Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | RCUS | |
Entity Registrant Name | Arcus Biosciences, Inc. | |
Entity Central Index Key | 0001724521 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38419 | |
Entity Tax Identification Number | 47-3898435 | |
Entity Address, Address Line One | 3928 Point Eden Way | |
Entity Address, City or Town | Hayward | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94545 | |
City Area Code | 510 | |
Local Phone Number | 694-6200 | |
Entity Common Stock, Shares Outstanding | 74,503,664 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, Par Value $0.0001 Per Share | |
Security Exchange Name | NYSE | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 29,000,000 | $ 27,000,000 | $ 54,000,000 | $ 45,000,000 |
Operating expenses: | ||||
Research and development (Net of recoveries of $34, $36, $67 and $66 from a related party) | 84,000,000 | 70,000,000 | 165,000,000 | 131,000,000 |
General and administrative | 28,000,000 | 26,000,000 | 58,000,000 | 50,000,000 |
Total operating expenses | 112,000,000 | 96,000,000 | 223,000,000 | 181,000,000 |
Loss from operations | (83,000,000) | (69,000,000) | (169,000,000) | (136,000,000) |
Non-operating income (expense): | ||||
Interest and other income, net | 9,000,000 | 3,000,000 | 18,000,000 | 3,000,000 |
Effective interest on liability for sale of future royalties | (1,000,000) | (1,000,000) | (1,000,000) | |
Total non-operating income, net | 9,000,000 | 2,000,000 | 17,000,000 | 2,000,000 |
Loss before income taxes | (74,000,000) | (67,000,000) | (152,000,000) | (134,000,000) |
Income tax expense | (1,000,000) | 0 | (3,000,000) | (1,000,000) |
Net loss | $ (75,000,000) | $ (67,000,000) | $ (155,000,000) | $ (135,000,000) |
Net loss per share, basic | $ (1.04) | $ (0.93) | $ (2.13) | $ (1.88) |
Net loss per share, diluted | $ (1.04) | $ (0.93) | $ (2.13) | $ (1.88) |
Shares used to compute net income loss per share, basic | 73.2 | 71.8 | 73.1 | 71.5 |
Shares used to compute net income loss per share, diluted | 73.2 | 71.8 | 73.1 | 71.5 |
License and Development Services Revenue | ||||
Revenues: | ||||
Total revenues | $ 19,000,000 | $ 17,000,000 | $ 36,000,000 | $ 25,000,000 |
Other Collaboration Revenue | ||||
Revenues: | ||||
Total revenues | $ 10,000,000 | $ 10,000,000 | $ 18,000,000 | $ 20,000,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
License and Development Services Revenue | ||||
Revenue from related parties | $ 19 | $ 17 | $ 36 | $ 25 |
Other Collaboration Revenue | ||||
Revenue from related parties | 10 | 9 | 18 | 17 |
Research and Development | ||||
Reimbursement from related party for shared costs | $ 34 | $ 36 | $ 67 | $ 66 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Net loss | $ (75) | $ (67) | $ (155) | $ (135) |
Other comprehensive income (loss) | (2) | 3 | (6) | |
Comprehensive loss | $ (75) | $ (69) | $ (152) | $ (141) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 230 | $ 206 |
Marketable securities | 700 | 803 |
Receivable from collaboration partners ($32 and $39 from a related party) | 34 | 39 |
Prepaid expenses and other current assets | 22 | 19 |
Total current assets | 986 | 1,067 |
Long-term marketable securities | 80 | 129 |
Property and equipment, net | 45 | 35 |
Other noncurrent assets ($5 and $2 from a related party) | 109 | 114 |
Total assets | 1,220 | 1,345 |
Current liabilities: | ||
Accounts payable | 12 | 20 |
Deferred revenue ($103 and $97 to a related party) | 103 | 97 |
Other current liabilities | 65 | 76 |
Total current liabilities | 180 | 193 |
Deferred revenue, noncurrent ($330 and $355 to a related party) | 330 | 355 |
Other noncurrent liabilities | 144 | 140 |
Commitments | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value per share; 10.0 shares authorized; no shares issued and outstanding | 0 | |
Common stock and additional paid-in capital: $0.0001 par value per share; 400.0 shares authorized; 74.5 shares in 2023 and 72.9 shares in 2022 issued and outstanding | 1,267 | 1,206 |
Accumulated deficit | (697) | (542) |
Accumulated other comprehensive loss | (4) | (7) |
Total stockholders’ equity | 566 | 657 |
Total liabilities and stockholders’ equity | $ 1,220 | $ 1,345 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Related party, receivable from collaboration partners | $ 32 | $ 39 |
Related Parties Contract Assets Noncurrent | 5 | 2 |
Related party, deferred revenue - current | 103 | 97 |
Related party, deferred revenue - noncurrent | $ 330 | $ 355 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 74,500,000 | 72,900,000 |
Common stock, shares outstanding | 74,500,000 | 72,900,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Second Stock Purchase Agreement Gilead | Equity Award Programs | Common Stock | Common Stock Second Stock Purchase Agreement Gilead | Common Stock Equity Award Programs | Common Stock and Additional Paid-In Capital | Common Stock and Additional Paid-In Capital Second Stock Purchase Agreement Gilead | Common Stock and Additional Paid-In Capital Equity Award Programs | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2021 | $ 842 | $ 1,118 | $ (275) | $ (1) | |||||||
Balance, shares at Dec. 31, 2021 | 70.8 | ||||||||||
Issuance of common stock | $ 10 | $ 10 | |||||||||
Issuance of common stock, shares | 0.8 | ||||||||||
Stock-based compensation | 17 | 17 | |||||||||
Other comprehensive gain (loss) | (4) | (4) | |||||||||
Net loss | (68) | (68) | |||||||||
Balance at Mar. 31, 2022 | 797 | 1,145 | (343) | (5) | |||||||
Balance, shares at Mar. 31, 2022 | 71.6 | ||||||||||
Balance at Dec. 31, 2021 | 842 | 1,118 | (275) | (1) | |||||||
Balance, shares at Dec. 31, 2021 | 70.8 | ||||||||||
Net loss | (135) | ||||||||||
Balance at Jun. 30, 2022 | 747 | 1,164 | (410) | (7) | |||||||
Balance, shares at Jun. 30, 2022 | 72.1 | ||||||||||
Balance at Mar. 31, 2022 | 797 | 1,145 | (343) | (5) | |||||||
Balance, shares at Mar. 31, 2022 | 71.6 | ||||||||||
Issuance of common stock | 4 | 4 | |||||||||
Issuance of common stock, shares | 0.5 | ||||||||||
Stock-based compensation | 15 | 15 | |||||||||
Other comprehensive gain (loss) | (2) | (2) | |||||||||
Net loss | (67) | (67) | |||||||||
Balance at Jun. 30, 2022 | 747 | 1,164 | (410) | (7) | |||||||
Balance, shares at Jun. 30, 2022 | 72.1 | ||||||||||
Balance at Dec. 31, 2022 | $ 657 | 1,206 | (542) | (7) | |||||||
Balance, shares at Dec. 31, 2022 | 72.9 | 72.9 | |||||||||
Issuance of common stock | 1 | 1 | |||||||||
Issuance of common stock, shares | 0.2 | ||||||||||
Stock-based compensation | $ 19 | 19 | |||||||||
Other comprehensive gain (loss) | 3 | 3 | |||||||||
Net loss | (80) | (80) | |||||||||
Balance at Mar. 31, 2023 | 600 | 1,226 | (622) | (4) | |||||||
Balance, shares at Mar. 31, 2023 | 73.1 | ||||||||||
Balance at Dec. 31, 2022 | $ 657 | 1,206 | (542) | (7) | |||||||
Balance, shares at Dec. 31, 2022 | 72.9 | 72.9 | |||||||||
Net loss | $ (155) | ||||||||||
Balance at Jun. 30, 2023 | $ 566 | 1,267 | (697) | (4) | |||||||
Balance, shares at Jun. 30, 2023 | 74.5 | 74.5 | |||||||||
Balance at Mar. 31, 2023 | $ 600 | 1,226 | (622) | (4) | |||||||
Balance, shares at Mar. 31, 2023 | 73.1 | ||||||||||
Issuance of common stock | $ 20 | $ 3 | $ 20 | $ 3 | |||||||
Issuance of common stock, shares | 1 | 0.4 | |||||||||
Stock-based compensation | 18 | 18 | |||||||||
Net loss | (75) | (75) | |||||||||
Balance at Jun. 30, 2023 | $ 566 | $ 1,267 | $ (697) | $ (4) | |||||||
Balance, shares at Jun. 30, 2023 | 74.5 | 74.5 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (155) | $ (135) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 37 | 32 |
Depreciation and amortization | 4 | 3 |
Noncash lease expense | 4 | 4 |
Amortization of premiums (discounts) on marketable securities | (8) | 2 |
Other items, net | 1 | 4 |
Changes in operating assets and liabilities: | ||
Receivable from collaboration partners ($7 and $709 from a related party) | 4 | 709 |
Other assets (($3) and ($1) from a related party) | (1) | 3 |
Accounts payable | (9) | 12 |
Deferred revenue (($19) and ($42) to a related party) | (19) | (45) |
Other liabilities | (13) | |
Net cash provided by (used in) operating activities | (155) | 589 |
Cash flows from investing activities | ||
Purchases of marketable securities | (393) | (763) |
Proceeds from maturities of marketable securities | 542 | 263 |
Proceeds from sales of marketable securities | 14 | 27 |
Purchases of property and equipment | (8) | (4) |
Purchases of in-process research and development | (6) | |
Net cash provided by (used in) investing activities | 155 | (483) |
Cash flow from financing activities | ||
Proceeds from issuance of common stock to a related party | 20 | |
Proceeds from issuance of common stock pursuant to equity award plans | 4 | 14 |
Proceeds from sale of future royalties | 5 | |
Net cash provided by financing activities | 24 | 19 |
Net increase in cash, cash equivalents and restricted cash | 24 | 125 |
Cash, cash equivalents and restricted cash at beginning of period | 209 | 151 |
Cash, cash equivalents and restricted cash at end of period | 233 | 276 |
Non-cash investing and financing activities: | ||
Unpaid portion of property and equipment purchases included in accounts payable and accrued liabilities | $ 8 | $ 1 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Cash Flows [Abstract] | ||
Receivable from related party | $ 7 | $ 709 |
Other assets from related party | (3) | (1) |
Deferred revenue from related party | $ (19) | $ (42) |
Organization, Liquidity and Cap
