All right. Thanks for joining us everybody. I'm Terence Flynn, Morgan Stanley's U.S. Biopharma analyst. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm very pleased to be hosting this afternoon, Arcus. We have Terry Rosen, the company's CEO, and Bob Goeltz, the company's CFO. Thank you both so much for joining me, really appreciate it. I guess, again, maybe just high level to get started. How should we think about the company, Terry? There've been a lot of changes over the years. Is this really a single product story, or is there a platform strategy here? I know a lot of focus on casdatifan, which we'll dig into, but how should we think more broadly about what the company is doing beyond Cas? First of all, thank you, Terence, for doing this, and thank you for all of those of you who are joining us. I think very clearly casdatifan obviously is a center of focus, for us, for the world. We believe very strongly it's going to be a $5 billion-$10 billion drug. Not surprisingly, that question will come up. But I think Arcus continues to be as we planned since its inception to be a company that's focused on with a long-term vision. We have a very sustainable pipeline. We have a program, quemli, in frontline pancreatic cancer, its interim analysis happening this quarter. We feel that casdatifan's going to lead the way, but that we can build a great long-term and highly valuable company. If you put in economics, we can become the $10 billion, $20 billion, $50 billion plus company. That continues to be our approach. Great. What do you think is one thing that people are underestimating right now about the investment case? Yeah. Just pick one thing. Yeah. Interestingly enough, that question, you know, you get asked that, and I'll share what an investor recently told me what he thought investors were missing. I think he hit it spot on. When you think about casdatifan and that opportunity, if you go back to the earliest data we generated, the PK/PD profile, which is dramatically different from belzutifan. Then you think about the data that we generated subsequent to that. A lot of the questions about the ultimate commercial opportunity with casdatifan as we think about frontline, second line, third line, should really just come from that simple observation. Because at the outset, we just had those data, but now we've done three medical conference presentations, we've had an investor event, we had a Nature publication, we've published all the details, and it's very clear that those data drive all this efficacy that reads through to all lines. In the front line, we don't even have a competitor. I think the thing that's missing is those data tell you that casdatifan is going to win in the front line, it's going to win in the second line, it's going to win in the late line, no caveats. We have an event coming up in October, and I think the data are going to demonstrate that. Yep. Great. Yeah, I saw the announcement this morning on the timing of the event. I think you guys gave a little bit of a preview on the second quarter recap, but maybe, again, talk to us about, number one, why you're hosting this event, and then just, again, high level maybe, what are the kind of key things that are going to be in focus? Then I know we'll unpack a lot of those in subsequent questions. Perfect. The reason we are doing this, there is a convergence of datasets that read on all of the lines of therapy, frontline, second line, and late line. We felt like the best venue and best way to communicate all of that was in a single form, and it is over 200 patients worth of data. Since we will talk about metrics for each of these and what we need to be successful, let me just describe what those various studies will be. This is all of the data that we will be presenting come under the umbrella of a platform study called ARC-20. Within that study, since we are talking about frontline, second line, and late line, you can basically think about those three buckets of being the primary data that we are going to speak to. On the frontline, the standard of care that we are going against is ipi/nivo. It is clear cell renal cell carcinoma, and we are talking about a standard care in the frontline, ipi/nivo. What we are going to have for that is a dataset where we are looking at anti-PD-1 plus casdatifan without the ipi, and we are going to have about 11 plus months of data to compare to, and we will talk about how that fits into the metrics. That will give you a good feel for the efficacy, even without the ipi. The second component there is in that triplet, we will have anti-PD-1, ipi, and Cas. What we are running right now is what will generate the safety dataset that both the FDA and the EMA have told us we need to start the registrational study at the end of this year. That cohort is fully enrolled. It is 30 patients, and what they want to see is 12 weeks of safety data. Why 12 weeks? When you think about what is ipi/nivo, ipi/nivo is four cycles of ipi/nivo, which is 12 weeks, and then you get nivo for the rest of the therapy. They want to see that 25 patients with that sort of follow-up, and by the data update, we will have roughly 20 patients that have had that 12 weeks. A very good