What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-25 · 243 added, 244 removed, 783 unchanged (38% of the section changed)

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As described in Notes 3 and 5 to the consolidated financial statements, the Company has ongoing Option, License and Collaboration Agreements with Gilead Sciences, Inc., a related party, referred to as the "Gilead Agreements", which resulted in the recognition of $240 million of revenue for the year ended December 31, 2025 and $78 million of deferred revenue at December 31, 2025.

Of the revenue recognized under the Gilead Agreements in 2024, $215 million related to amounts recognized as revenue when services are performed, based on the level of effort expended in a given period in relation to the total effort expected to be incurred to satisfy the applicable performance obligation.

Of the revenue recognized under the Gilead Agreements in 2025, $224 million related to amounts recognized when services are performed, based on the level of effort expended in a given period in relation to the total effort expected to be incurred to satisfy the applicable performance obligation.

Management periodically updates its estimates of the total effort expected to be incurred to satisfy such performance obligations, with any changes in estimate potentially changing the amount of revenue previously recognized and/or the amount to be recognized in future periods.

Auditing the Company’s process for estimating the total effort expected to be incurred to satisfy such performance obligations is complex due to the significant judgment applied by the Company in determining the total effort.

Auditing the estimated effort to be incurred to satisfy such performance obligations is complex due to the extent of data compiled and judgments applied by the Company.

How We Addressed the Matter in Our Audit

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2025 2024 2023

License and development service revenue

License and development services

(Includes $ 214 , $ 207 and $ 75 from a related party)

$ 221 $ 222 $ 80

Other collaboration revenue

Other collaboration

(Includes $ 26 , $ 36 and $ 37 from a related party)

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Research and development

(Includes $ 39 , $ 110 and $ 132 of net recoveries from

a related party)

(Includes $ 25 , ($ 39 ) and ($ 110 ) payments to/(from) a related party)

General and administrative

(Includes ($ 2 ), $ — and $ 1 of net recoveries from

(payments to) a related party)

(Includes $ 5 , $ 2 and $ — payments to a related party)

Impairment of long-lived assets (see Note 14, Leases) — 20 —

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Net loss $ ( 353 ) $ ( 283 ) $ ( 307 )

Other comprehensive income (loss) — 7 ( 6 )

Other comprehensive income — — 7

Comprehensive loss $ ( 353 ) $ ( 283 ) $ ( 300 )

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Property and equipment, net 40 47

Other noncurrent assets ($ — and $ 6 from a related party)

Other noncurrent assets 63 73

Total assets $ 1,139 $ 1,150

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Current liabilities:

Accounts payable $ 18 $ 17

Accounts payable ($ 24 and $ — to a related party)

Deferred revenue ($ 35 and $ 85 to a related party)

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Balance at December 31, 2022 72.9 $ 1,206 $ ( 542 ) $ ( 7 ) $ 657

Issuance of common stock (see Note 3, Related party - Gilead Sciences, Inc.

and Note 15, Stockholders' Equity) 1.2 25 — — 25

Issuance of common stock in connection with our equity award programs 1.4 7 — — 7

Stock-based compensation — 73 — — 73

Other comprehensive loss — — — ( 6 ) ( 6 )

Other comprehensive income — — — 7 7

Net loss — — ( 307 ) — ( 307 )

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Stock-based compensation — 76 — — 76

Other comprehensive income — — — 7 7

Net loss — — ( 283 ) — ( 283 )

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Net loss $ ( 353 ) $ ( 283 ) $ ( 307 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation expense 60 76 73

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Other assets ($ — , $ 6 and ($ 4 ) from a related party)

Accounts payable 3 ( 1 ) 8

Accounts payable ($ 24 , $ — , and $ — to a related party)

Deferred revenue (($ 240 ), ($ 56 ) and ($ 77 ) to a related party)

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Other liabilities 8 25 ( 3 )

Net cash provided by (used in) operating activities ( 170 ) ( 306 ) 438

Net cash used in operating activities ( 482 ) ( 170 ) ( 306 )

Cash flow from investing activities

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Purchases of property and equipment ( 2 ) ( 6 ) ( 24 )

Other items, net — — ( 3 )

Net cash provided by (used in) investing activities 66 ( 84 ) 194

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Payments of employee taxes related to net settlement of equity awards — ( 7 ) —

Proceeds from sale of future royalties — — 10

Net cash provided by financing activities 488 277 33

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Arcus Biosciences, Inc.

(referred to as “Arcus,” “we,” “our,” “us,” or the “Company”) is a clinical-stage biopharmaceutical company focused on creating best-in-class therapies.

Using our robust and highly efficient drug discovery capability, we have created a significant portfolio of investigational products which are in clinical development, with our most advanced molecule, an anti-TIGIT antibody, now in multiple Phase 3 registrational studies targeting lung and gastrointestinal cancers.

Our deep portfolio of novel small molecules and enabling antibodies allows us to create highly differentiated therapies, which we are developing to treat multiple large indications.

(referred to as "Arcus," "we," "our," "us," or the "Company") is a late clinical-stage biopharmaceutical company focused on developing differentiated molecules for patients with cancer and inflammatory and autoimmune diseases.

Our most advanced molecules are in Phase 3 registrational studies for various cancer indications and we expect our next wave of clinical-stage molecules to come from our inflammation and autoimmune disease programs.

Our vision is to leverage our internal small-molecule discovery capabilities to create, develop and commercialize highly differentiated therapies that can have a meaningful impact on patients.

We operate and manage our business as one reportable and operating segment, which is the business of developing and commercializing highly differentiated therapies that have a meaningful impact on patients.

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Liquidity and Capital Resources

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $ 992 million, which we believe will be sufficient to fund our planned operations for a period of at least twelve months following the date of filing of this Annual Report.

See Note 19, Subsequent events, for additional information on stock issuances that occurred in February 2025.

As of December 31, 2025, we had cash, cash equivalents and marketable securities of $ 1.0 billion, which we believe will be sufficient to fund our planned operations for a period of at least twelve months following the date of filing of this Annual Report.

Summary of significant accounting policies

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Net payment or reimbursement of R&D costs is recognized when the obligations are incurred and as we become entitled to the cost recovery.

See Note 4, License and collaboration agreements, for more information.

See Note 4, License and collaborations, for more information.

Clinical trial costs are a significant component of R&D expenses.

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and other general and administrative costs.

G&A expenses also include cost recoveries associated with collaborative R&D arrangements.

G&A expenses also include G&A cost reimbursements and costs sharing under our collaborative R&D arrangements.

Stock-Based Compensation

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Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year.

Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards, measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse.

Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax bases of assets and liabilities and NOLs and credit carryforwards, measured using the enacted tax rates and laws that will be in effect when such items are expected to reverse.

Deferred income tax assets are reduced, as necessary, by a valuation allowance when we determine it is more likely than not that some or all of the tax benefits will not be realized.

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See Note 11, Property and equipment, for more information.

Debt Issuance Costs

Debt issuance costs consist of costs incurred to obtain long-term financing.

These costs are classified on the Consolidated Balance Sheets as a direct deduction from the carrying amount of the related debt liability and amortized as interest expense in the Consolidated Statement of Operations using the effective interest rate method.

We determine whether an arrangement is or contains a lease at contract inception.

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Right-of-use assets are adjusted for prepaid lease payments, lease incentives and initial direct costs incurred.

Operating lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term and includes both lease and non-lease components due to our election account for these components as a single lease component.

Operating lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term and includes both lease and non-lease components due to our election to account for these components as a single lease component.

When our operating leases do not provide an implicit interest rate, we generally utilize our incremental borrowing rate, based on the information available at the commencement date to determine the lease liability.

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Our other significant accounting policies are described in the remaining appropriate notes to the Consolidated Financial Statements.

Recent Accounting Pronouncements

Adopted in the Current Period

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 — Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures.

This ASU expands segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses.

The ASU does not change how a public entity identifies its operating segments, aggregates them or applies the quantitative thresholds to determine its reportable segments.

The additional disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment.

Early adoption is permitted, and the standard requires retrospective application to all prior period presented.

There was no impact on our reportable segments identified and additional required disclosures have been included in Note 18.

Not Yet Adopted

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

We adopted this guidance beginning with this Annual Report, resulting in increased disclosures in our Notes to Consolidated Financial Statements.

Income Taxes, for more information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03 — Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses.

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We plan to adopt this guidance beginning with our 2027 Annual Report to be filed in early 2028 and all quarterly and Annual Reports thereafter.

We expect the adoption of this standard to result in increased disclosures in our Notes to Consolidated Financial Statements.

We expect the adoption of this standard to result in increased disclosures in our Notes to our Consolidated Financial Statements.

In September 2025, the FASB issued ASU 2025-07 — Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.

This ASU refines the scope of the guidance on derivatives in Topic 815 and clarifies the guidance on share-based payments from a customer in ASC 606.

The standard will become effective for the fiscal year ending December 31, 2027, with early adoption permitted.

We are currently assessing the potential impact of this new standard on our Consolidated Financial Statements.

