Gilead Sciences has defied analysts’ expectations by passing on its chance to license Arcus Biosciences’ potential rival to Merck & Co.’s kidney cancer drug Welireg.
Gilead had the right to opt in to develop and sell Arcus’ experimental hypoxia-inducible factor-2 alpha (HIF-2a) inhibitor, called casdatifan, once Arcus had delivered a qualifying data package. Last October, the biotech unveiled phase 1 data in metastatic clear cell renal cell carcinoma (ccRCC) showing casdatifan achieved a general overall response rate (ORR) of 34% and a confirmed ORR of 25%. The readout led Evercore analysts to predict that Gilead would opt in to the program by early 2025.
But, this morning, the company announced that the window for Gilead to take up this option had expired, and the rights to casdatifan would in fact be staying with Arcus.
If Arcus CEO Terry Rosen, Ph.D., was disappointed by Gilead’s decision, he certainly wasn’t showing it. The biotech is “thrilled to retain ownership of casdatifan,” Rosen said in a statement, arguing that the drug “has the potential to address a significant unmet need for patients with an estimated $5 billion market opportunity.”
The CEO pointed to updated phase 1 data presented at the American Society of Clinical Oncology Genitourinary Cancers Symposium on Saturday as demonstrating “casdatifan’s potential to be the best-in-class HIF-2a inhibitor in what appears to be a two-horse race” with Merck’s Welireg. That readout showed a 33% confirmed response rate for the 100-mg dose that Arcus is looking to take forward.
Arcus has been pitching casdatifan as an alternative to Merck’s Welireg, which is also a HIF-2a inhibitor. Welireg won its second FDA approval in relapsed or refractory renal cell carcinoma in December after being initially approved to treat the rare disease von Hippel-Lindau.
“Owning the rights to casdatifan represents a transformational change for Arcus, providing us with significant future strategic optionality,” Rosen said. “We anticipate that every patient with ccRCC will receive a HIF-2a inhibitor, and our development plan is designed to position casdatifan as the HIF-2a inhibitor of choice.”
To this end, Arcus will launch a phase 3 study comparing a combo of casdatifan and Exelixis' Cabometyx versus Cabometyx alone in the second quarter. Arcus has also secured a collaboration to evaluate its drug with AstraZeneca’s investigational anti-PD-1/CTLA-4 bispecific antibody volrustomig in a phase 1 trial of patients who have not yet received an anti-PD-1.
But the withdrawal of Gilead’s interest in casdatifan means Arcus has had to look elsewhere to fund the program. As a result, the biotech has also announced this morning a $150 million offering of its common stock, which will fund the phase 3 trial as well as “enable Arcus to rapidly advance casdatifan and maintain the momentum for this program that Arcus has independently built to date.”
The casadatifan collaboration was only one facet of a far-reaching, 10-year deal that Gilead struck with Arcus in 2020, paying $175 million upfront for rights to the PD-1 checkpoint inhibitor zimberelimab plus options on the rest of Arcus’ pipeline. Gilead took up options on three Arcus programs the following year, handing the biotech another $725 million.
There have been some bumps in the road since then, with Gilead and Arcus announcing a year ago that they were stopping a phase 3 lung cancer TIGIT trial. At the same time, Gilead revealed it would leave Arcus to run a late-stage study of the small-molecule CD73 inhibitor quemliclustat on its own.
Still, Gilead kept an interest in Arcus' work, with the Foster City, California-based pharma plugging a further $320 million into its biotech partner at the time. Arcus said last year that it would use the cash, in part, to help fund its phase 3 trial of casdatifan.