read on the safety. That brings me to the second line. Again, if you think about what we are doing, we believe that we are going to transform the paradigm in this field. But we are doing it in a way where we are providing a HIF-2 inhibitor on top of standards of care that physicians like. We have taken a lot of feedback from physicians in so far as what they want to see, and that reflects our strategy. In the second line, the standard of care, 40% of that second-line therapy is monotherapy cabo. What we will have is a data set combining cabo plus casdatifan with roughly 20 months of follow-up, and that is a 40-plus patient data set. Finally, in the late line, we have used 120 patients' data set to really dramatically show the differentiation between casdatifan and belzutifan. I think that is what really established a major inflection in our program. What we will have for those 120 patients will now have almost 30 months of median follow-up. That is going to lead us to not only show how that data set continues to evolve and how it continues to differentiate itself, but for the first time, we will have an endpoint where we can look at overall survival. Given that Merck with belzutifan has run three registrational trials, it hasn't hit statistical significance on OS yet, we think that could be very meaningful. Great. Let's dig into this. I think on the frontline study, again, here you have a triplet, you've got a doublet. Talk to us about how you kind of choose between these. Again, I know you've already outlined the design of the phase III, but again, what else informs this doublet versus triplet strategy? Yeah. It will be a triplet. It will be ipi/nivo/cas versus ipi/nivo. Largely, that came through, again, as I was mentioning, our ad boards, both U.S. and European, felt that no matter how good the casdatifan anti-PD-1 data looked alone to enroll the study, they're such strong believers that the ipi contributes to the survival that they felt running a doublet. We thought about a three-arm study would slow the enrollment down. We see that may be a question after people see our data as to, "Ooh, would anti-PD-1 cas be good enough?" That it's going to be a two-arm study. The nice thing is there are very good benchmarks that we'll be able to compare to. You can think of bookends on the benchmark front to the standard of care, which is ipi/nivo. Yeah. That's really our only competitor is the existing standard of care. The data for ipi/nivo are, first of all, it has a rate of primary progression just under 20%, about 18%. It has a response rate in the high 30%, and it has a median PFS of 12.4 months. Now, what do physicians want to see? Well, ipi/nivo is really the preferred frontline regimen. It's most used. Roughly 30% of the frontline patient population gets that, and then the other 60% or so is fragmented amongst TKIs. The reason ipi/nivo gets that usage is because it has the best overall survival. It would get more use if you could improve the regimen where you could bring down the rate of primary progression or improve even just the timing of that progression, which I mentioned was 12 months and change. What we will be looking to show is that we can lower that rate of primary progression down into the 10% range or so, and then also improve with that 12.5 month median PFS. Landmark data would say you have about 50% of the patients still on at about 12 months. With 11-plus months of median follow-up, and I think this is going to be one of the most surprising things, not only the data, but the data set itself. It is going to be very clear if casdatifan plus anti-PD-1, even without the ipi, looks better than ipi/nivo. Another data set that is very important that most people are not aware of is that Merck has actually run a study in that exact same patient population with just KEYTRUDA. What is important about that is when you look at our anti-PD-1 casdatifan, that gives you the other end. You have ipi/nivo and, well, what would anti-PD-1 do alone? It is very different than ipi/nivo. For KEYTRUDA in that setting, same patient population, you see a 30% rate of primary progression, an ORR that is in the mid-30s and a PFS that ranges between seven and eight months. With those guardrails, we think you are going to come out of that October event with a very clear picture that casdatifan ipi/nivo is going to be a successful frontline regimen. I think on ARC-20, for at least the doublet, you guys already reported that you had, what, 7% primary progression? Correct. The doublet showed a 7% rate of primary progression. We reported that at ASCO. I am sorry, JP Morgan this year. We also described that the waterfall plot looked really good. I think the dots are going to connect very well. The other piece there is that since we will have those 20 or so patients that have been on the triplet, we expect a safety profile that should just look simply like ipi/nivo with perhaps some anemia that comes from the on-target activity of the HIF-2 inhibiting component of the therapy. Okay, great. Then maybe just remind us in terms of that PEAK-20 trial, what's the timeline for that and size of it, and anything on powering? Yeah yet? Yeah. We really will share more details on