Arvinas, Inc. (NASDAQ:ARVN) Q2 2025 Earnings Call Transcript

Arvinas, Inc. (NASDAQ:ARVN) Q2 2025 Earnings Call Transcript August 6, 2025

Arvinas, Inc. beats earnings expectations. Reported EPS is $-0.83836, expectations were $-0.87.

Operator: Thank you for standing by. At this time, I would like to welcome everyone to Arvinas’ Second Quarter 2025 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Jeff Boyle, Arvinas’ Vice President of Investor Relations. Please go ahead.

Jeff Boyle: Good morning, everyone, and thank you for joining us. Earlier today we issued a press release with our second quarter 2025 financial results, which is available on the Investors and Media section of our website at arvinas.com. Joining the call today are John Houston, Arvinas’ Chief Executive Officer, President and Chairperson; Noah Berkowitz, our Chief Medical Officer; Angela Cacace, our Chief Scientific Officer; and Andrew Saik, our Chief Financial Officer. Before we begin the call, I’ll remind you that today’s discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. These risks and uncertainties are outlined in today’s press release and in the company’s recent filing with the Securities and Exchange Commission, which I urge you to read. Our actual results may differ materially from what is discussed on today’s call. And now I’ll turn the call over to John. John?

John G. Houston: Thanks, Jeff. Good morning, everyone, and thank you for joining us today. As outlined in our second quarter earnings release this morning, our business is in a solid position with strong momentum. It was an eventful and exciting quarter at Arvinas with significant clinical and regulatory programs across our pipeline of PROTAC degraders. We continued making significant strides across our early stage programs where we are enrolling patients in 3 Phase I trials across our neuro and oncology portfolio, including the recently initiated trial with our KRAS G12D degrader ARV-806. During the quarter, we also presented compelling first-in-human data from ARV-102, our LRRK2 degrader and preclinical data for our BCL6 degrader, ARV-393.

I’m also pleased to share an update on our antigen receptor degrader, luxdegalutamide, which we licensed to Novartis in 2024. We are pleased to see that Novartis is rapidly progressing the assets and announced the recent initiation of two combination Phase II trials that will further advance luxdegalutamide towards patients. One trial is in metastatic castration resistant prostate cancer and the other is metastatic hormone sensitive prostate cancer, and both will identify recommended Phase III doses and we believe further validate our ability to develop potentially best-in-class protein degraders. As a reminder, our license agreement with Novartis includes up to $1 billion in development, regulatory and commercial milestones as well as tiered royalties.

The accomplishments from across our portfolio are the latest in a long stream of successes at Arvinas. At the same time, we have recognized the ongoing need to enhance our financial position and set Arvinas up for future success. To that end, last quarter we announced a company-wide restructuring that extended our cash runway and included 2 key elements. First, we reprioritized our research pipeline, cutting a number of programs and continuing investment in our assets with the greatest potential value. And second, we streamlined operations across the organization by reducing our workforce by approximately one-third. While difficult, these defective actions bolstered our financial profile and drove efficiencies across the company. They also enabled us to turn our full attention to our near-term imperatives, which are first working with Pfizer or identifying another partner to advance vepdeg towards commercial launch.

Second, achieving critical data milestones from our pipeline in the next 12 months. And third, carefully allocating capital to support those milestones efficiently. I’ll return to those 3 imperatives in a few moments, but I’d first like to say a few words about the recent announcement of my planned retirement and the CEO transition for Arvinas. Having recently strengthened our financial profile and with a clear line of sight into those near-term imperatives, the Board and I agreed it is the right time to initiate a search for a new CEO. As with any public company, succession planning is a priority for our Board of Directors, and I have been talking to the Board about the potential timing of this transition for well over a year. While there never seems to be a good time, we agreed that waiting until after our first pivotal data readout was essential.

We are now conducting a rigorous and thoughtful CEO search process spearheaded by independent directors on our nominating and corporate governance committee with the assistance of a leading executive search firm. The board is fully engaged and intense on finding the right CEO to lead Arvinas into our next chapter and help shape our long-term strategy to create value for shareholders and deliver on our mission to serve patients. I’m also honored to continue as Chair of the Arvinas Board once I step down from the CEO role. For now, our long-term strategy is driven by the imperatives I mentioned above, advancing vepdeg to launch by Pfizer or another partner, achieving critical data milestones and efficiently allocating capital. I’ll spend a few minutes discussing our vepdeg strategy before turning the call over to Noah and Angela who will provide updates and discuss upcoming milestones for our clinical programs.

Andrew will then provide a financial overview and some thoughts on capital planning. First, regarding vepdeg. Our collaboration with Pfizer was signed in 2021 with the intention for vepdeg to be developed as a monotherapy and in combinations across the adjuvant first and second line settings. With that plan, the idea of having 50-50 co- development and commercialization was very attractive. We are now on the threshold of vepdeg potentially becoming a best-in-class treatment in its first indication. Second line monotherapy treatment in ESR1 ER+/HER2- metastatic breast cancer. However, the recent decision to remove the combination pivotal trials from our development plans with Pfizer has created a situation where the 50-50 cocommercialization agreement no longer makes sense and we’re actively reworking our collaboration.

Should the negotiation lead to vepdeg being returned to Arvinas, we are prepared to seek a party to commercialize and further develop vepdeg. Reaching a positive conclusion for vepdeg is a critical step in maximizing its value while also allowing us to focus on our promising clinical pipeline. Preclinical data has shown that ARV-102, ARV-393 and ARV-806 are all differentiated from inhibitors and other degraders. With compelling clinical data milestones over the next year, we believe our maturing pipeline will be a significant value driver for the company and our shareholders. Taken together, we are advancing a very exciting pipeline, applying our PROTAC technology to new areas in both neuroscience and oncology where we can truly differentiate from other mechanisms of action.

Operating from a strong financial position underpinned by an extended cash runway efficient capital allocation, and a development strategy that unlocks the potential of our platform to bring patients important treatments, we are confident in our path forward and in our ability to maximize value for shareholders and benefits for patients. With that, I’ll turn the call over to Noah.

