rcus-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to _______________

Commission File Number: 001-38419

_____________________________________

Arcus Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

_____________________________________


Delaware			47-3898435
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3928 Point Eden Way Hayward, California 94545
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (510) 694-6200

_____________________________________

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

Titles 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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of April 30, 2026, the registrant had 125,773,162 shares of common stock, $0.0001 par value per share, outstanding.

ARCUS BIOSCIENCES, INC.

TABLE OF CONTENTS


		Page
	RISK FACTOR SUMMARY	i
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Statements of Operations	1
	Condensed Consolidated Statements of Comprehensive Loss	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	62
SIGNATURES		63

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RISK FACTOR SUMMARY

The following is a summary of the key risks and uncertainties that make an investment in our securities speculative and risky. The below summary does not contain all of the information that may be important to you, and you should read this summary together with the more detailed description of the risks set forth under "Part II. Item 1A. Risk Factors" of the Quarterly Report.

Risks Related to our Limited Operating History, Financial Position and Capital Requirements

•We have a history of operating losses, have never generated any revenue from product sales and anticipate that we will continue to incur significant losses for the foreseeable future.

•We may need to obtain additional funding. If we do not receive or are unable to raise additional capital when needed, we may be forced to restrict our operations or delay, reduce or eliminate our product development programs.

•Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement with Hercules Capital, Inc. ("Hercules"), as amended, and we may be required to repay the outstanding indebtedness in an event of default, which could have a materially adverse effect on our business.

Risks Related to the Discovery and Development of our Investigational Products

•If we are unable to obtain regulatory approval for our investigational products, or experience significant delays in doing so, our business will be materially harmed.

•Preliminary, topline and interim data from our clinical studies that we announce or publish from time to time are subject to audit and verification procedures that could result in material changes in the final data and may change as more patient data become available.

•Enrollment and retention of subjects in clinical trials is expensive and time consuming and can be made more difficult or rendered impossible by competing treatments, clinical trials of competing investigational products, geopolitical instability and public health epidemics, each of which could result in significant delays and additional costs in our product development activities, or in the failure of such activities.

•Serious adverse events ("AEs"), undesirable side effects or other unexpected properties of our investigational products may be identified during development or after approval, which could lead to the discontinuation of our clinical development programs, refusal by regulatory authorities to approve our investigational products or limitations on the use of our investigational products or, if discovered following marketing approval, revocation of marketing authorizations or subsequent limitations on the use of our investigational products.

•Certain of our investigational products may require companion diagnostics in certain indications. Failure to successfully develop, validate and obtain regulatory clearance or approval for such tests could harm our product development strategy or prevent us from realizing the full commercial potential of our investigational products.

Risks Related to Reliance on Third Parties, Manufacturing and Commercialization

•We expect to depend on collaborations for the development of our investigational products. If our collaboration efforts are not successful, the scope of our development efforts may be limited and our business could be adversely affected.

•We rely on third parties to conduct our clinical trials and perform some of our research and preclinical studies. If these third parties do not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our development programs may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.

•Even if we receive marketing approval for one or more of our investigational products, we may not be successful in commercializing our investigational products. Our commercial success is dependent, in part, on obtaining coverage and reimbursement for a product from a government or other third-party payor, which coverage may be delayed or may not be sufficient to cover our costs.

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•Obtaining and maintaining regulatory approval of investigational products in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. Even if our investigational products are approved by the U.S. Food and Drug Administration ("FDA"), they may never be approved or commercialized outside the United States ("U.S."), which would limit our ability to realize their full market potential.

•Any investigational products for which we intend to seek approval as biologic products may face competition sooner than anticipated.

Risks Related to our In-Licenses and Other Strategic Agreements

•We are currently party to several in-license agreements under which we acquired rights to use, develop, manufacture and/or commercialize certain of our investigational products. If we breach our obligations under these agreements, we may be required to pay damages, lose our rights to these investigational products or both, which would adversely affect our business and prospects.

Risks Related to Intellectual Property

•If we are unable to obtain and maintain sufficient intellectual property protection for our investigational products, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

•We may become involved in lawsuits alleging that we have infringed the intellectual property rights of third parties or to protect or enforce our patents or other intellectual property, which litigation could be expensive, time consuming and adversely affect our ability to develop or commercialize our investigational products.

