Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________

FORM 8-K

________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 29, 2024

________________________________________________________

Arcus Biosciences, Inc.

(Exact name of Registrant as Specified in Its Charter)

________________________________________________________

Delaware

001-38419

47-3898435

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

3928 Point Eden Way

Hayward, California

94545

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (510) 694-6200

(Former Name or Former Address, if Changed Since Last Report)

________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.0001 Per Share

RCUS

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 1.01 Entry into a Material Definitive Agreement.

Third Amended and Restated Common Stock Purchase Agreement

On January 29, 2024, Arcus Biosciences, Inc. (the “Company”) and Gilead Sciences, Inc. (“Gilead”) entered into a Third Amended and Restated Common Stock Purchase Agreement (the “A&R Purchase Agreement”), which amends and restates in its entirety the Second Amended & Restated Common Stock Purchase Agreement dated June 27, 2023 (the “Existing Purchase Agreement”). Pursuant to the A&R Purchase Agreement, Gilead purchased from the Company 15,238,095 shares of the Company’s common stock at a purchase price of $21.00 per share (the “2024 Gilead Financing”). All other terms of the Existing Purchase Agreement, including Gilead’s option to purchase additional shares from the Company, up to a maximum of 35% of the Company’s then-outstanding common stock, from time to time until July 13, 2025, remain unchanged.

Amended and Restated Investor Rights Agreement

On January 29, 2024, the Company and Gilead entered into an Amended and Restated Investor Rights Agreement (the “A&R Investor Rights Agreement”), which amends and restates in its entirety the Investor Rights Agreement dated May 27, 2020, as amended on October 11, 2022 (as previously amended, the “Existing Investor Rights Agreement”). Pursuant to the A&R Investor Rights Agreement, and in connection with the 2024 Gilead Financing, (i) Gilead has the right to designate up to three individuals to be appointed to the Company’s board of directors (the “Board”), (ii) Juan Jaen, Ph.D. and Jennifer Jarrett would resign from the Board, and (iii) the Company agreed to establish a Science Committee and any director appointed by Gilead having an advanced scientific degree shall be a member of such Science Committee. All other terms of the Existing Investor Rights Agreement, remain unchanged.

Amendment No. 3 to Option, License and Collaboration Agreement

On January 29, 2024, the Company and Gilead also entered into Amendment No. 3 (“Amendment No. 3”) to the Option, License and Collaboration Agreement, dated May 27, 2020, as amended on November 17, 2021 and May 12, 2023 (as previously amended, the “OLCA”). Amendment No. 3, among other things, (i) makes various modifications to the program governance structure, (ii) requires Gilead to pay the $100,000,000 option continuation payment due on the fourth anniversary of the OLCA, and (iii) provides that the Company will operationalize and fund a Phase 3 study to evaluate quemliclustat in pancreatic cancer in addition to certain other activities. In connection with Amendment No. 3, the Company and Gilead have reprioritized the joint domvanalimab development program to focus on advancing and potentially accelerating their Phase 3 studies, STAR-121 (lung cancer) and STAR-221 (gastrointestinal cancer), and are discontinuing enrollment in the Phase 3 ARC-10 study evaluating domvanalimab plus zimberelimab compared to pembrolizumab monotherapy in front-line, locally advanced or metastatic, PD-L1-high non-small cell lung cancer. No changes to the safety and efficacy profile of domvanalimab and zimberelimab have been observed.

The foregoing is only a brief description of the material terms of the A&R Purchase Agreement, A&R Investor Rights Agreement and Amendment No. 3 and does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to each agreement, which will be filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 above related to the Gilead Financing is incorporated by reference here. The shares were sold to Gilead pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and were sold to one entity that is an accredited investor.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 29, 2024 (i) Dr. Jaen and Ms. Jarrett resigned from the Board and (ii) following such resignations, the Board appointed Johanna Mercier to the Board as a Class II director. Dr. Jaen and Ms. Jarrett’s resignations are not the result of any dispute or disagreement with the Company or the Board on any matter relating to the operations, policies or practices of the Company.