Noah Berkowitz: Thanks, John, and good morning, everyone. Our pipeline continues to progress at a remarkable pace, demonstrating the vast potential of our PROTAC platform. I’ll begin with our most advanced neuroscience program ARV-102. We have designed investigational oral PROTAC degraders to cross the blood-brain barrier and selectively degrade leucine-rich repeat kinase 2 OR LRRK2. LRRK2 is a large multi-domain scaffolding kinase that plays a critical role in effective endo lysosomal trafficking. Unlike traditional small molecule inhibitors that only block LRRK2’s kinase activity, LRRK2 degraders eliminate pathologic scaffolding function, GTPAse activity and the kinase activity of LRRK2 implicated in this disease. We believe our lead LRRK2 degrader, ARV-102 is particularly well positioned to be evaluated in 2 diseases where there are no disease-modifying therapies available.

The first is Parkinson’s disease or PD, a disease where increased LRRK2 expression and activity contributes to neuro degeneration and its pathogenesis, making it a rational therapeutic target. And the second is progressive supranuclear palsy, or PSP, a disease where genetic variations in LRRK2 are associated with PSP progression. Additionally, we have published data associating the tau pathology of PSP with LRRK2-mediated endo-lysosomal dysfunction, which again makes this a very rational therapeutic target. ARV-102 is the only PROTAC we know of in the clinic to demonstrate deep-brain penetration in non-human primates and now blood-brain barrier penetration in humans. As presented at the AD/PD congress, ARV-102 is well tolerated at single doses up to 200 milligrams and at multiple doses up to 80 milligrams.

No serious adverse events after single and multiple oral doses and healthy volunteers were observed. Single and multiple doses of ARV-102 demonstrated dose-dependent exposure in the central nervous system by cerebral spinal fluid or CSF sampling. This was associated with substantial degradation of LRRK2 protein in the peripheral blood and the CSF and on-target activity with levels of engagement not reported with inhibitors currently in the clinic. We believe the high levels of target engagement, enhanced potency and pathway engagement demonstrated with ARV-102 will differentiate it from clinical-stage inhibitors, which in preclinical studies have not shown the same ability as ARV-102 to move important biomarkers in the CSF. These PK and PD properties and acceptable safety and tolerability profile supports further study of LRRK2 degraders in PD and PSP.

Dosing of the Phase I single ascending dose cohort in patients with Parkinson’s disease is complete and we expect to present initial data confirming pathway engagement later this year. We will also initiate multiple dose cohorts in patients with PD in the coming weeks as well as a trial in PSP in the first half of 2026. In parallel to the advancement of ARV-102, we are making nice progress with ARV-393 our BCL6 degrader and ARV-806 our KRAS G12D degrader, which entered the clinic in the second quarter. It is too early for me to share clinical results for these exciting new clinical stage assets, but Angela will share some of the compelling preclinical data supporting the advance of both in the clinic. But first, I would like to provide some regulatory updates regarding vepdeg.

We have submitted the new drug application for vepdeg. This represents another significant first for Arvinas, the first PROTAC degrader to enter clinical trials and have a positive readout in a Phase III trial. It’s also the first-ever new drug application submitted for a PROTAC. The NDA was supported by VERITAC-2 data that were presented at the ASCO oral late-breaking session, and simultaneously published in the New England Journal of Medicine. The enthusiasm among physicians generated by VERITAC-2 data was very rewarding. Later this year, we plan to present the patient- reported outcomes data from the VERITAC-2 trial. We believe these data disclosures reinforced vepdeg’s profile as a potential best- in-class monotherapy. I’ll now turn the call over to Angela.

Angela?

Angela M. Cacace: Thanks, Noah, and good morning, everyone. ARV-393, our investigational oral PROTAC designed to degrade B-cell lymphoma 6, or BCL6, is an exciting asset that demonstrates the power and breadth of our platform. BCL6 is a previously undrugged transcription factor, a master regulator of multiple cellular processes during B-cell development, including proliferation, survival, and apoptosis. Altered BCL6 activity has been implicated as an oncogenic driver in several subtypes of non-Hodgkin lymphoma, making it a rational therapeutic target with initial clinical validation emerging. PROTAC-mediated degradation has the potential to overcome the historically undruggable nature of BCL6. With its iterative activity, ARV-393 potently and rapidly degrades the BCL6 protein which is critical to overcoming its rapid resynthesis rate and sustaining anti-tumor activity.

In second quarter of 2025 we presented 2 sets of preclinical data for ARV-3 93. First at the American Association for Cancer Research Annual Meeting in April, we presented new preclinical data highlighting the therapeutic potential of ARV-393 in combination with standard of care biologics, chemotherapy, and small molecule inhibitors targeting cooperative oncogenic drivers. ARV-393 combinations demonstrated increased tumor growth inhibition, including tumor regressions in preclinical models of aggressive B-cell lymphoma. These data underscore the potential of ARV-393 to become a backbone therapy for development of rational mechanism- informed chemo-free or all oral therapeutic options with the potential to improve patient outcomes and convenience.

In June at the European Hematology Association Conference, we presented new data demonstrating the potent single agent efficacy of ARV-393 in patient-derived systemic models of angioimmunoblastic T-cell lymphoma and transformed follicular lymphoma. To our knowledge, these are the first preclinical evidence of an efficacious BCL6 targeted degrader in human models of these diseases. These data highlights the broad utility of a ARV-393 across non-Hodgkin lymphoma subtypes with unmet need beyond DLBCL. Later this year we also expect to share preclinical data showing the combinability of a ARV-393 with glofitamab a CD3, CD20 bispecific antibody, and an emerging standard of care for DLBCL that supports our plan to evaluate this combination in an upcoming trial.

We are excited about the potential here, given ARV-393’s ability to increase CD20 expression, which provides rationale for the exploration of ARV-393 with CD20-targeted agents and in the context of low or loss of CD20 expression. We also plan to share the initial clinical data with ARV-393 later this year. As you have heard from Noah, I’m pleased to report that we have initiated a Phase I clinical trial of ARV-806, our novel PROTAC degrader targeting KRAS G12D. The trial has progressed rapidly through the first patient cohort, reflecting strong interest from clinical investigators and underscoring the high unmet need for effective KRAS-targeted therapies. KRAS G12D is a well characterized oncogenic driver associated with poor prognosis and resistance to standard treatments across major tumor types, including pancreatic, colorectal, and non-small cell lung cancers.