•Changes in patent law in the U.S. and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our investigational products.

•We may rely on trade secret and proprietary know-how which can be difficult to trace and enforce, and if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

Risks Related to our Business Operations and Industry

•We expect to expand our business operations and, as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

•We face substantial competition, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us. If their investigational products are shown to be safer or more effective than ours, then our commercial opportunity will be reduced or eliminated.

•Our internal information technology systems, and those of our third-party contract research organizations ("CROs") and other third parties upon which we rely, are subject to failure, security breaches and other disruptions, which could result in a material disruption of our investigational products’ development programs, jeopardize sensitive information, prevent us from accessing critical information or result in a loss of our assets, and potentially expose us to notification obligations, loss, liability or reputational damage and otherwise adversely affect our business.

•Failure to comply with data privacy and data protection laws, regulations or other obligations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

•Changes in healthcare law and implementing regulations, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict, and may have a significant adverse effect on our business and results of operations.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

ARCUS BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(unaudited)


	Three Months Ended March 31,
		2026		2025
Revenues:
License and development services (Includes $10 and $20 from a related party)		$	12	$	20
Other collaboration (Includes $5 and $8 from a related party)		5		8
Total revenues		17		28

Operating expenses:
Research and development (Includes $— and ($5) from a related party)		122		122
General and administrative (Includes $— and $— from a related party)		29		28
Total operating expenses		151		150

Loss from operations		(134)		(122)

Non-operating income (expense):
Interest and other income, net		9		11
Interest expense		(3)		(1)
Total non-operating income, net		6		10

Loss before income taxes		(128)		(112)

Income tax expense		—		—

Net loss		$	(128)	$	(112)

Net loss per share:
Basic and diluted		$	(1.02)	$	(1.14)

Shares used to compute net loss per share:
Basic and diluted		125.4		98.4

See accompanying notes.

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ARCUS BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In millions)

(unaudited)


	Three Months Ended March 31,
		2026		2025
Net loss		$	(128)	$	(112)
Other comprehensive loss		(1)		—
Comprehensive loss		$	(129)	$	(112)

See accompanying notes.

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ARCUS BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)

(unaudited)


	March 31, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	201	$	222
Marketable securities	621		759
Receivable from collaboration partners	3		11
Prepaid expenses and other current assets	19		15
Total current assets	844		1,007

Long-term marketable securities	54		29
Property and equipment, net	38		40
Other noncurrent assets	61		63
Total assets	$	997	$	1,139

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ($11 and $24 to a related party)	$	39	$	42
Deferred revenue ($27 and $35 to a related party)	34		35
Other current liabilities	136		154
Total current liabilities	209		231

Deferred revenue, noncurrent ($36 and $43 to a related party)	45		43
Long-term debt	100		99
Other noncurrent liabilities	119		135

Commitments

Stockholders’ equity:
Common stock and additional paid-in capital: $0.0001 par value per share; 400.0 shares authorized; 125.5 shares in 2026 and 125.3 shares in 2025 issued and outstanding	2,138		2,116
Accumulated deficit	(1,613)		(1,485)
Accumulated other comprehensive loss	(1)		—
Total stockholders’ equity	524		631
Total liabilities and stockholders’ equity	$	997	$	1,139

See accompanying notes.

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ARCUS BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions)

(unaudited)


	Number of shares of common stock	Common stock and additional paid-in capital		Accumulated deficit		Accumulated other comprehensive loss		Total stockholders’ equity
Balance at December 31, 2024	92.2	$	1,617	$	(1,132)	$	—	$	485
Issuance of common stock (see Note 3, Related party - Gilead Sciences, Inc. and Note 13, Stockholders' equity)	13.6	142		—		—		142
Issuance of common stock in connection with our equity award programs	0.1	—		—		—		—
Stock-based compensation	—	16		—		—		16

Net loss	—	—		(112)		—		(112)
Balance at March 31, 2025	105.9	$	1,775	$	(1,244)	$	—	$	531











Balance at December 31, 2025	125.3	$	2,116	$	(1,485)	$	—	$	631
Issuance of common stock in connection with our equity award programs	0.2	3		—		—		3
Stock-based compensation	—	19		—		—		19
Other comprehensive loss	—	—		—		(1)		(1)
Net loss	—	—		(128)		—		(128)
Balance at March 31, 2026	125.5	$	2,138	$	(1,613)	$	(1)	$	524

See accompanying notes.

