Gilead Amends Arcus Biosciences Stake, Signals Ownership Change

TL;DR

**Gilead just updated its Arcus Biosciences stake, watch for potential strategic shifts!**

AI Summary

Gilead Sciences, Inc. filed an amendment to its Schedule 13D, indicating a change in its beneficial ownership of Arcus Biosciences, Inc. common stock as of January 29, 2024. This filing updates previous disclosures regarding Gilead's significant stake in Arcus Biosciences. This matters to investors because Gilead is a major pharmaceutical company, and its continued or altered investment in Arcus Biosciences can signal confidence or changes in strategic alignment, potentially influencing Arcus's stock performance and future prospects.

Why It Matters

Gilead's updated filing on its Arcus Biosciences holdings provides transparency into its investment strategy, which can impact investor perception and the stock's valuation.

Risk Assessment

Risk Level: medium — Changes in a major investor's stake can introduce uncertainty about future corporate control or strategic direction, posing a medium risk to current shareholders.

Analyst Insight

An investor should review the full Schedule 13D/A filing to understand the specific changes in Gilead's beneficial ownership of Arcus Biosciences, as this could signal a shift in their strategic partnership or investment thesis, potentially impacting Arcus's future valuation.

Key Players & Entities

• Gilead Sciences, Inc. (company) — the reporting person and major investor in Arcus Biosciences, Inc.
• Arcus Biosciences, Inc. (company) — the subject company whose common stock is being reported on
• January 29, 2024 (date) — the date of the event requiring this filing
• $0.0001 (dollar_amount) — par value of Arcus Biosciences, Inc. Common Stock

FAQ

Key Financial Figures

• $0.0001 — ame of Issuer) Common Stock, par value $0.0001 (Title of Class of Securities) 03969
• $27.50 — rdquo;) at the public offering price of $27.50 per share. The Public Offering was comp
• $60,500,000 — ad for these shares of Common Stock was $60,500,000, and such consideration was obtained fr
• $33.54 — urchase ”) at a purchase price of $33.54 per share (the “ Initial Purchase
• $199,999,992 — sideration for the Initial Purchase was $199,999,992.66, and such consideration was obtained
• $39.00 — urchase ”) at a purchase price of $39.00 per share (the “ Second Purchase
• $230,350,000 — nsideration for the Second Purchase was $230,350,000.00, and such consideration was obtained
• $19.26 — urchase ”) at a purchase price of $19.26 per share (the “ Third Purchase P
• $19,452,600 — onsideration for the Third Purchase was $19,452,600, and such consideration was obtained fr
• $21.00 — urchase ”) at a purchase price of $21.00 per share (the “ Fourth Purchase
• $320,000,000 — nsideration for the Fourth Purchase was $320,000,000, and such consideration was obtained fr

Filing Documents

• tm244278d1_sc13da.htm (SC 13D/A) — 69KB
• tm244278d1_ex99-1.htm (EX-99.1) — 216KB
• tm244278d1_ex99-2.htm (EX-99.2) — 173KB
• 0001104659-24-008866.txt ( ) — 459KB

Security and Issuer

Item 1. Security and Issuer This Amendment No. 3 to Schedule 13D (the “ Schedule 13D ”) relates to the common stock, par value $0.0001 per share (the “ Common Stock ”), of Arcus Biosciences, Inc., a Delaware corporation (the “ Issuer ”). The Issuer’s principal executive offices are located at 3928 Point Eden Way, Hayward, California 94545.