ARV-806 has demonstrated compelling preclinical activity with high potency and clear differentiation from both KRAS inhibitors and other degraders currently in the clinic. Notably, because of the catalytic activity of our PROTAC, ARV-806 has shown it can overcome KRAS resynthesis and increased expression, a major clinically relevant emerging mechanism of resistance that existing inhibitors have failed to address. Our PROTAC binds to and degrades both the active and inactive forms of KRAS G12D, achieving potent and durable elimination of the target rather than inhibition in all models tested. In preclinical studies, ARV-806 achieved in-vitro potency approximately 25x greater than KRAS inhibitors and 40x greater than the leading clinical-stage degrader, demonstrating strong potential for differentiation from both KRAS inhibitors and degraders currently in the clinic.

Furthermore, ARV-806 exhibits dose-dependent selective robust anti-tumor activity culminating in regressions across preclinical models of KRAS G12D mutant cancers. These results highlight the strong therapeutic potential of ARV-806 and support its continued and rapid advancement in the clinic. We look forward to updating you on our clinical progress and anticipate sharing preclinical data from ARV-806 and the first ever data from our oral pan-KRAS degrader program later this year. With that, I’ll turn the call over to Andrew to review our quarterly financial information.

Andrew R. Saik: Thanks, Angela, and good morning, everyone. I’m pleased to provide financial highlights for the second quarter ended June 30, 2025, and expand on our approach to capital allocation and development strategy. As a reminder, detailed financial results for the second quarter are included in the press release we issued this morning. During the quarter, we took significant action to reduce costs and increase efficiency across the organization. These actions included a reprioritization and reduction to our research portfolio, as well as a reduction of approximately one-third of our total workforce. When combined with the announced changes to our vepdeg development plan, our cash runway was extended into the second half of 2028.

These changes will make us leaner and more efficient as we work towards a promising stretch of catalyst over the next 12 months. As I mentioned previously, the restructuring was focused on reducing internal costs without having an impact on the clinical stage programs that will drive value over the next several years. We will maintain our discipline and focused approach to capital allocation, and our development strategy will be focused on bringing pipeline programs through major clinical inflection points. With respect to vepdeg, we anticipate relatively minimal costs to prepare the market in the coming months. Our current agreement with Pfizer includes establishing a go-to-market strategy that will benefit both sides of the partnership. While we continue to believe that vepdeg is a potentially best-in-class asset, given the changes to the development plan, we have determined that it is no longer viable for us to build out our commercial infrastructure as we had previously planned.

As John said earlier, we are in active discussions with Pfizer to rework our collaboration to determine the most efficient way to make this important drug available to patients if approved. Across our pipeline, we have a rich set of catalysts coming up in the next year for both our oncology and neuroscience portfolios. With our strong balance sheet, we have sufficient resources to move these exciting programs forward to key value inflection points. We’ve seen great clinical success here in the past, both in the development of vepdeg in partnership with Pfizer, and in the platform validating out-licensing of luxdegalutamide to Novartis. We are excited to continue development of the next generation of Arvinas PROTACs. I’ll now briefly touch on some key financial highlights for the second quarter of 2025.

At the end of the second quarter, we had approximately $861.2 million in cash, cash equivalents and marketable securities on the balance sheet, compared with $1.04 billion as of December 31, 2024. Revenue for the 3 months and June 30, 2025, totaled $22.4 million compared to $76.5 million for the 3 months ended June 30, 2024. The decrease of $54.1 million was primarily driven by $45.6 million of decreased revenue from the Novartis License Agreement and the Novartis Asset Agreement, both of which were entered into during the 3 months ended June 30, 2024, and were completed by December 31, 2024, as the technology transfer of our ongoing planned clinical trials of luxdegalutamide were transitioned to Novartis. Revenue from the vepdeg collaboration agreement with Pfizer decreased $6.8 million related to the removal of 2 Phase III trials from the development plan during the first quarter of 2025.

General and administrative expenses were $25.3 million in the second quarter compared to $31.3 million for the same period of 2024. The decrease of $6 million was primarily driven by a decrease in personnel and infrastructure related costs of $4.8 million and professional fees of $2.2 million, partially offset by an increase in costs related to developing our commercial operations of $1.1 million. Research and development expenses were $68.6 million in the second quarter compared to $93.7 million for the same period of 2024. The decrease of $25.1 million was primarily driven by a decrease in the vepdeg program of $10 million, a decrease in the luxdegalutamide program of $9.5 million, and decreases in personnel expenses and non-program specific expenses of $10.3 million offset by an increase in the LRRK2 program of $2.1 million and the KRAS program of $1.5 million.

Restructuring costs in the quarter amounted to $7.4 million of cash expenses consisting primarily of employee-related expenses which were offset by a reversal of non-cash employee stock compensation and bonus expenses of $6.4 million. The announced restructuring is now complete, and the full benefit in terms of cost reduction will be seen starting in the third quarter. We are maintaining our prior cash runway guidance into the second half of 2028. We are focused on staying disciplined by investing in areas that will maximize shareholder value as we move towards important catalysts in the coming months. In addition, we will continue to look at ways to reduce costs and increase efficiency while continuing to focus on our goals of progressing our very promising early pipeline.

With that, I’ll turn the call over to John for closing remarks. John?

John G. Houston: Thanks, Andrew. As you’ve heard, we see multiple near-term milestones across our clinical development and regulatory efforts. Our programs offer a rich set of catalysts over the next 12 months, including clinical data from ARV-102 and ARV-393 and potentially initial clinical data from ARV-806 and of course the potential for the first ever approval of a PROTAC. During this time, we will also advance ARV-102 in its ongoing trial in patients with Parkinson’s and initiate a trial with ARV-102 in progressive supranuclear palsy. Before opening the call for Q&A, I’d like to reiterate our confidence in our near-term plan to create value for patients and shareholders. This includes advancing vepdeg to launch by Pfizer or another party, achieving the important data milestones I just described and allocating capital to ensure we reach those milestones efficiently.

While we made sweeping changes in the first half of 2025, we are always evaluating the best ways to create shareholder value. With that, I’ll turn the call over to Jeff to begin the Q&A portion of the call. Jeff?

Jeff Boyle: Thanks, John. Operator, can you please open the queue?

Q&A Session

Operator: [Operator Instructions] And our first question comes from the line of Ted Tenthoff with Piper Sandler.

Edward Andrew Tenthoff: Andrew, just 1 quick housekeeping. The restructuring charge that you mentioned, was that primarily in the G&A line? And then I have a pipeline question for you guys.