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ARCUS BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(unaudited)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities
Net loss	$	(128)	$	(112)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	19		16
Depreciation and amortization	2		3
Noncash lease expense	2		2
Amortization of discounts on marketable securities	(3)		(4)
Other items, net	1		—
Changes in operating assets and liabilities:
Receivable from collaboration partners ($— and $2 from a related party)	8		5
Other assets	(3)		—
Accounts payable (($13) and $— to a related party)	(3)		3
Deferred revenue (($15) and ($28) to a related party)	(17)		(28)
Other liabilities	(16)		(17)
Net cash used in operating activities	(138)		(132)

Cash flows from investing activities
Purchases of marketable securities	(150)		(353)
Proceeds from maturities of marketable securities	257		360
Proceeds from sales of marketable securities	7		26
Purchases of property and equipment	—		(1)
Net cash provided by investing activities	114		32

Cash flows from financing activities
Proceeds from issuance of common stock ($— and $14 from a related party)	—		142

Proceeds from issuance of common stock pursuant to equity award plans	3		—

Net cash provided by financing activities	3		142
Net increase (decrease) in cash, cash equivalents and restricted cash	(21)		42
Cash, cash equivalents and restricted cash at beginning of period	225		153
Cash, cash equivalents and restricted cash at end of period	$	204	$	195

See accompanying notes.

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ARCUS BIOSCIENCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Organization, liquidity and capital resources

Organization

Arcus Biosciences, Inc. (referred to as "Arcus," "we," "our," "us," or the "Company") is a late clinical-stage biopharmaceutical company focused on developing differentiated molecules for patients with cancer and inflammatory and autoimmune diseases. Our most advanced molecules are in Phase 3 registrational studies for various cancer indications and we expect our next wave of clinical-stage molecules to come from our inflammation and autoimmune disease programs. Our vision is to leverage our internal small-molecule discovery capabilities to create, develop and commercialize highly differentiated therapies that can have a meaningful impact on patients.

We operate and manage our business as one reportable and operating segment, which is the business of developing and commercializing highly differentiated therapies that have a meaningful impact on patients. See Note 15, Business segment, for more information.

Liquidity and Capital Resources

As of March 31, 2026, we had cash, cash equivalents and marketable securities of $876 million, which we believe will be sufficient to fund our planned operations for a period of at least twelve months following the date of filing of this report.

Note 2. Summary of significant accounting policies

Basis of Presentation

These interim financial statements should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2026. There have been no significant changes to our summary of significant accounting policies as disclosed in that filing.

These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and include all normal and recurring adjustments that management believes are necessary for a fair presentation of the periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any future period.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed and updated each period to reflect current information. Actual results may differ materially from those estimates.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03 — Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses. This ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. We plan to adopt this guidance beginning with our 2027 Annual Report to be filed in early 2028 and all quarterly and Annual Reports thereafter. We expect the adoption of this standard to result in increased disclosures in the Notes to our Consolidated Financial Statements.

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In September 2025, the FASB issued ASU 2025-07 — Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This ASU refines the scope of the guidance on derivatives in Topic 815 and clarifies the guidance on share-based payments from a customer in ASC 606. We have adopted this standard during the current quarter with no significant impact on our Consolidated Financial Statements.

Note 3. Related party - Gilead Sciences, Inc.

In 2020, we and Gilead Sciences, Inc. ("Gilead") entered into an Option, License and Collaboration Agreement (the "Gilead Collaboration Agreement"), Common Stock Purchase Agreement (the "Stock Purchase Agreement"), and Investor Rights Agreement (the "Investor Rights Agreement").

The Gilead Collaboration Agreement was amended in 2021 (the "First Gilead Collaboration Agreement Amendment"), in 2023 (the "Second Gilead Collaboration Agreement Amendment"), in 2024 (the "Third Gilead Collaboration Agreement Amendment") and (the "Fourth Gilead Collaboration Agreement Amendment"), and in 2025 (the "Fifth Gilead Collaboration Agreement Amendment").