Related party - Gilead Sciences, Inc.

In 2020, we and Gilead entered into the Gilead Collaboration Agreement, the Stock Purchase Agreement, and the Investor Rights Agreement.

The Gilead Collaboration Agreement was amended in 2021, in 2023, in the first quarter 2024 and in the second quarter 2024 (the "Fourth Gilead Collaboration Agreement Amendment").

The Stock Purchase Agreement was amended in 2021, in 2023, and was amended and restated in the first quarter 2024.

The Investor Rights Agreement was amended in 2022 and was amended and restated in the first quarter 2024.

The Gilead Collaboration Agreement was amended in 2021 (the "First Gilead Collaboration Agreement Amendment"), in 2023 (the "Second Gilead Collaboration Agreement Amendment"), in 2024 (the "Third Gilead Collaboration Agreement Amendment"), in 2024 (the "Fourth Gilead Collaboration Agreement Amendment") and in 2025 (the "Fifth Gilead Collaboration Agreement Amendment") .

The Stock Purchase Agreement was amended in 2021 (the "First Stock Purchase Agreement Amendment"), in 2023 (the "Second Stock Purchase Agreement Amendment"), and was amended and restated in 2024 (the "Third Stock Purchase Agreement Amendment").

The Investor Rights Agreement was amended in 2022 (the "First Investor Rights Agreement Amendment") and was amended and restated in 2024 (the "Second Investor Rights Agreement Amendment").

We refer to these agreements collectively as the Gilead Agreements.

Stock Purchase and Investor Rights Agreements

In 2020, under the Stock Purchase Agreement, Gilead purchased 6.0 million shares of our common stock for total gross proceeds of $ 200 million, of which $ 91 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Gilead Collaboration Agreement as deferred revenue, see Note 5, Revenues, for more information.

In 2021, under the First Stock Purchase Agreement Amendment, Gilead purchased 5.7 million shares of our common stock for total gross proceeds of $ 220 million.

In 2023, under the Second Stock Purchase Agreement Amendment, Gilead purchased 1.0 million shares of our common stock for total gross proceeds of $ 20 million.

In 2024, under the Third Stock Purchase Agreement Amendment, Gilead purchased 15.2 million shares of our common stock for total gross proceeds of $ 320 million, of which $ 87 million was determined to be a premium on the purchase of common stock and allocated to the performance obligations created by the Third Gilead Collaboration Agreement Amendment as deferred revenue, see Note 5, Revenues, for more information.

Gilead has the right under the Stock Purchase Agreement and the related amendments to purchase, at its option until July 2025, up to a maximum of 35 % of the Company’s then-outstanding voting common stock, at a purchase price equal to the greater of a 20 % premium to market (based on a trailing five-day average closing price at option exercise) or the $ 33.54 initial purchase price.

In the first quarter 2025, through our underwritten offering, Gilead purchased 1.4 million shares of our common stock for total gross proceeds of $ 15 million.

Gilead had the right under the Stock Purchase Agreement and the related amendments, which expired in July 2025, to purchase up to a maximum of 35 % of the Company’s then-outstanding voting common stock, at a purchase price equal to the greater of a 20 % premium to market (based on a trailing five-day average closing price at option exercise) or the $ 33.54 initial purchase price.

Based on the value of our common stock at each contract closing, the right to purchase additional shares had no value.

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registration rights for shares that it purchases;

and pro rata participation rights in certain future financings.

and had pro rata participation rights in certain future financings that expired in July 2025.

Gilead has exercised its rights to appoint all three board members and we have registered all shares purchased to date.

As of December 31, 2024, Gilead held approximately 32.6 % of our outstanding common stock arising from purchases in our 2020 public offering and purchases under the Stock Purchase Agreement and the related amendments.

See Note 19, Subsequent events, for additional information regarding our February 2025 common stock offering.

As of December 31, 2025, Gilead held approximately 25.1 % of our outstanding common stock.

Collaboration Agreements

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regulatory approval milestones.

Gilead's option, on a program-by-program basis, will expire after a prescribed period following the achievement of a clinical development milestone in such program and our delivery to Gilead of the requisite data package.

Gilead's option to acquire exclusive licenses to develop and commercialize any of our clinical programs arising during the collaboration term, on a program-by-program basis, will expire after a prescribed period following the achievement of a clinical development milestone in such program and our delivery to Gilead of the requisite data package.

Gilead may exercise its option to any program at any time prior to expiration of the option and will pay Arcus an option fee of $ 150 million per program.

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If Gilead exercises its option at the earlier time point for the first two programs, we would be eligible to receive up to $ 375 million in regulatory and commercial milestone payments as well as tiered royalties for each optioned program.

For any other program option exercise by Gilead, the parties would have rights to co-develop and share global development costs and to co-commercialize and share profits in the U.S.

For any other program option exercise by Gilead, the parties would have rights to co-develop and share global development costs and to co-promote and share profits in the U.S.

for that program.

We received a total upfront payment of $ 35 million for an initial two research programs in 2023.

Gilead's options to the other two research programs, expire unless the programs are selected prior to May 2025, as amended under the Fourth Gilead Collaboration Agreement Amendment.

In the first quarter 2024, we entered into the Third Gilead Collaboration Agreement Amendment.

The Third Gilead Collaboration Agreement Amendment, among other things, (i) requires Gilead to pay the $ 100 million option continuation payment due on the fourth anniversary of the Gilead Collaboration Agreement, which was received in the third quarter 2024 (ii) provides that we will operationalize and fund the Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer subject to Gilead's right to reinstate the study as part of the parties' joint development activities upon regulatory approval, (iii) provides that we will solely fund our share of PACIFIC-8, subject to Gilead’s right to reinstate PACIFIC-8 as part of the parties’ joint development activities for the TIGIT Program in the first quarter of 2026, and (iv) provides that we will fund certain other activities.

Gilead's options to the other two research programs, as amended under the Fourth Gilead Collaboration Agreement Amendment expired in May 2025.

In 2024, we entered into the Third Gilead Collaboration Agreement Amendment.

The Third Gilead Collaboration Agreement Amendment, among other things, (i) required Gilead to pay the $ 100 million option continuation payment due on the fourth anniversary of the Gilead Collaboration Agreement, which was received in 2024 (ii) provides that we will operationalize and fund the Phase 3 PRISM-1 study evaluating quemliclustat in pancreatic cancer subject to Gilead's right to reinstate the study as part of the parties' joint development activities upon regulatory approval, (iii) provides that we will solely fund our share of PACIFIC-8, subject to Gilead’s right to reinstate PACIFIC-8 as part of the parties’ joint development activities for the TIGIT Program in the first quarter of 2026, and (iv) provides that we will fund certain other activities.

All other terms of the existing collaboration agreements, remain unchanged.

As of December 31, 2024, Gilead has licenses to domvanalimab, AB308, etrumadenant, quemliclustat and zimberelimab.

In February 2025, Gilead's time-limited exclusive option rights to our HIF-2α program (including casdatifan) expired.

In the first quarter 2025, Gilead's time-limited exclusive option rights to our HIF-2α program, which includes casdatifan, expired.

In the second quarter 2025, Gilead returned its license to the adenosine receptor antagonist program, which includes etrumadenant.

As of December 31, 2025, Gilead has licenses to domvanalimab, AB308, quemliclustat and zimberelimab.

For the years ended December 31, 2025, 2024 and 2023;

we recognized revenue under the Gilead Agreements of $ 243 million, $ 112 million and $ 107 million, respectively and net reimbursements from Gilead recognized as reductions in R&D expense of $ 39 million, $ 110 million and $ 132 million, respectively.

For the years ended December 31, 2024 and 2022, respectively, we recognized net payments to Gilead in G&A expense of $ 2 million and net reimbursements from Gilead as reductions in G&A expense of $ 1 million.

At December 31, 2024 and 2023, we had a net receivable of $ 6 million and $ 20 million, respectively, recorded in Receivable from collaboration partners on our Consolidated Balance Sheets.

At December 31, 2023, we had $ 6 million recorded in Other noncurrent assets on our Consolidated Balance Sheets.

we recognized revenue under the Gilead Agreements of $ 240 million, $ 243 million and $ 112 million, respectively.

For the year ended December 31, 2025, we recognized net expense to Gilead of $ 30 million, and for the years ended December 31, 2024 and 2023, we recognized net reimbursements from Gilead of $ 37 million and $ 110 million, respectively, in Operating expense, allocated between R&D and G&A based upon the activity that generated the net expense or reimbursement.

At December 31, 2025, we had a net payable to Gilead of $ 24 million, recorded in Accounts payable on our Consolidated Balance Sheet.

At December 31, 2024, we had a net receivable from Gilead of $ 6 million, recorded in Receivable from collaboration partners on our Consolidated Balance Sheet.

For a more detailed discussion on revenues recognized under the Gilead Agreements, see Note 5, Revenues, for more information.

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Our significant arrangements are discussed below.

For a more detailed discussion on revenues recognized under these arrangements, see Note 5, Revenues.