Andrew R. Saik: Yes. Ted, no, it was actually split up between research and development and G&A. And indeed, most of the stock-based comp would have been recorded in the R&D section.

Edward Andrew Tenthoff: Great. That makes sense. Awesome. So can you give us a little bit more color on what to expect from 102 data this year? I know that we’ve still got more to hear about the healthy volunteers for the multiple ascending cohorts. But what should we expect from the single ascending doses from Parkinson’s patients?

John G. Houston: Thanks, Ted. And yes, the trials were going well. And I’ll hand over to Noah to give you some of the details.

Noah Berkowitz: Hi, Ted, thanks for the question. Yes, good morning. So as you said, I think you summed it up. We’re going — we expect at a conference, an upcoming conference, to summarize the full healthy volunteer data set that we assembled. And in addition to that, if things work out, we’ll be able to present some SADs data, which will — I’m not going to go into the details of what we’ll present exactly, but should be able to signal that we’re on track with — when you compare it to the healthy volunteer findings.

Operator: Next question comes from the line of Jonathan Miller with Evercore ISI.

Jonathan Miller: Congrats on — as I should say, congrats is the wrong word, but good job on getting your restructuring going. I’d love to follow up on 102 question. Maybe it’s a little too early to say exactly what you’ll give us in patients this year. But maybe could you talk a little bit about what you hope to see in a more full patient data set? What are your bars for success in patients that can give you confidence going into later on in efficacy readouts?

John G. Houston: Thanks, Jonathan. Noah?

Noah Berkowitz: Sure. Jonathan, so, yes, thanks for the interest here. I think we’ve outlined that we expect to start a Parkinson’s disease multiple dose study over the course of the next month or so. While I can’t really comment about when those data will be presented, the idea is that we’re enrolling patients with the insights gained from healthy volunteers regarding a dose range, and that will allow us to establish that in patients who have higher baseline LRRK2 levels and also patients that are more elderly because healthy volunteers tend to be very young, like a little more than college age and Parkinson’s disease are going to be more than twice that on average, I suspect. So we’ll be able to demonstrate that we have the same exciting results that we previously reported in healthy volunteers of orally bioavailable brain-penetrant PROTAC and the ability to move biomarkers, which also now we have much more insight into than we did many months ago, right?

So we continue to do work to understand what are the best biomarkers that we can track and are going to be most predictive of an impact in the endo lysosomal trafficking and neuroinflammation that is characteristic of Parkinson’s disease and PSP. And so we expect we could start tracking this in real patients rather than healthy volunteers.

Jonathan Miller: Awesome. And then maybe on the BCL6, you mentioned in the press release and this call that glofitamab, that combination results to present this year, but you’ve presented on a number of different combos preclinically. Can you give us a sense of where you might want to start in patients, what combo therapies you may want to start with?

John G. Houston: I think we’ve been — I’ve been signaling in conversations. We can certainly speak clearly — very directly about it here that our interest for BCL6 is to learn what — find the dose in monotherapy. It’s something we’re obligated to do. But the real interest is moving forward in combinations, in particular, in DLBCL. And I think it should be clear to everyone that bispecifics in second-line plus DLBCL and maybe eventually in not that far in the future in first line are important drugs in that space. So if we can combine with bispecifics in human beings and get results that look anything like what we’ve seen preclinically, we think we’re well positioned for a new modality of therapy with a real orthogonal approach that enhances the activity of the bispecific.

And remember, one of the great combination properties here is that we recognize that 393 can increase the expression of CD20 which could potentially make the bispecifics even more active. And on top of that, we’ve been reporting out the great potency with our drug that if that translates into the clinic, then that gives us a great competitive advantage against the only other degrader that’s in the clinic currently.

Operator: Next question comes from the line of Derek Archila with Wells Fargo.

Unidentified Analyst: This is Karl calling in for Derek. So I guess for ARV-102, could you talk a little bit more on the elevated LRRK2 level in PD patients in terms of how much should we expect and how to maybe feel confident that similar more than 50% degradation can be achieved in CSF? And then on the vepdeg, the label potentially, could you talk about maybe the base case, what could be some potential differentiations you could expect versus your competitors?

John G. Houston: I think I captured the second question with vepdeg, but there was a lot of cracking of the — in the transmission to the first question. Did anyone here catch that?

Jeff Boyle: Yes, if you could you maybe just repeat the first question. Just the first…

Unidentified Analyst: Yes, of course. Sorry about that. for ARB-102, so I guess the question is the elevated LRRK2 level in PD patients. Could you talk about the expectation of the elevation and how to feel confident that more than 50% degradation in CSF can be achieved?

John G. Houston: Yes. So I think it’s a great question. So fundamentally, I think it’s been established by external sources that there is increased LRRK2 protein expression in the brain and in the CSF of patients with Parkinson’s disease. In our own hands, we’ve already seen in the SAD that there are higher baseline levels of Parkinson’s of LRRK2 than we observed in the healthy volunteers. So that’s already kind of consistent, but not a surprise to us at all. That was the expectation. In terms of one of the great properties of the degrader that I think differentiates it beautifully from an inhibitor is that we’ve already established in the healthy volunteers that we can get really good target engagement in the brain, right? And we know that the inhibitors just don’t do that well, right?

They’re only achieving 30% or so inhibition in the brain. We know preclinically, they’re not reaching deep brain regions as effectively as our degrader can. So we’re getting higher engagement. And because we have a degrader here, which has that iterative property that at even lower exposures you get continued degradation of the target, we think that should be — we should be well poised to reduce LRRK2 levels. That’s the underlying premise that’s been borne out in preclinical models. We’ve shown it in healthy volunteers, and now we think we can confirm it in the multiple doses in Parkinson’s disease patients. Regarding the second question, I think the question was how — what differentiates us essentially from — with our vepdeg from competitors in the space.

And more or less it comes down to efficacy, the better PFS that’s been seen when compared to fulvestrant control — monotherapy control, which in our hands, we’re talking about 3 months improvement, which other drugs really haven’t achieved. On top of that, we have — we’re leaning into some PRO data that you’ll see soon that show that the patients experience the drug very well. Certainly, the adverse event profile is more attractive which is to say that there’s a lot of GI toxicity seen with other agents in this space. We have reported half or even 33% of that when you compare to different drugs. And I think that, that combination of benefit risk really stands out for vepdeg when compared to other agents.