Ms. Mercier is the Chief Commercial Officer of Gilead and is being appointed pursuant to Gilead’s rights under the A&R Investor Rights Agreement and will not receive any compensation for her service as a member of the Board. The Company expects to enter into its standard form of indemnification agreement with Ms. Mercier.

Item 8.01 Other Events.

On January 29, 2024, the Company issued a press release announcing various updates regarding its anti-TIGIT clinical development program.

A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.						Description
99.1						Press release dated January 29, 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ARCUS BIOSCIENCES, INC.

Date: January 30, 2024	By:	/s/ Terry Rosen, Ph. D.
		Terry Rosen, Ph.D.
		Chief Executive Officer (Principal Executive Officer)

Exhibit 99.1


Gilead Contacts: Jacquie Ross, Investors investor_relations@gilead.com Meaghan Smith, Media public_affairs@gilead.com			Arcus Contacts: Pia Eaves, Investors peaves@arcusbio.com, (617) 459-2006 Holli Kolkey, Media hkolkey@arcusbio.com, (650) 922-1269

GILEAD AND ARCUS ANNOUNCE AMENDED COLLABORATION AND EQUITY INVESTMENT

– Investment Reinforces Companies’ Conviction in TIGIT Pathway and Provides Opportunity to Accelerate the Anti-TIGIT Program –

– Additional Equity Investment of $320M, Raising Gilead’s Ownership Stake in Arcus to 33% –

– Amendment Provides Gilead with One Additional Seat on the Arcus Board –

Foster City, Calif., & Hayward, Calif., January 29, 2024 – Gilead Sciences, Inc. (Nasdaq: GILD) and Arcus Biosciences, Inc. (NYSE: RCUS) today announced an amendment to their collaboration agreement and a separate equity investment by Gilead of $320 million in Arcus common stock at $21.00 per share. The equity investment and collaboration amendment enable accelerated growth of the companies’ joint development programs that span multiple indications. Additionally, Johanna Mercier, Chief Commercial Officer at Gilead Sciences, will join the Arcus Board, bringing Gilead’s total director designees to three. The amendment also includes governance enhancements enabling streamlined decision-making and reflecting the continued growth of the collaboration.

“This amendment allows Gilead to accelerate the domvanalimab program and enables Arcus to focus on progressing multiple pipeline assets, including both Gilead-optioned and non-optioned programs,” said Merdad Parsey, MD, PhD, Chief Medical Officer, Gilead Sciences. “We look forward to strengthening our collaboration as we explore the collective power of our cross-portfolio combinations to help transform how cancer is treated.”

Gilead and Arcus have reprioritized the joint domvanalimab development program to focus on advancing and potentially accelerating the Phase 3 studies STAR-121 (lung cancer) and STAR-221 (gastrointestinal cancer), which are both expected to be fully enrolled by year-end. This prioritization focuses on domvanalimab-containing regimen research in areas where it may have significant impact in combination with chemotherapy and in settings with high unmet need through all-comer study designs. The companies also plan to initiate STAR-131, a new registrational Phase 3 lung cancer study that includes the domvanalimab plus zimberelimab regimen. This prioritization reflects the companies’ continued conviction in the TIGIT pathway and the Fc-silent design of domvanalimab, which has the potential for differentiation in both efficacy and safety.

Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA www.gilead.com

phone 650 574 3000 facsimile 650 578 9264

“Since the inception of our partnership with Gilead in 2020, the companies have moved increasingly closer in all aspects of our research and development efforts,” said Terry Rosen, Ph.D., Chief Executive Officer, Arcus. “This investment and prioritization enable both companies to leverage their respective strengths and focus on efficiently advancing novel combinations that have the potential to change the landscape of cancer treatment. The additional investment by Gilead, which extends our cash runway into 2027, will enable us to fund our Phase 3 studies of quemliclustat in pancreatic cancer and AB521 in kidney cancer, as well as to begin preparation for our first potential product approvals.”

