Arcus Biosciences Announces That Taiho Pharmaceutical Has Exercised Its Option to Develop and Commercialize
AB928 in Its Territories
Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage biopharmaceutical company focused on creating innovative cancer
immunotherapies, today announced that Taiho Pharmaceutical Co., Ltd. (Taiho) exercised its option under the Option and License
Agreement entered into in September 2017 (Taiho Agreement) to obtain an exclusive development and commercialization license to the
Company’s adenosine receptor antagonist program, which includes AB928 and back-up compounds, in Japan and certain other territories
in Asia (excluding China). In addition to an option exercise payment, Arcus is eligible to receive clinical and regulatory
milestones totaling up to $130 million as well as commercialization milestones and royalties on net sales for this program.
“We are pleased that Taiho has decided to exercise their option just as we are initiating our Phase 1/1b program for AB928 in
the U.S. and Australia,” said Terry Rosen, Ph.D., CEO at Arcus. “We believe that Taiho’s decision to exercise their option to this
program at this early stage reflects their recognition that AB928, the first adenosine 2 receptor antagonist in clinical
development to be specifically designed for the oncology setting, has significant potential to treat a broad array of tumor types.
We are confident that Taiho’s expertise and capabilities in oncology, as well as their experience co-promoting Keytruda® in Japan,
make them the ideal partner to bring AB928 to cancer patients as quickly as possible in their territories.”
“Our collaboration with Arcus is an important relationship for Taiho, as we expand our oncology franchise in Japan and other
important territories in Asia,” said Masayuki Kobayashi, President and Representative Director at Taiho. “We have been impressed by
Arcus’s small molecule drug discovery capabilities, the quality of their clinical candidates and the scientific rigor of their
candidate selection process. AB928 appears to have the ideal properties to block the immuno-suppressive effects of adenosine in the
tumor microenvironment. We look forward to working with Arcus on the development of this important new immuno-oncology mechanism
for the treatment of multiple tumor types.”
About the Taiho Agreement
Arcus and Taiho entered into an option and license agreement in September 2017. Taiho will provide $35.0 million of cash
payments to Arcus during the first three years of the agreement in exchange for an exclusive option, over a five-year period, to
in-license the development and commercialization rights to clinical stage product candidates from Arcus’s portfolio for Japan and
certain other territories in Asia (excluding China). Taiho is obligated to pay an option exercise payment for each option exercise
of between $3.0 million to $15.0 million, with the amount dependent on the development stage of the applicable Arcus program for
which the option is exercised. In addition, Taiho is obligated to pay to Arcus clinical, regulatory and commercialization
milestones up to $275.0 million per program as well as royalties ranging from high single digits to mid-teens on net sales in
Taiho’s territories.
About AB928
AB928 is an orally bioavailable, highly potent antagonist of the adenosine 2a and 2b receptors. The activation of these
receptors by adenosine interferes with the activity of key populations of immune cells and inhibits an optimal anti-tumor immune
response. By blocking these receptors, AB928 has the potential to reverse adenosine-induced immune suppression within the tumor
microenvironment. AB928 was designed specifically for the oncology setting, with a profile that includes potent activity in the
presence of high concentrations of adenosine and a minimal shift in potency due to non-specific protein binding, both essential
properties for efficacy in the tumor microenvironment. AB928 has other attractive features, including high penetration of tumor
tissue and low penetration through the healthy blood-brain barrier. In a Phase 1 trial in healthy volunteers, AB928 has been shown
to be safe and well tolerated and to have pharmacokinetic and pharmacodynamic profiles consistent with a once-daily dosing
regimen.
About Arcus Biosciences
Arcus Biosciences is a clinical-stage biopharmaceutical company focused on creating innovative cancer
immunotherapies. Arcus has several programs targeting important immuno-oncology pathways, including a dual adenosine receptor
antagonist AB928, which will be evaluated in combination with other agents in multiple tumor types in a Phase 1/1b program, and an
anti-PD-1 antibody, which is being evaluated in a Phase 1 trial and will be tested in combination with Arcus’s other product
candidates. Arcus’s other programs include a small molecule inhibitor of CD73 and an anti-TIGIT antibody, both of which are in
IND-enabling studies. Arcus has extensive in-house expertise in medicinal chemistry, immunology, biochemistry, pharmacology
and structural biology. For more information about Arcus Biosciences, please visit www.arcusbio.com.
Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical facts contained
herein, including, but not limited to, the potential for AB928 to treat a broad array of tumor types, are forward-looking
statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. All forward-looking statements involve known and unknown risks, uncertainties and other
important factors that may cause Arcus’s actual results, performance or achievements to differ significantly from those expressed
or implied. Factors that could cause or contribute to such differences include, but are not limited to, the inherent uncertainty
associated with pharmaceutical product development and clinical trials, the applicability of early studies to Arcus’s clinical
development program and the emergence of drug-related adverse events in Arcus’s clinical trials with AB928. Risks and uncertainties
facing Arcus are described more fully in Arcus’s quarterly report on Form 10-Q for the quarter ended March 31, 2018 filed on May 9,
2018 with the SEC. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date
of this press release. Arcus disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements
contained in this press release.
Keytruda® is a registered trademark of Merck.
Arcus Biosciences
Jennifer Jarrett, 510-694-6261
jjarrett@arcusbio.com
or
Nicole Arndt, 510-284-4728
narndt@arcusbio.com
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