Operator: Next question comes from the line of Tazeen Ahmad with Bank of America.

Tazeen Ahmad: I maybe wanted to focus on some commercial questions. So as you think about vepdeg and the upcoming launch, you’re obviously bullish about its place potentially in monotherapy, but you also talked about needing to be careful about how you’re prepping for the launch. So how does this work in terms of setting up a sales force? When do you start prepping for that? How has that plan changed relative to what you would have planned for before? And then secondly, if Pfizer returns rights for the program to the company, would there be a gap in between when Pfizer returned the rights and when you’d be able to secure a new partner? Or are you kind of in process now for seeking a potential replacement should Pfizer return those rights?

John G. Houston: Yes. No, thank you for the question. Yes. So in the second part, I’ll tackle that first. Clearly we’re in negotiation with Pfizer right now. The original deal that we signed in ’21 was a 50-50 co-development, co-commercialization, very attractive deal at the time. We had planned for doing second-line monotherapy, first-line adjuvant. And that would have been a very significant market and a very significant opportunity to share 50-50. With the decision not to go forward with first line or the second-line combo, it puts us into a position where vep at the moment is only focused on second-line monotherapy. So a smaller market really doesn’t move the dial for Pfizer in terms of 50-50 and not particularly attractive for Arvinas either.

So the dialogue we’ve been having actively with Pfizer is about how we redo the collaboration so that either they get more of the economics or we get more of the economics. In a scenario where potentially we get the asset back, our plan is clear that we would immediately look to find the next partner that would help to develop vep and launch vep, which goes back to the first question, which is, as we stated, we are really not building out a sales force at all. Right now, we’re focused on, first of all, getting vep approved and also getting launch ready, which is a relatively minimal amount of money that we’ll be spending between now and the end of the year. So the idea would be that with that launch readiness, if we got the asset back, we’d run an active process and be in a position for another company to take on the development and launch of vep fairly rapidly.

So we’re hoping there wouldn’t be a particular gap.

Tazeen Ahmad: Okay. But as of today, could there be a gap between when it got approved and when it launched, if you are not able to secure the right terms then?

John G. Houston: No, no. Sorry, say the last bit again. Say the last bit of your question, sorry?

Tazeen Ahmad: I just wanted to clarify whether there would be a gap in the launch if you wouldn’t find a suitable partner in time once it’s approved.

John G. Houston: So, yes, the suitable partner. So at the moment, the plan is there’ll be no gap between getting approval, ideally having a partner in place or having Pfizer launch, there will be no gap at all. I think your question there is if you don’t get — if you get the asset back and you don’t get a partner then, yes, we’ve taking stock of that. Our plan is that we find a partner if we get…

Operator: Next question comes from the line of Andrew Berens with Leerink Partners.

Unidentified Analyst: This is Amanda on for Andy. We wanted to get your thoughts on the recent readout from the Phase III trial evaluating [indiscernible] second-line HR+ breast cancer and patients that don’t have a PIK3CA mutation, which then would include some ESR1 mutant patients. And we’re wondering how does this change or if this changes your outlook for second-line ESR1 mutation patients? And if you would ever consider a combination with [indiscernible] to address a broader population?

John G. Houston: Thanks for the question. Noah?

Noah Berkowitz: Sure. Yes. So we wouldn’t — we really are not surprised by the result. We recognize the opportunity for PIK3 mutation directed drugs to — in breast cancer. There is overlap, as you had suggested between ESR1 mutations and PIK3CA. So the question comes down to whether it’s in our modeling. And overall, we’re — my impression is that it will have little impact on the modeling. I could turn it over to my colleague, Alex, from commercial to offer further comments. But part of your question was whether we would develop it with an agent like that. And the answer to that is someone may, but we won’t because we’ve already established that we’re not doing further development on the drug, initiating new studies and combinations. And it would be something that should be very much of interest to another company. We’ve already scouted that out, but it’s not something we’ll be embarking.

Operator: Next question comes from the line of Li Watsek with Cantor Fitzgerald.

Li Wang Watsek: Nice progress on the pipeline. I guess for vepdeg NDA submission, it sounds like you know the PDUFA date very soon. Should we anticipate priority review here? And any guidance on your part for the global filing strategy? Do you need maybe to wait for more mature vep data?

John G. Houston: Yes. For the second part of that question, I’ll hand over to Noah. For the first part, yes, we’re still awaiting details from the FDA. And as soon as we get that information, we’ll pass that on. So we and don’t have the PDUFA date yet. Noah, do you want to tackle that second part of the question?

Noah Berkowitz: Yes. What we’ve shared, what we’ve offered guidance to is our filing of the NDA in the U.S. And obviously, we’re waiting on feedback regarding PDUFA date. But regarding global strategy, we haven’t offered guidance on that yet. So I think it would be premature.

Li Wang Watsek: Okay. And then in terms of finding maybe a potential new partner for vepdeg in the case that you got the molecule back, can you elaborate some of the considerations that you prioritize, what’s important for you guys in terms of maximizing the value?

John G. Houston: Yes, great question. I mean, clearly, we believe vepdeg is an important drug. We believe it has a lot of value. Because of the partnership we’re in with Pfizer and the decisions have been made, maximizing that value is going to be somewhat difficult. So that’s why we’re in discussion with Pfizer about changing the nature of the collaboration. And ideally, as I said, either Pfizer or Arvinas should go forward with the asset more kind of fuller economics. And in the scenario where maybe we get the compound back, yes, we’ll be looking to partner, and ideally a partner that does have the kind of the deal and interest to develop the asset further, both from the U.S. and the global setting. Our involvement in that, I think, would be relatively minimal in terms of development. Our view is that we vepdeg in the hand of a partner, be it Pfizer or another company, that really takes the compound forward, launches it and progresses with further development.

Operator: Next question comes from the line of Akash Tewari with Jefferies.

Unidentified Analyst: This is [ Manoj ] on for Akash. What are your expectations around the Denali LRRK2 data in the first half of next year? And if that trial fails or doesn’t meet expectations, what signals from that study would you be looking for to give confidence for your own degrader program?