Organization, Liquidity and Capital Resources | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Liquidity, and Capital Resources | Note 1. Organization, liquidity, and capital resources Organization Arcus Biosciences, Inc. (referred to as "Arcus," "we," "our," "us," or the "Company") is a clinical-stage, biopharmaceutical company focused on creating best-in-class therapies. Using our robust and highly efficient drug discovery capability, we have created a significant portfolio of investigational products which are in clinical development, with our most advanced molecule, an anti-TIGIT antibody, now in four Phase 3 registrational studies targeting lung and gastrointestinal cancers. Our deep portfolio of novel small molecules and enabling antibodies allows us to create highly differentiated therapies, which we are developing to treat multiple large indications. We operate and manage our business as one reportable and operating segment, which is the business of developing and commercializing highly differentiated therapies that have a meaningful impact on patients. Liquidity and Capital Resources As of June 30, 2023, we had cash, cash equivalents and marketable securities of $ 1.0 b illion, which we believe will be sufficient to fund our planned operations for a period of at least twelve months following the date of filing of this report. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2. Summary of significant accounting policies Basis of Presentation These interim financial statements should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 28, 2023. There have been no significant changes to our accounting policies as described in Note 2, Summary of significant accounting policies, in the notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and include all adjustments consisting of normal recurring adjustments that management believes are necessary for a fair presentation of the periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2022 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any future period. Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed and updated each period to reflect current information. Actual results may differ materially from those estimates. Recent Accounting Pronouncements There have been no new accounting pronouncements issued or adopted during the period with a significant impact to our financial statements. |
Related party - Gilead Sciences
Related party - Gilead Sciences, Inc. | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related party - Gilead Sciences, Inc. | Note 3. Related party - Gilead Sciences, Inc. In 2020, we and Gilead Sciences, Inc. (Gilead) entered into an Option, License and Collaboration Agreement (the Gilead Collaboration Agreement), Common Stock Purchase Agreement (the Stock Purchase Agreement), and Investor Rights Agreement (Investor Rights Agreement). In 2021, we amended the Gilead Collaboration Agreement (the First Gilead Collaboration Agreement Amendment) and the Stock Purchase Agreement (the First Stock Purchase Agreement Amendment), and in 2022 we amended the Investor Rights Agreement (Amended Investor Rights Agreement). In the second quarter 2023, we expanded our collaboration to include research-stage inflammation programs (the Second Gilead Collaboration Agreement Amendment) and further amended the Stock Purchase Agreement (the Second Stock Purchase Agreement Amendment). We refer to these agreements collectively as the Gilead Agreements. Stock Purchase Agreement and Investor Rights Agreement In 2020, under the Stock Purchase Agreement, Gilead purchased 6.0 million shares for a total cost of $ 200 million, of which $ 91 million was allocated to the revenue related performance obligations (See Note 5, Revenues for more information) created by the Gilead Collaboration Agreement. In 2021, under the First Stock Purchase Agreement Amendment, Gilead purchased 5.7 million shares for a total cost of $ 220 million. On June 27, 2023, under the Second Stock Purchase Agreement Amendment, Gilead purchased 1.0 million shares of our common stock at the closing day purchase price of $ 19.26 per share for a total cost of $ 20 million. Gilead has the right, at its option until July 2025, to purchase up to a maximum of 35 % of the Company’s then-outstanding voting common stock, at a purchase price equal to the greater of a 20 % premium to market (based on a trailing five-day average closing price at option exercise) or the $ 33.54 initial purchase price. Based on the value of our common stock at each contract closing, the right to purchase additional shares had no value. Under the Investor Rights Agreement, Gilead has the right, which they have exercised, to designate two members of our Board of Directors. This agreement also included a three-year standstill and a two-year lockup, provided Gilead with registration rights commencing at the end of the lockup period and provides Gilead with pro rata participation rights in certain future financings. In October 2022, we registered Gilead’s shares and entered into the Amended Investor Rights Agreement, primarily to extend the two-year lockup period to three-years which expired on July 13, 2023. As of June 30, 2023, Gilead held approximately 19.9 % of the Company’s outstanding common stock arising from purchases in our May 2020 public offering and purchases under the Stock Purchase Agreement and the First and Second Amended Stock Purchase Agreements. Collaboration Agreements In 2020, we entered into the Gilead Collaboration Agreement, which gave Gilead an exclusive license to develop and commercialize zimberelimab (the anti PD-1 program) in certain markets and time-limited options to acquire exclusive licenses to develop and commercialize any of our then-current and future clinical programs arising during the 10-year collaboration term, contingent upon $ 100 million option continuation payments payable on each of the second, fourth, sixth and eighth anniversaries of the agreement. Upon closing of the transaction in July 2020, Gilead made an upfront payment of $ 175 million. In 2021, we entered into the First Gilead Collaboration Agreement Amendment pursuant to which Gilead exercised its option to three programs—providing Gilead with exclusive licenses to develop and commercialize domvanalimab and AB308 (collectively, the anti-TIGIT program), etrumadenant (the adenosine receptor antagonist program) and quemliclustat (the CD73 program), in certain markets—for a total payment of $ 725 million that was received in 2022. The amendment also (i) provided for a slight reduction in the royalties for these three programs, such that Gilead will pay us tiered royalties as a percentage of revenues ranging from the mid-teens to the low twenties; and (ii) removed the $ 100 million option continuation payment that was otherwise due on the second anniversary of the Gilead Collaboration Agreement. Gilead's option, on a program-by-program basis, will expire after a prescribed period following the achievement of a clinical development milestone in such program and our delivery to Gilead of the requisite data package. Gilead may exercise its option to any program at any time prior to expiration of the option and will pay Arcus an option fee of $ 150 million per program. With respect to domvanalimab, we are also eligible to receive up to $ 500 million in potential U.S. regulatory approval milestones. For each program that Gilead opts in to, both companies will co-develop and equally share global development costs, subject to certain opt-out rights that we have, and caps on our spending and related subsequent adjustments. For each program, provided we have not exercised our opt-out rights, we have the option to co-promote in the United States with equal sharing of related profits and losses. Gilead has the right to exclusively commercialize outside of the U.S., subject to the rights of our existing partners in any territories and will pay us tiered royalties as a percentage of revenues ranging from the high teens to the low twenties. Under the First Gilead Collaboration Agreement Amendment, Gilead also has option rights to two immuno-oncology research programs for which we will lead discovery and early development activities. With respect to these two research programs, Gilead has the right to exercise its option, on a program-by-program basis, either (i) upon our completion of certain IND-enabling activities for an option payment of $ 60 million or (ii) following the achievement of a clinical development milestone for an option payment of $ 150 million. These research programs were not determined to be performance obligations at contract inception, due to the very early stages of the programs. On May 12, 2023, we entered into the Second Gilead Collaboration Agreement Amendment pursuant to which we expanded our collaboration to provide Gilead with options to license up to four jointly selected research-stage programs that target inflammatory diseases for which we will lead discovery and early development activities. We will receive an upfront payment of $ 17.5 million for each initiated program and Gilead will have an option to license each program at two separate, prespecified time points. For the first two research programs, Gilead has the right to exercise its option, on a program-by-program basis, either (i) upon our completion of certain IND-enabling activities for an option payment of $ 45 million or (ii) following the achievement of a clinical development milestone for an option payment of $ 150 million. If Gilead exercises its option at the earlier time point for the first two programs, we would be eligible to receive up to $ 375 million in regulatory and commercial milestone payments as well as tiered royalties for each optioned program. For any other program option exercise by Gilead, the parties would have rights to co-develop and share global development costs and to co-commercialize and share profits in the US for that program. We received a total upfront payment of $ 35 million for an initial two research programs during the three months ended June 30, 2023. As of June 30, 2023, Gilead has licenses to domvanalimab, AB308, etrumadenant, quemliclustat and zimberelimab. For the three months ended June 30, 2023 and 2022, we recognized revenue under the Gilead Agreements of $ 29 million and $ 26 million , respectively; and net reimbursements from Gilead recognized as reductions in R&D expense of $ 34 million and $ 36 million , respectively. For the six months ended June 30, 2023 and 2022, we recognized revenue under the Gilead Agreements of $ 54 million and $ 42 million , respectively; and net reimbursements from Gilead recognized as reductions in R&D expense of $ 67 million and $ 66 million , respectively. For a more detailed discussion on revenues recognized under the Gilead Agreements see Note 5, Revenues. |
