Gilead Passes on Arcus' Promising Kidney Cancer Drug, Shifting Industry Landscape

In an unexpected turn of events, Gilead Sciences has declined to exercise its option to license Arcus Biosciences' casdatifan, a potential rival to Merck & Co.'s kidney cancer drug Welireg. This decision comes despite promising early clinical data for casdatifan, reshaping the competitive landscape in the renal cell carcinoma (RCC) treatment market.

Casdatifan Shows Strong Potential in Early Trials

Arcus Biosciences recently presented Phase I/Ib data for casdatifan at the 2025 American Society of Clinical Oncology Genitourinary Cancers Symposium. The results were encouraging, with a 100-mg daily dose showing a 33% confirmed overall response rate (ORR) and a 52% stable disease rate in patients with metastatic clear cell renal cell carcinoma (RCC).

Notably, patients treated with this dosage did not reach median progression-free survival (PFS) at the time of the readout. A different dose level of 50 mg twice-daily demonstrated a median PFS of 9.7 months. These results have led some analysts to suggest that casdatifan may be superior to Merck's Welireg, which showed a 5.6-month PFS in its label.

Arcus Retains Full Control and Plans Expansion

With Gilead's option expiring, Arcus will retain full control over casdatifan and its development path forward. CEO Terry Rosen expressed enthusiasm about this outcome, stating that it "represents a transformational change for Arcus" and allows the company to address "a significant unmet need for patients with an estimated $5 billion market opportunity."

To support the continued development of casdatifan, Arcus has announced a $150 million common stock offering. The biotech plans to use these funds to ramp up investment in the drug's development, aiming to position casdatifan as the "HIF-2a inhibitor of choice."

Arcus is preparing to launch a new study called PEAK-1, which will test casdatifan in combination with Exelixis's VEGF2 inhibitor Cabometyx in metastatic clear cell RCC patients who have previously undergone immune-oncology treatments. Additionally, the company has secured a collaboration to evaluate casdatifan with AstraZeneca's investigational anti-PD-1/CTLA-4 bispecific antibody volrustomig in a phase 1 trial.

Market Reaction and Industry Implications

The news of Gilead's decision had an immediate impact on Arcus' stock, which dipped 16% to $10.96 on Tuesday, reaching a new 52-week low. However, analysts at Mizuho Securities remained optimistic, suggesting that the stock offering could allow Arcus to advance the casdatifan program independently and provide freedom to assess the candidate as a monotherapy or as part of combination regimens.

This development marks a significant shift in the ongoing competition between HIF-2a inhibitors, with casdatifan now positioned as a potential challenger to Merck's Welireg. As Arcus moves forward with its ambitious development plans, the pharmaceutical industry will be closely watching the progression of casdatifan and its potential impact on the treatment landscape for renal cell carcinoma.