Noah Berkowitz: Yes. Thanks for the question. Yes. If the question was expectations for the Denali program last year, I think it’s a fantastic question. We think that LRRK2 is an outstanding target. And I think the entire key opinion leader community would agree with us on that. The question is, what is the best drug to address that target. And so we see some virtue in an inhibitor, but it has challenges. And I outlined that earlier that the inhibitor doesn’t seem to penetrate the brain as deeply as, let’s say, our degrader. And on top of it, it doesn’t necessarily engage its target as effectively. We have a broader engagement. Not only are we binding it and degrading it and that we’re eliminating because of that degradation, the LRRK2 kinase activity, the [ GTPS activity scaffold ] function.

So all of those features make a degrader more attractive than inhibitor. So we think that they may succeed. We know they have the right target, and we are looking forward to learning from their results, learning if there’s something about patient selection that could be incorporated and overall whatever signals can come out of their trial.

Operator: Next question comes from the line of Evan Seigerman with BMO Capital Markets.

Conor Thomas MacKay: This is Conor MacKay on for Evan. We just had a quick one on the submission of vepdeg. Given the current environment at FDA, we were just wondering if you’d be willing to characterize your recent interactions with the agency and maybe comment on level of alignment there. And then just one quick follow-up on ARV-806. Would you be able to share a little bit more on how you’re thinking about positioning this asset versus the pan-KRAS agent you mentioned today?

John G. Houston: Yes. Thanks for the question. The second one, I’ll hand over to Noah and Angela for the first one. I’d have to say our whole process with the FDA has gone very smoothly. The interactions have been excellent. Their timing in terms of getting back to us has been really good. So even though we know that there’s lots of other pressures on the FDA, and it could impact time lines, we haven’t seen that yet with our interactions on vepdeg, which is a really good positive thing for us. Noah, do you want to add…

Noah Berkowitz: Regarding 806, I’ll make some comments about clinical, and I’ll turn it, when I’m done, to Angela, who may have some comments about some of the interesting differentiation preclinically. This drug entered the clinic a little faster than we expected because of great efficiencies at the team level. Then what we noticed is that there is tremendous appetite for drugs like ours in this space because our cohorts are in demand. So we’re advancing through early dose escalation now. Overall, we expect that there are going to be 5 or fewer dose levels in this escalation. So that’s going to at least give you a sense of where we’re headed. The key is to look at where we are in monotherapy compares ourselves to data that’s out for inhibitors and the very, very modest and unimpressive data that have been presented by a degrader in the clinic, which is limited, had dose-limiting toxicity relating to hepatic function.

So we’ll compare ourselves to that. We have good go/no-go criteria. But then the intention is to move our IV degrader, which has once a week, possibly once every 2-week dosing. That’s something we’ll learn from this dose escalation in combination with EGFR inhibitors and with chemotherapy. And that’s built into our plan, and that allows us to start moving into eventually first-line colorectal cancer and pancreatic cancer and also opportunities in non-small cell lung cancer. I’ll turn it to Angela.

Angela M. Cacace: Sure. Thanks, Noah. So just to comment on some of the other differentiation features of our 806 molecule. It’s very potent with respect to its activity. We’re 25x greater in terms of potency for antiproliferative activity with respect to the inhibitors and then 40x more effective than the clinical stage degrader. The other piece that I’ll mention is that catalytic activity that we have overcomes this KRAS resynthesis rate that has been observed as a major mechanism of resistance in the clinic with RMC — certainly with RMC-6236. So it’s something we’re excited about. We think this is a very strong differentiator. Of course, we’ll see what happens clinically. So I hope that helps.

Operator: Next question comes from the line of Srikripa Devarakonda with Truist Securities.

Unidentified Analyst: This is Anna on for Kripa. So in regards to 102, I know you mentioned the elevated LRRK2 levels in Parkinson’s. Could you remind us as to what percent of Parkinson’s patients could be eligible for an LRRK2 targeting drug? And then a second question, just in regards to neoadjuvant vepdeg and that potential data readout, how would this potentially inform any room for vepdeg to be used earlier in the treatment paradigm and besides commercializing in second-line monotherapy and that fixed combo, any additional plans for development?

John G. Houston: Yes. Thank you for the question. Noah, would you like to go to the LRRK2?

Noah Berkowitz: Yes. So LRRK2 levels are higher in the Parkinson’s disease patients. Now we haven’t made a choice that we’re only treating patients with elevated LRRK2. And by the way, I should say that, that’s something that might be on the table. It’s something that we’re going to explore. We’re going to look at our own data sets as they evolve. We’ll look at what’s coming out of the Denali program, if it’s shared. So that’s a possibility. If your question implies genetically, since LRRK2 is so implicated genetically in diseases like Parkinson’s disease, if we — when we move forward in Parkinson’s disease, what patients — what percentage of patients have LRRK2 implicated disease? Well, in idiopathic — well, in familial Parkinson’s, about 15% of patients are — have LRRK2 mutations.

And there’s a higher percentage that have LRRK2 pathway mutations that contribute to other types of familial Parkinson’s disease. When you look at idiopathic, it’s down in the few percent range. But beyond those LRRK2 mutations themselves, there are all kinds of pathway perturbations that suggest that LRRK2 could be at the center of this endolysosomal dysfunction that is characteristic of Parkinson’s disease and PD. So you start to have 30% of patients that can have SNPs and other biomarkers that are associated with this LRRK2 dysregulation and may lead to LRRK2 elevation. And we have a particular interest in that subset of patients, and that’s why we’re engaging in a lot of biomarker analysis. We’ve been a long-time collaborator with the Michael J.

Fox Parkinson’s disease biomarker initiative, and this is bearing fruit for us. So I think that we’ll — we have no kind of guidance yet about whether we’re doing patient selection or patient enrichment or going for all comers, but these are the types of questions we are investing in right now to ensure that we have the best development plan moving forward. Now the second question was about neoadjuvant vepdeg, so —

John G. Houston: And our positioning, the potential for vepdeg in an…

Noah Berkowitz: Yes. So really, we have to keep in mind, there have been no evidence to date to suggest that vepdeg shouldn’t be working in the adjuvant setting and in first line. We have every reason to believe that we can be very effective in that space. We know the drug is very tolerable. Cross-study comparisons suggest maybe we’re more tolerable than aromatase inhibitors. That could be very important in both of those settings. But ultimately, a decision is being made in this partnership that because of where we are with timing and the interest probably more than with our partner, in this case Pfizer in first line, that we’re just not going to be going forward in those early lines. And that’s why we’ve been giving so much guidance to — for our intent to out-license this or proceed with renegotiation with Pfizer. But I don’t think that we should draw any conclusions that there are any problems in the adjuvant setting or in first line.