License and Collaborations
License and Collaborations | 6 Months Ended |
Jun. 30, 2023 | |
License And Collaboration Agreements [Abstract] | |
License and Collaborations | Note 4. License and collaborations We enter into licensing agreements, strategic collaborations and other similar arrangements with third parties for the development and commercialization of certain investigational products. These arrangements may be collaborative and involve two or more parties who are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities. These arrangements may include: non-refundable upfront payments; payments for options to acquire certain rights; potential development and regulatory milestone payments and/or sales-based milestone payments; royalty payments; revenue or profit-sharing arrangements; expense reimbursements; and cost-sharing arrangements. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line items in the Condensed Consolidated Statements of Operations, net of any payments due to or reimbursements due from our collaboration partners, with such reimbursements being recognized at the time the party becomes obligated to pay. Our significant arrangements are discussed below. Gilead Collaboration See Note 3, Related party - Gilead Sciences, Inc. AstraZeneca Collaboration In 2020, we entered into a collaboration with AstraZeneca to evaluate domvanalimab, our investigational anti-TIGIT antibody, in combination with AstraZeneca’s durvalumab in a registrational Phase 3 clinical trial in patients with unresectable Stage 3 non-small cell lung cancer (NSCLC), known as the PACIFIC-8 trial. Under the collaboration, each company will retain existing rights to their respective molecules and any future commercial economics. AstraZeneca will conduct the trial, and each company will supply their respective investigational product to support the trial. Under the terms of the agreement, we will reimburse AstraZeneca for its share of the trial costs upon the achievement of certain milestones or under certain circumstances if the agreement is terminated early. The portion of the costs that we consider to be unavoidable are accrued in advance of the achievement of the milestone. For the three months ended June 30, 2023 and 2022, we recognized as R&D expense $ 3 million and $ 1 million, respectively, before expected recoveries from our cost-sharing agreement with Gilead. For the six months ended June 30, 2023 and 2022, we recognized as R&D expense $ 5 million and $ 2 million, respectively, before expected recoveries from our cost-sharing agreement with Gilead. At June 30, 2023 and December 31, 2022, we have recognized a liability of $ 10 million and $ 5 million, respectively, related to our obligation to AstraZeneca which is recorded in Other noncurrent liabilities. The PACIFIC-8 trial forms part of the Arcus and Gilead joint development program for domvanalimab and our portion of the trial costs are shared with Gilead. At June 30, 2023 and December 31, 2022, we have recognized a receivable due from Gilead for these shared costs of $ 5 million and $ 2 million, respectively, which is recorded in Other noncurrent assets. Taiho License In 2017, we entered into an agreement with Taiho Pharmaceutical Co., Ltd (Taiho) under which we granted Taiho exclusive options to programs arising over a five-year period which ended in September 2022 (the Option Period) for an upfront payment of $ 35 million. Upon an option exercise of a program, Taiho would obtain exclusive development and commercialization rights to investigational products under the program for Japan and certain other territories in Asia (excluding China) (the Taiho Territory). For each option that Taiho exercises, they will be obligated to make a payment of $ 3 million to $ 15 million, depending on the development stage of the optioned program. Upon exercise, Taiho is solely responsible for continued development and commercialization in the Taiho Territory. In addition, for each optioned program we would be eligible to receive clinical and regulatory milestones of up to $ 130 million and commercial milestone payments of up to $ 145 million with the achievement of certain sales thresholds in the Taiho Territory. During the fourth quarter 2022, Taiho opted to participate in two Phase 3 trials of domvanalimab combinations, STAR-121 and STAR-221, and are obligated to make certain milestone payments contingent upon successfully satisfying the related clinical milestones. We will also receive royalties ranging from high single-digits to mid-teens on net sales of licensed products in the Taiho Territory. Royalties will be payable by product and country commencing on the first commercial sale and ending upon the later of: (a) 10 years; and (b) expiration of the last-to-expire valid claim of our patents covering the manufacture, use or sale. As of June 30, 2023, Taiho has licenses for the Taiho Territory to (i) etrumadenant (the adenosine receptor antagonist program); (ii) zimberelimab (the anti PD-1 program); and (iii) domvanalimab and AB308 (collectively, the anti-TIGIT program). For the three and six months ended June 30, 2022 we recognized revenue of $ 1 million and $ 3 million, respectively, related to the upfront payment. For both the three and six months ended June 30, 2023 we recognized as reductions in R&D expense net reimbursements from Taiho of $ 2 million. There was no remaining deferred revenue after the Option Period ended in September 2022. For a more detailed discussion on revenues see Note 5, Revenues. WuXi Biologics License - anti-PD-1 In 2017, we entered into an agreement with WuXi Biologics Ireland Limited (WuXi Biologics) which, as amended, provides us with exclusive rights to (i) develop, use and manufacture products that include an anti-PD-1 antibody, including zimberelimab, worldwide and (ii) commercialize any such products worldwide, except in Greater China. Under the agreement, as of June 30, 2023 we may incur (i) clinical and regulatory milestone payments, and commercialization milestone payments of up to $ 375 million, (ii) tiered royalties that range from the high single-digits to low teens on net sales of the licensed products and (iii) fees related to any sublicenses. For the three and six months ended June 30, 2023 and 2022, we did not have any transactions nor were any amounts due under this arrangement. WuXi Biologics License - anti-CD39 In 2020, we entered into an agreement with WuXi Biologics, under which we obtained the exclusive worldwide license to develop and commercialize anti-CD39 antibodies discovered under the agreement. As of June 30, 2023 we may incur additional clinical and regulatory milestone payments of up to $ 14 million and royalty payments in the low single digits on net sales of the licensed products under this agreement. For the three months ended June 30, 2023 and 2022, we incurred no development milestones nor were any amounts due under this arrangement. For the six months ended June 30, 2023 and 2022, we incurred development milestones under this arrangement of $ 1 million and $ 2 million, respectively, which were recognized as R&D expense. Abmuno License In 2016, we entered into an agreement with Abmuno Therapeutics LLC (Abmuno), under which we obtained the exclusive worldwide license to develop, use, manufacture, and commercialize products that include an anti-TIGIT antibody, including domvanalimab. As of June 30, 2023 we may incur additional clinical, regulatory and commercialization milestone payments of up to $ 88 million under this agreement. For the three and six months ended June 30, 2023 and 2022, we did not have any transactions nor were any amounts due under this arrangement. