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Arcus Biosciences Inc (RCUS)
NYSE:RCUS
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Arcus Biosciences
(NYSE:RCUS)
49Neutral
Positive Factors
Efficacy and Safety
ARC-20 trial data presents a compelling signal that casdatifan will prove meaningfully advantaged over the market leader, belzutifan, with better efficacy benchmarks and comparable safety profiles.
Financial Position
RCUS finished 2024 in a strong cash position, with $992M in cash and cash equivalents expected to fund operations into mid-2027.
Negative Factors
Commercial Strategy
Contrary to expectations given the promising data, GILD chose not to opt-in for commercial rights to cas, driven by strategic concerns.
Investor Concerns
Investors have expressed hesitation stemming from Gilead’s decision not to opt-in to the program and whether cas’s differentiation over Merck’s belzutifan will prove clinically meaningful.
Arcus Biosciences (RCUS) vs. S&P 500 (SPY)
Market Cap
$816.04M
Dividend YieldN/A
Average Volume (3M)1.17M
Price to Earnings (P/E)―
Beta (1Y)1.91
Revenue Growth120.51%
EPS Growth25.37%
CountryUS
Employees627
SectorHealthcare
Sector Strength62
IndustryBiotechnology
Share Statistics
EPS (TTM)-3.10
Shares Outstanding105,841,420
10 Day Avg. Volume898,944
30 Day Avg. Volume1,167,712
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.67
Price to Cash Flow (P/CF)-2.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.00Price Target Upside292.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Arcus Biosciences Business Overview & Revenue Model
Company DescriptionArcus Biosciences, Inc., a clinical-stage biopharmaceutical company, develops and commercializes cancer therapies in the United States. Its product pipeline includes, Etrumadenant, a dual A2a/A2b adenosine receptor antagonist, which is in a Phase 1b/2 clinical trial; and Zimberelimab, an anti-PD-1 antibody that is in Phase 1b clinical trial for monotherapy. The company also develops Domvanalimab, an anti-TIGIT monoclonal antibody, which is in Phase 2 development for the treatment of first-line metastatic non-small cell lung cancer in combination with Zimberelimab; Quemliclustat, a small-molecule CD73 inhibitor is in a Phase 1/1b study for the treatment of first-line metastatic pancreatic cancer; and AB521, an oral and small molecule HIF-2a inhibitor that is in Phase 1 study for the treatment of patients with von Hippel- Lindau disease. It has a clinical development collaboration agreement with Strata Oncology, Inc. to evaluate Zimberelimab; a collaboration with AstraZeneca, BVF Partners L.P to evaluate domvanalimab, its investigational anti-TIGIT antibody, in combination with Imfinzi (durvalumab) in a registrational Phase 3 clinical trial in patients with unresectable Stage III non-small cell lung cancer; and license agreements with Taiho Pharmaceutical Co., Ltd, Abmuno Therapeutics LLC, and WuXi Biologics to develop anti-CD39 antibody for the treatment of cancer. The company was incorporated in 2015 and is headquartered in Hayward, California.
How the Company Makes MoneyArcus Biosciences generates revenue primarily through strategic collaborations and partnerships with larger pharmaceutical companies. These alliances often involve upfront payments, milestone payments based on the achievement of specific developmental or regulatory goals, and potential royalties on sales if therapies are successfully commercialized. Additionally, the company may occasionally receive grants or funding from research institutions to support its innovative projects. As Arcus Biosciences continues to advance its pipeline, licensing agreements for its proprietary therapies also serve as significant revenue streams, contributing to its financial stability and growth.
