Week 6: Deep Dive into the Research Portfolio

As I continue the strategic planning process it is necessary to take a deeper dive into what Arcus offers in their research portfolio. Arcus Biosciences is focused on developing various molecules targeting immune checkpoints to treat cancer. Some of their key molecules at this time include: 1. AB122 (Domvanalimab): A PD-1 antagonist being developed for various cancers, either as a monotherapy or in combination with other therapies. 2. AB154 (Tiragolumab): A monoclonal antibody targeting TIGIT (T cell immunoreceptor with Ig and ITIM domains) for the treatment of solid tumors, particularly in combination with PD-1/PD-L1 inhibitors. 3. AB928: An adenosine receptor antagonist and dual antagonist of A2a and A2b receptors. It is being evaluated in combination with chemotherapy and with other immunotherapy agents. In addition, they are also working on Quemiliclustat, an investigational drug for the treatment of cancer. It is an inhibitor of glycolysis, a metabolic pathway that plays a crucial role in the growth and proliferation of cancer cells. By targeting glycolysis, Quemiliclustat aims to disrupt cancer cell metabolism and inhibit tumor growth. As well as: Etrumadenant (also known as AB928), another investigational drug. It is an oral, small molecule antagonist of the adenosine receptors A2a and A2b. Adenosine signaling in the tumor microenvironment can suppress the immune response against cancer. By blocking these receptors, Etrumadenant aims to enhance anti-tumor immunity and improve the efficacy of cancer immunotherapy. 

Essentially, the molecules in the Arcus pipeline address the cancer patients with the PD-L receptors that are resistant to current drug treatment. We can compare this to a similar product that has already reached the market, Amgen’s KRAS inhibitor, lumekras. The current market size and current sales for a drug treatment alone, as represented by Amgen stands at around 280 million with 8% year over year sales growth for the next 5 years. Arcus’s comparable cancer molecules are currently in stage 3 of clinical trials and are applicable in lung cancer, as well as GI, pancreatic, and colorectal cancer and thus can be projected to bring in around $500M with a 10% YOY growth in revenue. 

Gilead also has a number of approved and marketed oncology products as well as many others in clinical testing. Gilead Sciences has been actively involved in the development of therapies for lung cancer. Lung cancer remains one of the leading causes of cancer-related mortality globally, with non-small cell lung cancer (NSCLC) being the most common subtype. One of Gilead’s notable contributions to lung cancer treatment is through its acquisition of Immunomedics in 2020, which brought Trodelvy (sacituzumab govitecan) into its portfolio. Trodelvy is an antibody-drug conjugate (ADC) targeting Trop-2, a protein overexpressed in many solid tumors, including lung cancer. It delivers a cytotoxic payload directly to cancer cells, potentially improving efficacy while minimizing systemic toxicity. Clinical trials evaluating Trodelvy in lung cancer have shown promising results, particularly in patients with metastatic disease who have previously received multiple lines of therapy. In these trials, Trodelvy demonstrated meaningful antitumor activity and durable responses, leading to its approval for the treatment of metastatic NSCLC in certain patient populations. Thus upon acquisition, Gilead’s pre-existing architecture built for quick drug approval can be applied, saving upto 300M in R&D costs and contributing to operational infrastructure (average R&D costs for late stage cancer drug approval as reported by BMJ). Next week I will make this into more concrete steps and return to the model to calculate returns on the investment.