The Stock Purchase Agreement was amended in 2021 (the "First Stock Purchase Agreement Amendment"), in 2023 (the "Second Stock Purchase Agreement Amendment"), and was amended and restated in 2024 (the "Third Stock Purchase Agreement Amendment").

The Investor Rights Agreement was amended in 2022 (the "First Investor Rights Agreement Amendment") and was amended and restated in 2024 (the "Second Investor Rights Agreement Amendment").

We refer to these agreements collectively as the "Gilead Agreements".

Stock Purchase and Investor Rights Agreements

In the first quarter 2025, through our underwritten offering, Gilead purchased 1.4 million shares of our common stock for total gross proceeds of $15 million.

Under the Investor Rights Agreement entered into in 2020 and subsequent amendments, Gilead has the right to designate three members of our board of directors and registration rights for shares that it purchases. Gilead has exercised its rights to appoint all three board members and we have registered all shares purchased to date.

As of March 31, 2026, Gilead held approximately 25.0% of our outstanding common stock.

Collaboration Agreements

In 2020, we entered into the Gilead Collaboration Agreement, which gave Gilead an exclusive license to develop and commercialize zimberelimab (the anti-PD-1 program) in certain markets and time-limited options to acquire exclusive licenses to develop and commercialize any of our then-current and future clinical programs arising during the 10-year collaboration term, contingent upon $100 million option continuation payments payable on each of the second, fourth, sixth and eighth anniversaries of the agreement. The period to determine Gilead's option rights under the Gilead Collaboration Agreement will end on July 14, 2026, following Gilead’s decision to not make the option continuation payment due on the sixth anniversary. Upon closing of the transaction in 2020, Gilead made an upfront payment of $175 million.

In 2021, we entered into the First Gilead Collaboration Agreement Amendment pursuant to which Gilead exercised its option to three programs—providing Gilead with exclusive licenses to develop and commercialize domvanalimab and AB308 (collectively, the anti-TIGIT program), etrumadenant (the adenosine receptor antagonist program) and quemliclustat (the CD73 program), in certain markets—for a total payment of $725 million that was received in 2022. The amendment also (i) provided for a slight reduction in the royalties for these three programs, such that Gilead will pay us tiered royalties as a percentage of revenues ranging from the mid-teens to the low twenties; and (ii) removed the $100 million option continuation payment that was otherwise due on the second anniversary of the Gilead Collaboration Agreement. With respect to domvanalimab, we are also eligible to receive up to $500 million in potential U.S. regulatory approval milestones.

Gilead's option to acquire exclusive licenses to develop and commercialize AB801 (an investigational small molecule AXL inhibitor) and AB598 (an investigational anti-CD39 monoclonal antibody), will expire after a prescribed period following the achievement of a clinical development milestone in such program and our delivery to Gilead of the requisite data package. Gilead may exercise its option to these programs at any time prior to expiration of the option and will pay Arcus an option fee of $150 million per program.

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For each program that Gilead opts in to, both companies will co-develop and equally share global development costs, subject to certain opt-out rights that we have, caps on our spending and related subsequent adjustments, and certain other exceptions. For each program, provided we have not exercised our opt-out rights, we have the option to co-promote in the U.S. with equal sharing of related profits and losses. Gilead has the right to exclusively commercialize outside of the U.S., subject to the rights of our existing partners in any territories and will pay us tiered royalties as a percentage of revenues ranging from the high teens to the low twenties.

Under the First Gilead Collaboration Agreement Amendment, Gilead also has option rights to two oncology research programs for which we will lead discovery and early development activities. With respect to these two research programs, Gilead has the right to exercise its option, on a program-by-program basis, either (i) upon our completion of certain investigational new drug ("IND")-enabling activities for an option payment of $60 million or (ii) following the achievement of a clinical development milestone for an option payment of $150 million.