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 5. Revenues The following table summarizes our revenues by collaboration, category of revenue, and the method of recognition (in millions): Three Months Ended June 30, Six Months Ended June 30, Over time Point in time 2023 2022 2023 2022 Gilead Collaboration License and R&D services * $ 20 $ 17 $ 37 $ 25 Access rights * 9 9 17 17 Taiho Collaboration Access rights * - 1 - 3 Total revenues $ 29 $ 27 $ 54 $ 45 Revenues from Gilead accounted for 100 % and 96 % of Total revenues for the three months ended June 30, 2023 and 2022, respectively and 100 % and 93 % for the six months ended June 30, 2023 and 2022, respectively. The following table summarizes the revenue recognized as a result of changes in the deferred revenue balance (in millions): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue recognized from amounts included in deferred revenue at the beginning of the period $ 28 $ 27 $ 53 $ 45 Revenue from the Gilead Collaboration We had $ 433 million and $ 452 million of deferred revenue remaining on our Condensed Consolidated Balance Sheets related to the Gilead collaboration at June 30, 2023 and December 31, 2022, respectively, allocated between current and noncurrent based on the expected timing of future recognition. Activity for performance obligations under this arrangement for the periods presented herein was as follows: Inflammation Programs - R&D Services In May 2023, we entered into the Second Gilead Collaboration Agreement Amendment pursuant to which we expanded our collaboration to provide Gilead with options to license up to four jointly selected research-stage programs that target inflammatory diseases for which we will lead discovery and early development activities (see Note 3, Related party - Gilead Sciences, Inc., for more information). During the three months ended June 30, 2023, we received a total upfront payment of $ 35 million for an initial two jointly selected research-stage programs. We determined that the Second Gilead Collaboration Agreement Amendment represented a separate contract and, at the amendment closing date, we allocated the transaction price of $ 35 million to the performance obligations created as of the date of this amendment. The following table summarizes the allocation of the transaction price to the distinct performance obligations (in millions): Allocation to performance obligations Distinct Amount Inflammation target 1 * $ 18 Inflammation target 2 * 17 Total allocated transaction price $ 35 We determined that we have separate performance obligations to perform R&D services for Gilead related to discovery and early development activities for each research program for which they have made an upfront payment. The standalone selling price of these obligations was determined using an expected cost-plus margin approach. We recognize the amounts allocated to these services as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program. The options to acquire additional licenses or services did not result in additional performance obligations because they did not provide a material right at contract inception, primarily due to the very early stages of the programs. We recognized revenue of $ 1 million for both the three and six months ended June 30, 2023, within Other collaboration revenue in our Condensed Consolidated Statements of Operations. At June 30, 2023, we had $ 34 million of deferred revenue remaining on our Condensed Consolidated Balance Sheet related to these performance obligations. Etrumadenant - License and R&D Services Under the First Gilead Collaboration Agreement Amendment, Gilead has an exclusive license and we are also obligated to perform further R&D services for Gilead related to etrumadenant. We determined that the license and R&D services were combined based on an evaluation of the delivery of the license, due to the early stage of the technology and the specialized nature of our know-how. We allocated arrangement consideration of $ 219 million to the combined license and R&D services performance obligation and recognize the amounts allocated as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program. We recognized revenue of $ 10 million and $ 13 million for the three months ended June 30, 2023 and 2022, respectively, and $ 18 million for both the six months ended June 30, 2023 and 2022, respectively, within License and development service revenue in our Condensed Consolidated Statements of Operations. At June 30, 2023, we had $ 167 million of deferred revenue remaining on our Condensed Consolidated Balance Sheet related to this performance obligation. Quemliclustat - License and R&D Services Under the First Gilead Collaboration Agreement Amendment, Gilead has an exclusive license and we are also obligated to perform further R&D services for Gilead related to quemliclustat. We determined that the license and R&D services were combined based on an evaluation of the delivery of the license, due to the early stage of the technology and the specialized nature of our know-how. We allocated arrangement consideration of $ 176 million to the combined license and R&D services performance obligation and recognize the amounts allocated as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program. We recognized revenue of $ 7 million and $ 2 million for the three months ended June 30, 2023 and 2022, respectively, and $ 15 million and $ 4 million for the six months ended June 30, 2023 and 2022, respectively , within License and development service revenue in our Condensed Consolidated Statements of Operations. At June 30, 2023, we had $ 134 million of deferred revenue remaining on our Condensed Consolidated Balance Sheet related to this performance obligation. Domvanalimab - R&D Services Under the First Gilead Collaboration Agreement Amendment, we have an obligation to perform further R&D services for Gilead related to domvanalimab. We determined that these services are distinct based on an evaluation of the delivery of the related license, noting that the program was in the later stages of development and license met the criteria for being distinct from the R&D services required. We allocated arrangement consideration of $ 34 million to the R&D services performance obligation and recognize the amounts allocated as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program. We recognized revenue of $ 1 million for both the three months ended June 30, 2023 and 2022, respectively, and $ 2 million for both the six months ended June 30, 2023 and 2022, respectively, within License and development service revenue in our Condensed Consolidated Statements of Operations. At June 30, 2023, we had $ 28 million of deferred revenue remaining on our Condensed Consolidated Balance Sheet related to this performance obligation. Zimberelimab - R&D and Commercialization Services Under the First Gilead Collaboration Agreement Amendment, we have an obligation to perform further R&D and commercialization services for Gilead related to zimberelimab, as a monotherapy and in combination with other agents. We determined that these services are distinct based on an evaluation of the delivery of the related license, noting that the program was in the later stages of development and license met the criteria for being distinct from the R&D and commercialization services required. We allocated arrangement consideration of $ 11 million to the R&D and commercialization services performance obligation and recognize the amounts allocated as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program. We recognized revenue of $ 1 million for the three and six months ended June 30, 2023, and for the three and six months ended June 30, 2022, within License and development service revenue in our Condensed Consolidated Statements of Operations. As of December 31, 2022, substantially all the revenue related to this performance obligation had been recognized. Access Rights and Option Continuation Periods Under the First Gilead Collaboration Agreement Amendment, Gilead has exclusive access to our current programs as well as the future programs for a period of ten years , contingent upon option continuation payments totaling $ 300 million, consisting of a $ 100 million payment on each of the fourth, sixth, and eighth anniversaries of the agreement. We allocated arrangement consideration of $ 121 million to this performance obligation. We use a time-elapsed input method to measure progress toward satisfying this obligation, which is the method we believe most faithfully depicts our performance in transferring the promised services during the time period in which Gilead has access to our R&D pipeline. Accordingly , the revenue allocated to this performance obligation is being recognized using this input method over the minimum four-year period. We have determined that Gilead is not obligated to pay the remaining $ 300 million due over the remainder of the term and excluded these payments from the transaction price. Failure to pay the non-obligatory option continuation payments will result in Gilead’s loss of certain rights to access and obtain licenses to the programs arising from our R&D pipeline. We recognized revenue of $ 9 million associated with the performance of this obligation for both the three months ended June 30, 2023 and 2022, respectively, and $ 17 million for both the six months ended June 30, 2023 and 2022, respectively, within Other collaboration revenue in our Condensed Consolidated Statements of Operations. At June 30, 2023, we had $ 70 million of deferred revenue on our Condensed Consolidated Balance Sheet related to this performance obligation. Capitalized Costs to Obtain Contracts We incurred certain costs to obtain the Gilead Collaboration Agreement in 2020 and the First Gilead Collaboration Agreement Amendment in 2021, which consisted of consultant and legal fees. We allocated these costs to the various performance obligations, to be recognized as the underlying performance obligations are satisfied and revenue is recognized. For the three and six months ended June 30, 2023, and 2022, the recognized expense was not significant. At June 30, 2023, we had $ 4 million in capitalized costs to obtain the contracts, of which $ 1 million was recorded as Prepaid and other current assets and $ 3 million was recorded as Other noncurrent assets in our Condensed Consolidated Balance Sheet. