Arcus Biosciences (RCUS) experienced a significant decline in its stock price on Friday, erasing nearly 300% in gains accumulated over the past eight months. This downturn followed disappointing results from a Phase 3 trial of its cancer treatment, which was developed in partnership with Gilead Sciences (GILD).
The trial assessed the efficacy of domvanalimab, an anti-TIGIT therapy, combined with traditional chemotherapy and a PD-1 checkpoint inhibitor for patients with upper gastrointestinal cancers. These anti-TIGIT drugs aim to target proteins that disguise cancer cells, thus enabling the immune system to identify and attack them.
Unfortunately, the three-drug regimen did not result in improved overall survival rates compared to a combination of Bristol Myers Squibb’s Opdivo (a PD-1 inhibitor) and chemotherapy. Following the announcement of these results, Arcus’s stock plummeted more than 10%, trading at approximately 22.49. This marked a stark reversal from its earlier surge to around 287% from a low of 6.50 back in early April. Gilead Sciences also saw a slight decline, dropping nearly 1% to 122.10.
In light of the disappointing trial outcome, Arcus and Gilead opted to discontinue further development of domvanalimab for this specific application, as recommended by an independent data monitoring committee.
Looking ahead, Arcus is shifting its focus toward casdatifan, a drug that inhibits the HIF-2a protein. This mechanism has the potential to convert “cold” tumors into “hot” ones, enhancing the immune system’s ability to recognize cancer cells. Preliminary results from trials involving over 120 patients with late-stage clear cell renal carcinoma indicate that casdatifan demonstrates robust single-agent activity, with improvements in both overall survival and progression-free survival.
Moreover, Arcus retains full rights to casdatifan outside Japan and select Asian markets, having optioned those rights to Taiho Pharmaceutical last October. The company is also actively developing a portfolio in immunology and inflammation, with plans to initiate testing for a treatment targeting eczema and chronic spontaneous urticaria—conditions that lead to hives—in the coming year. Furthermore, Arcus anticipates launching a clinical study for an innovative therapy addressing rheumatoid arthritis, psoriasis, and inflammatory bowel disease by late 2026 or early 2027.
This pivot towards different avenues of research reflects a resilient strategy in the biotech sector, particularly amidst setbacks. As the landscape for cancer treatment continues to evolve, firms like Arcus remain committed to exploring novel therapies that could significantly enhance patient outcomes.