Additional changes during this prioritization will include discontinuing further enrollment in the Phase 3 ARC-10 study evaluating domvanalimab plus zimberelimab compared to pembrolizumab monotherapy in first-line locally advanced or metastatic PD-L1-high NSCLC. The discontinuation of the ARC-10 study is based on strategic prioritization to advance and potentially accelerate the Phase 3 studies STAR-121 and STAR-221, which have the potential to address a higher unmet need for patients with lung and gastrointestinal cancers.

Gilead and Arcus are grateful to the patients and investigators who have made the choice to participate in ARC-10, which will continue to generate data and insights that will be shared at future scientific conferences. Patients currently enrolled in ARC-10, or who consented prior to January 29, 2024, and choose to enroll in the study, may continue their treatment and be monitored according to the study protocol. No changes to the safety and efficacy profile of domvanalimab and zimberelimab have been observed.

Also, under the terms of the amended collaboration agreement, the planned Phase 3 first-line study in pancreatic cancer evaluating the investigational small molecule CD73 inhibitor quemliclustat will become an Arcus independent study.

Domvanalimab, zimberelimab and quemliclustat are investigational molecules. Neither Gilead nor Arcus has received approval from any regulatory authority for any use of these molecules, and their safety and efficacy for the treatment of lung, gastrointestinal and pancreatic cancers have not been established.

About Domvanalimab

Domvanalimab is the first Fc-silent investigational monoclonal antibody in pivotal trials which was designed to block and bind to the T-cell immunoreceptor with Ig and ITIM domains (TIGIT), a protein on immune cells that acts as a brake on the immune response. Cancer cells can exploit TIGIT to avoid detection by the immune system. By binding to TIGIT, domvanalimab is designed to free up immune activating pathways and activate immune cells to attack and kill cancer cells. Domvanalimab has demonstrated complete target coverage on all TIGIT-expressing immune cells in the blood of patients.

Domvanalimab is being evaluated in three registrational Phase 3 studies across lung and gastrointestinal cancers, including: (1) STAR-121, evaluating domvanalimab plus zimberelimab and chemotherapy versus pembrolizumab plus chemotherapy in first-line all comer NSCLC regardless of PD-L1 expression levels; (2) STAR-221, evaluating domvanalimab plus zimberelimab and chemotherapy versus nivolumab plus chemotherapy in first-line locally advanced, unresectable or metastatic gastric, esophageal and gastro-esophageal junction adenocarcinomas; and (3) PACIFIC-8, being operationalized by AstraZeneca, evaluating domvanalimab plus durvalumab in unresectable Stage 3 NSCLC.

About Zimberelimab

Zimberelimab is an anti-programmed cell death protein-1 (PD-1) monoclonal antibody that binds PD-1, with the goal of restoring the antitumor activity of T cells. As a differentiated next-generation, fully

human antibody, zimberelimab has demonstrated high affinity, selectivity and potency in various tumor types.

Guangzhou Gloria Biosciences Co. Ltd., who holds commercialization rights for zimberelimab in greater China, has obtained approval for zimberelimab as the first and only anti-PD-1 antibody to treat recurrent or metastatic cervical cancer (September 2023). Additionally, in China, zimberelimab is approved to treat relapsed or refractory classical Hodgkin's lymphoma (August 2021). Zimberelimab is not approved for any use in the U.S. or other regions outside of China. Gloria conducts its development and commercialization activities independent of Arcus and Gilead.

About Arcus Biosciences

Arcus Biosciences is a clinical-stage, global biopharmaceutical company developing differentiated molecules and combination medicines for people with cancer. In partnership with industry collaborators, patients and physicians around the world, Arcus is expediting the development of first- or best-in-class medicines against well-characterized biological targets and pathways and studying novel, biology-driven combinations that have the potential to help people with cancer live longer. Founded in 2015, the company has expedited the development of multiple investigational medicines into clinical studies, including new combination approaches that target TIGIT, PD-1, the adenosine axis (CD73 and dual A2a/A2b receptor), HIF-2a, CD39 and AXL. For more information about Arcus Biosciences’ clinical and preclinical programs, please visit www.arcusbio.com.

