Company: RCUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001724521-25-000101
Chunk: 248

Company: Arcus Biosciences, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 248
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 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 six months ended June 30, 2025, we recognized revenue of $5 million and $11 million respectively. For the three and six months ended June 30, 2024, we recognized revenue of $9 million and $17 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 discounted cash flow method probability-adjusted for the likelihood of exercise. We will recognize the amount allocated to each right if and when the related study is reinstated into the parties' co-development plans or if the option lapses.As of June 30, 2025, we have $17 million of deferred revenue on our Condensed Consolidated Balance Sheet related to these performance obligations.R&D Services - Inflammation Programs In addition to the amendments noted above, 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