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6. Income taxes The income tax provision or benefit for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into consideration in the relevant period. Each quarter, we update the estimate of the annual effective tax rate, and if the estimated tax rate changes, we record a cumulative adjustment to the provision or benefit. The income tax expense was $ 1 million for the three months ended June 30, 2023, with an effective tax rate of ( 2.0 %). We did no t record a provision for income taxes for the three months ended June 30, 2022. The income tax expense was $ 3 million and $ 1 million for the six months ended June 30, 2023 and 2022, with an effective tax rate of ( 2.1 %) and ( 0.8 %), respectively. The year-over-year increase in the income tax provision was due to an increase in taxable income. We have taxable income compared to book losses before income taxes due to the timing of recognition of deferred revenue for tax purposes and the effects of the mandatory capitalization and amortization of research and development expenses starting in 2022, as required by the 2017 Tax Cuts and Jobs Act. The effective tax rate differs from the U.S. statutory tax rate primarily due to the valuation allowances on our deferred tax assets and state income taxes. As of June 30, 2023 and December 31, 2022, we have provided a valuation allowance against U.S. federal and state deferred tax assets. We continue to evaluate the realizability of deferred tax assets and the related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. We recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision. To date, we have not recognized any interest and penalties, nor have we accrued for or made payments for interest and penalties. We have not been audited by the Internal Revenue Service, or any state or foreign tax authority. We are subject to taxation in the United States and in Australia. Due to net operating loss and research credit carryforwards, all of our tax years, from 2015 to 2022, remain open to U.S. federal and California state tax examinations. In addition, our fiscal years from 2018 to 2022 are open to examination in Australia. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 7. Net loss per share The following table summarizes potentially dilutive securities excluded from the computation of diluted net loss per share calculations because they would have been antidilutive (in millions): June 30, 2023 June 30, 2022 Common stock options issued and outstanding 13.9 12.4 Restricted stock units issued 2.0 1.4 Employee Stock Purchase Plan shares 0.2 0.1 Total potential dilutive securities 16.1 13.9 We have also excluded the effect of Gilead’s right to purchase additional shares of our common stock from the calculation as these rights had no intrinsic value at either June 30, 2023 or 2022. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 8. Stock-based compensation The following table reflects the components of stock-based compensation expense recognized in our Condensed Consolidated Statements of Operations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 9 $ 7 $ 18 $ 16 General and administrative 9 8 19 16 Total stock-based compensation $ 18 $ 15 $ 37 $ 32 |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 6 Months Ended |
Jun. 30, 2023 | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | Note 9. Cash, cash equivalents and marketable securities The following table summarizes amortized cost, gross unrealized gains and losses and the fair value of our cash, cash equivalents and marketable securities, all of which are considered available for sale, by type of securities: Types of securities as of June 30, 2023 Amortized Unrealized Unrealized Fair Money market funds $ 182 $ - $ - $ 182 U.S. treasury securities 313 - ( 2 ) 311 Corporate securities and commercial paper 409 - ( 1 ) 408 U.S. government agency securities 103 - ( 1 ) 102 Certificate of deposit 7 - - 7 Total cash, cash equivalents and marketable securities $ 1,014 $ - $ ( 4 ) $ 1,010 Types of securities as of December 31, 2022 Amortized Unrealized Unrealized Fair Money market funds $ 169 $ - $ - $ 169 U.S. treasury securities 317 - ( 3 ) 314 Corporate securities and commercial paper 635 - ( 4 ) 631 U.S. government agency securities 20 - - 20 Certificate of deposit 4 - - 4 Total cash, cash equivalents and marketable securities $ 1,145 $ - $ ( 7 ) $ 1,138 The following table summarizes the fair values of our cash, cash equivalents and marketable securities by location in the Condensed Consolidated Balance Sheets and contractual maturity: Location in Condensed Consolidated Balance Sheets Contractual Maturity June 30, 2023 December 31, 2022 Cash and cash equivalents - $ 230 $ 206 Marketable securities Within one year 700 803 Long-term marketable securities Between one and three years 80 129 Total cash, cash equivalents and marketable securities $ 1,010 $ 1,138 Realized gains or losses recognized on the sale of available-for-sale marketable securities were not material for the three and six months ended June 30, 2023 and 2022. Realized gains and losses are included in Interest and other income, net, in the Condensed Consolidated Statements of Operations. The cost of a security sold is determined using the specific-identification method. We limit the credit risk associated with our investments by placing them with banks and institutions we believe are highly credit worthy and investing in highly rated investments. We held a total of 144 and 219 positions in securities which were in unrealized loss positions as of June 30, 2023 and December 31, 2022, respectively. We do not intend to sell our securities with unrealized loss positions and have concluded we will not be required to sell the securities before recovery of the amortized cost for the investment at maturity. No credit related losses have been recognized for any of the periods presented. The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets to the total shown in the Condensed Consolidated Statements of Cash Flows (in millions): June 30, 2023 2022 Cash and cash equivalents $ 230 $ 273 Restricted cash (included in Other noncurrent assets) 3 3 Total cash, cash equivalents and restricted cash $ 233 $ 276 |
Condensed Consolidated Balanc_3
Condensed Consolidated Balance Sheet Components | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Consolidated balance sheet components | Note 10. Condensed consolidated balance sheet components Prepaid and Other Current Assets Prepaid and other current assets consisted of the following (in millions): June 30, 2023 December 31, 2022 Prepaids and other assets $ 19 $ 15 Accrued interest receivable 3 4 Total prepaid and other current assets $ 22 $ 19 Other Current Liabilities Other current liabilities consisted of the following (in millions): June 30, 2023 December 31, 2022 Accrued research and development $ 40 $ 45 Accrued personnel expenses 15 25 Income taxes payable 2 - Other 8 6 Total other current liabilities $ 65 $ 76 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 11. Leases The following table summarizes our cash and non-cash information related to our operating leases (in millions): Six Months Ended June 30, 2023 2022 Cash paid for amounts included in measurement of lease liabilities $ 8 $ 4 Cash received from tenant improvement allowances $ 1 $ 8 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ 3 Recognition of tenant improvement allowance receivable included in Other current liabilities $ 4 $ 6 As of June 30, 2023 and December 31, 2022, we have provided deposits for letters of credit totaling $ 3 million to secure our obligations under our leases, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 12. Stockholders' Equity On June 27, 2023, under the Second Stock Purchase Agreement, Gilead purchased 1.0 million shares of our common stock at the closing day purchase price of $ 19.26 per share for a total cost of $ 20 million. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 13. Fair value measurements We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows: • Level 1 inputs include unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 inputs include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3 inputs include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Our Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables summarize the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in millions): Fair value measurement as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market funds $ 182 $ - $ - $ 182 U.S. treasury securities - 311 - 311 Corporate securities and commercial paper - 408 - 408 U.S. government agency obligations - 102 - 102 Certificate of deposit - 7 - 7 Total assets measured at fair value $ 182 $ 828 $ - $ 1,010 Liabilities Liability for sale of future royalties $ - $ - $ 18 $ 18 Total liabilities measured at fair value $ - $ - $ 18 $ 18 Fair value measurement as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 169 $ - $ - $ 169 U.S. treasury securities - 314 - 314 Corporate securities and commercial paper - 631 - 631 U.S. government agency securities - 20 - 20 Certificate of deposit - 4 - 4 Total assets measured at fair value $ 169 $ 969 $ - $ 1,138 Liabilities Liability for sale of future royalties $ - $ - $ 17 $ 17 Total liabilities measured at fair value $ - $ - $ 17 $ 17 Liability for Sale of Future Royalties In 2021, we entered into an agreement with BVF Partners L.P. (BVF), under which BVF funded the discovery and development of compounds for the treatment of inflammatory diseases (the BVF Program) for $ 15 million in non-refundable payments which were paid in 2021 and 2022. In return, we are obligated to: perform research and development activities in the Program; to make contingent payments upon the achievement of certain clinical and regulatory milestones of up to $ 73 million or $ 160 million depending on whether the program is solely developed by us or with Gilead if they opt-in under the Gilead Collaboration Agreement; and pay mid- to high-single digit royalties on any net product