Arcus Biosciences Financial Statement Overview
Summary
Arcus Biosciences exhibits strong revenue growth but struggles with profitability and cash flow sustainability. The balance sheet is solid, with minimal leverage and strong equity. However, the persistent net losses and negative cash flows highlight the need for improved operational efficiency to ensure long-term viability.Income Statement
Revenue saw a significant increase from $117M in 2023 to $258M in 2024, marking strong growth. However, the company continues to operate at a loss with negative EBIT and EBITDA margins, indicating ongoing profitability challenges. Net profit margin remains negative due to substantial net losses.55
Neutral
Balance Sheet
The company maintains a robust cash position with cash and short-term investments exceeding total debt, resulting in negative net debt. However, the debt-to-equity ratio is relatively low, suggesting low leverage risk. The equity ratio is strong, indicating a solid capital structure despite the accumulated losses.60
Neutral
Cash Flow
The operating cash flow improved from -$306M in 2023 to -$170M in 2024, yet remains negative, reflecting ongoing cash burn. Free cash flow has similarly improved but is still negative, implying the company needs to enhance operational efficiency to achieve sustainable cash generation.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 258.00M | 117.00M | 112.00M | 382.88M | 77.52M | Gross Profit |
| 258.00M | -223.00M | 98.00M | 375.82M | -81.48M | EBIT |
| -330.00M | -340.00M | -280.00M | 54.25M | -124.23M | EBITDA |
| -269.00M | -283.00M | -250.00M | 61.96M | -118.47M | Net Income Common Stockholders |
| -283.00M | -307.00M | -267.00M | 53.00M | -116.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 978.00M | 759.00M | 1.14B | 681.30M | 735.09M | Total Assets |
| 1.15B | 1.09B | 1.34B | 1.59B | 772.29M | Total Debt |
| 48.00M | 11.00M | 120.00M | 116.89M | 15.24M | Net Debt |
| -102.00M | -116.00M | -86.00M | -31.03M | -158.17M | Total Liabilities |
| 665.00M | 633.00M | 688.00M | 750.45M | 269.99M | Stockholders Equity |
| 485.00M | 462.00M | 657.00M | 841.45M | 502.30M |
| Cash Flow | Free Cash Flow | |||
| -176.00M | -330.00M | 426.00M | -282.25M | 108.11M | Operating Cash Flow |
| -170.00M | -306.00M | 438.00M | -256.17M | 111.17M | Investing Cash Flow |
| -84.00M | 194.00M | -413.00M | -3.87M | -434.37M | Financing Cash Flow |
| 277.00M | 33.00M | 33.00M | 237.34M | 438.68M |
Arcus Biosciences Technical Analysis
Negative
7.89
Price Trends
10.75
Negative
13.19
Negative
14.63
Negative
Market Momentum
-0.83
Positive
26.90
Positive
12.12
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCUS, the sentiment is Negative. The current price of 7.89 is below the 20-day moving average (MA) of 8.93, below the 50-day MA of 10.75, and below the 200-day MA of 14.63, indicating a bearish trend. The MACD of -0.83 indicates Positive momentum. The RSI at 26.90 is Positive, neither overbought nor oversold. The STOCH value of 12.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RCUS.
Arcus Biosciences Risk Analysis
Arcus Biosciences disclosed 60 risk factors in its most recent earnings report. Arcus Biosciences reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arcus Biosciences Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $782.02M | ― | 222.83% | ― | 23.89% | 16.86% | |
51 Neutral | $847.55M | ― | -38.09% | ― | -13.90% | 16.56% | |
49 Neutral | $816.04M | ― | -59.77% | ― | 120.51% | 25.37% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% | |
48 Neutral | $771.31M | ― | -22.49% | ― | ― | 56.10% | |
41 Neutral | $688.91M | ― | -54.00% | ― | 59.55% | 3.09% | |
34 Underperform | $794.54M | ― | -53.22% | ― | -29.15% | -9.10% |
* Healthcare Sector Average
Performance Comparison
RCUS
Arcus Biosciences
7.89
-9.38
-54.31%
NTLA
Intellia Therapeutics
7.30
-17.67
-70.76%
XERS
Xeris Pharmaceuticals
4.88
2.83
138.05%
VIR
Vir Biotechnology
6.48
-2.99
-31.57%
NRIX
Nurix Therapeutics
11.38
-2.56
-18.36%
DAWN
Day One Biopharmaceuticals
7.97
-6.23
-43.87%
Arcus Biosciences Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -22.95% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call presented strong data for key drug candidates, significant progress in clinical trials, and a stable financial position, although strategic uncertainties with collaborations and competitive challenges in the RCC market were noted.Highlights
Promising Data for HIF-2 Alpha Inhibitor
The ARC-20 study showed a 34% ORR and 25% confirmed ORR in the 100-mg cohort, with significant potential for further improvement. The median PFS has not been reached, suggesting strong efficacy in heavily pretreated patients.
