Arcus Biosciences, Inc. (RCUS): PESTLE Analysis [Nov-2025 Updated]

You're tracking Arcus Biosciences, Inc. (RCUS) and wondering what's next after their big Gilead collaboration. The simple truth is they're sitting on a war chest of over $841 million in cash as of Q3 2025, giving them a long runway into 2028, but that capital is a bet on a few key clinical trial results coming in 2026. Political headwinds, like the Inflation Reduction Act (IRA) drug pricing risk, are defintely a factor, plus their entire $24 billion market opportunity hinges on whether their novel assets, like casdatifan and domvanalimab, can beat the competition in the clinic. Let's look at the full PESTLE breakdown to map the real risks and opportunities for this oncology player.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Political factors

US government's Most-Favored-Nation (MFN) drug pricing policy creates significant revenue uncertainty for future branded products.

You need to factor in the very real threat of the Most-Favored-Nation (MFN) pricing policy, which was revived by an Executive Order signed on May 12, 2025. This policy aims to peg US drug prices to the lowest price paid in a set of comparable developed nations, mostly in Europe. Honestly, this is a massive headwind for a company like Arcus Biosciences, Inc. that is nearing a potential first launch with a drug like casdatifan.

The administration is claiming this MFN approach could reduce prescription drug prices by anywhere from 30% to 80%. For a novel, single-source oncology drug, this means the US price-historically the source of roughly 70% of global pharmaceutical profits-could be dramatically cut before you even get to market. The Department of Health and Human Services (HHS) is expected to communicate MFN price targets to manufacturers by June 11, 2025. This creates a high degree of revenue uncertainty for your projected full-year 2025 GAAP revenue of between $225 million and $235 million, which is largely collaboration-based, but the long-term valuation of your pipeline is now under a cloud.

Inflation Reduction Act (IRA) drug price negotiation risk, which could be expanded to include small-molecule drugs like casdatifan earlier.

The Inflation Reduction Act (IRA) already creates a structural disadvantage for small-molecule drugs like your lead candidate, casdatifan, which is being studied in the Phase 3 PEAK-1 trial for kidney cancer. Under the IRA, small-molecule drugs become eligible for Medicare price negotiation after only 9 years post-approval, while biologics get 13 years. This four-year difference-the so-called 'pill penalty'-significantly lowers the effective patent life and return on investment for small-molecule R&D.

The current political battle is actually about fixing this penalty, not expanding it to be worse. In April 2025, an Executive Order was issued to seek reforms to end the pill penalty. Also, the bipartisan EPIC Act (H.R. 1492) was reintroduced in February 2025 to equalize the negotiation window to 13 years for small molecules. The risk here is that Congress fails to pass this fix, leaving casdatifan and other small-molecule assets subject to the shorter timeline. You're defintely watching legislative gridlock here, not an expansion of the negotiation power itself.

Executive orders encouraging domestic biopharma manufacturing to reduce reliance on foreign supply chains.

The political push to reshore pharmaceutical manufacturing is a clear opportunity for Arcus Biosciences, Inc. to de-risk its supply chain. On May 5, 2025, a new Executive Order, 'Regulatory Relief to Promote Domestic Production of Critical Medicines,' was signed. This order directs the FDA, EPA, and Army Corps of Engineers to streamline regulations and permitting for domestic facilities by November 1, 2025.

This is a dual-pronged political action. It aims to make it easier to build and expand manufacturing capacity in the US by reducing 'duplicative or unnecessary requirements'. Plus, the order calls for increasing inspections and fees on foreign manufacturing facilities, which makes overseas production less attractive and more costly for your competitors.

• Action: Streamline FDA/EPA review of domestic facilities.
• Impact: Lower regulatory barrier for US-based Active Pharmaceutical Ingredient (API) production.
• Counter-Action: Increase frequency and fees for foreign facility inspections.

Geopolitical tensions causing delays in global clinical trial enrollment and supply chain logistics.

Geopolitical tensions are translating directly into higher costs and slower trial execution, which impacts your timeline for key readouts like the casdatifan data expected in 2026. The US life sciences sector is facing headwinds from new tariffs imposed in early April 2025, with a baseline of 10% on most goods and rates soaring up to 25-50% for certain countries.

For a clinical-stage oncology company like Arcus Biosciences, Inc., this hits two areas hard:

1. Supply Chain: Tariffs on Active Pharmaceutical Ingredients (APIs) from major suppliers like China and India are increasing input costs. The global API market is estimated at $238.4 billion in 2025, and these tariffs inflate that cost base.
2. Clinical Trials: Geopolitical conflicts, such as the escalating Iran-Israel conflict, are causing disruptions. This instability forces sponsors to be more flexible and diverse, shifting clinical trial populations to other countries like India, which saw 944 trial initiations in Q2 2025. Since oncology remains the leading therapeutic area globally, with 1,674 trials launched or scheduled in Q2 2025, competition for sites and patients is intense, and any delay can push back a drug's market entry.