the design, as we get closer. But it's on track to start at the end of this year. In fact, the safety data, we've already had the discussions with the FDA. As I said, that cohort of 30 patients that will provide the 25 with that 12 weeks is already fully enrolled. The study, the primary endpoint will be PFS. Okay. That tells you not only do we expect a fast enrollment, but the readout should come relatively quickly. Yeah Knowing what ipi/nivo looks like. Just remind us on LITESPARK-012, that was the other Merck study that recently had a setback in that study. What was the driver? What was your conclusion on the reason for that? Yeah. I'll answer that in two ways. What do we think happened, and second, I always feel that question behind the question on that is does it have any read-through to us? What we feel the primary driver is, going back to that what is everybody missing piece, which is that initial PK/PD data that we discussed. What's known is that biomarker data revolves around looking at the ability of your HIF-2 inhibitor to diminish the production of erythropoietin. That's the gold standard for inhibiting HIF-2 in a human. What's known as well, casdatifan robustly inhibits that well out past a year. Belzutifan loses effect somewhere between zero and 13 weeks, and those are Merck's own data. We feel unquestionably that it's the lack of that durable effect that really manifests itself, particularly in the front line. If you look at the various Merck registrational trials, they've gone first in the late line versus something that had a PFS of five months and change to something that had 10 months to something that has 24 months. We feel like absolutely the efficacy that shorter time of hitting the target hard is getting diluted out. A lot of people speculate that triplet might be more toxic than the doublet. We'll see. The important thing is we think it has zero read-through for two reasons. First of all, it's a completely different regimen. In that case, you're going on top of TKI anti-PD-1. In our case, we're going on top of ipi/nivo. The second thing, most importantly, is we already have a lot of data. You'll see in October, we have a lot of data in the front line, not only that shows a very profound effect of casdatifan in that patient population. Okay, great. Maybe we will pivot to the second line setting now. Just remind us what is the benchmark that you are aiming for here at this update in October? Sure. We view second line as a huge opportunity to, what I will say, dramatically differentiate from belzutifan. Belzutifan was successful in the second line. We believe that there is two opportunities to really set ourselves apart from the belzutifan lenvatinib data set. And that is they did not hit on overall survival, and also we believe there is an opportunity in the second line to very much differentiate on the outcome for patients that in the front line were treated with a TKI. I will say a little bit about that. We have recently described some of the differences in the patient populations between their registrational trial, LITESPARK-011, and our ARC-20 cohort as well as our registrational trial, which is called PEAK-01. There is two key things about the Merck population. The first thing is in their study, they excluded patients that had received prior lenva, that TKI in the front line. They excluded patients that had received cabozantinib in the front line, and also those patients that did get TKI. 25% of the patients in their study, not just 25% of the TKI patients, 25% of the patients got sunitinib or another first-generation TKI. The first thing that we would just say about the patient demographic, it looks very different than the real world. In the real world, 60% of the front-line patients are pretty much going to either get cabo, lenva, or axi, and so they have zero cabo, zero lenva, and all those patients with the first-generation TKIs. The second thing that we would emphasize about that is that it is very different than the ARC-20 and PEAK-1 patient populations. What I would say in the ARC-20 patient population, it looks very much like the distribution from the real world, including a very substantial portion that are lenva patients. The important reason that we mention that is not to set expectations that since we have a more difficult-to-treat patient population, that somehow we should expect a lesser performance. But what we wanted to point out is that given those more difficult patients to treat, we feel it is a huge opportunity to essentially show that casdatifan is not only a quantitative and incremental advantages, but completely discontinuous. One other fact that I can use as an example here is that what is known, and there have been recently two publications, real world data. If you get lenvatinib in the front line and then get treated with cabo, your ORR drops to 5% and the PFS drops to four to five months. In fact, your OS is substantially hurt as well. We feel we have the opportunity to actually do phenomenally well in those patients. We are thrilled that we have these not only TKI patients but Lenva patients. Part of the reason for our feeling very strongly, and you will see this very shortly, we will get to