sales generated by the BVF Program. We account for the BVF Agreement as a liability primarily because we have significant continuing involvement in generating the cash flows due to BVF. The liability is recorded at fair value by using probability-adjusted discounted cash flows and is revalued each reporting period until the related contingencies have been resolved. The fair value measurement is based on significant unobservable inputs that are reviewed quarterly by management and include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable. Changes in the fair value of this liability related to interest accretion are recognized in Non-operating income (expense) in the Consolidated Statements of Operations. During the second quarter of 2023, new preclinical information from our BVF Program led to revised assumptions which decreased the estimated probabilities of success and delayed the projected timing of achieving specified development, regulatory and commercial milestones and commercial sales. These changes in estimate are accounted for prospectively and resulted in a decrease in the imputed effective interest rate on the unamortized portion of the liability to 10.1 % during the quarter ended June 30, 2023 compared to 20.6 % for the quarter ended March 31, 2023 and June 30, 2022 and the six months ended June 30, 2022. The impact of this change on the non-cash interest expense for the quarter ended June 30, 2023 was not material. The liability for sale of future royalties is reported in Other noncurrent liabilities in the Condensed Consolidated Balance Sheets and changes were as follows (in millions): Six Months Ended June 30, 2023 2022 Beginning balance $ 17 $ 5 Cash received - 5 Interest accretion 1 1 Ending balance $ 18 $ 11 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These interim financial statements should be read in conjunction with the audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 28, 2023. There have been no significant changes to our accounting policies as described in Note 2, Summary of significant accounting policies, in the notes to Consolidated Financial Statements in Item 8 of Part II of the Form 10-K. These interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and include all adjustments consisting of normal recurring adjustments that management believes are necessary for a fair presentation of the periods presented. The Condensed Consolidated Balance Sheet as of December 31, 2022 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any future period. |
Use of Estimates | Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed and updated each period to reflect current information. Actual results may differ materially from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There have been no new accounting pronouncements issued or adopted during the period with a significant impact to our financial statements. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenues by Collaboration, Category of Revenue and Method of Recognition | The following table summarizes our revenues by collaboration, category of revenue, and the method of recognition (in millions): Three Months Ended June 30, Six Months Ended June 30, Over time Point in time 2023 2022 2023 2022 Gilead Collaboration License and R&D services * $ 20 $ 17 $ 37 $ 25 Access rights * 9 9 17 17 Taiho Collaboration Access rights * - 1 - 3 Total revenues $ 29 $ 27 $ 54 $ 45 |
Summary of Revenue Recognized as a Result of Changes in Deferred Revenue | The following table summarizes the revenue recognized as a result of changes in the deferred revenue balance (in millions): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue recognized from amounts included in deferred revenue at the beginning of the period $ 28 $ 27 $ 53 $ 45 |
Summary of Transaction Price and Allocation of Transaction Price to the Performance Obligations | The following table summarizes the allocation of the transaction price to the distinct performance obligations (in millions): Allocation to performance obligations Distinct Amount Inflammation target 1 * $ 18 Inflammation target 2 * 17 Total allocated transaction price $ 35 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Outstanding Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share | The following table summarizes potentially dilutive securities excluded from the computation of diluted net loss per share calculations because they would have been antidilutive (in millions): June 30, 2023 June 30, 2022 Common stock options issued and outstanding 13.9 12.4 Restricted stock units issued 2.0 1.4 Employee Stock Purchase Plan shares 0.2 0.1 Total potential dilutive securities 16.1 13.9 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Expense | The following table reflects the components of stock-based compensation expense recognized in our Condensed Consolidated Statements of Operations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 9 $ 7 $ 18 $ 16 General and administrative 9 8 19 16 Total stock-based compensation $ 18 $ 15 $ 37 $ 32 |
Cash, Cash Equivalents and Ma_2
Cash, Cash Equivalents and Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Our Cash, Cash Equivalents and Marketable Securities Considered as Available for Sale by Type of Securities | The following table summarizes amortized cost, gross unrealized gains and losses and the fair value of our cash, cash equivalents and marketable securities, all of which are considered available for sale, by type of securities: Types of securities as of June 30, 2023 Amortized Unrealized Unrealized Fair Money market funds $ 182 $ - $ - $ 182 U.S. treasury securities 313 - ( 2 ) 311 Corporate securities and commercial paper 409 - ( 1 ) 408 U.S. government agency securities 103 - ( 1 ) 102 Certificate of deposit 7 - - 7 Total cash, cash equivalents and marketable securities $ 1,014 $ - $ ( 4 ) $ 1,010 Types of securities as of December 31, 2022 Amortized Unrealized Unrealized Fair Money market funds $ 169 $ - $ - $ 169 U.S. treasury securities 317 - ( 3 ) 314 Corporate securities and commercial paper 635 - ( 4 ) 631 U.S. government agency securities 20 - - 20 Certificate of deposit 4 - - 4 Total cash, cash equivalents and marketable securities $ 1,145 $ - $ ( 7 ) $ 1,138 |
Schedule of Fair Values of Our Cash, Cash Equivalents and Marketable Securities by Location in Condensed Consolidated Balance Sheets and Contractual Maturity | The following table summarizes the fair values of our cash, cash equivalents and marketable securities by location in the Condensed Consolidated Balance Sheets and contractual maturity: Location in Condensed Consolidated Balance Sheets Contractual Maturity June 30, 2023 December 31, 2022 Cash and cash equivalents - $ 230 $ 206 Marketable securities Within one year 700 803 Long-term marketable securities Between one and three years 80 129 Total cash, cash equivalents and marketable securities $ 1,010 $ 1,138 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets to the total shown in the Condensed Consolidated Statements of Cash Flows (in millions): June 30, 2023 2022 Cash and cash equivalents $ 230 $ 273 Restricted cash (included in Other noncurrent assets) 3 3 Total cash, cash equivalents and restricted cash $ 233 $ 276 |
Condensed Consolidated Balanc_4
Condensed Consolidated Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Prepaid and Other Current Assets | Prepaid and other current assets consisted of the following (in millions): June 30, 2023 December 31, 2022 Prepaids and other assets $ 19 $ 15 Accrued interest receivable 3 4 Total prepaid and other current assets $ 22 $ 19 |
Summary of Other Current Liabilities | Other current liabilities consisted of the following (in millions): June 30, 2023 December 31, 2022 Accrued research and development $ 40 $ 45 Accrued personnel expenses 15 25 Income taxes payable 2 - Other 8 6 Total other current liabilities $ 65 $ 76 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Summary of Cash and Non-cash Information Related to Operating Leases | The following table summarizes our cash and non-cash information related to our operating leases (in millions): Six Months Ended June 30, 2023 2022 Cash paid for amounts included in measurement of lease liabilities $ 8 $ 4 Cash received from tenant improvement allowances $ 1 $ 8 Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ 3 Recognition of tenant improvement allowance receivable included in Other current liabilities $ 4 $ 6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables summarize the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in millions): Fair value measurement as of June 30, 2023 Level 1 Level 2 Level 3 Total Assets Money market funds $ 182 $ - $ - $ 182 U.S. treasury securities - 311 - 311 Corporate securities and commercial paper - 408 - 408 U.S. government agency obligations - 102 - 102 Certificate of deposit - 7 - 7 Total assets measured at fair value $ 182 $ 828 $ - $ 1,010 Liabilities Liability for sale of future royalties $ - $ - $ 18 $ 18 Total liabilities measured at fair value $ - $ - $ 18 $ 18 Fair value measurement as of December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 169 $ - $ - $ 169 U.S. treasury securities - 314 - 314 Corporate securities and commercial paper - 631 - 631 U.S. government agency securities - 20 - 20 Certificate of deposit - 4 - 4 Total assets measured at fair value $ 169 $ 969 $ - $ 1,138 Liabilities Liability for sale of future royalties $ - $ - $ 17 $ 17 Total liabilities measured at fair value $ - $ - $ 17 $ 17 |
