| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 32.70 | 55 |
| Intrinsic value (DCF) | 4.38 | -79 |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Arcus Biosciences, Inc. (NYSE: RCUS) is a clinical-stage biopharmaceutical company pioneering innovative cancer therapies. Headquartered in Hayward, California, Arcus focuses on developing immuno-oncology treatments targeting adenosine receptors, PD-1, TIGIT, CD73, and HIF-2a pathways. Its diversified pipeline includes etrumadenant (A2a/A2b antagonist), zimberelimab (anti-PD-1), domvanalimab (anti-TIGIT), quemliclustat (CD73 inhibitor), and AB521 (HIF-2a inhibitor), addressing high-need oncology indications like non-small cell lung cancer (NSCLC), pancreatic cancer, and von Hippel-Lindau disease. The company leverages strategic collaborations with AstraZeneca, Taiho Pharmaceutical, and WuXi Biologics to accelerate development. With a market cap of ~$955M, Arcus operates in the competitive $200B+ global oncology market, where immuno-oncology innovations drive significant investor interest. Its asset-centric partnerships and Phase 2/3 trials position it as an emerging player in next-generation combination therapies.
Arcus Biosciences presents a high-risk, high-reward opportunity in immuno-oncology, with its clinical pipeline targeting large oncology markets. Key value drivers include domvanalimab (anti-TIGIT) in Phase 3 NSCLC trials with AstraZeneca and zimberelimab's potential in PD-1-refractory cancers. However, the company reported a net loss of $283M (EPS: -$3.14) in FY2023, with cash reserves of $150M against $60M debt, indicating a ~12-month runway at current burn rates. Success hinges on clinical milestones (e.g., Phase 3 ARC-7 data in 2024) and partnership monetization. Competition in TIGIT/PD-1 space (e.g., Roche, Merck) and high R&D costs ($170M operating cash outflow) pose risks. Investors should weigh pipeline diversification against binary trial outcomes.
Arcus competes in the crowded immuno-oncology sector by focusing on niche mechanisms (adenosine pathway, TIGIT) and combination therapies. Its anti-TIGIT candidate (domvanalimab) differentiates via Fc-silencing design, potentially reducing toxicity vs. competitors like Roche’s tiragolumab. The AstraZeneca partnership validates its platform and provides commercialization leverage. However, Arcus lacks commercial infrastructure, relying heavily on partners—a weakness compared to vertically integrated peers like Merck. Its PD-1 inhibitor (zimberelimab) faces saturation but could carve a niche in combinations. CD73 inhibitor quemliclustat targets pancreatic cancer, a high-unmet-need area with limited competition. Financially, Arcus’s $955M valuation is modest vs. peers, reflecting its clinical-stage status. Strategic advantages include a modular pipeline and biomarker-driven approaches, but late-stage trial failures could severely impact its positioning given limited cash reserves.