the real data. We have already generated data in the late line that reads on this. This is part of our Nature publication. What Merck showed in both LITESPARK-005, their approval study in the late line, as well as LITESPARK-013, which is essentially the same population, different study, is that they showed an inverse relationship. The more TKIs that patients were treated, so I am going from 3 to 2 to 1, the worse performance. The more TKIs you had, the worse you did. Actually, what we showed in our 120 patients in the late line is no dependence on that. Whether you had one TKI, two TKIs, three TKIs, and we will show you the curves. They are right on top of each other. We think that relates to a couple of things. One last point that we showed is that in that same study, we showed that the more HIF-2 activity that a patient had when it showed up, the better that patient did. HIF-2 is one of the worst prognostics you can have, not only in RCC, but in cancer in general. The fact that we are doing better in patients with the worst prognostics is generally taken to mean that it is not only correlative but it is causative. What else do we know about the biology of HIF-2 and TKIs in general? What is known is that when you treat a patient with an anti-angiogenic, including a TKI, that causes the patient to have more HIF-2 activity. What we believe is going on is that those patients that are getting those hard-hitting TKIs in the front line are actually now coming into the second line with one arm tied behind their back, particularly in a world that is HIF-2 free. That has been shown in a number of studies. If you take one of those patients and you put them on cabo, they really do poorly. We feel that with casdatifan, that is hard-hitting and durable, we have a chance, just like we showed in the late line, to actually do better in those patients. I am not just saying incrementally better. If you look at Merck's data, if you look at the hazard ratios in the patients that were treated with TKI coming into that versus IO/IO, the hazard ratio is better in the IO/IO. We actually feel like we have the opportunity in our registrational trial that the cabo patients obviously will perform more poorly, but we feel we could do as well or better. We actually feel like we have an opportunity to totally shift the paradigm, not just do something that is better because 60% of your patients are going to get a TKI in the front line. Coming into second line, they should be on a therapy with a HIF-2 inhibitor. The second point that we will be able to read on is with 20 plus months of median follow-up. As I mentioned, Merck already we know missed, even though numerically they had a positive OS signal. Statistical significance they did not have. What we know is that cabozantinib's OS is roughly 21 months and change. We will share OS Kaplan-Meier curves. We have an opportunity on two fronts. That ability to better serve patients that have TKI treatment in the front line, and the opportunity to win on OS, which we think for all practical purposes, we would own the entire second-line opportunity there. We are very excited about those data, and you will see those in October as well. Great. Then just any caveats as we do that cross-trial comparison. Again, you mentioned some of these baseline characteristics, but anything else as we make that comparison to the 21 months with cabozantinib? Yes. The one baseline thing that I would mention when we think about what belzutifan has done is their patient population. When you talk about cabo, that is the perfect comparator because that is still going to be We actually did a survey of physicians after the LITESPARK-01 data read out, and we talked to 50 physicians, and about half of them said they would go to that lenva/belz regimen. But cabo will still be primarily used. It is well-defined. It is well understood. Physicians like it, so it is the perfect comparator. Okay. Then maybe bake that all together. What does that mean for your PEAK-01 phase III trial? That is, again, the first phase III trial that you guys are doing. But talk to us about kind of design of that, timelines. I think you said enrollment completion by year-end. Yeah. PEAK-01 is enrolling rapidly. We expect it to be fully enrolled by this year. It's a 2-to-1 study arm versus control, so we expect it to enroll rapidly. Importantly, it's going to look similar to this ARC-20 patient population, that the patient population will be representative of what you expect to be coming out of the front line. Of course, we feel that's important because not only do we want to be successful on that ITT population, but those subpatient analysis, again, are very important insofar as dramatically changing that usage in the TKI population. Then finally, we will be able to give you a sense of, since we will be sharing Kaplan-Meier curves for both PFS and OS, this one since belzutifan did not hit on this, you don't even have to think about the cross-trial comparison. It'll just be how's our hazard ratio going to look versus cabo? There's plenty of data out there when you see how our OS Kaplan-Meier curve is looking from ARC-20 to give you a quite strong feeling of optimism on that. We'll talk