Arcus Biosciences

Fierce 15

A biopharma and startup vet aim to build an immuno-oncology powerhouse to offer a rational approach to combination therapy

CEO: Terry Rosen
Based: Hayward, CA
Founded: 2015
Clinical focus: Immuno-oncology

The scoop: Terry Rosen bagged one of the biggest private biotech exits last year with the $1.25 billion sale of Flexus Biosciences to Bristol-Myers Squibb ($BMY). He’s moved on to start Arcus, which his team plans to build into a freestanding biopharma rather than pursuing a fast exit path.

Arcus is working on small-molecule and antibody immuno-oncology approaches with the aim of building its own internal combinations. Rosen likens the combo land-grab around I/O as likely to shape up along similar lines as the hepatitis C combo race, in which there were some major winners and losers on the path to assembling relevant combinations.

Since its inception in May 2015, Arcus has raised almost $120 million in a pair of financings. It aims to advance into the clinic on its own--without the aid of a larger partner or acquirer--in an effort to better preserve and grow the value of the company.

“At this juncture, we need to think first about what is going to get us where we want to be better and faster,” Rosen told FierceBiotech. “We want to maintain our rights and we have the investor support to continue to push projects forward; we are not actively looking to do a big collaboration.”

What makes Arcus Fierce: It aims to have best-in-class combinations in a trio of areas: the elimination of active mechanisms of immune suppression, enhanced function of the APC (antigen presenting cells) as well as enhanced T cell, NK cell and macrophage effector activity.

The company has selected its first three targets for small molecules along the ATP-adenosine pathway: CD73, CD39 and the A2A receptor. The idea is to use multiple means to discourage the extracellular enzymatic conversion of ATP, which is released by damaged or dying cells, into adenosine; the former encourages an immune response to cancer cells while the latter discourages it.

Arcus plans to select a clinical candidate from its CD73 program, which is expected to be its lead, during the last quarter of this year. It, along with the A2A antagonist program, are both slated to reach the clinic next year.

“As the immuno-oncology field is playing out in front of our eyes, we’ve learned some things that have very much affected our strategy. Everyone knows that combinations are important, but it’s become apparent that in immuno-oncology it may be advantageous to own or control parts of the combination,” said Rosen.

“Hepatitis C is a good analogy to use. And we saw this before with the IDO inhibitor field; we came to realize that with all the organizations looking at an IDO inhibitor, there may not be one for everyone to combine. … All things being equal, we started by picking projects that would make good combinations--that would have individual and combination value. We started to share that concept with investors and it really resonated.”

The startup is also doing preclinical work on monoclonal antibodies, which could result in backbone cancer therapies. These are intended to complement the workings of the small molecules. Arcus is aiming not just for individual candidate activity, but for a combination effect with its own as well as external drugs. The company expects to have up to three of these antibodies in the clinic in 2018.

Investors: Founders, The Column Group, Foresite Capital, Novartis ($NVS), Celgene ($CELG), GV, Invus, Taiho Ventures, DROIA Oncology Ventures and Stanford University

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Arcus Biosciences