0001724521-26-000034
SEC filingMixed Q1 with revenue declining sharply on lower collaboration milestones, while operating losses widened modestly as the company pivots R&D spend toward casdatifan and inflammation programs.
Revenue for the first quarter of 2026 was $17.0 million, a decrease of 39% from $28.0 million in the same period last year. The decline was primarily driven by lower development services performed under the Gilead collaboration and the timing of milestone receipts from Taiho. As a development-stage company, Arcus relies on collaboration agreements for revenue, and the variability in milestone achievements can cause significant period-to-period fluctuations.
Net cash used in operating activities was $138.0 million in Q1 2026, compared to $132.0 million in Q1 2025. The increase was primarily due to the timing of receipts from Taiho for development milestones. Capital expenditures were nil in the current quarter versus $1.0 million in the prior year, reflecting reduced investment in property and equipment. Free cash flow was negative $138.0 million. The company's cash and investments are held in interest-bearing instruments, and management expects that existing resources will fund operations until at least the second half of 2028, providing a buffer to execute on strategic priorities.
The company is actively reprioritizing its pipeline following the April 2026 discontinuation of the Phase 3 STAR-121 study for domvanalimab due to futility, and the decision with AstraZeneca not to re-open enrollment in the eVOLVE-RCC02 study. Management expects R&D expenses to decline in the near term as domvanalimab studies wind down, with streamlining initiatives expected to further reduce costs. These savings will be partially offset by increased investment in casdatifan and advancement of small-molecule inflammation and immunology programs. The company's cash runway through H2 2028 provides a buffer to execute on these priorities, but the lack of approved products and history of operating losses underscore the high-risk nature of the business. Investors should watch for data readouts from casdatifan and quemliclustat trials, as well as any updates on Gilead's remaining option rights and potential partnership changes.