about what we're going to learn from the late line that I think will read through to that. Yep. Just the primary of PEAK-01 is PFS, and then OS, I'm assuming it's powered for OS too as a secondary? The way this is set up, it's very nice. The primary endpoint is PFS. If we hit on PFS, all of the alpha transfers to OS. Okay. We're in great position on that. Great. Just remind us, again, enrollment completion by year-end, what does that mean for timing of data? We haven't given guidance, but if you were to just do the math, given that the control arm is about 10 months or so, it probably takes you into early 2028. Okay. Got it. Great. Then I guess just anything else on the market dynamics that we need to consider here as you think about launching into that second-line market, just anything else? Again, you walk through a lot of different variables here in terms of some of the TKI use and things like that, but just any other considerations that we think about kind of framing that second-line market potential for us, either on the duration side or other dynamics? Yeah, I think Terry described the potential for us to differentiate on the majority of patients that are coming into the second line that have previously seen a TKI. We think that'd be huge potential. In terms of the actual commercial execution, we think this is an opportunity that Arcus is imminently capable of executing against. It'll be a targeted sales force and commercial footprint, and we think the path for a HIF-2 inhibitor will be well-worn at that point with belzutifan, but we think we have the potential to generate data that puts us in a strong position to capture the market. And maybe just to elaborate on that a little bit, what does the commercial build look like in terms of rough numbers of people? Yeah. It's pretty typical for a kind of a largish oncology tumor type sales force sort of in the 100-ish reps kind of zone. We think that there's been a pretty well-worn path for smaller biopharmas to execute on that type of indication. And does that build, that spend starts next year, most likely? Yeah. If you look at a launch that wouldn't be before, let's say, late 2028, basically a year out is when you see the more significant investment for launch preparation. Okay. How are you guys, I know you already have a partner in Japan, but how are you thinking about the European side of it? Yeah. For right now, we're very focused on maintaining strategic optionality, especially with Western European Okay commercial rights. Not to say that if we got closer and we launch, that we might not leverage somebody in that area. But for right now, we think it makes a lot of sense for us to retain those rights. Yeah. Okay. Understood. I mean, Terry, you already talked about this, but the $5 billion-$10 billion, maybe just break that down for us by line of therapy, like what you guys think is second line, third line, first line. Yeah. We think second line is, I think with a very conservative duration of treatment, is $1.5 billion-$2 billion. If you look at just as a marker right now, belzutifan is doing basically a billion-dollar run rate with the majority of that coming from the late line. There's a little bit of second-line usage monotherapy, but most of it's late line. Obviously their late line, the PFS was 5.6 months. Our monotherapy's shown PFS is on the order of double, so we think there's upside from a duration of therapy perspective, and then obviously the market size in the second line is also more significant. So we think $1.5 billion-$2 billion is very conservative for the second line. In the front line, if you look at the ipi/nivo regimen, right now it has roughly a 30% share in the front line. We think with compelling data, physicians really want to use that regimen because it gives patients the best chance for long-term survival. If we showed that we can bring near-term disease control, augment long-term survival with a tolerability profile that's probably more attractive than the PD-1 TKI combinations, it wouldn't be hard to imagine growing that share from 30% to 50%, which translates into a $4 billion+ commercial opportunity. The one thing on the durability that I think really emphasizes the point is in the late line. We are going to read out on OS on that with the 30 months. To give you a sense in thinking about this even before we get to October. Approximately 28% of those monotherapy patients were still on the therapy after two years. We've even had a couple patients convert from stable disease to a response after two years. So when you see the spider plot, it really gets to the point of a very prolonged duration of therapy, and that's in the late line in a very advanced patient population. I was starting to mention before, if you look in the late line, we even have compared, when you think about belzutifan, we have 20-some odd percent of patients that are fourth line plus Merck-00. Yeah. Okay. Well, I think we're up against time, guys, but looking forward to seeing you again in October. Yeah. Thank you, and we think we're going to have a really exciting data set. We look forward to talking about it that day and thereafter. Thanks. Thank you. Thank you, Terry. Thanks, everyone else.