Company: RCUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001724521-25-000101
Chunk: 219

Company: Arcus Biosciences, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 219
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 recurring basis by level within the fair value hierarchy (in millions):Fair value measurement as of June 30, 2025Level 1Level 2Level 3TotalAssetsMoney market funds$187 $— $— $187 U.S. treasury securities— 229 — 229 Corporate securities and commercial paper— 485 — 485 U.S. government agency obligations— 2 — 2 Certificate of deposit— 24 — 24 Total assets measured at fair value$187 $740 $— $927 

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Fair value measurement as of December 31, 2024Level 1Level 2Level 3TotalAssetsMoney market funds$120 $— $— $120 U.S. treasury securities— 251 — 251 Corporate securities and commercial paper— 592 — 592 U.S. government agency obligations— 5 — 5 Certificate of deposit— 24 — 24 Total assets measured at fair value$120 $872 $— $992 Liabilities    Liability for sale of future royalties$— $— $21 $21 Total liabilities measured at fair value$— $— $21 $21 Liability for sale of future royaltiesIn 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 they paid in 2021 and 2022. In return, we were obligated to: perform R&D activities in the BVF Program; make contingent payments upon the achievement of certain clinical and regulatory milestones; and pay mid- to high-single digit royalties on any net product sales generated by this program. We account for the BVF agreement as a liability primarily because at the time the agreement was entered into we had significant continuing involvement in generating the cash flows due to BVF. During the first quarter 2025, new preclinical information led to the decision to discontinue the BVF Program which decreased the likelihood of achieving regulatory and commercial success. These changes in assumptions are accounted for prospectively, resulting in the amortization of the net carrying amount of the liability to the initial carrying amount of $15 million using an imputed effective interest rate of negative 6.1%, on the