- Arcus Biosciences on Wednesday said initial results from a closely watched lung cancer study were "encouraging," as partner Gilead takes more time to consider exercising an option on the most important drug in the smaller company's pipeline.
- Arcus didn't detail any specific results in Wednesday's announcement, leaving analysts to interpret company executives' "body language" on a call for investors and guess at the effects observed so far for the three Arcus experimental drugs included in the trial.
- Investors are most focused on domvanalimab, a type of antibody drug that works by blocking the protein called TIGIT. The treatment is viewed as having blockbuster sales potential, and investors are eagerly awaiting a licensing decision from Gilead, which Arcus said will come "later this year."
With management declining to share details, the only clear conclusion is that the results were strong enough to continue the trial. But they may not have been strong enough to warrant an immediate opt-in from Gilead, analysts said.
It makes sense for Gilead to wait to see more data because the company is already working with Arcus and doesn't have to rush to secure licensing rights, wrote Alethia Young, an analyst at Cantor Fitzgerald, in a note to investors. Domvanalimab is an important drug for Gilead's pipeline as well, Young said.
Patients in the ARC-7 study randomly got one of three treatment regimens, all made up of experimental Arcus drugs that work in different ways. One treatment group received a drug called zimberelimab alone, a second group got a combination of domvanalimab and zimberelimab, and a third received domvanalimab, zimberelimab and a medicine called etrumadenant.
Zimberelimab is an anti-PD1 drug in the same class as Merck & Co.'s Keytruda. Arcus said the experimental drug "showed activity similar" to anti-PD1 treatments already on the market. The combination arms, meanwhile, "showed encouraging clinical activity," Arcus said in its press release.
After listening to Arcus' call for investors, Evercore ISI analyst Umer Raffat said he came away thinking company executives were most intrigued by the results for the triple combination therapy, as they used the word "excited" several times when talking about it. By contrast, Arcus' wording for the double combination was more along the lines of "sufficient to continue," Raffat wrote in a note to investors.
The company noted in the conference call that a significant portion of patients took a while to respond to treatment, which means the results may change as the trial continues. Researchers will present data from the study at a medical conference later this year, Arcus said.
The protein TIGIT has become a top target for drugmakers working to improve on cancer immunotherapy. Early results from Roche and Merck appeared promising and several other candidates from Bristol Myers Squibb, Beigene and GlaxoSmithKline are in development as well.