Gilead Collaboration

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Taiho Collaboration

In 2017, we entered into an agreement with Taiho under which we granted them exclusive options to programs arising over a five-year period which ended in September 2022 for an upfront payment of $ 35 million.

Upon an option exercise of a program, Taiho would obtain exclusive development and commercialization rights to investigational products under the program for the Taiho Territory.

For each option that Taiho exercises, they will be obligated to make a payment of $ 3 million to $ 15 million, depending on the development stage of the optioned program.

Upon exercise, Taiho is solely responsible for continued development and commercialization in the Taiho Territory.

In 2017, we entered into an agreement with Taiho pursuant to which Taiho obtained an exclusive option to in-license development and commercialization rights to programs for the Taiho Territory for which IND-enabling studies had begun during a five-year term which ended in September 2022, for an upfront payment of $ 35 million.

For each option to a program that Taiho exercises, except for casdatifan (the HIF-2α program) discussed below, they will be obligated to make a payment of $ 3 million to $ 15 million, depending on the development stage of the optioned program.

Upon exercise, Taiho is solely responsible for continued development and commercialization in the Taiho Territory, unless they opt to participate in a global study, in which case they would become obligated to reimburse us for their portion of the global study costs.

In addition, for each optioned program we would be eligible to receive clinical and regulatory milestones of up to $ 130 million and commercial milestone payments of up to $ 145 million with the achievement of certain sales thresholds in the Taiho Territory.

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and (b) expiration of the last-to-expire valid claim of our patents covering the manufacture, use or sale.

As of December 31, 2024, Taiho has licenses for the Taiho Territory to (i) etrumadenant (the adenosine receptor antagonist program);

(ii) zimberelimab (the anti PD-1 program);

(iii) domvanalimab and AB308 (the anti-TIGIT program);

and (iv) quemliclustat (the CD73 program), for which Taiho exercised its option and made an option payment of $ 15 million in the third quarter 2024.

During 2022, Taiho opted to participate in two global Phase 3 trials of domvanalimab and zimberelimab combinations, STAR-121 and STAR-221, and became obligated to reimburse us for their portion of the global study costs, and to make milestone payments contingent upon successfully satisfying the related clinical milestones.

During the year ended December 31, 2023, the clinical milestones for domvanalimab and zimberelimab for the STAR-221 study were met and Taiho became obligated to pay us $ 28 million which has been fully received.

In the first quarter 2024, the clinical milestones for domvanalimab and zimberelimab for the STAR-121 study were met and Taiho became obligated to pay us $ 26 million, of which $ 16 million was received in the first quarter 2024.

The remaining $ 10 million was received in January 2025.

Due to the nature of this arrangement, these clinical milestones were determined to be advance cost sharing payments for a portion of the global study R&D costs under the collaboration and are deferred and recognized as a reduction in R&D expense as the related global studies are performed, calculated as an estimated percentage of completion based on the estimated total effort for the programs.

In October 2024, Taiho opted to participate in the global Phase 3 trial of quemliclustat, PRISM-1, and became obligated to reimburse us for their portion of the global study costs and in February 2025, Taiho dosed their first patient in Japan for PRISM-1, and became obligated to make milestone payments totaling $ 19 million.

For the years ended December 31, 2024, 2023 and 2022, we recognized revenue of $ 15 million, $ 5 million and $ 5 million, respectively.

For the years ended December 31, 2024 and 2023 we recognized net reimbursements from Taiho of $ 28 million and $ 8 million, respectively, recognized as a reduction in R&D expense under this arrangement.

In 2022, Taiho opted to participate in two global Phase 3 trials of domvanalimab and zimberelimab combinations, STAR-121 and STAR-221, and became obligated to reimburse us for their portion of the global study costs, and to make milestone payments contingent upon successfully satisfying the related clinical milestones.

The clinical milestones for domvanalimab and zimberelimab for the STAR-221 study were met in 2023, and Taiho became obligated to pay us $ 28 million which has been fully received.

The clinical milestones for domvanalimab and zimberelimab for the STAR-121 study were met in 2024 and Taiho became obligated to pay us $ 26 million, of which $ 16 million was received in 2024 and the remaining $ 10 million was received in 2025.

In 2024, Taiho opted to participate in the global Phase 3 trial of quemliclustat, PRISM-1, and became obligated to reimburse us for their portion of the global study costs and in the first quarter 2025, Taiho dosed their first patient in Japan for PRISM-1, and became obligated to make milestone payments totaling $ 19 million of which $ 12 million was received in 2025 and the remaining $ 7 million is due in the first quarter 2026.

Due to the nature of this arrangement, these clinical milestones were determined to be advance cost sharing payments for a portion of the related global study R&D costs under the collaboration and are deferred and recognized as a reduction in R&D expense as the related global studies are performed, calculated as an estimated percentage of completion based on the estimated total effort for the programs.

In 2024, Taiho exercised its option for the CD73 program (including quemliclustat) for the Taiho Territory, for an option payment of $ 15 million.

In the fourth quarter 2025, Taiho exercised its option for HIF-2α inhibitor program (including casdatifan) for the Taiho Territory , for an option payment of $ 15 million.

We and Taiho concurrently entered into the Second Amendment where we will lead development for two indications in Japan and we may also be eligible to receive clinical and regulatory milestones of up to $ 172 million, commercial milestone payments of up to $ 145 million with the achievement of certain sales thresholds in the Taiho Territory and royalties ranging from high single-digits to mid-teens on net sales of the licensed product in the Taiho Territory.

We will be responsible for the global study costs.

See Note 5, Revenues, for more information.

As of December 31, 2025, Taiho has licenses for the Taiho Territory to (i) HIF-2α inhibitor program (including casdatifan);

(ii) anti-TIGIT program (including domvanalimab);

(iii) anti-PD-1 program (including zimberelimab);

(iv) CD73 program (including quemliclustat);

and (v) adenosine receptor antagonist program (including etrumadenant).

Under this arrangement, for the years ended December 31, 2025, 2024 and 2023, we recognized (i) revenue of $ 7 million, $ 15 million and $ 5 million, respectively and (ii) reimbursements, including amounts related to advance cost share payments, of $ 34 million, $ 28 million, and $ 8 million, respectively, as a reduction in R&D expense.

At December 31, 2025 and 2024, we had $ 10 million and $ 14 million, respectively, related to this arrangement recorded in Receivable from collaboration partners on our Consolidated Balance Sheets.

At December 31, 2024, we had liabilities of

$ 36 million related to certain advance cost sharing payments under this arrangement recorded in Other liabilities, allocated between current and noncurrent based on the expected timing of future recognition.

At December 31, 2025, we had liabilities of $ 44 million related to certain advance cost sharing payments under this arrangement recorded in Other liabilities, allocated between current and noncurrent based on the expected timing of future recognition.

AstraZeneca Collaboration

In 2020, we entered into a collaboration with AstraZeneca to evaluate domvanalimab, our investigational anti-TIGIT antibody, in combination with AstraZeneca’s durvalumab in a registrational Phase 3 clinical trial in patients with unresectable Stage 3 NSCLC, known as the PACIFIC-8 trial.

The terms of this agreement were amended in the first quarter 2024.

The terms of this agreement were amended in 2024.

Under the collaboration, as amended, each company will retain existing rights to their respective molecules and any future commercial economics.

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Prior to January 2024, the PACIFIC-8 trial formed part of the Arcus and Gilead joint development program for domvanalimab and our portion of the trial costs were shared with Gilead.

At December 31, 2023, we had recognized amounts due from Gilead for these shared costs of $ 6 million, recorded in Other noncurrent assets on our Consolidated Balance Sheet.

Under the Third Gilead Collaboration Agreement Amendment, we agreed to solely fund our share of PACIFIC-8, subject to Gilead’s right to reinstate PACIFIC-8 as part of the parties’ joint development activities for the TIGIT Program in the first quarter of 2026.

For the year ended December 31, 2024, we incurred $ 6 million of R&D expense reflecting our additional share of incurred costs to date.

In October 2024, we entered into a clinical collaboration with AstraZeneca to evaluate casdatifan, our investigational HIF-2α inhibitor, in combination with volrustomig, AstraZeneca’s investigational PD-1/CTLA-4 bispecific antibody, in IO-naive patients with ccRCC.

AstraZeneca will operationalize the study.

Under the collaboration, each company will retain existing rights to their respective molecules and any future commercial economics.

AstraZeneca will conduct the trial, and each company will supply their respective investigational product to support the phase 1b trial.

For the years ended December 31, 2025, 2024, and 2023, we recognized as R&D expense $ 20 million, $ 14 million, and $ 6 million, respectively, under this arrangement.

At December 31, 2024, we have recognized a total liability of $ 26 million related to our obligation to AstraZeneca, recorded in Other current liabilities and Other noncurrent liabilities on our Consolidated Balance Sheets based on the expected timing of payment.

At December 31, 2023, we have recognized a liability of $ 11 million, which is recorded in Other noncurrent liabilities on our Consolidated Balance Sheets.