Operator: Next question comes from the line of Jeet Mukherjee with BTIG.

Suranjit Mukherjee: So perhaps just coming back to the discussions with Pfizer over vepdeg. You’ve talked about scenarios where perhaps Pfizer gets more economics or you get more economics or perhaps you find a new partner altogether. So based upon where your discussions are right now, would you say that you and Pfizer have very different views on how to maximize value for vepdeg? And are you in active dialogue with other partners? If yes, how are those discussions going?

John G. Houston: Yes, great question. I would say that Pfizer and Arvinas and the discussions we are having are aligned in terms of what the best way to get value for vepdeg is. Even though we might have different views about the development future of vepdeg, I think there’s Pfizer and Arvinas truly believe there’s value to be had there. And that’s why we’re in these discussions. Clearly, if the asset does come back, and again, that’s just one of the scenarios, the other scenarios that Pfizer takes the compound for. But in the scenario where it comes to us, yes, we’d run an active process. But obviously, we cannot run an active process right now because we’re in a collaboration with Pfizer, and we don’t have the ability to do that.

Our belief is if we get the asset back, we ran a process, there would be companies extremely interested in taking a near-approved drug and with the potential to develop it not only in the first-line setting, but even earlier. So we are very pleased with the progress in terms of discussion with Pfizer. Like I say, if they want to take it forward aggressively and launch it themselves, that would be extremely positive. But if they don’t and the outcome is we get the compound, then yes, we’d run an active process.

Operator: Next question comes from the line of Ellie Merle with UBS.

Unidentified Analyst: This is [ Tejas ] on for Ellie. I think you talked a little bit about some of the preclinical data for the KRAS inhibitors. Can you talk a little bit more about what we should expect with more data later this year? And how might that inform what we think about in the Phase I?

John G. Houston: Great. Thanks for the question. I’ll hand that over to Angela.

Angela M. Cacace: So for the KRAS inhibitors for 806, certainly you can expect to see some preclinical data just showing the differentiation profile that we see relative to inhibitors that are in the clinic. We’ll also show some additional data just showing the combinability of the molecule. Noah had mentioned with EGFR mechanisms that’s difficult with the pan-inhibitors certainly in the clinic, showing some side effects that would basically preclude that combination. We’ll also show data that we think is really compelling from our oral pan-KRAS program, showing that we’re making really great strides there as well. Other additional comparative data that we’ll have will include some other models where we’re looking at combinability with immuno- oncology approaches and some of the unique features of PROTACs, we think, in this space, also with respect to the resistance mechanisms and overcoming that upregulation that is seen clinically with the inhibitors as well.

So we think we have a very differential profile, and it’s an exciting opportunity, certainly. And we’re seeing that with the over-enrollment and the interest from the investigators that treat patients. So I think it’s an exciting time, and I’m sure Noah and the team will be sharing clinical data as soon as we have it. Hope that helps.

Operator: Next question comes from the line of Peter Lawson with Barclays.

Peter Richard Lawson: Maybe just leading on from the prior question. For the G12D and the update, when should we expect the initial first-in-human data update? And kind of if you could talk through how enrollment is going and the number of sites that are open and any other details around that trial? And then I have a follow-up.

John G. Houston: Thanks, Peter. Noah, you want to take it?

Noah Berkowitz: Sure. So Peter, we just announced that we opened the study for enrollment a little ahead of schedule, and the immediate reaction seems to be very favorable. We haven’t offered guidance yet on when we will be sharing data. But you’re going to get it soon. We’ll get the guidance soon, meaning it will be sometime next year, obviously. I would suggest just track things on clinicaltrials.gov because it’s not — we wouldn’t typically be giving you site numbers and things like that for a Phase I study.

Peter Richard Lawson: Got you. And I apologize, I arrived late on the call. But for the BCL6, so that’s what 353, the data in the second half, kind of what should we focus on with regards to the data and kind of other metrics that we may be delivering in that data set?

John G. Houston: Noah?

Noah Berkowitz: Sure. So we’ve shared that we’ll provide some update of our data set in the second half of this year. I really don’t want to get ahead of ourselves and share what that disclosure will be. But the idea is that we’re advancing through our dose escalation program. And obviously, in dose escalation programs, the data that you’re going to see are going to be more like — but before you’re done with it, safety and PK and early signs of efficacy. So I think you can look for those. Obviously, as we approach the completion of that or as we achieve the completion of that dose escalation or ready for expansion, we would be armed with more efficacy data, but still a focus on target engagement through PK/PD.

Peter Richard Lawson: Got you. Would that be kind of like the range of like 10 to 20 patients or I presume kind of heavily pretreated. Any details there?

Noah Berkowitz: Yes, I would say that’s a reasonable guess.

Operator: Next question comes from the line of Sudan Loganathan with Stephens.

Unidentified Analyst: This is [ Keethav ] on behalf of Sudan. So regarding the recent clinical data published by Celcuity on their advanced breast cancer asset, could you kind of just comment on your insights and what your perspective on that data is? And where do you like see vepdeg’s competitive positioning within the treatment landscape?

John G. Houston: No, thank you for the questions. Noah, I know you’ve tackled this earlier.

Noah Berkowitz: Yes. I’m not sure if I have more to add than what was said earlier. We recognize — have always recognized that a drug like Celcuity could demonstrate attractive benefit risk in that — in the second-line setting and in the first-line setting. There is overlap between ESR1 mutant and PI3 kinase targeting agents. In the end, what physicians are looking for are oral PROTAC, [ hypo ] oral degraders. So in our case, a PROTAC that has an attractive benefit risk profile. So we think we’re delivering that. And physicians kind of want to avoid toxicity as much as possible and you get all the benefit they can after first-line therapy before adding drugs that have some toxicity. So the impact on market opportunity in that second-line setting is probably modest, but we haven’t been offering specific guidance on market opportunities. So it’s difficult to measure that modestly.

Operator: Next question comes from the line of Michael Schmidt with Guggenheim Partners.

Unidentified Analyst: This is Sara on for Michael. I wanted to quickly circle back to the oral pan-KRS that you mentioned. I would love to hear more details on that and specifically how you would expect to differentiate from later-stage pan-KRAS.

John G. Houston: Sorry, we couldn’t understand the question. Could you repeat it one more time?

