Company: RCUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001724521-25-000101
Chunk: 246

Company: Arcus Biosciences, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 246
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0252024Revenue recognized from amounts in deferred revenue at the beginning of the period$160 $39 $188 $180 We had $131 million and $319 million of deferred revenue remaining on our Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024, respectively, allocated between current and noncurrent based on the expected timing of future recognition.Revenue from the Gilead CollaborationIn the first quarter 2025, we decided to pause future development of etrumadenant. In June 2025, Gilead terminated its rights to etrumadenant (the adenosine receptor antagonist program). We determined that this was a significant reduction in the scope of the arrangement, which met the accounting definition of a contract modification. As a result, we accounted for this 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. Accordingly, we allocated the updated transaction price of $256 million, which was comprised of the deferred revenue remaining as of the modification date, to the remaining unsatisfied and partially satisfied performance obligations and updated the measure of progress as of the modification date, which resulted in a cumulative catch-up to revenue of $143 million during the three and six months ended June 30, 2025. The impact of this cumulative catch-up on net income (loss) per share, basic and diluted, in the three and six months ended June 30, 2025, was to reduce net loss per share by $1.35 and $1.40, respectively. See Note 3, Related party - Gilead Sciences, Inc., for more information.The following table summarizes the allocation of the updated transaction price to the remaining unsatisfied and partially satisfied performance obligations (in millions):Allocation to performance obligationsDistinctCombinedAmountLicense and R&D services*$192 R&D services*17Access rights and option continuation periods*30Rights to certain studies*17Total allocated transaction price$256 We account for these performance obligations as follows:License and R&D Services - Etrumadenant, Quemliclustat and DomvanalimabUnder the Gilead Collaboration Agreement, Gilead obtained options to the exclusive rights: to our adenosine receptor antagonist program, etrumadenant; to our CD73 program, quemliclustat; and to our anti