In 2023, we entered into the Second Gilead Collaboration Agreement Amendment pursuant to which we expanded our collaboration to provide Gilead with options to license up to four jointly selected research-stage programs that target inflammatory diseases for which we will lead discovery and early development activities. We will receive an upfront payment of $17.5 million for each initiated program and Gilead will have an option to license each program at two separate, prespecified time points. We received a total upfront payment of $35 million for an initial two research programs in 2023. Gilead’s options to the other two research programs, as amended under the Fourth Gilead Collaboration Agreement Amendment expired in May 2025. For the two research programs, including AB102 (an investigational MRGPRX2 antagonist), Gilead has the right, on a program-by-program basis, either (i) to exercise its option upon our completion of certain IND-enabling activities for an option payment of $45 million or (ii) to extend its option and exercise it following the achievement of a clinical development milestone for an option payment of $150 million. If Gilead exercises its option at the earlier time point for the first two programs, we would be eligible to receive up to $375 million in regulatory and commercial milestone payments as well as tiered royalties for each optioned program. For any other program option exercise by Gilead, the parties would have rights to co-develop and share global development costs and to co-promote and share profits in the U.S. for that program.

In 2024, we entered into the Third Gilead Collaboration Agreement Amendment. The Third Gilead Collaboration Agreement Amendment, among other things, (i) required Gilead to pay the $100 million option continuation payment due on the fourth anniversary of the Gilead Collaboration Agreement, which was received in 2024, (ii) provides that we will operationalize and fund the Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer subject to Gilead's right to reinstate the study as part of the parties' joint development activities upon regulatory approval, (iii) provides that we will solely fund our share of PACIFIC-8, subject to Gilead’s right to reinstate PACIFIC-8 as part of the parties’ joint development activities for the TIGIT Program upon regulatory approval, and (iv) provides that we will fund certain other activities. All other terms of the existing collaboration agreements, remain unchanged.

As of March 31, 2026, Gilead has licenses to domvanalimab, AB308, quemliclustat and zimberelimab. In the second quarter 2025, Gilead returned its license to the adenosine receptor antagonist program, which includes etrumadenant. After July 14, 2026, Gilead will maintain its existing time-limited options to programs including AB801, AB598, AB102 and an investigational TNF small molecule inhibitor.

For the three months ended March 31, 2026 and 2025, under the Gilead Agreements we recognized revenue of $15 million and $28 million, respectively. For a more detailed discussion on revenues recognized under the Gilead Agreements, see Note 5, Revenues, for more information.

For the three months ended March 31, 2025, we recognized net reimbursements from Gilead of $5 million. Expenses and reimbursements from Gilead are recognized in Operating expense, allocated between Research and Development ("R&D") and General and Administrative ("G&A") based upon the activity that generated the net expense or reimbursement.

At March 31, 2026 and December 31, 2025, we had net payables to Gilead of $11 million and $24 million, respectively, recorded in Accounts payable on our Condensed Consolidated Balance Sheets.

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Note 4. License and collaborations

We enter into licensing agreements, strategic collaborations and other similar arrangements with third parties for the development and commercialization of certain investigational products. These arrangements: may be collaborative and involve two or more parties who are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities; are performed with no guarantee of either technological or commercial success; and are each unique in nature. Such arrangements may include: non-refundable upfront payments; payments for options to acquire certain rights; potential development and regulatory milestone payments and/or sales-based milestone payments; royalty payments; revenue or profit-sharing arrangements; expense reimbursements; and cost-sharing arrangements.

Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line items in the Condensed Consolidated Statements of Operations, net of any payments due to or reimbursements due from our collaboration partners, with such reimbursements being recognized at the time the party becomes obligated to pay.

Our significant arrangements are discussed below. For a more detailed discussion on revenues recognized under these arrangements, see Note 5, Revenues.

Gilead Collaboration

See Note 3, Related party - Gilead Sciences, Inc., for more information.

Taiho Collaboration

In 2017, we entered into an agreement with Taiho Pharmaceutical Co., Ltd ("Taiho" and the "Taiho Agreement") pursuant to which Taiho obtained an exclusive option to in-license development and commercialization rights to programs for Japan and certain other Asian countries, excluding China (the "Taiho Territory") for which IND-enabling studies had begun during a five-year term which ended in September 2022, for an upfront payment of $35 million.

For each option to a program that Taiho exercises, except for casdatifan (the HIF-2α program) discussed below, they will be obligated to make a payment of $3 million to $15 million, depending on the development stage of the optioned program. Upon exercise, Taiho is solely responsible for continued development and commercialization in the Taiho Territory, unless they opt to participate in a global study, in which case they would become obligated to reimburse us for their portion of the global study costs. In addition, for each optioned program we would be eligible to receive clinical and regulatory milestones of up to $130 million and commercial milestone payments of up to $145 million with the achievement of certain sales thresholds in the Taiho Territory. We will also receive royalties ranging from high single-digits to mid-teens on net sales of licensed products in the Taiho Territory. Royalties will be payable by product and country commencing on the first commercial sale and ending upon the later of: (a) 10 years; and (b) expiration of the last-to-expire valid claim of our patents covering the manufacture, use or sale.