Noah Berkowitz: There’s a lot of echo.

Unidentified Analyst: One second.

John G. Houston: [Indiscernible] Pan-KRAS and how it differentiates from other KRAS —

Unidentified Analyst: Yes, exactly. So my question was about the pan-KRAS and any thoughts on differentiating from later-stage pan-KRAS and pan-RAS programs?

Angela M. Cacace: Sure, sure. So as you know, we differentiate at least with ARV-806 from what we’ve said publicly. But our pan-KRAS program, we aim to have the same level of potency differentiation as well. We do bind to and degrade. So we degrade. We don’t inhibit. So we avoid that upregulation that’s observed clinically. So as you’re aware, the clinical inhibitors, the pan-RAS inhibitor has shown a major mechanism of upregulation of KRAS as a resistance mechanism in the clinic. So they’re claiming around 20% to 30% of patients that are seeing this. So it’s pretty profound. So we think we have an opportunity there. Our oral pan-KRAS also will have great combinability. We’ll speak a bit about some of the differential profiles of our molecule relative to the pan-RAS molecules that are in the clinic.

We expect that we’ll have greater combinability with the immune stimulatory mechanisms like KEYTRUDA and other IO agents because we will not inhibit T-cell receptor activity. So we think that combinability will also provide a major advantage to other mechanisms clinically. So there’s a number of other differential activities that we’re observing that we’ll be discussing as we move forward and advance the program. But it’s an exciting time for us. So stay tuned for more data this year at the triple meeting.

Operator: Next question comes from the line of Terence Flynn with Morgan Stanley.

Unidentified Analyst: This is Chris on for Terence. Just one question from us. For 393, beyond safety, what do you need to see in order to advance the asset into a combo trial with glofi?

John G. Houston: Thanks, Chris. Noah, do you want to?

Noah Berkowitz: Sure. So we don’t — probably not a lot, like we weren’t expecting any hematopoietic toxicity, which would be the principal toxicity of glofit beyond the CRS seen in the first cycle, but well managed with glofi’s dosing over the first month or the first 3 weeks. So it’s just a matter of reinforcing that we’re not seeing any unexpected toxicities. And I don’t have much more to add than that. Pretty clean drug —

Operator: Next question comes from the line of Yigal Nochomovitz with Citi.

Jong Keon Kim: This is Jon Kim on for Yigal. Maybe just one quick one from us. Can you comment on whether AI was utilized to facilitate the compilation and submission of modules for vepdeg to the FDA? And more broadly, any potential utilization in the early drug development pipeline?

John G. Houston: That’s a great question. I suppose your definition of AI. Yes, we certainly used a lot of kind of artificial intelligence in all of our research programs, and Angela can talk to the different features of that, whether or not it was used in the actual NDA application. Noah, I’m not sure —

Noah Berkowitz: Well, part of the NDA is a submission process. We do work with some vendors. So there is AI that’s going on there through our vendors. But in terms of our business overall or the development part of our business, think of it AI as being able to help us with a lot of medical writing, right? So we’re going to be able to take documents that we have previously generated across different assets and learn from them. These are things we’re doing currently and learn from them to impact our medical writing cost and efficiency in the future. Think of it also as something that helps in clinical operations to more efficiently review our vendor management, our contracts that there’s more clear accountability and roles and responsibilities across different contracts for a company that does rely on a lot of externalized work in clin ops.

And then obviously, we’re using it in all the time with our status programming, like that’s something that’s been ongoing. There are many other areas in the company that are beginning to use it. But at least that gives you a sense of how it could have been used for an NDA and in like in our development programs.

Angela M. Cacace: And I can comment on how we’re using it in research. So we have computational chemistry and computational biology teams that use AI all the time in machine learning algorithms. We’ve been applying AI to our PROTAC design features as we’ve been in this for 13 years, we’ve actually accumulated a lot of real-world data on PROTAC activity and optimization. We are applying that and learning from it. So we iterate our PROTAC designs much faster now. And so we’re seeing a big benefit in how we move with speed in research. And so this includes pharmacokinetic properties of these molecules and absorption features as well, which, as you probably know, is really key for PROTAC design. On the computational biology side, we’re using it all the time for how do we go about analyzing our ligand identification data.

So this enables us to go after previously undrugged targets and optimize those warheads to utilize in PROTAC for targeted protein degradation. In addition, I would say we use AI to mine real-world data from biomarker features that exist in publicly available data sets. And this sets us up well for deep understanding of pathway biology, and this is how we’ve been approaching our Parkinson’s disease and also our PSP as well as other neurodegenerative diseases and really mining CSF protein changes in those diseases and have set the clinical group up really well to understand how we might use those biologic features to stratify patients. So thank you for the question.

Operator: Next question comes from the line of Tyler Van Buren with TD Cowen.

Unidentified Analyst: This is [ Ikan ] on for Tyler. Just to go back to the vepdeg and Pfizer collaboration. Has Pfizer indicated its willingness to revise the collaboration or give back rights to vepdeg? And why would they be motivated to give vepdeg back given the amount they have invested to date? Also, wouldn’t that require a significant cash outlay by Arvinas? And are you willing to use the existing cash on hand with milestones or royalties to do that?

John G. Houston: Yes. Just to reiterate, we’re in the current 50-50. The attraction for that 50-50 was the planning on second line, first-line and neoadjuvant — sorry, adjuvant trials. Now we’re currently left in a situation where it’s only second-line monotherapy, so less attractive in terms of a market size for Pfizer. They have shown no interest to develop that further. So that’s the first important thing, that that will not be developed further by Pfizer. We’re in negotiation right now about what’s the best way forward in terms of moving away from the 50-50 collaboration we had where either Pfizer takes the asset and launches it and gets more economics or they hand the compound back to us. I’ve said really clearly, I’ll say it again, if the compound comes back to us, we are not spending any money on the further development of E, none at all.

We’d be running a process to find a partner who would then ideally launch the drug and ideally further develop the drug and we gain the benefit — the forward benefit of seeing the drug on the market. But we have no plans to further develop that if we got the compound back…

Operator: That concludes our Q&A session. I’d like to turn the call back over to John Houston for closing remarks.

John G. Houston: Thank you, operator, and thanks to everyone for joining us this morning and all the fabulous set of questions. Obviously we look forward to providing additional updates in the coming months. But thank you so much for your time today.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now disconnect.