About Gilead Sciences

Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. The company is committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, COVID-19, and cancer. Gilead operates in more than 35 countries worldwide, with headquarters in Foster City, California.

Arcus Forward-Looking Statements

This press release contains forward-looking statements. All statements regarding events or results to occur in the future contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the statements regarding: the initiation of new studies and continuation or discontinuation of existing studies and indications; the ability of Arcus to advance its pipeline; Arcus’s expectations regarding the completion of enrollment of STAR-121 and STAR-221 in 2024; Arcus’s expectations regarding the extension of its cash runway into 2027; and the potential of domvanalimab-containing regimens to be differentiated and potentially transformative in the treatment of certain cancers. All forward-looking statements involve known and unknown risks and uncertainties and other important factors that may cause our actual results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: dependence on the collaboration with Gilead for the successful development and commercialization of Arcus’s investigational products, including domvanalimab and zimberelimab; difficulties associated with the management of the collaboration activities or expanded clinical programs; the emergence of new or unexpected adverse events or unfavorable results from ongoing or future clinical trials with domvanalimab, zimberelimab or quemliclustat; the inherent uncertainty associated with pharmaceutical product development and clinical trials; delays in Arcus’s clinical trials due to difficulties or delays in the regulatory process, enrolling subjects or manufacturing or supplying product for such clinical trials; and changes in the competitive landscape for Arcus’s programs. Risks and uncertainties facing Arcus are

described more fully in the “Risk Factors” section of Arcus’s most recent periodic report that has been filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this press release. Arcus disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this press release.

Gilead Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including the risk that Gilead may not realize the potential benefits of amended collaboration and investment agreement with Arcus or its other investments in oncology; difficulties or unanticipated expenses in connection with the collaboration and the potential effects on Gilead’s revenues and earnings; the risk that Gilead’s investment in Arcus will lose value for any number of reasons; the ability of the parties to initiate, progress or complete clinical trials within currently anticipated timelines or at all, and the possibility of unfavorable results from ongoing or additional clinical trials, including those involving domvanalimab, zimberelimab and/or quemliclustat (such as STAR-121, STAR-131, STAR-221 and PACIFIC-8); uncertainties relating to regulatory applications for these and other candidates and related filing and approval timelines; Gilead’s ability to receive regulatory approvals for such candidates in a timely manner or at all, and the risk that any such approvals may be subject to significant limitations on use; the possibility that the parties may make a strategic decision to terminate the collaboration at any time, or to discontinue development of programs for indications currently under evaluation and as a result, such programs and/or indications may never be commercialized; and any assumptions underlying any of the foregoing. These and other risks, uncertainties and other factors are described in detail in Gilead’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission. These risks, uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The reader is cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and is cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements are based on information currently available to Gilead, and Gilead assumes no obligation and disclaims any intent to update any such forward-looking statements.

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The Arcus name and logo are trademarks of Arcus Biosciences, Inc., and Gilead and the Gilead logo are trademarks of Gilead Sciences, Inc., or its related companies.

For more information about Gilead, please visit the company’s website at www.gilead.com, follow Gilead on X (@GileadSciences) or call Gilead Public Affairs at 1-800-GILEAD-5 or 1-650-574-3000.

Cover	Jan. 29, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jan. 29, 2024
Entity Registrant Name	Arcus Biosciences, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38419
Entity Tax Identification Number	47-3898435
Entity Address, Address Line One	3928 Point Eden Way
Entity Address, City or Town	Hayward
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94545
City Area Code	510
Local Phone Number	694-6200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $0.0001 Per Share
Trading Symbol	RCUS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001724521
Document Information [Line Items]
Document Period End Date	Jan. 29, 2024