At December 31, 2025 and 2024, we have recognized a total liability of $ 12 million and of $ 26 million, respectively, related to our obligation to AstraZeneca including milestones, recorded in Other current liabilities and Other noncurrent liabilities on our Consolidated Balance Sheets based on the expected timing of payment.

WuXi Biologics License – anti-PD-1

In 2017, we entered into an agreement with WuXi Biologics which, as amended, provides us with exclusive rights to (i) develop, use and manufacture products that include an anti-PD-1 antibody, including zimberelimab, worldwide and (ii) commercialize any such products worldwide, except in Greater China.

Under this agreement, as of December 31, 2024 we may incur (i) regulatory milestone payments of up to $ 50 million for zimberelimab, and commercialization milestone payments of up to $ 375 million, (ii) tiered royalties that range from the high single-digits to low teens on net sales of the licensed products and (iii) fees related to any sublicenses.

As of December 31, 2025, under this arrangement we may incur (i) additional regulatory milestone payments of up to $ 50 million, and commercialization milestone payments of up to $ 375 million, (ii) tiered royalties that range from the high single-digits to low teens on net sales of the licensed products and (iii) fees related to any sublicenses.

For the years ended December 31, 2025, 2024, and 2023, we did not have any milestones or royalties due under this arrangement.

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In 2020, we entered into an agreement with WuXi Biologics, under which we obtained the exclusive worldwide license to develop and commercialize anti-CD39 antibodies discovered under this arrangement.

As of December 31, 2024 we may incur additional clinical and regulatory milestone payments of up to $ 14 million and royalty payments in the low single digits on net sales of the licensed products under this agreement.

For the years ended December 31, 2023 and 2022, we incurred development milestones of $ 1 million and $ 2 million, respectively, related to this agreement, which were recognized as R&D expense.

As of December 31, 2025, under this arrangement we may incur additional clinical and regulatory milestone payments of up to $ 14 million and royalty payments in the low single digits on net sales of the licensed products.

For the years ended December 31, 2025 and 2024, we did not have any milestones or royalties due under this arrangement.

For the year ended December 31, 2023, we incurred a development milestone of $ 1 million under this arrangement, which was recognized as R&D expense.

Abmuno License

In 2016, we entered into an agreement with Abmuno, under which we obtained the exclusive worldwide license to develop, use, manufacture, and commercialize products that include an anti-TIGIT antibody, including domvanalimab.

Under this agreement, as of December 31, 2024 we may incur additional clinical, regulatory and commercialization milestone payments of up to $ 88 million.

For the year ended December 31, 2022, we incurred development milestones of $ 5 million related to this agreement, which were recorded as R&D expense.

As of December 31, 2025, under this arrangement we may incur additional clinical, regulatory and commercialization milestone payments of up to $ 88 million.

For the years ended December 31, 2025, 2024, and 2023, we did not have any milestones or royalties due under this arrangement.

The following table summarizes our revenues by collaboration, category of revenue, and the method of recognition (in millions):

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Gilead Collaboration

License and R&D services * $ 207 $ 75 $ 74

License and development services * $ 214 $ 207 $ 75

R&D services * 10 8 4

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Taiho Collaboration

License revenue * 15 — —

License * 7 15 —

Other * — — 5

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Revenue from the Gilead Collaboration

In January 2024, we entered into the Third Gilead Collaboration Agreement Amendment, which we determined was a change in scope and price of the original contract and we accounted for this contract modification as both a modification of the existing contract and the creation of a new contract.

2024 Third Gilead Collaboration Agreement

In 2024, we entered into the Third Gilead Collaboration Agreement Amendment, which we determined was a change in scope and price of the arrangement and 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.

However, we adjusted revenue previously recognized to reflect the effect of the contract modification due to the updated estimated transaction price allocated to the partially satisfied performance obligations and the updated measure of progress as of the modification date.

Accordingly, we allocated the transaction price to the remaining performance obligations (both from the existing contract and the modification) and recognized a cumulative catch-up to revenue of $ 107 million based on the updated transaction price and measure of progress for the partially satisfied performance obligations.

Accordingly, we allocated the updated transaction price to the new, remaining unsatisfied and partially satisfied performance obligations (both from the existing contract and the modification) and updated the measure of progress as of the modification date which resulted in a cumulative catch-up to revenue of $ 107 million in the year ended December 31, 2024.

This cumulative catch-up reduced net loss per share, basic and diluted, in the year ended December 31, 2024 by $ 1.19 , see Note 3, Related party - Gilead Sciences, Inc., for more information.

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Our assessment of the updated transaction price for the Third Gilead Collaboration Agreement Amendment included an analysis of amounts we expected to receive, which at contract amendment consisted of:

$ 100 million option continuation payment that Gilead committed to and paid in the third quarter of 2024 for continued access to our pipeline;

$ 87 million allocated from the premium from the Third Stock Purchase agreement;

$ 100 million option continuation payment that Gilead committed to and paid in 2024 for continued access to our pipeline;

$ 87 million allocated from the premium from the Third Stock Purchase Agreement Amendment;

and $ 335 million deferred revenue remaining from the First Gilead Collaboration Agreement Amendment effective December 2021.

We determined the entire $ 522 million to be the allocable transaction price as of the amendment closing date, due to the history of timely payments by Gilead.

The following table summarizes the allocation of the transaction price to the performance obligations (in millions):

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 obligations Distinct Combined Amount

Etrumadenant - License and R&D services * $ 210

Quemliclustat - License and R&D services * 168

Domvanalimab - R&D services * 33

Access rights * 57

Option continuation periods * 20

License and development services

Development services * 33

Access rights and option continuation periods

Rights to certain studies * 34

Total allocated transaction price $ 522

Total transaction price

2025 Termination of rights to etrumadenant

In the second quarter 2025, Gilead terminated its rights to etrumadenant (the adenosine receptor antagonist program), which we determined was a significant reduction in the scope of the arrangement, which met the accounting definition of a contract modification and 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 in the year ended December 31, 2025.

This cumulative catch-up reduced net loss per share, basic and diluted, in the year ended December 31, 2025 by $ 1.33 .

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 obligations Distinct Combined Amount

License and development services * $ 192

Development services * 17

Access right and option continuation periods * 30

Rights to certain studies * 17

Total transaction price $ 256

We accounted for each performance obligation as follows:

Etrumadenant – License and R&D Services

Under the Gilead Collaboration Agreement, Gilead obtained an option to the exclusive rights to our adenosine receptor program, etrumadenant, in exchange for an option payment of $ 250 million, if exercised.

Effective December 2021, under the First Gilead Collaboration Agreement Amendment, Gilead exercised the option and obtained an exclusive license to etrumadenant and we were also obligated to perform further R&D services for Gilead related to etrumadenant.

We determined that the license and R&D services were combined at the inception of the agreement based on an evaluation of the delivery of the license, due to the early stage of the technology and the specialized nature of our know-how.

We determined the standalone selling price of the license using a discounted cash flow method and the R&D services using an expected cost-plus margin approach.

We recognize the amounts allocated to the combined license and services as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program.

Prior to the closing of the Third Gilead Collaboration Agreement Amendment, we had $ 129 million of deferred revenue on our Consolidated Balance Sheet related to this performance obligation.

Effective January 2024, under the Third Gilead Collaboration Agreement Amendment, this performance obligation was partially satisfied and there were no changes to the scope of the related R&D service obligation as a result of the amendment.

We allocated the updated transaction price to this performance obligation based on the standalone selling price and adjusted revenue based on an updated measure of progress, which resulted in a cumulative catch-up of revenue of $ 14 million.

We recognized $ 47 million, $ 52 million, and $ 34 million in the years ended December 31, 2024, 2023 and 2022, respectively, within License and development services revenue in our Consolidated Statements of Operations.

At December 31, 2024 and 2023, we had $ 166 million and $ 133 million, respectively, of deferred revenue remaining on our Consolidated Balance Sheet related to this performance obligation.

Quemliclustat – License and R&D Services

Under the Gilead Collaboration Agreement, Gilead obtained an option to the exclusive rights to our CD73 program, quemliclustat, in exchange for an option payment of $ 200 million, if exercised.

Effective December 2021, under the First Gilead Collaboration Agreement Amendment, Gilead exercised the option and obtained an exclusive license to quemliclustat and we were also obligated to perform further R&D services for Gilead related to quemliclustat.

We determined the standalone selling price of the license using a discounted cash flow method and the R&D services using an expected cost-plus margin approach.

Prior to the closing of the Third Gilead Collaboration Agreement Amendment, we had $ 130 million of deferred revenue on our Consolidated Balance Sheet related to this performance obligation.

Effective January 2024, under the Third Gilead Collaboration Agreement Amendment, this performance obligation was partially satisfied and there was a reduction to the scope of the related R&D service obligation as a result of the amendment.

Specifically, the amendment provides that we will independently initiate, operationalize and fund a Phase 3 study to evaluate quemliclustat in pancreatic cancer, which reduces our estimated obligation to perform further R&D services for Gilead related to quemliclustat under the collaboration.