Here's the quick math: higher input tariffs mean higher R&D costs, and trial delays mean a longer burn rate against your $841 million cash position.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Economic factors

You need to understand that Arcus Biosciences' economic position in 2025 is a study in two parts: a fortress balance sheet funding a high-burn, high-potential oncology pipeline. The company is largely insulated from near-term biotech market volatility, but its long-term valuation hinges entirely on clinical trial success. It's a classic biotech bet: massive capital outlay now for a potential multi-billion dollar payoff later.

Strong cash position of over $841 million (Q3 2025) provides a runway into 2028, insulating against near-term biotech market volatility.

The most critical economic factor for Arcus Biosciences is its liquidity. As of September 30, 2025, the company reported a robust cash, cash equivalents, and marketable securities balance of $841 million. This is defintely a significant buffer in a biotech landscape where many firms are struggling for capital. This cash position, coupled with collaboration funding from Gilead Sciences, is projected to provide a runway through the initial pivotal data readouts for their key programs, including STAR-221, PRISM-1, and PEAK-1, effectively pushing out any immediate need for a dilutive equity raise. That's a huge advantage.

Here's the quick math on their financial stability as of Q3 2025:

• Cash & Equivalents (Q3 2025): Over $841 million
• Q3 2025 R&D Expense: $141 million
• Q3 2025 Net Loss: $135 million

Full-year 2025 GAAP revenue projected between $225 million and $235 million, primarily from the Gilead Sciences collaboration.

Arcus's top-line revenue is not from drug sales yet, but almost entirely from its strategic partnership with Gilead Sciences. The full-year 2025 GAAP revenue is projected to be between $225 million and $235 million. This collaboration revenue is crucial; it helps offset the massive research and development (R&D) costs and validates the pipeline's potential through a major pharmaceutical partner. Revenue is largely driven by reimbursements for shared expenses and milestone payments related to the co-development of molecules like domvanalimab and zimberelimab.

High R&D expenditure, with Q3 2025 expenses at $141 million, reflecting the cost of running multiple Phase 3 oncology trials.

The flip side of the strong cash position is the high burn rate, which is necessary to advance a late-stage oncology pipeline. R&D expenses for Q3 2025 were $141 million, an increase from the prior year, reflecting the costs associated with running multiple global Phase 3 trials. These include the PEAK-1 study for casdatifan in clear cell renal cell carcinoma (ccRCC) and the STAR-221 study for domvanalimab in upper gastrointestinal (GI) cancers. The company expects R&D expenses to start declining in the fourth quarter of 2025 as the domvanalimab Phase 3 development program costs decrease significantly.

Global market opportunity for their late-stage pipeline (e.g., ccRCC, gastric cancer) is estimated to exceed $24 billion.

The economic opportunity is enormous, which is why investors tolerate the current losses. The global market opportunity for Arcus's late-stage pipeline, which includes ccRCC and gastric cancer, is estimated to exceed $24 billion. This figure represents the total addressable market (TAM) for their potential first- and best-in-class therapies. For context, the global kidney cancer drugs market alone is estimated to be valued at $7.31 billion in 2025. Success in just one of these pivotal trials would fundamentally change the company's valuation from a clinical-stage biotech to a commercial-stage oncology player.

The broader economic environment in 2025 also presents both risks and opportunities for a company like Arcus. The macro picture matters a lot for biotech financing:

Mapping Near-Term Risks and Opportunities

The near-term economic risk is purely execution-based, not funding-based. The company is well-capitalized, but the high R&D spend means cash burn is significant. Operating cash flow is negative, indicating continued cash burn from operations. The money is there, but it's being spent fast. The opportunity is a massive re-rating of the stock upon positive clinical data, which would turn the R&D expense into a successful capital investment.

• Risk: Clinical trial costs are subject to inflation, potentially increasing the total Phase 3 spend.
• Opportunity: Positive Phase 3 data in 2026 would unlock the multi-billion dollar TAM, making the current $841 million cash reserve look like a shrewd investment.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Social factors

You're operating in a space where clinical success doesn't just mean scientific validation; it creates a powerful social mandate for adoption. The public appetite for transformative cancer treatments, especially in areas with high mortality, is persistent, but it's now directly counterbalanced by an intense and very real pressure on drug affordability. This social dynamic is a major factor shaping Arcus Biosciences' near-term commercial strategy.

The good news is that your pipeline is delivering the kind of data that cuts through the noise and drives physician and patient interest. The challenge, however, is mapping that clinical value to a sustainable commercial price point that satisfies payers and policymakers in the current 2025 environment. It's a tightrope walk between innovation and accessibility.

High, persistent demand for novel, less toxic cancer immunotherapies in high-unmet-need indications like pancreatic cancer and ccRCC.

The core social factor driving Arcus Biosciences' valuation is the desperate, unmet need in specific, aggressive cancers. Patients and physicians are actively seeking alternatives to older, highly toxic chemotherapy regimens, creating a significant pull for novel immunotherapy combinations. This demand is particularly acute in pancreatic cancer and clear cell renal cell carcinoma (ccRCC).