In 2022, Taiho opted to participate in two global Phase 3 trials of domvanalimab and zimberelimab combinations, STAR-121 and STAR-221, and in 2024, Taiho opted to participate in the global Phase 3 trial of quemliclustat, PRISM-1. For each of these trials, Taiho became obligated to reimburse us for their portion of the global trial costs, and to make milestone payments contingent upon successfully satisfying the related clinical milestones. The clinical milestones were met: for domvanalimab and zimberelimab for the STAR-221 trial in 2023, and Taiho became obligated to pay us $28 million; domvanalimab and zimberelimab for the STAR-121 trial in 2024, and Taiho became obligated to pay us $26 million; and for quemliclustat for the PRISM-1 trial in the first quarter 2025, and became obligated to make milestone payments totaling $19 million. All the milestone payments due have been fully received. In the fourth quarter 2025, Taiho exercised its option for HIF-2α inhibitor program (including casdatifan) for the Taiho Territory, for an option payment of $15 million. We and Taiho concurrently entered into the Second Amendment where: (i) we will lead development for two indications in Japan and be responsible for the global study costs; (ii) we may also be eligible to receive clinical and regulatory milestones of up to $172 million, commercial milestone payments of up to $145 million upon the achievement of certain sales thresholds in the Taiho Territory and royalties ranging from high single-digits to mid-teens on net sales of the licensed product in the Taiho Territory. Due to the nature of these arrangements, a portion of these clinical milestones were determined to be advance cost sharing payments for Taiho's share of the related global study R&D costs under the collaboration and are deferred and recognized as a reduction in R&D expense as the related global studies are performed, calculated as an estimated percentage of completion based on the estimated total effort for the programs. See Note 5, Revenues, for more information.

As of March 31, 2026, Taiho has licenses for the Taiho Territory to (i) HIF-2α inhibitor program (including casdatifan); (ii) anti-TIGIT program (including domvanalimab and AB308); (iii) anti-PD-1 program (including zimberelimab); (iv) CD73 program (including quemliclustat); and (v) adenosine receptor antagonist program (including etrumadenant).

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Under this arrangement, for the three months ended March 31, 2026, we recognized revenue of $2 million. We recognized net reimbursements including amortization of advance cost share payments from Taiho for the three months ended March 31, 2026 and 2025 of $5 million and $9 million, respectively, recognized as a reduction in R&D expense.

At March 31, 2026 and December 31, 2025, we had $3 million and $10 million, respectively, related to this arrangement recorded in Receivable from collaboration partners on our Condensed Consolidated Balance Sheets. At March 31, 2026 and December 31, 2025, we had liabilities of $23 million and $44 million, respectively related to certain advance cost sharing payments under this arrangement recorded in Other liabilities, allocated between current and noncurrent based on the expected timing of future recognition.

AstraZeneca Collaboration

In 2020, we entered into a collaboration with AstraZeneca to evaluate domvanalimab, our investigational anti-TIGIT antibody, in combination with AstraZeneca’s durvalumab in a registrational Phase 3 clinical trial in patients with unresectable Stage 3 non-small cell lung cancer ("NSCLC"), known as the PACIFIC-8 trial. The terms of this agreement were amended in 2024.

Under the collaboration, as amended, each company will retain existing rights to their respective molecules and any future commercial economics. AstraZeneca will conduct the trial, and each company will supply their respective investigational product to support the trial. We may be obligated to pay milestones of up to $24 million upon the achievement of certain clinical trial progress milestones or under certain circumstances if the agreement is terminated early and we will reimburse AstraZeneca annually for a portion of the trial costs. The portion of the costs that we consider to be unavoidable is accrued as incurred and milestones that are deemed probable of occurring are accrued in advance of the achievement of the milestone.