We allocated the updated transaction price to this performance obligation based on the standalone selling price and adjusted revenue based on an updated measure of progress which resulted in cumulative catch-up of revenue of $ 88 million.

We recognized $ 147 million, $ 17 million, and $ 26 million in the years ended December 31, 2024, 2023 and 2022, respectively, within License and development service revenue in our Consolidated Statements of Operations.

At December 31, 2024 and 2023, we had $ 23 million and $ 132 million, respectively, of deferred revenue remaining on our Consolidated Balance Sheet related to this performance obligation.

Domvanalimab – R&D Services

Under the First Gilead Collaboration Agreement Amendment, we determined that we retain a separate performance obligation to perform further R&D services for Gilead related to domvanalimab.

The standalone selling price of this obligation was determined using an expected cost-plus margin approach.

We recognize the amounts allocated to these services as the performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program.

Prior to the closing of the Third Gilead Collaboration Agreement Amendment, we had $ 25 million of deferred revenue on our Consolidated Balance Sheet related to this performance obligation.

Effective January 2024, under the Third Gilead Collaboration Agreement Amendment, this performance obligation was partially satisfied and there were no significant changes to the scope of this obligation as a result of the amendment.

We recognized $ 13 million, $ 5 million, and $ 5 million in the years ended December 31, 2024, 2023, and 2022, respectively, within License and development services revenue in our Consolidated Statements of Operations.

At December 31, 2024 and 2023, we had $ 21 million and $ 25 million, respectively, of deferred revenue remaining on our Consolidated Balance Sheet related to this performance obligation.

Zimberelimab – R&D and Commercialization Services

Under the First Gilead Collaboration Agreement Amendment, we determined that we retained separate performance obligations to perform further R&D and commercialization services for Gilead related to zimberelimab, as a monotherapy and in combination with other agents.

The standalone selling price of these obligations were determined using an expected cost-plus margin approach.

We recognize the amounts allocated to these services as the performance obligations are satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for the program.

We recognized $ 1 million and $ 9 million for R&D and commercialization services in the years ended December 31, 2023 and 2022, respectively, within License and development service revenue in our Consolidated Statements of Operations.

At December 31, 2023, the performance obligation was fully satisfied and all revenue has been recognized.

License and Development Services - Etrumadenant, Quemliclustat and Domvanalimab

Under 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-TIGIT program, domvanalimab and AB308.

Effective December 2021, under the First Gilead Collaboration Agreement Amendment, Gilead exercised these options and obtained exclusive licenses to these programs for a total non-refundable payment totaling $ 725 million.

We determined the standalone selling price of each license using a discounted cash flow method and the R&D services for each program, using an expected cost-plus margin approach.

For domvanalimab, we determined that the license was distinct based on an evaluation of the delivery of the license, noting that the program was in the later stages of development and the ongoing R&D services do not significantly modify or customize the related intellectual property.

Accordingly, we recognized the allocated transaction price as revenue in the year ended December 31, 2021.

For etrumadenant and quemliclustat programs, we determined that the license and R&D services were combined at the inception of the agreement based on an evaluation of the delivery of the license, due to the early stage of the technology and the specialized nature of our know-how.

We recognize the amounts allocated to R&D services for domvanalimab and the combined license and R&D for etrumadenant and quemliclustat as each performance obligation is satisfied, calculated as an estimated percentage of completion based on management's estimated total effort for each program.

We recognized $ 214 million (including the cumulative catch-up of $ 143 million), $ 207 million (including the cumulative catch-up of $ 107 million), and $ 75 million in the years ended December 31, 2025, 2024 and 2023, respectively, within License and development services revenue in our Consolidated Statements of Operations.

Access Rights and Option Continuation Periods

Under the First Gilead Collaboration Agreement Amendment, Gilead has exclusive access to our current programs as well as the 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, sixth, and eighth anniversaries of the Gilead Collaboration Agreement.

Prior to the closing of the Third Gilead Collaboration Agreement Amendment, we had $ 51 million of deferred revenue on our Consolidated Balance Sheet related to these performance obligations.

Effective January 2024, under the Third Gilead Collaboration Agreement Amendment, Gilead agreed to pay the $ 100 million option continuation payment due on the fourth anniversary of the Gilead Collaboration Agreement, which occurred and was received in the third quarter of 2024, and we included this payment in the transaction price.

By exercising this right Gilead’s exclusive access to our current programs as well as any future programs is extended to 2026.

We determined that as of the closing date in January 2024, Gilead is not obligated to make the remaining contingent payments totaling $ 200 million due on the sixth and eighth anniversaries of the Gilead Collaboration Agreement and accordingly, we have excluded these payments from the transaction price.

Under the Gilead Collaboration Agreement entered into in 2020 and related amendments, Gilead has exclusive access to our current programs as well as any 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 third quarter 2024), sixth, and eighth anniversaries of the Gilead Collaboration Agreement.

Failure to pay the non-obligatory option continuation payments will result in Gilead’s loss of certain rights to access and obtain licenses to the programs arising from our R&D pipeline.

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 the Company's 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 is being recognized using this input method over the remaining period through July 2024, and for the access rights continuation, over the two-year period commencing July 2024.

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.

We recognized $ 16 million, $ 28 million, and $ 33 million in the years ended December 31, 2025, 2024, and 2023, respectively, within Other collaboration revenue in our Consolidated Statements of Operations.

At December 31, 2024 and 2023, we had $ 52 million and $ 54 million, respectively, of deferred revenue on our Consolidated Balance Sheet related to these performance obligations.

Rights to Certain Studies

Effective 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.

At December 31, 2024, we had $ 34 million of deferred revenue remaining on our Consolidated Balance Sheet related to these performance obligations.

Inflammation Programs - R&D Services

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 programs that target inflammatory diseases for which we will lead discovery and early development activities, see Note 3, Related party - Gilead Sciences, Inc., for more information.

In 2023, we received a total upfront payment of $ 35 million for an initial two jointly selected research-stage programs.

We determined that the Second Gilead Collaboration Agreement Amendment represented a separate contract and, at the amendment closing date, we allocated the transaction price of $ 35 million to the performance obligations created as of the date of this amendment.

The following table summarizes the allocation of the transaction price to the performance obligations (in millions):

Allocation to performance obligations Distinct Amount

Inflammation target 1 - R&D services * $ 18

Inflammation target 2 - R&D services * 17

Total allocated transaction price $ 35

We determined that we have separate performance obligations to perform R&D services for Gilead related to discovery and early development activities for each research program for which they have made an upfront payment.

At December 31, 2025, we had $ 17 million of deferred revenue on our Consolidated Balance Sheet related to these performance obligations.

R&D Services - Inflammation Programs

In 2023, we entered into the Second Gilead Collaboration Agreement Amendment pursuant to which we expanded our collaboration to provide Gilead with options to license an initial two jointly selected research-stage programs that target inflammatory diseases for which we will lead discovery and early development activities, see Note 3, Related party - Gilead Sciences, Inc., for more information.

We received a total upfront payment of $ 35 million.

We determined that the Second Gilead Collaboration Agreement Amendment represented a separate contract.

We determined that we have two separate distinct performance obligations to perform R&D services for Gilead related to discovery and early development activities for each research program for which they have made an upfront payment and, at the amendment closing date, we allocated the transaction price of $ 35 million equally to the two performance obligations created by this amendment based upon the respective standalone selling prices.

The standalone selling prices of these obligations were determined using an expected cost-plus margin approach.

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The options to acquire additional licenses or services did not result in additional performance obligations because they did not provide a material right at contract inception, primarily due to the very early stages of the programs.

We recognized revenue of $ 8 million and $ 4 million for the years ended December 31, 2024 and 2023, respectively, within Other collaboration revenue in our Consolidated Statements of Operations.

At December 31, 2024 and 2023, we had $ 23 million and $ 31 million, respectively, of deferred revenue remaining on our Consolidated Balance Sheet related to these performance obligations.

We recognized revenue of $ 10 million, $ 8 million, and $ 4 million for the years ended December 31, 2025, 2024, and 2023 respectively, within Other collaboration revenue in our Consolidated Statements of Operations.

Revenue from the Taiho Collaboration

Quemliclustat - License

In July 2024, Taiho exercised its option under the agreement we entered into in 2017 and obtained an exclusive license for quemliclustat (the CD73 program) for the Taiho Territory for an option payment of $ 15 million which was received in the third quarter 2024.

We determined that this license was the only performance obligation and we recognized upon delivery the full $ 15 million of revenue in the year ended December 31, 2024 within License and development services revenue in our Consolidated Statements of Operations.

Capitalized Costs to Obtain Contracts

We incurred $ 8 million of costs in the first quarter 2024 to obtain the Third Gilead Collaboration Agreement Amendment, Third Stock Purchase Agreement Amendment and the Second Investor Rights Agreement Amendment, which consisted of consultant fees that were payable upon the successful completion of the agreements.

