Gilead Declines Option on Arcus' Kidney Cancer Drug, Shifting Competitive Landscape

Gilead Sciences has made an unexpected move by allowing its option to license Arcus Biosciences' potential rival to Merck's kidney cancer drug Welireg to expire. This decision has significant implications for both companies and the broader landscape of kidney cancer treatment.

Arcus Retains Rights to Casdatifan

Contrary to analysts' predictions, Gilead has passed on the opportunity to develop and commercialize casdatifan, Arcus Biosciences' experimental hypoxia-inducible factor-2 alpha (HIF-2a) inhibitor. The drug, which has shown promise in early-stage trials for metastatic clear cell renal cell carcinoma (ccRCC), will remain under Arcus' control.

Arcus CEO Terry Rosen expressed enthusiasm about retaining ownership of casdatifan, citing its potential to address a significant unmet need in a market estimated at $5 billion. The company believes casdatifan has the potential to be the best-in-class HIF-2a inhibitor, positioning it as a strong competitor to Merck's Welireg.

Clinical Data and Future Plans

Recent phase 1 data presented at the American Society of Clinical Oncology Genitourinary Cancers Symposium demonstrated casdatifan's efficacy, with a 33% confirmed response rate for the 100-mg dose. This data has bolstered Arcus' confidence in the drug's potential.

Arcus is moving forward with an ambitious development plan for casdatifan. The company will launch a phase 3 study in the second quarter, comparing a combination of casdatifan and Exelixis' Cabometyx versus Cabometyx alone. Additionally, Arcus has secured a collaboration to evaluate casdatifan with AstraZeneca's investigational anti-PD-1/CTLA-4 bispecific antibody volrustomig in a phase 1 trial for treatment-naïve patients.

Financial Implications and Strategic Shifts

To fund the continued development of casdatifan without Gilead's support, Arcus has announced a $150 million offering of its common stock. This move will enable the company to finance the phase 3 trial and maintain momentum for the program.

The decision marks a significant shift in the relationship between Gilead and Arcus, which began with a far-reaching, 10-year deal in 2020. While Gilead remains involved in other aspects of their collaboration, including rights to the PD-1 checkpoint inhibitor zimberelimab, the casdatifan decision represents a notable change in their partnership dynamics.