Summary of Changes of Liabilities for Sale of Future Royalties | The liability for sale of future royalties is reported in Other noncurrent liabilities in the Condensed Consolidated Balance Sheets and changes were as follows (in millions): Six Months Ended June 30, 2023 2022 Beginning balance $ 17 $ 5 Cash received - 5 Interest accretion 1 1 Ending balance $ 18 $ 11 |
Organization, Liquidity and C_2
Organization, Liquidity and Capital Resources - Additional Information (Details) $ in Billions | 6 Months Ended |
Jun. 30, 2023 USD ($) Segment | |
Organization [Line Items] | |
Number of reportable segments | 1 |
Number of operating segments | 1 |
Cash, Cash Equivalents and Investments in Marketable Securities | |
Organization [Line Items] | |
Cash and investments | $ | $ 1 |
Related party - Gilead Scienc_2
Related party - Gilead Sciences, Inc. - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 27, 2023 USD ($) $ / shares shares | May 12, 2023 USD ($) Program | Oct. 31, 2022 | Jan. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Program $ / shares | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) Program shares | Dec. 31, 2020 USD ($) shares | |
Research and Development | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Reimbursed under cost-sharing provisions of arrangement | $ 34 | $ 36 | $ 67 | $ 66 | ||||||
Gilead Collaboration Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Option payment upon completion of certain IND-enabling activities | 60 | |||||||||
Option payment upon achievement of certain development milestones | $ 150 | |||||||||
Amended Investor Rights Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Lockup period | 2 years | |||||||||
Extended lockup period | 3 years | |||||||||
Amended Gilead Collaboration Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of programs, eligible to receive regulatory and commercial milestone payments | Program | 2 | |||||||||
Number of exercise option to programs | Program | 3 | |||||||||
Option payments received | $ 725 | |||||||||
Removal of option continuation payment under agreement | $ 100 | |||||||||
Option payment upon achievement of certain development milestones | $ 150 | |||||||||
Gilead | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percentage of outstanding common stock held | 19.90% | 19.90% | ||||||||
Gilead | Research and Development | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Reimbursed under cost-sharing provisions of arrangement | $ 34 | 36 | $ 67 | 66 | ||||||
Gilead | Gilead Collaboration Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Collaboration term for current and future clinical programs | 10 years | |||||||||
Option continuation payment due upon second anniversary of agreement | $ 100 | |||||||||
Option continuation payment due upon fourth anniversary of agreement | 100 | |||||||||
Option continuation payment due upon sixth anniversary of agreement | 100 | |||||||||
Option Continuation Payment Due Upon Eighth Anniversary of Agreement | 100 | |||||||||
Upfront cash payment | 175 | |||||||||
Option fee per program for all other programs entering clinical development to exercise option | 150 | |||||||||
Number of research programs | Program | 2 | |||||||||
Revenue recognized | $ 29 | $ 26 | $ 54 | $ 42 | ||||||
Gilead | Gilead Collaboration Agreement | Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Potential regulatory approval milestones payment receivable related to domvanalimab | $ 500 | |||||||||
Gilead | Stock Purchase Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percentage of premium purchase price of common stock | 20% | |||||||||
Trailing days average closing price | 5 days | |||||||||
Weighted average closing price of our common stock on grant date | $ / shares | $ 19.26 | $ 33.54 | $ 33.54 | |||||||
Issuance of common stock, shares | shares | 1 | 5.7 | 6 | |||||||
Issuance of common stock | $ 20 | $ 220 | ||||||||
Funds received for purchase of common stock | $ 200 | |||||||||
Purchase price of common stock allocation to performance obligation | $ 91 | |||||||||
Gilead | Stock Purchase Agreement | Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Right to purchase additional outstanding voting common stock percentage | 35% | 35% | ||||||||
Gilead | Amended Gilead Collaboration Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Upfront cash payment | 17.5 | $ 35 | ||||||||
Number of research programs | Program | 2 | |||||||||
Option payment upon completion of certain IND-enabling activities | 45 | |||||||||
Gilead | Amended Gilead Collaboration Agreement | Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Regulatory and commercial milestone payments received | $ 375 |
License and Collaborations - Ad
License and Collaborations - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2017 | Dec. 31, 2022 | Mar. 31, 2022 | |
License And Collaboration Agreements [Line Items] | |||||||
Liabilities classified as noncurrent | $ 144,000,000 | $ 144,000,000 | $ 140,000,000 | ||||
Shared costs classified as other noncurrent assets | 109,000,000 | 109,000,000 | 114,000,000 | ||||
Total collaboration and license revenues | 29,000,000 | $ 27,000,000 | 54,000,000 | $ 45,000,000 | |||
Research and Development | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Reimbursement from related party for shared costs | 34,000,000 | 36,000,000 | 67,000,000 | 66,000,000 | |||
WuXi Biologics License Agreement | anti-CD39 | Research and Development | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Development milestone expense | 0 | 0 | 1,000,000 | 2,000,000 | |||
WuXi Biologics License Agreement | Maximum | anti-PD-1 | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Clinical, regulatory and commercialization milestone payments | $ 375,000,000 | ||||||
WuXi Biologics License Agreement | Maximum | anti-CD39 | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Additional clinical, regulatory and commercialization milestone payments | 14,000,000 | ||||||
Abmuno License Agreement | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Additional clinical, regulatory and commercialization milestone payments | 88,000,000 | ||||||
AstraZeneca Agreement | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Liabilities classified as noncurrent | 10,000,000 | 10,000,000 | 5,000,000 | ||||
Development cost recorded within research and development expenses | 3,000,000 | 1,000,000 | $ 5,000,000 | 2,000,000 | |||
Taiho Agreement | Taiho Pharmaceutical Co., Ltd | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Option period | 5 years | ||||||
Option ending period | 2022-09 | ||||||
Non refundable and non creditable cash payments | $ 35,000,000 | ||||||
Range of royalties receivable on net sales | high single-digits to mid-teens | ||||||
Royalties payable description | Royalties will be payable by product and country commencing on the first commercial sale and ending upon the later of: (a) 10 years; and (b) expiration of the last-to-expire valid claim of our patents covering the manufacture, use or sale. | ||||||
Total collaboration and license revenues | $ 1,000,000 | $ 3,000,000 | |||||
Reimbursement of research and development expense | 2,000,000 | $ 2,000,000 | |||||
Deferred revenue | $ 0 | ||||||
Taiho Agreement | Taiho Pharmaceutical Co., Ltd | Minimum | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Payment for option exercise | 3,000,000 | ||||||
Taiho Agreement | Taiho Pharmaceutical Co., Ltd | Maximum | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Contingent milestone payments receivable | 145,000,000 | ||||||
Payment for option exercise | 15,000,000 | ||||||
Additional clinical and regulatory milestone payments receivable | $ 130,000,000 | ||||||
Option License And Collaboration Agreement [Member] | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Shared costs classified as other noncurrent assets | 5,000,000 | 5,000,000 | 2,000,000 | ||||
Deferred revenue | $ 433,000,000 | $ 433,000,000 | $ 452,000,000 |
Revenues - Summary of Revenues
Revenues - Summary of Revenues by Collaboration, Category of Revenue and Method of Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
License And Collaboration Agreements [Line Items] | ||||
Total revenues | $ 29 | $ 27 | $ 54 | $ 45 |
Gilead Collaboration, License and R&D services | ||||
License And Collaboration Agreements [Line Items] | ||||
Total revenues | 20 | 17 | 37 | 25 |
Gilead Collaboration, Access Rights | ||||
License And Collaboration Agreements [Line Items] | ||||
Total revenues | $ 9 | 9 | $ 17 | 17 |
Taiho Collaboration, Access Rights | ||||
License And Collaboration Agreements [Line Items] | ||||
Total revenues | $ 1 | $ 3 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jul. 13, 2020 | May 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
License And Collaboration Agreements [Line Items] | |||||||
Allocated transaction price | $ 35 | ||||||
Total collaboration and license revenues | $ 29 | $ 27 | 54 | $ 45 | |||
Deferred revenue recognized | 28 | $ 27 | 53 | $ 45 | |||
Gilead | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Cost sharing receivable | 4 | 4 | |||||
Gilead | Prepaid Expenses and Other Current Assets | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Capitalized Contract Cost, Net, Current | 1 | 1 | |||||
Gilead | Other Noncurrent Assets | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Capitalized Contract Cost, Net, Noncurrent | $ 3 | $ 3 | |||||
Customer Concentration Risk | Gilead | Revenue Benchmark | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Percentage of revenues | 100% | 96% | 100% | 93% | |||
Gilead Collaboration Agreement | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | $ 433 | $ 433 | $ 452 | ||||
Gilead Collaboration Agreement | Gilead | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | 167 | 167 | |||||
Upfront cash payment | 35 | ||||||
Allocated transaction price | $ 35 | ||||||