Identity and Background

Item 2. Identity and Background (a)This Schedule 13D is being filed by Gilead Sciences, Inc., a Delaware corporation (“ Gilead ” or the “ Reporting Person ”). (b)The principal business address of the Reporting Person is 333 Lakeside Drive, Foster City, California 94404. (c)The principal business of the Reporting Person is to develop and commercialize innovative medicines in areas of unmet medical need and engage in any other activity or business lawfully carried on by a corporation organized under the laws of the State of Delaware. The directors and executive officers of the Reporting Person are set forth on Schedule I, attached hereto. Schedule I sets forth the following information with respect to each such person: (i)name; (ii)business address; (iii)position with the Reporting Person and present principal occupation or employment and, for persons not employed by the Reporting Person, the name, principal business and address of any corporation or other organization in which such employment is conducted; and (iv)citizenship. (d) – (e) During the last five years, neither the Reporting Person nor any person named in Schedule I has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The jurisdiction of organization of the Reporting Person is set forth in subsection (a) above. The citizenship of each of the individuals referred to in Schedule I is set forth on Schedule I.

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration Gilead acquired from the Issuer 2,200,000 shares of Common Stock in the Issuer’s public offering (the “ Public Offering ”) at the public offering price of $27.50 per share. The Public Offering was completed on June 2, 2020. The total consideration paid by Gilead for these shares of Common Stock was $60,500,000, and such consideration was obtained from the available cash resources of Gilead. CUSIP No. 03969F109 Page 4 of 8 Pages On May 27, 2020, Gilead entered into the Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an initial 5,963,029 shares of the Issuer’s Common Stock (the “ Initial Purchase ”) at a purchase price of $33.54 per share (the “ Initial Purchase Price ”), which purchase occurred on July 13, 2020. The total consideration for the Initial Purchase was $199,999,992.66, and such consideration was obtained from the available cash resources of Gilead. On January 31, 2021, Gilead entered into the Amended and Restated Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an additional 5,650,000 shares of the Issuer’s Common Stock (the “ Second Purchase ”) at a purchase price of $39.00 per share (the “ Second Purchase Price ”), which purchase occurred on February 1, 2021. The total consideration for the Second Purchase was $230,350,000.00, and such consideration was obtained from the available cash resources of Gilead. On June 27, 2023, Gilead entered into the Second Amended and Restated Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an additional 1,010,000 shares of the Issuer’s Common Stock (the “ Third Purchase ”) at a purchase price of $19.26 per share (the “ Third Purchase Price ”), which purchase occurred on June 28, 2023. The total consideration for the Third Purchase was $19,452,600, a

Purpose of Transaction

Item 4. Purpose of Transaction On May 27, 2020, Gilead and the Issuer entered into an Option, License and Collaboration Agreement (the “ Collaboration Agreement ”) pursuant to with Gilead obtained an exclusive option to acquire an exclusive license to all of the Issuer’s current and future clinical programs during the 10-year collaboration term and, for those programs that enter clinical development prior to the end of the collaboration term, for up to an additional three years thereafter. In addition to the Collaboration Agreement, Gilead and the Issuer entered into a Common Stock Purchase Agreement (the “ Purchase Agreement ”), which was amended and restated on January 31, 2021 to account for the Second Purchase (the “ Amended and Restated Purchase Agreement ”), on June 27, 2023 to account for the Third Purchase (the “ Second Amended and Restated Purchase Agreement ”), and on January 29, 2024 to account for the Fourth Purchase (the “ Third Amended and Restated Purchase Agreement ”) and an Investor Rights Agreement (as amended by Amendment No. 1 thereto, which was subsequently amended and restated on January 29, 2024, the “ Amended and Restated Investor Rights Agreement ” and, together with the Third Amended and Restated Purchase Agreement, the “ Equity Agreements ”) pursuant to which Gilead made the Initial Purchase at the Initial Purchase Price, the Second Purchase at the Second Purchase Price, the Third Purchase at the Third Purchase Price and the Fourth Purchase at the Fourth Purchase Price. Gilead also has the right, at its option, to purchase additional shares from the Issuer, up to a maximum of 35% of the Issuer’s then-outstanding Common Stock, from time to time for a period of five years from the closing of the Initial Purchase, at a purchase price equal to the greater of a 20% premium to market (based on a trailing five-day average closing price) at the time

