ARVN 3Q26 Earnings Call - ARVINAS INC

Explicit Guidance:

• Cash runway extended through the second half of 2028, enabling funding of current Phase 1 and expansion trials, including BCL-6 (ARV-393) through next year and SBMA (ARV-027) through the guidance period.
• Non-GAAP operating expenses for Q3 2026 ($53.5M) and Q4 expected to reflect the current disciplined spend level, representing a 25% year-over-year reduction.
• First royalty revenue of $0.5M booked in Q3 2026 from Rigel; a 1% royalty on future revenue applies to specific programs (not all programs), with milestone payments in the low single digits.

Business-Segment Outlook:

• ARV-393 (BCL-6): Initial monotherapy data disclosure scheduled for December (ASH conference) focusing on T-cell lymphoma; a second readout expected in mid-2027 targeting B-cell lymphoma patients at efficacious doses, including durability and initial combination data with glofitamab.
• ARV-027 (Androgen Receptor/SBMA): Initial data from Healthy Volunteer cohorts expected in the first half of 2027; patient dosing for SBMA intended to begin in the first half of 2027; goal is to de-risk for registration-enabling discussions post-Phase 1.
• ARV-6723 (HPK1): Monotherapy dose escalation ongoing; combination dosing with pembrolizumab to initiate in the first half of 2027; initial clinical data anticipated in the second half of 2027.
• ARV-102 (LRRK2): Phase 1b trial initiation targeted for 2027 in the EU and UK; US sites aim to be included after Phase 1b completion, pending FDA resolution of ongoing clinical hold.
• ARV-806 (KRAS-G12C): Program contingent on finding a partner; data expected at an upcoming conference next month.

Market and Competitive Outlook:

• ARV-393 Strategy: Focus on T-cell lymphoma first due to limited treatment options (35–45% response rate with current market therapies), aiming for >30% response rate in early escalation; B-cell data expected to demonstrate >50% response rates as seen with competitors, with potential for dose reduction of or sparing from chemotherapy.
• ARV-027 Differentiation: Targeting 50% reduction in PolyQAR to achieve muscle strength rescue without compromising androgen tone; aims to become the first disease-modifying therapy for SBMA.
• ARV-6723 Competitive Position: Preclinical data shows activity in seven checkpoint-inhibitor resistant models, suggesting potential benefit in patients unresponsive to PD-1/VEGF therapies; intended to function as a backbone for future immunotherapy combinations.
• Capacity/Portfolio: No new M&A or restructuring planned; focus remains on advancing Phase 1 assets and expanding combination cohorts (e.g., with R-CHOP, bispecifics, glofitamab) for ARV-393.

Macro / Industry Outlook:

• Regulatory path for neurodegenerative diseases (PSP) involves starting in EU/UK to bypass immediate US clinical hold delays, with a strategy to potentially expand to a global registration paradigm (including Japan/US) post-Phase 1b.
• Industry trend toward protein degradation as a backbone for treatment strategies in oncology and rare diseases, shifting focus from inhibition to removal of undruggable transcription factors and toxic aggregates.

Strategic Initiatives:

• Pipeline De-risking: Prioritizing data-driven capital allocation to move from clinical milestones to registration discussions (ARV-027) and Phase 1b initiation (ARV-102).
• Geographic Expansion: Initiating EU/UK Phase 1b for ARV-102 to accelerate proof-of-concept; parallel consultations with Japanese health authorities for long-term global strategy.
• Biomarker Development: Expanding use of objective measures (e.g., oculomotor function, CSF biomarkers) to correlate target degradation with clinical benefit in neurodegenerative programs.
• Partnership Search: Actively seeking a partner specifically for the ARV-806 program.

Risks and Headwinds to Outlook:

• ARV-102 Regulatory: Ongoing clinical hold with FDA in the US; timeline for US site inclusion remains uncertain and dependent on resolution of discussions.
• Clinical Trial Execution: Early phase data (ARV-393) limited to low-dose cohorts; durability and efficacy at efficacious doses for B-cell lymphomas to be confirmed in mid-2027.
• Trial Design: SBMA and PSP trials may face challenges in patient recruitment due to rare disease nature; endpoints for functional improvement in PSP require validation against natural history data.
• Competition: BCL-6 degrader space is becoming competitive; efficacy benchmarks set by competitors may rise, requiring ARV-393 to demonstrate comparable or superior depth/durability.

Management Tone on the Future:

• Confidence: High confidence in the "protein degradation" platform's ability to address unmet needs in oncology and neurology; described as moving from "scientific promise" to "first ever FDA-approved degrader" with expectations of "multiple successes."
• Discipline: Emphasis on "letting data drive capital allocation decisions" and a "disciplined approach to portfolio decisions," evidenced by significant cost reductions ($17.8M R&D, $8.4M G&A YoY).
• Hedges: Caution regarding the specific efficacy benchmarks for BCL-6 at early doses; acknowledgment that PSP functional endpoints (e.g., oculomotor) are novel and require proof of correlation with clinical benefit.

Miscellaneous:

• Clinical Trial Timing: Healthy volunteer dosing for ARV-027 is ongoing; patient dosing for SBMA expected in H1 2027.
• Data Presentations: First ARV-393 data at ASH (December); ARV-6723 preclinical data at SITC (current week); ARV-102 biomarker data at MDS (previous month).
• Royalty Structure: Specific programs covered by the Yale/Rigel royalty not fully disclosed; expected to be revealed closer to commercialization.