Dom-Zim Combination Shows Strong Results
ARC-10 data showed a hazard ratio below 0.65 for both PFS and OS, with a median OS not reached with dom-zim in first-line PD-L1 high non-small cell lung cancer, outperforming contemporary benchmarks.
Financial Position and Collaborations
Arcus Biosciences has $1.1 billion in cash and investments, with a runway into mid-2027, bolstered by collaboration payments from Gilead and Taiho.
Phase 3 Trials and Development Plans
Multiple Phase 3 trials, including PEAK-1 and STAR-221, are underway, targeting significant market opportunities across various cancer indications.
Lowlights
Potential Strategic Concerns with Gilead
The decision on Gilead's opt-in for the cas program remains pending, with no certainty on timing or outcome, which could impact future strategic directions.
Competition and Challenges in RCC Market
Facing competition from Merck's combinations in RCC, with potential challenges in differentiating the cas plus cabo regimen effectively in the market.
Company Guidance
During Arcus Biosciences' Q3 2024 earnings call, the management provided comprehensive guidance, focusing on several key metrics and strategic updates. The call highlighted the launch of the late-stage development program for the HIF-2 alpha inhibitor casdatifan, with promising data from the ARC-20 study showing a primary progression rate of 19% in the 100-mg cohort and a 34% overall response rate (ORR), with a 25% confirmed ORR. Furthermore, the median progression-free survival (PFS) had not been reached, surpassing the belzutifan benchmark of 5.6 months. The company plans to present additional data from ARC-20 throughout 2025, including more mature ORR and median PFS. For domvanalimab, the ARC-10 study demonstrated a hazard ratio below 0.65 for both PFS and OS, reflecting strong efficacy. Financially, Arcus ended the quarter with $1.1 billion in cash, with GAAP revenue of $48 million, and expects its cash runway to extend into mid-2027. The anticipated opt-in decision by Gilead for the casdatifan program, potentially late this year or early next year, and the ongoing partnership with AstraZeneca and Taiho, are expected to further enhance Arcus's robust pipeline.Arcus Biosciences Corporate Events
Executive/Board Changes
Arcus Biosciences Appoints New Board Director
Neutral
Feb 6, 2025
On February 6, 2025, Merdad Parsey, M.D., Ph.D., resigned from Arcus Biosciences’ Board of Directors following his departure from Gilead Sciences, Inc. The Board appointed Dietmar Berger, M.D., Ph.D., as a Class II director to replace Dr. Parsey. Dr. Berger, who joined Gilead as Chief Medical Officer in January 2025, will not receive compensation for his role at Arcus. This change aligns with the Amended and Restated Investor Rights Agreement between Arcus and Gilead.
Executive/Board Changes
Arcus Biosciences Announces New Chief Medical Officer
Neutral
Jan 21, 2025
Arcus Biosciences, Inc. announced on January 21, 2025, that Dr. Richard Markus will become the Chief Medical Officer effective January 31, 2025, while Dr. Dimitry Nuyten will leave the company on the same date. Dr. Nuyten will receive severance benefits, including a lump-sum payment equivalent to his annual salary, COBRA coverage, and a bonus payment, aligning with the company’s Severance Benefits Plan.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.