Prior to January 2024, the PACIFIC-8 trial formed part of the Arcus and Gilead joint development program for domvanalimab and our portion of the trial costs was shared with Gilead. Under the Third Gilead Collaboration Agreement Amendment, we agreed to solely fund our share of PACIFIC-8, subject to Gilead’s right to reinstate PACIFIC-8 as part of the parties’ joint development activities for the TIGIT Program.

We recognized R&D expense for the three months ended March 31, 2026 and 2025 of $5 million and $4 million, respectively, under this arrangement.

At March 31, 2026 and December 31, 2025, we have recognized a total liability of $17 million and $12 million, respectively, related to our obligation to AstraZeneca including the first milestone, recorded in Other current liabilities and Other noncurrent liabilities on our Condensed Consolidated Balance Sheets based on the expected timing of payment.

WuXi Biologics License - anti-PD-1

In 2017, we entered into an agreement with WuXi Biologics Ireland Limited ("WuXi Biologics") which, as amended, provides us with exclusive rights to (i) develop, use and manufacture products that include an anti-PD-1 antibody, including zimberelimab, worldwide and (ii) commercialize any such products worldwide, except in Greater China. As of March 31, 2026, under this arrangement, we may incur (i) additional regulatory milestone payments of up to $50 million and commercialization milestone payments of up to $375 million, (ii) tiered royalties that range from the high single-digits to low teens on net sales of the licensed products and (iii) fees related to any sublicenses.

We did not have any milestones or royalties due under this arrangement for the three months ended March 31, 2026 and 2025.

WuXi Biologics License - anti-CD39

In 2020, we entered into an agreement with WuXi Biologics, under which we obtained the exclusive worldwide license to develop and commercialize anti-CD39 antibodies discovered under this arrangement. As of March 31, 2026, under this arrangement we may incur additional clinical and regulatory milestone payments of up to $14 million and royalty payments in the low single digits on net sales of the licensed products.

We did not have any milestones or royalties due under this arrangement for the three months ended March 31, 2026 and 2025.

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Abmuno License

In 2016, we entered into an agreement (the "Abmuno Agreement") with Abmuno Therapeutics LLC ("Abmuno"), under which we obtained the exclusive worldwide license to develop, use, manufacture, and commercialize products that include an anti-TIGIT antibody, including domvanalimab. As of March 31, 2026, under this arrangement we may incur additional clinical, regulatory and commercialization milestone payments of up to $88 million.

We did not have any milestones or royalties due under this arrangement for the three months ended March 31, 2026 and 2025.

Note 5. Revenues

The following table summarizes our revenues by collaboration, category of revenue, and the method of recognition (in millions):


			Three Months Ended March 31,
	Over time	Point in time		2026		2025
Gilead Collaboration
License and development services	*			$	8	$	20
R&D services	*			2		2
Access rights	*			3		6
Other		*		2		—
Taiho Collaboration
License	*			2		—
Total revenues				$	17	$	28

Total revenues from collaborations				$	10	$	20
Total revenues from a customer				$	7	$	8

Revenues from Gilead accounted for 88% and 100% of Total revenues for the three months ended March 31, 2026 and 2025, respectively.

The following table summarizes the revenue recognized as a result of changes in the deferred revenue balance (in millions):


	Three Months Ended March 31,
		2026		2025
Revenue recognized from amounts in deferred revenue at the beginning of the period		$	17	$	28

We had $79 million and $78 million of deferred revenue remaining on our Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025, respectively, allocated between current and noncurrent based on the expected timing of future recognition.

Revenue from the Gilead Collaboration

2025 Termination of rights to etrumadenant

In the second quarter 2025, Gilead terminated its rights to etrumadenant (the adenosine receptor antagonist program), which we determined was a significant reduction in the scope of the arrangement, which met the accounting definition of a contract modification and we accounted for this as both a modification of the existing contract and the creation of a new contract. Under the applicable accounting rules for such contract modifications, we did not adjust the accounting for completed performance obligations that were distinct from the modified goods or services. Accordingly, we allocated the updated transaction price of $256 million, which was comprised of the deferred revenue remaining as of the modification date, to the remaining unsatisfied and partially satisfied performance obligations and updated the measure of progress as of the modification date, which resulted in a cumulative catch-up to revenue of $143 million for the quarter ended June 30, 2025.

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SEC Form 10-Q filed by Arcus Biosciences Inc.