Shares of Arcus Biosciences, Inc. RCUS, a clinical-stage biopharmaceutical company, declined 14.4% following the announcement that its late-stage STAR-221 study was discontinued for futility.
The study was being conducted in collaboration with Gilead Sciences, Inc. GILD.
The decision to discontinue the STAR-221 study evaluating a domvanalimab-based combination in upper gastrointestinal cancers was based on the recommendation from the Independent Data Monitoring Committee following its review of data from an event-driven, pre-specified interim analysis of overall survival (OS).
Year to date, RCUS shares have gained 44.6% compared with the industry’s growth of 18.2%.
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More on RCUS’ STAR-221 Study
Domvanalimab was designed to block and bind to the T-cell immunoreceptor with Ig and ITIM domains (TIGIT), a protein on immune cells that acts as a brake on the immune response.
The phase III STAR-221 study evaluated the anti-TIGIT antibody domvanalimab plus anti-PD-1 antibody zimberelimab and chemotherapy versus Opdivo (nivolumab) plus chemotherapy as a first-line treatment for advanced gastric and esophageal cancers.
Data at the interim analysis demonstrated that the domvanalimab-based combination did not improve OS relative to that of nivolumab plus chemotherapy. Nonetheless, the domvanalimab-based combination showed a safety profile comparable to nivolumab plus chemotherapy, with no new safety findings. Consequently, the STAR-221 and the phase II EDGE-Gastric studies will be discontinued.
Arcus and GILD entered into an initial collaboration in 2020, which was subsequently amended in 2024. Gilead and Arcus also reprioritized the joint domvanalimab development program in 2024 to focus on domvanalimab-containing regimen research in areas where it may have a significant impact in combination with chemotherapy and in settings with high unmet need through all-comer study designs.
Road Ahead for Arcus Biosciences
Arcus will now focus on expanding its development program for casdatifan, a potential best-in-class HIF-2a inhibitor with robust single-agent activity.
Casdatifan has shown robust single-agent activity based on data reported from more than 120 patients with late-line clear cell renal cell carcinoma (ccRCC) in the ARC-20 phase I/Ib study. The data demonstrated improvements across all evaluated efficacy measures, including overall response rate and progression-free survival (PFS), compared with the only marketed HIF-2α inhibitor. Multiple data readouts are expected in 2026.
RCUS retains full rights to casdatifan worldwide, except in Japan and certain other Asian territories, where rights were optioned to Taiho Pharmaceutical Co., Ltd. in October 2025.
The company’s oncology portfolio also includes quemliclustat, a small-molecule CD73 inhibitor that completed enrollment in the late-stage PRISM-1 study in pancreatic cancer. Results are expected in 2027 for the registrational study, which is evaluating quemliclustat plus gemcitabine/nab-paclitaxel versus gemcitabine/nab-paclitaxel in first-line metastatic pancreatic ductal adenocarcinoma.
Arcus’ early development efforts will focus on five programs targeting inflammatory and autoimmune (I&I) diseases. Arcus’s I&I portfolio includes several oral, small molecules being developed in indications currently dominated by injectable drugs. The portfolio includes the following programs — MRGPRX2, TNF, CCR6, CD89 and CD40L.
Notably, a small molecule targeting MRGPRX2 is expected to enter the clinic in 2026.
Arcus expects to be able to fund its planned operations until at least the second half of 2028 on the basis of approximately $1 billion of cash and investments.
However, the setback in the STAR-221 study will weigh on the stock.
RCUS Rank and Stocks to Consider
RCUS currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the biotech sector are CorMedix CRMD and Amicus Therapeutics FOLD, both sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for CorMedix’s 2025 earnings per share (EPS) have increased from $1.85 to $2.87. EPS estimates for 2026 have moved up from $2.49 to $2.88 during the same period. CRMD stock has risen 41.8% year to date. CorMedix’s earnings beat estimates in each of the trailing four quarters, with an average surprise of 27.04%.
In the past 60 days, estimates for Amicus Therapeutics’ 2025 EPS have increased to 36 cents from 31 cents. During the same time, EPS estimates for 2026 have decreased to 67 cents from 70 cents. Year to date, shares of FOLD have gained 12%.
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Arcus Biosciences, Inc. (RCUS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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