We determined that $ 5 million of these costs were related to the Third Stock Purchase Agreement Amendment which were recognized as offering costs in additional paid-in capital.

The remaining costs were combined with $ 3 million in capitalized costs that remained from the initial Gilead Collaboration Agreement and subsequent amendments, and the total was allocated to the various remaining performance obligations, to be recognized as the underlying performance obligations are satisfied and revenue is recognized.

For the years ended December 31, 2024, 2023, and 2022, we recognized $ 3 million, $ 1 million, and $ 4 million, respectively, of expense in G&A expense.

At each of December 31, 2024 and 2023, we had $ 3 million in capitalized costs to obtain the contracts, allocated between Prepaid expenses and other current assets and Other noncurrent assets in our Consolidated Balance Sheets based on the expected timing of future recognition.

In 2024, Taiho exercised its option under the collaboration arrangement and obtained an exclusive license for quemliclustat (the CD73 program) for the Taiho Territory for an option payment of $ 15 million which was received in 2024.

We determined that this license was the only distinct performance obligation based on an evaluation of the delivery of the license, noting that the program was in the later stages of development and the ongoing R&D services do not significantly modify or customize the related intellectual property and we recognized the allocated transaction price upon delivery in the year ended December 31, 2024, within License and development services revenue in our Consolidated Statements of Operations.

In 2025, Taiho exercised its option under the collaboration arrangement and obtained an exclusive license to casdatifan (the HIF-2α inhibitor) for the Taiho Territory and concurrently entered into the second amendment whereby we will lead development for two indications in Japan including the global Phase 3 trial of casdatifan PEAK-1.

In exchange, Taiho made an option exercise payment of $ 15 million which was received in fourth quarter 2025.

We determined that the option exercise and amendment represented a single contract under which we have two separate distinct performance obligations, a license with a customer and R&D services for a collaborative partner related to the global study activities.

The following table summarizes the allocation of the transaction price of $ 15 million to the performance obligations (in millions):

Allocation to performance obligations Distinct Amount

License * $ 7

R&D services * 8

Total transaction price $ 15

We accounted for each performance obligation as follows:

License - Casdatifan

We determined that the license for casdatifan was distinct based on an evaluation of the delivery of the license, noting that the program was in the later stages of development and the ongoing R&D services do not significantly modify or customize the related intellectual property.

We determined the standalone selling price of this license using a discounted cash flow method.

We recognized as revenue the allocated transaction price of $ 7 million in the year ended December 31, 2025, within License and development services revenue in our Consolidated Statements of Operations.

R&D Services - Casdatifan

The standalone selling price of the R&D services obligation was determined using an expected cost-plus margin approach.

We determined that these services are with a collaborative partner and not a customer and in accordance with our policy recognize these amounts as R&D expense reimbursements.

See Note 4, License and collaborations, for more information .

Loss before income taxes included the following (in millions):

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Total income tax expense $ — $ 1 $ 6

The reconciliation between the federal statutory income tax rate and our effective tax rate was as follows:

Cash paid for income taxes, net of refunds consisted of the following (in millions):

Year Ended December 31,

2025 2024 2023

Federal statutory income tax rate 21.0 % 21.0 % 21.0 %

Federal $ — $ — $ 4

Pennsylvania $ — $ — $ 1

Total state $ — $ — $ 1

Total cash paid for income taxes, net of refunds $ — $ — $ 5

The reconciliation between the federal statutory income tax and our effective tax was as follows (in millions and as a rate):

Year Ended December 31,

2025 2024 2023

Federal statutory income taxes $ ( 74 ) 21.0 % $ ( 59 ) 21.0 % $ ( 63 ) 21.0 %

State taxes, net of federal benefit (1)

— 0.1 % — ( 0.1 ) % 2 ( 0.8 ) %

Domestic research and development credits ( 15 ) 4.2 % ( 12 ) 4.4 % ( 14 ) 4.6 %

Nontaxable or nondeductible items

Equity investment ( 12 ) 3.4 % ( 12 ) 4.1 % ( 1 ) 0.4 %

Research and development credits 5.4 % 5.2 % 3.1 %

Change in valuation allowance ( 28.1 ) % ( 26.3 ) % ( 24.5 ) %

Stock based compensation 4 ( 1.1 ) % 5 ( 1.9 ) % 6 ( 2.1 ) %

Non-deductible expenses and other ( 0.7 ) % 0.5 % ( 0.6 ) %

Other items 5 ( 1.4 ) % 2 ( 0.5 ) % — — %

Change in valuation allowance 92 ( 26.1 ) % 77 ( 27.2 ) % 76 ( 25.1 ) %

Provision for income taxes $ — 0.1 % $ 1 ( 0.2 ) % $ 6 ( 2.0 ) %

(1) State taxes in Pennsylvania and New York made up the majority (greater than 50%) of the tax effect in this category for the year ended December 31, 2023.

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

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Accordingly, a full valuation allowance has been established and no deferred tax asset is shown in the accompanying Consolidated Balance Sheets.

The valuation allowance increased by approximately $ 83 million for the years ended December 31, 2024 and 2023.

The valuation allowance increased by approximately $ 96 million and $ 83 million for the years ended December 31, 2025 and 2024, respectively.

enacted the Tax Cuts and Jobs Act in December 2017, which requires companies to capitalize all of their R&D costs for U.S.

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Beginning in 2022, for tax purposes we began capitalizing and amortizing R&D costs over a five-year period for domestic research and a fifteen-year period for international research rather than expensing these costs immediately.

At December 31, 2024, we have federal net operating losses of $ 13 million that have no expiration date and research tax credits of approximately $ 41 million that begin to expire in 2041.

The OBBBA was enacted on July 4, 2025.

The OBBBA contains several changes to corporate taxation, including permanent repeal of the requirement to capitalize domestic research and experimental expenditures for federal income tax purposes for taxable years beginning after December 31, 2024.

The OBBBA does not have a material impact to our consolidated financial statements.

At December 31, 2025, we have federal NOLs of $ 170 million that have no expiration date and research tax credits of approximately $ 59 million that begin to expire in 2041.

We also have state NOLs of approximately $ 49 million that begin to expire in 2035, and state research tax credits of approximately $ 25 million that have no expiration date, and foreign research tax credits of approximately $ 3 million that have no expiration date.

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We have determined that an ownership change, as defined under IRC Section 382, occurred in previous years.

While we do not expect these ownership changes to result in the expiration of net operating loss and credit carryforwards prior to utilization, we are subject to an annual limitation on the use of its tax attributes.

The limitation on the use of net operating loss and credit carryforwards could reduce our ability to use a portion of the tax attributes to offset future taxable income.

While we do not expect these ownership changes to result in the expiration of NOLs and credit carryforwards prior to utilization, we are subject to an annual limitation on the use of its tax attributes.

The limitation on the use of NOLs and credit carryforwards could reduce our ability to use a portion of the tax attributes to offset future taxable income.

We have not been audited by the Internal Revenue Service, any state or foreign tax authority.

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and in Australia.

Due to net operating loss and research credit carryforwards, all of our tax years, from 2015 to 2024, remain open to U.S.

Due to NOLs and research credit carryforwards, all of our tax years, from 2018 to 2025, remain open to U.S.

federal and California state tax examinations.

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The reserve for unrecognized tax benefits was approximately $ 24 million and $ 19 million at December 31, 2025, and 2024, respectively.

Due to the full valuation allowance at December 31, 2024 and 2023, current adjustments to the unrecognized tax benefit will have no impact on our effective income tax rate;

Due to the full valuation allowance at December 31, 2025 and 2024, current adjustments to the unrecognized tax benefit will have no material impact on our effective income tax rate;

any adjustments made after the valuation allowance is released will have an impact on the tax rate.

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Additions for tax positions taken in current year 5 5

Statute of limitations expiration ( 1 ) —

Ending balance $ 24 $ 19

As of December 31, 2024, the total amount of gross unrecognized tax benefits was $ 19 million, of which, if recognized, none would impact our effective tax rate.

As of December 31, 2025, the total amount of gross unrecognized tax benefits was $ 24 million, none of which would, if recognized, have a material impact on our effective tax rate.

We do not anticipate material changes to our uncertain tax positions through the next 12 months.

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Total potential dilutive securities 20.3 18.0 15.3

We have also excluded the effect of Gilead's right to purchase additional shares of our common stock from the calculation as these rights had no intrinsic value at December 31, 2024, 2023 or 2022.

We have also excluded the effect of Gilead’s right to purchase additional shares of our common stock, which expired in July 2025, from the calculation as these rights had no intrinsic value at December 31, 2024 or 2023.

Stock-based compensation

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As of December 31, 2025, there were 3.6 million shares available for grant under this plan.

On January 1, 2025, the number of shares available for issuance under the 2018 Equity Incentive Plan automatically increased by 3.6 million.

On January 1, 2026, the number of shares available for issuance under the 2018 Equity Incentive Plan automatically increased by 3.6 million shares.

Employee Stock Purchase Plan

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Volatility — Our estimate of expected volatility is based on the historical volatility of our common stock price.

