Company: RCUS
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001724521-25-000063
Chunk: 202

Company: Arcus Biosciences, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 202
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 $291 million and $319 million of deferred revenue remaining on our Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024, respectively, allocated between current and noncurrent based on the expected timing of future recognition.Revenue from the Gilead CollaborationIn January 2024, we entered into the Third Gilead Collaboration Agreement Amendment, which we determined was a change in scope and price of the original contract and we accounted for this contract modification as both a modification of the existing contract and the creation of a new contract. Under the applicable accounting rules for such contract modifications, we did not adjust the accounting for completed performance obligations that were distinct from the modified goods or services. However, we adjusted revenue previously recognized to reflect the effect of the contract modification due to the updated estimated transaction price allocated to the partially satisfied performance obligations and the updated measure of progress as of the modification date. Accordingly, we allocated the transaction price to the remaining performance obligations (both from the existing contract and the modification) and recognized a cumulative catch-up to revenue of $107 million based on the updated transaction price and measure of progress for the partially satisfied performance obligations. This cumulative catch-up reduced net loss per share, basic and diluted, in the three months ended March 31, 2024 by $1.24 per share, see Note 3, Related party - Gilead Sciences, Inc., for more information.The following table summarizes the transaction price (in millions):Transaction priceAmountPremium from Third Stock Purchase Agreement Amendment$87 Option continuation payment received in the third quarter of 2024100 Deferred revenue as of January 2024335 Total transaction price$522 

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Our assessment of the updated transaction price for the Third Gilead Collaboration Agreement Amendment included an analysis of amounts we expected to receive, which at contract amendment consisted of: $100 million option continuation payment that Gilead committed to and paid in the third quarter of 2024 for continued access to our pipeline; $87 million allocated from the premium from the Third Stock Purchase agreement; and $335 million deferred revenue remaining from the First Gilead Collaboration Agreement Amendment effective December 2021. We determined the entire $522 million to be the allocable transaction price as of the amendment closing date, due to the history of timely payments by Gilead.The following table summarizes the allocation of the transaction price to the performance obligations (in millions):Allocation to performance obligationsDistinctCombinedAmountEtrumadenant