Interest in Securities of the Issuer

Item 5. Interest in Securities of the Issuer (a)-(b) Number of shares of Common Stock beneficially owned: Gilead 31,532,781 shares Percent of class: Gilead 35 % The number of shares of Common Stock beneficially owned consists of (i) 2,200,000 shares of common stock of the Issuer purchased in the Issuer’s public offering that closed on June 2, 2020, (ii) the initial purchase of 5,963,029 shares of Common Stock of the Issuer pursuant to the Purchase Agreement, (iii) the subsequent purchase of 5,650,000 shares of Common Stock of the Issuer pursuant to the Amended and Restated Purchase Agreement, (iv) the subsequent purchase of 1,010,000 shares of Common Stock of the Issuer pursuant to the Second Amended and Restated Purchase Agreement, (v) the subsequent purchase of 15,238,095 shares of Common Stock of the Issuer pursuant to the Third Amended and Restated Purchase Agreement and (vi) 1,471,657 Option Shares. The percentage ownership was calculated based upon 74,855,565 shares of Common Stock of the Issuer issued and outstanding on November 1, 2023, as reported in the Form 10-Q filed with the SEC on November 7, 2023, and after giving effect to the offering of 15,238,095 shares of Common Stock of the Issuer, as reported in the Form 8-K filed with the SEC on January 30, 2024, assuming the immediate exercise in full by Gilead of its option to purchase the Option Shares. Number of shares as to which such person has: (i) Sole power to vote or to direct the vote: Gilead 31,532,781 shares (ii) Shared power to vote or to direct the vote: Gilead 0 shares CUSIP No. 03969F109 Page 6 of 8 Pages (iii) Sole power to dispose or to direct the disposition of: Gilead 31,532,781 shares (iv) Shared power to dispose or to direct the disposition of: Gilead 0 shares To the best knowledge of the Reporting Person, none of the individuals listed on Schedule I beneficially owns any of the Issuer’s Common Stock. (c) Except as reported in th

Contracts, Arrangements, Understandings or Relationship

Item 6. Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer Except as disclosed in Items 3 and 4 of this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) to which the Reporting Person is a party with respect to the securities of the Issuer.

Materials to Be Filed as Exhibits

Item 7. Materials to Be Filed as Exhibits Exhibit 99.1 Third Amended and Restated Common Stock Purchase Agreement, dated January 29, 2024, between Arcus Biosciences, Inc. and Gilead Sciences, Inc. Exhibit 99.2 Amended and Restated Investor Rights Agreement, dated January 29, 2024, between Arcus Biosciences, Inc. and Gilead Sciences, Inc. CUSIP No. 03969F109 Page 7 of 8 Pages SIGNATURE After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: January 31, 2024 GILEAD SCIENCES, INC. By: /s/ Andrew D. Dickinson Name: Andrew D. Dickinson Title: Executive Vice President and Chief Financial Officer CUSIP No. 03969F109 Page 8 of 8 Pages Schedule I The name and present principal occupation of each of the executive officers and directors of Gilead Sciences, Inc. are set forth below. Unless otherwise noted, each of these persons have as their business address c/o Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, California 94404. Name Title Citizenship Principal Occupation and, if not employed by Gilead Sciences, Inc., Name, Principal Business and Address of Employer Daniel P. O’Day Chief Executive Officer, Chairman and Director United States * Jacqueline K. Barton, Ph.D. Director United States Professor Emerita, California Institute of Technology Jeffrey A. Bluestone, Ph.D. Director United States President and Chief Executive Officer, Sonoma Biotherapeutics; Professor, University of California San Francisco Sandra J. Horning, M.D. Director United States Retired Chief Medical Officer of Roche, Inc. Kelly A. Kramer Director United States Retired Executive Vice President and Chief Financial Officer, Cisco Systems, Inc. Kevin E. Lofton, FACHE Director United States Retired Chief Executive Officer, CommonSpirit Health Harish Manwani Director Singapore

View Full Filing

View this SC 13D/A filing on SEC EDGAR