Prior to 2023, due to our limited operating history and a lack of company specific historical and implied volatility data, our estimate of expected volatility included the historical volatility of a group of similar publicly traded companies.

The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards.

Dividend yield — We have not issued any dividends in our history and do not expect to issue dividends over the life of the options.

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The Company matches, at its discretion, employee contributions.

For the years ended December 31, 2024, 2023, and 2022, we made contributions of $ 3 million, $ 3 million and $ 2 million, respectively, to the plan.

For the year ended December 31, 2025, we made contributions of $ 4 million to the plan.

For each of the years ended December 31, 2024 and 2023, we made contributions of $ 3 million to the plan.

Cash, cash equivalents and marketable securities

6 unchanged sentences

Corporate securities and commercial paper 487 — — 487

government agency securities 5 — — 5

Certificate of deposit 9 — — 9

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Long-term debt, non-current (Contractual maturity 2030) $ 100 $ 50

Unamortized discounts and issuance costs ( 2 ) —

Unamortized discounts, issuance costs, charges, and payment-in-kind interest, net ( 1 ) ( 2 )

Total long-term debt $ 99 $ 48

On August 27, 2024, we and Hercules entered into a loan and security agreement (the "Hercules Agreement"), under which Hercules agreed to lend us up to $ 250 million in term loans in various tranches subject to minimum draw requirements for each tranche.

Under the terms of this agreement, $ 50 million was drawn at closing and an additional $ 100 million is committed and fully available at our sole option in minimum increments of $ 25 million.

A second tranche of $ 100 million will be available subject to future approval by Hercules.

The Hercules Agreement has an initial maturity date of September 1, 2029 which is extendable by 12 months, at our discretion subject to the achievement of certain regulatory milestones related to our product candidates.

Repayment of the principal amount will be in 13 monthly installments commencing September 1, 2028, if not extended.

The term loans have an interest only period for the first 48 months from the agreement date and bear interest at a rate equal to the greater of (i) 10.45 % or (ii) the prime rate plus 1.95 %.

In 2024, we and Hercules entered into the Hercules Agreement, under which Hercules agreed to lend us up to $ 250 million in term loans in various tranches subject to minimum draw requirements for each tranche.

Under this agreement, $ 50 million was drawn at closing and $ 50 million was drawn in the second quarter 2025.

On December 18, 2025, (the "Hercules Amendment Date"), we and Hercules entered into the Hercules Amendment which:

(i) extended the maturity date by 12 months, to September 1, 2030, (ii) increased the end of term charge to 9.00 %, (iii) modified the period during which each of the remaining tranches were available to borrow, and (iv) modified the covenant requirements associated with the debt.

The Hercules Amendment was evaluated in accordance with the applicable accounting standards and determined to be a debt modification, resulting in an adjustment to the effective interest rate on a prospective basis.

Under the Hercules Agreement, as amended, an additional $ 50 million is committed and fully available at our sole option of which $ 25 million is available through March 15, 2026 and $ 25 million is available through September 15, 2026.

The remaining $ 100 million is available as follows:

$ 50 million following certain BLA-enabling clinical milestones related to our ongoing Phase 3 studies and drawable through the earlier of March 15, 2028 or 90 days following the achievement of the milestone, and $ 50 million following the FDA's approval of a BLA or NDA application for an Arcus investigational product and drawable through the earlier of December 15, 2028 or 90 days following the achievement of the milestone.

Undrawn portions of any expired tranches will remain available through the loan's maturity date, subject to lender approval and the achievement of any milestones associated with the original tranches.

The Hercules Agreement, as amended, has an interest-only period through September 1, 2028, after which the principal amount will be repaid in 25 monthly installments through the maturity date of September 1, 2030.

The term loans bear cash interest at a rate equal to the greater of (i) 10.45 % or (ii) the prime rate plus 1.95 %.

The agreement allows us to defer up to 2.0 % of the cash interest as payment-in-kind interest which is added to the principal at a 1.10 multiple and effective July 1, 2025, we have elected the maximum payment-in-kind deferral.

We may prepay all or any portion of the outstanding term loans at any time, subject to a prepayment fee of:

(i) 3.00 % of the principal amount prepaid if the prepayment occurs prior to the first anniversary of the funding date;

(ii) 2.00 % of the principal amount prepaid if the prepayment occurs on or after the first anniversary of the funding date and prior to the second anniversary of the funding date;

(i) 3.00 % of the principal amount prepaid if the prepayment occurs prior to the first anniversary of the Hercules Amendment Date;

(ii) 2.00 % of the principal amount prepaid if the prepayment occurs on or after the first anniversary and prior to the second anniversary of the Hercules Amendment Date;

or (iii) 1.00 % of the principal amount prepaid thereafter.

The agreement also has an upfront facility fee of $ 1 million and an end of term charge of 7.75 % of the total amount borrowed.

The Hercules Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to incur liens, incur indebtedness, make investments, pay dividends, merge or consolidate, dispose of assets, and enter into transactions with affiliates, subject to customary exceptions.

We are also required to maintain a minimum cash balance of 50 % of the funded amount if our market capitalization were to fall below a certain threshold which will be reduced in the event of certain regulatory approvals of our product candidates.

We do not have covenant requirements associated with this agreement until October 1, 2026.

The Hercules Agreement is secured by a first priority security interest in substantially all of our assets, excluding intellectual property.

The Hercules Agreement also contains customary events of default terms, including payment defaults, breaches of covenants, bankruptcy and insolvency events, cross-defaults to other indebtedness, material adverse events, and the occurrence of a change of control.

The agreement also has an end of term charge of 9.00 % of the total amount borrowed.

The Hercules Agreement, as amended, contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to incur liens, incur indebtedness, make investments, pay dividends, merge or consolidate, dispose of assets, and enter into transactions with affiliates, subject to customary exceptions.

We are also required to maintain a minimum cash balance of 50 % of the funded amount if our market capitalization were to fall below a certain threshold and, in the event that the outstanding principal balance exceeds $ 200 million, we will be required to meet certain net product revenue thresholds.

We do not have covenant requirements associated with this agreement until July 1, 2027.

The Hercules Agreement, as amended, is secured by a first priority security interest in substantially all of our assets, excluding certain intellectual property.

Upon the occurrence of an event of default, Hercules may declare all outstanding obligations under the Hercules Agreement to be immediately due and payable and exercise any or all of its rights and remedies, including foreclosure on the collateral securing the term loans.

The aggregate future minimum payments including principal payments and the end of term charge, due under the Hercules Agreement, are as follows (in millions):

The aggregate future minimum payments due under the Hercules Agreement, including principal payments, payment-in-kind interest incurred to date, and the end of term charge, are as follows (in millions):

Maturity Date Amount

Total payments $ 110

During the year ended December 31, 2024, we recognized $ 2 million of interest expense at an effective interest rate of 13.39 %, including amortization of the debt discount and issuance costs.

As of December 31, 2024, we had borrowed $ 50 million under the Hercules Agreement and had $ 200 million of additional borrowing capacity, of which $ 100 million is subject to additional approval by Hercules.

During the years ended December 31, 2025, and 2024, we recognized $ 9 million and $ 2 million of interest expense.

The effective interest rate of the debt, including amortization of the debt discount and issuance costs and payment-in-kind interest, was 12.85 % commencing with the modification which occurred in the fourth quarter 2025, compared to 13.08 % commencing with the second quarter 2025 and 13.39 % for all periods prior to the second quarter 2025.

We lease our corporate headquarters, which includes approximately 151,000 square feet of executive offices, R&D, and business operations, in Hayward, California.

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We subleased approximately 31,000 square feet of our Brisbane office to a third-party which commenced in October 2023.

This sublease included a tenant improvement allowance to be paid by us of $ 9 million, which was fully paid at December 31, 2024.

This sublease included a tenant improvement allowance to be paid by us of $ 9 million which was fully paid.

This sublease is non-cancelable and extends through 2028, with the sublessee having options to extend the lease term.

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Income from our subleases is recognized on a straight-line basis as reduction of rent expense within G&A.

For the year ended December 31, 2024, we recorded gross sublease income totaling $ 3 million.

For the years ended December 31, 2025 and 2024, we recorded gross sublease income totaling $ 4 million and $ 3 million, respectively.

Operating leases

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Other noncurrent liabilities - noncurrent operating lease liabilities $ 86 $ 99

In the first quarter of 2024, we evaluated our plans for a portion of our office space that we expected to sublease, and identified indicators of impairment to certain right-of-use assets associated with the leased space where the asset value was determined to be non-recoverable based upon a discounted cash flow analysis, resulting in an impairment charge of $ 20 million for the year ended December 31, 2024.

For the years ended December 31, 2024, 2023 and 2022, we incurred lease expense of $ 17 million, $ 18 million, and $ 18 million, respectively.

In 2024, we evaluated our plans for a portion of our office space that we expected to sublease, and identified indicators of impairment to certain right-of-use assets associated with the leased space where the asset value was determined to be non-recoverable based upon a discounted cash flow analysis, resulting in an impairment charge of $ 20 million for the year ended December 31, 2024.

