Arcus Biosciences, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Arcus Biosciences reported a decrease in collaboration revenue for Q1 2024 compared to the prior year, while maintaining a strong cash position and no debt.</b>

AI Summary

Arcus Biosciences, Inc. (RCUS) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Arcus Biosciences reported License and Development Services Revenue of $10.0M for Q1 2024, a decrease from $11.0M in Q1 2023. Other Collaboration Revenue was $1.0M for Q1 2024, down from $2.0M in Q1 2023. Total revenue from related party collaborations decreased to $11.0M in Q1 2024 from $13.0M in Q1 2023. The company's cash and cash equivalents stood at $783.6M as of March 31, 2024. Total debt was $0 as of March 31, 2024.

Why It Matters

For investors and stakeholders tracking Arcus Biosciences, Inc., this filing contains several important signals. The decline in collaboration revenue could indicate shifts in partnership dynamics or project milestones, impacting future income streams. The absence of debt and substantial cash reserves provide financial flexibility for ongoing research and development, but revenue generation remains a key focus.

Risk Assessment

Risk Level: medium — Arcus Biosciences, Inc. shows moderate risk based on this filing. The company's revenue is heavily reliant on collaboration agreements, which can fluctuate based on project progress and partner decisions, as evidenced by the year-over-year decrease in collaboration revenue.

Analyst Insight

Monitor future collaboration agreements and revenue trends to assess the company's ability to generate consistent income from its partnerships.

Revenue Breakdown

Key Numbers

• 10.0M — License and Development Services Revenue (Q1 2024)
• 11.0M — License and Development Services Revenue (Q1 2023)
• 1.0M — Other Collaboration Revenue (Q1 2024)
• 2.0M — Other Collaboration Revenue (Q1 2023)
• 11.0M — Total revenue from related party collaborations (Q1 2024)
• 13.0M — Total revenue from related party collaborations (Q1 2023)
• 783.6M — Cash and cash equivalents (March 31, 2024)
• 0 — Total debt (March 31, 2024)

Key Players & Entities

• Arcus Biosciences, Inc. (company) — Filer
• 2024-03-31 (date) — Period of report
• 2024-05-08 (date) — Filed as of date
• Hayward, CA (location) — Business address
• 10-Q (form) — Filing type

FAQ

Risk Factors

• Dependence on Collaboration and Licensing Agreements [medium — financial]: The company's revenue is significantly dependent on payments received under collaboration and licensing agreements, which can be variable and subject to the achievement of milestones.
• Research and Development Risks [high — operational]: The development of pharmaceutical products is a lengthy, expensive, and uncertain process, with a high risk of failure at various stages.
• Regulatory Approval Process [high — regulatory]: Obtaining regulatory approval for drug candidates is a complex and time-consuming process, with no guarantee of success.

Key Financial Figures

• $0.0001 — ich Registered Common Stock, Par Value $0.0001 Per Share RCUS The New York Stock Excha

Filing Documents

• rcus-20240331.htm (10-Q) — 1079KB
• a2024q1exhibit311.htm (EX-31.1) — 10KB
• a2024q1exhibit312.htm (EX-31.2) — 10KB
• a2024q1exhibit321.htm (EX-32.1) — 5KB
• a2024q1exhibit322.htm (EX-32.2) — 5KB
• rcus-20240331_g1.jpg (GRAPHIC) — 18KB
• rcus-20240331_g2.jpg (GRAPHIC) — 179KB
• rcus-20240331_g3.jpg (GRAPHIC) — 88KB
• rcus-20240331_g4.jpg (GRAPHIC) — 92KB
• rcus-20240331_g5.jpg (GRAPHIC) — 44KB
• rcus-20240331_g6.jpg (GRAPHIC) — 22KB
• rcus-20240331_g7.jpg (GRAPHIC) — 10KB
• 0001724521-24-000092.txt (&nbsp;) — 6752KB
• rcus-20240331.xsd (EX-101.SCH) — 57KB
• rcus-20240331_cal.xml (EX-101.CAL) — 53KB
• rcus-20240331_def.xml (EX-101.DEF) — 211KB
• rcus-20240331_lab.xml (EX-101.LAB) — 530KB
• rcus-20240331_pre.xml (EX-101.PRE) — 368KB
• rcus-20240331_htm.xml (XML) — 711KB

Financial Statements

Financial Statements 1 Condensed Consolidated Statements of Operations 1 Condensed Consolidated Statements of Comprehensive Loss 2 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Stockholders' Equity 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 29 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56 Item 3. Defaults Upon Senior Securities 56 Item 4. Mine Safety Disclosures 56 Item 5. Other Information 57 Item 6. Exhibits 58

SIGNATURES

SIGNATURES 60 Table of Contents RISK FACTOR SUMMARY The following is a summary of the key risks and uncertainties that make an investment in our securities speculative and risky. The below summary does not contain all of the information that may be important to you, and you should read this summary together with the more detailed description of the risks set forth under "Part II. Item 1A. Risk Factors" of the Quarterly Report. Risks Related to our Limited Operating History, Financial Position and Capital Requirements We have a history of operating losses, have never generated any revenue from product sales and anticipate that we will continue to incur significant losses for the foreseeable future. As a result, we may need to obtain additional funding to finance our operations. If we do not receive substantial capital when needed, we may be forced to restrict our operations or delay, reduce or eliminate our product development programs. Risks Related to the Discovery and Development of our Investigational Products Clinical drug development is a lengthy, expensive and uncertain process, if we are unable to develop, obtain regulatory approval for and commercialize our investigational products, or experience significant delays in doing so, our business will be materially harmed. The results of preclinical studies and early clinical trials, including interim data from our clinical studies that we announce or publish from time to time, are not always predictive of future results and could materially change due to audit and verification procedures or as more patient data become available. 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. Serious adverse events, undesirable side effects or other unexpected properties of our investigatio

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ARCUS BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) (unaudited) Three Months Ended March 31, 2024 2023 Revenues: License and development services revenue (Includes $ 131 and $ 17 from a related party) $ 135 $ 17 Other collaboration revenue (Includes $ 10 and $ 8 from a related party) 10 8 Total revenues 145 25 Operating expenses: Research and development (Net of recoveries of $ 16 and $ 33 from a related party) 109 81 General and administrative 32 30 Impairment of long-lived assets (see Note 11, Leases) 20 — Total operating expenses 161 111 Loss from operations ( 16 ) ( 86 ) Non-operating income (expense): Interest and other income, net 13 9 Effective interest on liability for sale of future royalties ( 1 ) ( 1 ) Total non-operating income, net 12 8 Loss before income taxes ( 4 ) ( 78 ) Income tax expense — ( 2 ) Net loss $ ( 4 ) $ ( 80 ) Net loss per share: Basic and diluted $ ( 0.05 ) $ ( 1.09 ) Shares used to compute net loss per share: Basic and diluted 86.2 73.0 See accompanying notes. 1 Table of Contents ARCUS BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In millions) (unaudited) Three Months Ended March 31, 2024 2023 Net loss $ ( 4 ) $ ( 80 ) Other comprehensive income (loss) ( 1 ) 3 Comprehensive loss $ ( 5 ) $ ( 77 ) See accompanying notes. 2 Table of Contents ARCUS BIOSCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) (unaudited) March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 185 $ 127 Marketable securities 810 632 Receivable from collaboration partners ($ 21 and $ 20 from a related party) 35 38 Prepaid expenses and other current assets 34 34 Total current assets 1,064 831 Long-term marketable securities 100 107 Property and equipment, net 51 51 Other noncurrent assets ($ — and

View Full Filing

View this 10-Q filing on SEC EDGAR