement.
Added
Adenosine Receptor Antagonist Program (etrumadenant) • In the first quarter 2025, based on our strategic priorities, we decided to pause future development of etrumadenant and in June 2025, Gilead returned its license to the adenosine receptor antagonist program, which includes etrumadenant. Strategic Partnerships Gilead Sciences, Inc.

… 39 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed1 unchanged
Biggest changeLong-term debt As of December 31, 2024, we had outstanding debt with a carrying value of $48 million bearing interest at a rate equal to the greater of (i) 10.45% or (ii) the prime rate plus 1.95%.
Biggest changeLong-term debt As of December 31, 2025 and 2024, we had outstanding debt with a carrying value of $99 million and $48 million, respectively, bearing interest at a rate equal to the greater of (i) 10.45% or (ii) the prime rate plus 1.95%.
A hypothetical 100 basis point increase in interest rates as of December 31, 2024 and 2023 would not have resulted in a material effect on the fair market value of our cash, cash equivalents and marketable securities.
A hypothetical 100 basis point increase in interest rates as of December 31, 2025 and 2024 would not have resulted in a material effect on the fair market value of our cash, cash equivalents and marketable securities.
In addition, a hypothetical 100 basis point decrease in interest rates as of December 31, 2024 and 2023 would not result in a material effect on income in the respective ensuing year.
In addition, a hypothetical 100 basis point decrease in interest rates as of December 31, 2025 and 2024 would not result in a material effect on income in the respective ensuing year.
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2024 and 2023, respectively would not result in material impact to our financial position or income in the respective ensuing year. 70 Table of Contents
A hypothetical 20% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2025 and 2024, respectively would not result in material impact to our financial position or income in the respective ensuing year. 73 Table of Contents
We are exposed to foreign currency exchange rate risk inherent in our contracts with research institutions, CROs, and contract manufacturing organizations as certain services are performed by them outside the U.S. and billed in other currencies.
We are exposed to foreign currency exchange rate risk inherent in our contracts with research institutions, CROs, and CMOs as certain services are performed by them outside the U.S. and billed in other currencies.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks that may result from changes in interest rates and foreign currency exchange rates. Interest Rate Risk Investments in marketable securities As of December 31, 2024 and 2023, we had cash, cash equivalents and marketable securities of $992 million, and $866 million, respectively.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks that may result from changes in interest rates and foreign currency exchange rates. Interest Rate Risk Investments in marketable securities As of December 31, 2025 and 2024, we had cash, cash equivalents and marketable securities of $1.0 billion and $992 million, respectively.
In addition, a hypothetical 100 basis point increase in the prime rate compared to December 31, 2024 would not result in material impact to our income in the respective ensuing year. Foreign Currency Exchange Risk We do not have any foreign currency forward or cross currency swap contracts.
In addition, a hypothetical 100 basis point increase in the prime rates as of December 31, 2025 and 2024 would not result in material impact to our income in the respective ensuing year. Foreign Currency Exchange Risk We do not have any foreign currency forward or cross currency swap contracts.
A hypothetical 100 basis point increase in the prime rate compared to December 31, 2024 would not have resulted in a material effect on the fair market value of our debt.
A hypothetical 100 basis point increase in the prime rates as of December 31, 2025 and 2024 would not have resulted in a material effect on the fair market value of our debt.

Other RCUS 10-K year-over-year comparisons