Total collaboration and license revenues | 10 | $ 13 | 18 | $ 18 | |||
Deferred revenue recognized | $ 121 | 219 | |||||
Current and future programs exclusive access period | 10 years | ||||||
Contingent milestone payments receivable | $ 300 | ||||||
Option continuation payment receivable upon sixth anniversary of agreement | $ 100 | ||||||
Performance obligation period | 4 years | ||||||
R&D Activities for Inflammation Programs | Gilead | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | 34 | 34 | |||||
Total collaboration and license revenues | 1 | 1 | |||||
R&D activities for Domvanalimab | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | 28 | 28 | |||||
Total collaboration and license revenues | 1 | 1 | 2 | 2 | |||
Deferred revenue recognized | 34 | ||||||
Quemliclustat, License and R&D services | Gilead | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | 134 | 134 | |||||
Total collaboration and license revenues | 7 | 2 | 15 | 4 | |||
Deferred revenue recognized | 176 | ||||||
R&D and Commercialization Activities for Zimberelimab | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Total collaboration and license revenues | 1 | 1 | 1 | 1 | |||
Deferred revenue recognized | 11 | ||||||
Access rights and option continuation periods | |||||||
License And Collaboration Agreements [Line Items] | |||||||
Deferred revenue | 70 | 70 | |||||
Total collaboration and license revenues | $ 9 | $ 9 | $ 17 | $ 17 |
Revenues - Summary of Revenue R
Revenues - Summary of Revenue Recognized as a Result of Changes in Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
License And Collaboration Agreements [Abstract] | ||||
Amounts included in deferred revenue at the beginning of the period | $ 28 | $ 27 | $ 53 | $ 45 |
Revenues - Summary of Transacti
Revenues - Summary of Transaction Price and Allocation of Transaction Price to the Performance Obligations (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
License And Collaboration Agreements [Line Items] | |
Allocated transaction price | $ 35 |
Inflammation target 1 | |
License And Collaboration Agreements [Line Items] | |
Allocated transaction price | 18 |
Inflammation target 2 | |
License And Collaboration Agreements [Line Items] | |
Allocated transaction price | $ 17 |
Income Taxes - Additional Infor
Income Taxes - Additional Information - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,000,000 | $ 0 | $ 3,000,000 | $ 1,000,000 |
Effective tax rate | (2.00%) | (2.10%) | (0.80%) |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Outstanding Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 16.1 | 13.9 |
Common Stock Options Issued and Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 13.9 | 12.4 |
Restricted Stock Units Issued | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 2 | 1.4 |
Employee Stock Purchase Plan Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 0.2 | 0.1 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 18 | $ 15 | $ 37 | $ 32 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 9 | 7 | 18 | 16 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 9 | $ 8 | $ 19 | $ 16 |
Cash, Cash Equivalents and Ma_3
Cash, Cash Equivalents and Marketable Securities - Schedule of Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Our Cash, Cash Equivalents and Marketable Securities Considered as Available for Sale by Type of Securities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | $ 1,014 | $ 1,145 |
Unrealized Loss | (4) | (7) |
Fair Value | 1,010 | 1,138 |
Money Market Funds | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 182 | 169 |
Fair Value | 182 | 169 |
U.S. Treasury Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 313 | 317 |
Unrealized Loss | (2) | (3) |
Fair Value | 311 | 314 |
Corporate Securities and Commercial Paper | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 409 | 635 |
Unrealized Loss | (1) | (4) |
Fair Value | 408 | 631 |
U.S. Government Agency Securities | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 103 | 20 |
Unrealized Loss | (1) | |
Fair Value | 102 | 20 |
Certificates of Deposit | ||
Debt Securities, Available-for-Sale [Line Items] | ||
Amortized Cost | 7 | 4 |
Fair Value | $ 7 | $ 4 |
Cash, Cash Equivalents and Ma_4
Cash, Cash Equivalents and Marketable Securities - Schedule of Fair Values of Our Cash, Cash Equivalents and Marketable Securities by Location in Condensed Consolidated Balance Sheets and Contractual Maturity (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Cash and cash equivalents | $ 230 | $ 206 |
Marketable securities | 700 | 803 |
Long-term marketable securities | 80 | 129 |
Total cash, cash equivalents and marketable securities | $ 1,010 | $ 1,138 |
Cash, Cash Equivalents and Ma_5
Cash, Cash Equivalents and Marketable Securities - Additional Information (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) Positions | Dec. 31, 2022 USD ($) Positions | |
Cash, Cash Equivalents and Marketable Securities [Abstract] | ||
Number of positions in securities in unrealized loss | Positions | 144 | 219 |
Credit related losses | $ | $ 0 | $ 0 |
Cash, Cash Equivalents and Ma_6
Cash, Cash Equivalents and Marketable Securities - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 230 | $ 206 | $ 273 | |
Restricted cash | $ 3 | $ 3 | ||
Restricted Cash, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other noncurrent assets ($5 and $2 from a related party) | Other noncurrent assets ($5 and $2 from a related party) | ||
Total cash, cash equivalents and restricted cash | $ 233 | $ 209 | $ 276 | $ 151 |
Condensed Consolidated Balanc_5
Condensed Consolidated Balance Sheet Components - Summary of Prepaid and Other Current Assets (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaids and other assets | $ 19 | $ 15 |
Accrued interest receivable | 3 | 4 |
Total prepaid and other current assets | $ 22 | $ 19 |
Condensed Consolidated Balanc_6
Condensed Consolidated Balance Sheet Components - Summary of Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued research and development | $ 40 | $ 45 |
Accrued personnel expenses | 15 | 25 |
Income taxes payable | 2 | |
Other | 8 | 6 |
Total other current liabilities | $ 65 | $ 76 |
Leases - Summary of Cash and No
Leases - Summary of Cash and Non-cash Information Related to Operating Leases (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in measurement of lease liabilities | $ 8 | $ 4 |
Cash received from tenant improvement allowances | 1 | 8 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 3 | |
Recognition of tenant improvement allowance receivable included in Other current liabilities | $ 4 | $ 6 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Lessee, Lease, Description [Line Items] | ||
Deposits for letters of credit | $ 3 | $ 3 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - Second Stock Purchase Agreement - Gilead $ / shares in Units, shares in Millions, $ in Millions | Jun. 27, 2023 USD ($) $ / shares shares |
Class of Stock [Line Items] | |
Issuance of common stock, shares | shares | 1 |
Purchase price per share | $ / shares | $ 19.26 |
Issuance of common stock | $ | $ 20 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value On Recurring Basis - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 1,010 | $ 1,138 |
Total liabilities measured at fair value | 18 | 17 |
Liability for Sale of Future Royalties | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 18 | 17 |
Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 182 | 169 |
U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 311 | 314 |
Corporate Securities and Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 408 | 631 |
U.S. Government Agency Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 102 | |
U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 20 | |
Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 7 | 4 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 182 | 169 |
Level 1 | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 182 | 169 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 828 | 969 |
Level 2 | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 311 | 314 |
Level 2 | Corporate Securities and Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 408 | 631 |
Level 2 | U.S. Government Agency Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 102 | |
Level 2 | U.S. Government Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 20 | |
Level 2 | Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 7 | 4 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | 18 | 17 |
Level 3 | Liability for Sale of Future Royalties | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities measured at fair value | $ 18 | $ 17 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - BVF Partners L.P. - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
BVF Agreement | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Imputed effective rate of interest on unamortized portion of liability | 10.10% | 20.60% | 20.60% | 20.60% | ||
Non-refundable payments received | $ 15,000,000 | $ 15,000,000 | ||||
BVF Agreement | Maximum | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Contingent payments upon achievement of certain clinical and regulatory milestones | 73,000,000 | |||||
Gilead Collaboration Agreement | Maximum | ||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||||
Contingent payments upon achievement of certain clinical and regulatory milestones | $ 160,000,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes of Liabilities for Sale of Future Royalties (Details) - BVF Partners L.P. - BVF Agreement - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 17 | $ 5 |
Cash received | 5 | |
Interest accretion | 1 | 1 |
Ending balance | $ 18 | $ 11 |