Company: ARVN
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0001655759-25-000016
Chunk: 70

Company: ARVINAS, INC.
Filing Date: 2025-02-11
Form: 10-K
Item: Item 8
Chunk 70
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statement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter 

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Research Collaboration and License Agreements – Novartis License and Asset Agreements – Refer to Notes 2 and 3 in the Consolidated Financial Statements 

Critical Audit Matter Description

In April 2024, the Company entered into a transaction (the “Novartis Transaction”), including both a license agreement (the “Novartis License Agreement”) and an asset purchase agreement (the “Novartis Asset Agreement”) with Novartis Pharma AG (“Novartis”) for the worldwide development, manufacture and commercialization of luxdegalutamide (ARV-766) and for the sale of the Company’s preclinical AR-V7 program. The Company determined that the Novartis License Agreement and the Novartis Asset Agreement entered into 

F - 2

with Novartis concurrently should be evaluated as a combined contract in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). 

We determined that the identification of performance obligations for the Novartis Transaction is a critical audit matter because of the significant judgments necessary for management to determine whether promised goods or services identified within the Novartis Transaction were distinct or should be combined with other promised goods and services to identify the performance obligations. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our specialists, when performing audit procedures to evaluate the performance obligations identified.

How the Critical Audit