For each of the years ended December 31, 2025 and 2024, we incurred lease expense of $ 17 million.

For the year ended December 31, 2023, we incurred lease expense of $ 18 million.

Lease costs include rent expense, which consists primarily of our proportionate share of operating expenses, property taxes, and insurance which we have elected to include in lease costs.

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Cash received from tenant improvement allowances $ — $ — $ 9

Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ — $ 3

Recognition of tenant improvement allowance receivable included in Other current liabilities $ — $ — $ 4

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Gilead Stock Purchase Agreement

In 2023, under the Second Stock Purchase Agreement, Gilead purchased 1.0 million shares of our common stock at the closing day purchase price of $ 19.26 per share for total gross proceeds of $ 20 million.

In 2023, under the Second Stock Purchase Agreement Amendment, Gilead purchased 1.0 million shares of our common stock at the closing day purchase price of $ 19.26 per share for total gross proceeds of $ 20 million.

In 2024, under the Third Stock Purchase Agreement Amendment, Gilead purchased 15.2 million shares of our common stock at a price of $ 21.00 per share for total gross proceeds of $ 320 million.

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Net proceeds from Gilead's equity investment were $ 228 million after allocating the premium and deducting direct offering expenses of $ 5 million.

Underwritten Offerings

In the first quarter 2025, we sold through an underwritten offering, 13.6 million shares of our common stock at a price of $ 11.00 per share, for total gross proceeds of approximately $ 150 million, before deducting underwriting discounts, commissions and offering expenses.

As part of this underwritten offering, Gilead purchased 1.4 million shares of our common stock for total gross proceeds of $ 15 million.

In the fourth quarter 2025, we issued through an underwritten offering, 15.8 million shares of our common stock at a price of $ 18.25 per share, for total gross proceeds of approximately $ 288 million, before deducting underwriting discounts, commissions and offering expense.

At-the-Market Facility

In 2023, we entered into an equity distribution agreement pursuant to which we may, from time to time, sell shares of our common stock, par value $ 0.0001 per share, having an aggregate offering price of up to $ 200 million.

During the year ended December 31, 2023, we issued and sold under this agreement 0.2 million shares of our common stock for total net proceeds of $ 5 million.

In 2023, we entered into an equity distribution agreement, pursuant to which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $ 200 million.

In 2023, we issued and sold 0.2 million shares of our common stock for total gross proceeds of $ 5 million.

In 2025, we issued and sold 1.4 million shares of our common stock for total gross proceeds of $ 18 million, before deducting underwriting discounts and offering expenses.

Preferred Stock

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There was no preferred stock outstanding as of December 31, 2025 and 2024.

See Note 19, Subsequent events, for additional information on stock issuances that occurred in February 2025.

Fair value measurements

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Corporate securities and commercial paper — 487 — 487

government agency obligations — 5 — 5

Certificate of deposit — 9 — 9

Total assets measured at fair value $ 155 $ 855 $ — $ 1,010

Liability for sale of future royalties $ — $ — $ 21 $ 21

Total liabilities measured at fair value $ — $ — $ 21 $ 21

Fair value measurement as of December 31, 2024 Level 1 Level 2 Level 3 Total

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Liability for sale of future royalties

In 2021, we entered into an agreement with BVF, under which BVF funded the discovery and development of compounds for the treatment of inflammatory diseases (the "BVF Program") for $ 15 million in non-refundable payments which were paid in 2021 and 2022.

In return, we are obligated to perform R&D activities in the BVF Program;

make contingent payments upon the achievement of certain clinical and regulatory milestones of up to $ 73 million or $ 160 million depending on whether the BVF Program is solely developed by us or with Gilead if they opt-in under the Gilead Collaboration Agreement;

and pay mid- to high-single digit royalties on any net product sales generated by the BVF Program.

We account for the BVF agreement as a liability primarily because we have significant continuing involvement in generating the cash flows due to BVF.

The liability is recorded at fair value by using probability-adjusted discounted cash flows and is revalued each reporting period until the related contingencies have been resolved.

The fair value measurement is based on significant unobservable inputs that are reviewed quarterly by management and include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales.

Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or that shorten or lengthen the time required to achieve such events or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable.

Changes in the fair value of this liability related to interest accretion are recognized in Non-operating income (expense) in the Consolidated Statements of Operations.

During the second quarter of 2023, new preclinical information from our BVF Program led to revised assumptions which decreased the estimated probabilities of success and delayed the projected timing of achieving specified development, regulatory and commercial milestones and commercial sales.

These changes in estimates are accounted for prospectively and resulted in a decrease in the imputed effective interest rate on the unamortized portion of the liability to 10.1 % commencing with the quarter ended June 30, 2023, compared to 20.6 % for the quarters ended March 31, 2023 and prior.

The impact of this change on the non-cash interest expense for the year ended December 31, 2024 was not material when compared to the prior year periods.

The liability for sale of future royalties is reported in Other noncurrent liabilities in the Consolidated Balance Sheets and changes were as follows (in millions):

In return, we were obligated to:

perform R&D activities in the BVF Program;

make contingent payments upon the achievement of certain clinical and regulatory milestones;

and pay mid- to high-single digit royalties on any net product sales generated by this program.

We account for the BVF agreement as a liability primarily because at the time the agreement was entered into we had significant continuing involvement in generating the cash flows due to BVF.

In the first quarter 2025, new preclinical information led to the decision to discontinue the BVF Program which decreased the likelihood of achieving regulatory and commercial success.

These changes in assumptions are accounted for prospectively, resulting in the amortization of the net carrying amount of the liability to the initial carrying amount of $ 15 million using an imputed effective interest rate of negative 6.1 %, on the unamortized portion of the liability, which will be applied until there is a change in future cash flow expectations or the debt is legally extinguished.

The imputed effective interest for periods shown prior to first quarter 2025 was 10.1 %.

Changes in this liability related to interest accretion are recognized in Non-operating income (expense) in the Consolidated Statements of Operations.

The liability for sale of future royalties is reflected at the unamortized carrying amount and thus is no longer considered to be at fair value commencing the first quarter 2025, with the estimated fair value being immaterial.

The liability is reported in Other noncurrent liabilities in the Consolidated Balance Sheets and changes were as follows (in millions):

Year Ended December 31

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Long-term debt

As of December 31, 2024, the estimated fair value of our long-term debt approximated the carrying amount.

As of December 31, 2025 and 2024, the estimated fair value of our long-term debt approximated the carrying amount.

The fair value of the long-term debt was estimated for disclosure purposes only and was determined based on other inputs that are observable, and thus categorized as Level 2 in the fair value hierarchy.

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We believe the fair value of the indemnification rights and agreements is minimal and accordingly, we have not recorded any liabilities as of December 31, 2025 and 2024.

Segments of business

Business segment

Our chief operating decision maker ("CODM") is the Chief Executive Officer, who decides how to allocate resources and assesses segment performance based on net loss reported on the Consolidated Income Statements.

Our chief operating decision maker ("CODM") is the Chief Executive Officer, who decides how to allocate resources and assesses segment performance based on the net loss reported in the Consolidated Statements of Operations.

The table below is a summary of the segment net loss, including significant segment expenses (in millions):

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Total revenues $ 247 $ 258 $ 117

Adjusted for expense (income):

Late-stage development programs (1)

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(1) R&D expenses incurred related to a Phase 3 clinical program intended to result in registration of a new product.

This includes all unallocated program-level expense not directly attributable to a specific clinical trial once a molecule enters into one or more Phase 3 clinical trials.

(2) R&D expenses incurred for activities ranging from early-stage R&D and preclinical to Phase 2 clinical trials.

This includes all unallocated program-level expense not directly attributable to a specific clinical trial once the related program enters into one or more Phase 3 clinical trials.

(2) R&D expenses incurred for activities ranging from early-stage development and preclinical to Phase 2 clinical trials.

This includes all unallocated program-level expense not directly attributable to a specific clinical trial unless the related program has entered into one or more Phase 3 clinical trials.

(3) Other segment items includes non-allocated program costs and other G&A costs.

Total segment assets at December 31, 2024, 2023 and 2022 were $ 1.2 billion, $ 1.1 billion, and $ 1.3 billion, respectively.

Subsequent events

In February 2025, we announced that Gilead's time-limited exclusive option rights to our HIF-2α program (including casdatifan) have expired.

As a result, Gilead has no future rights to casdatifan and we retain full global development and commercial rights, subject to Taiho’s option right for the Taiho Territory.

In February 2025, we sold through an underwritten offering, 13.6 million shares of our common stock at price of $ 11.00 per share, for total gross proceeds of approximately $ 150 million, before deducting underwriting discounts, commissions and offering expenses.

Gilead acquired 1.4 million shares of our common stock through this offering and held approximately 29.7 % of our common stock as of February 19, 2025.

Total segment assets at December 31, 2025 and 2024 were $ 1.1 billion and $ 1.2 billion, respectively.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data