Company: RCUS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0001724521-25-000116
Chunk: 212

Company: Arcus Biosciences, Inc.
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 1
Chunk 212
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 months ended September 30, 2024, we recognized revenue of $23 million and $179 million (including the cumulative catch-up due to the Third Gilead Collaboration Agreement Amendment executed in the first quarter 2024), respectively. This was recognized within License and development services revenue in our Condensed Consolidated Statements of Operations. Access Rights and Option Continuation PeriodsUnder the Gilead Collaboration Agreement entered into in 2020 and related amendments, Gilead has exclusive access to our current programs as well as 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 (paid in July 2024), sixth, and eighth anniversaries of the Gilead Collaboration Agreement.The standalone selling price of the ongoing R&D pipeline access and the option continuation material rights were determined using an expected cost-plus margin approach, with the option continuation material rights probability-adjusted for the likelihood of exercise. We use a time-elapsed input method to measure progress toward satisfying the access rights performance 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 the initial four-year access rights performance obligation was recognized using this input method over the remaining period through July 2024, and for the fourth anniversary access rights continuation, over the two-year period commencing July 2024. For the remaining access rights option continuation periods commencing on the sixth, and eighth anniversaries of the agreement, if Gilead elects to exercise their option, we will recognize the revenue allocated to that option together with the $100 million continuation payment over the new minimum access period or immediately if the option lapses.For the three and nine months ended September 30, 2025, we recognized revenue of $3 million and $14 million respectively. For the three and nine months ended September 30, 2024, we recognized revenue of $5 million and $22 million, respectively. This was recognized within Other collaboration revenue in our Condensed Consolidated Statements of Operations. Rights to Certain StudiesEffective January 2024, under the Third Gilead Collaboration Agreement Amendment, we will solely fund certain studies, but Gilead retains exclusive rights to reinstate into the collaboration each study at specified time-points for a payment. We have determined that these are material rights and we estimated the standalone selling price of these performance obligations using a