In pancreatic cancer, which has seen limited advancements in decades, your Phase 3 PRISM-1 trial for quemliclustat combined with standard chemotherapy is directly addressing this gap. Earlier data showed a median Overall Survival (OS) of 15.7 months for quemliclustat-based regimens, which is a meaningful improvement over historical chemotherapy benchmarks alone. For ccRCC, your HIF-2α inhibitor, casdatifan, is being developed as a potential best-in-class therapy. In a pooled analysis of 121 patients with late-line kidney cancer, casdatifan monotherapy demonstrated a median Progression-Free Survival (mPFS) of 12.2 months, with an 18-month landmark PFS of 43%. That's a clear signal of therapeutic differentiation that patients are looking for.

Public and political pressure for drug affordability, which directly impacts commercial pricing models upon eventual approval.

Honesty, the social and political climate around drug pricing in the US is the single biggest headwind for any biotech nearing commercialization in 2025. The median annual cost of new cancer drugs launched in 2024 was a staggering $411,855. This high cost fuels public outcry and legislative action, forcing companies like Arcus Biosciences to think critically about commercial strategy years before launch.

The Inflation Reduction Act (IRA) is the most concrete manifestation of this pressure. For 2025, the IRA has capped annual out-of-pocket drug costs for Medicare Part D beneficiaries at just $2,000. While this helps patient adherence, it shifts the financial burden to payers and manufacturers, creating a tougher negotiation environment for new, high-value oncology drugs. The total US spending on anticancer therapies, projected to hit $180 billion by 2028, ensures this pressure won't let up.

Here's the quick math on the affordability challenge:

Clinical data showing improved patient outcomes, like the 26.7 months median Overall Survival (OS) in the EDGE-Gastric study, drives physician adoption.

In oncology, survival data is the ultimate social currency. When a treatment shows a clear, significant survival advantage, it immediately changes the standard of care and drives physician adoption. The Phase 2 EDGE-Gastric study, combining domvanalimab, zimberelimab, and chemotherapy in advanced gastroesophageal adenocarcinomas, is a prime example.

The reported median Overall Survival (OS) of 26.7 months is a powerful data point that surpasses standard expectations for first-line therapy in this disease. This kind of outcome creates buzz among oncologists and moves the needle more than any marketing effort ever could. The high confirmed Objective Response Rate (ORR) of 59% in the overall patient group further reinforces the therapeutic benefit, making it an easy choice for clinicians to recommend the ongoing Phase 3 STAR-221 trial regimen. Good data defintely drives patient interest.

Increasing patient willingness to participate in combination therapy trials, especially for refractory or late-line cancers.

The social acceptance of complex, multi-drug combination trials is increasing, especially among patients with refractory (treatment-resistant) or late-line cancers who have exhausted standard options. For these patients, the potential for a meaningful survival extension outweighs the risk of a complex regimen. This willingness is a tailwind for Arcus Biosciences' development strategy, which is heavily focused on combination therapies.

The successful enrollment and data from Arcus's recent combination trials demonstrate this trend:

• The EDGE-Gastric study, which combined three agents (domvanalimab, zimberelimab, and chemotherapy), successfully enrolled 41 patients.
• The ARC-20 study, evaluating casdatifan plus cabozantinib in immunotherapy-experienced ccRCC, showed a confirmed Overall Response Rate (ORR) of 46% in patients with sufficient follow-up, a compelling result for late-line patients.
• The Phase 3 PRISM-1 trial for quemliclustat in first-line metastatic pancreatic cancer is expected to be fully enrolled by the end of 2025, indicating strong physician and patient participation in this high-risk population.

This acceptance allows Arcus to rapidly test and validate complex, biology-driven combinations, accelerating the path to potential regulatory approval.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Technological factors

The core of Arcus Biosciences' value proposition is its ability to engineer and rapidly advance differentiated molecules, but this technology edge is constantly challenged by competitors who are also refining the standard of care. Your focus should be on how Arcus's platform for novel targets and complex combination trials can outpace the market's shift toward next-generation, patient-friendly formulations.

Deep pipeline focus on novel, differentiated mechanisms like the HIF-2$\alpha$ inhibitor casdatifan and the anti-TIGIT antibody domvanalimab

Arcus is defintely pushing the envelope by focusing on less-tapped, high-potential targets. Their lead assets, casdatifan and domvanalimab, are designed to be best-in-class, not just me-too drugs. Casdatifan, the small-molecule HIF-2$\alpha$ inhibitor, is showing compelling data in clear cell renal cell carcinoma (ccRCC). For 121 patients with late-line kidney cancer, pooled analysis of casdatifan monotherapy showed a median progression-free survival (mPFS) of 12.2 months, which is a meaningful clinical benchmark.

In the highly competitive TIGIT space, domvanalimab is positioned as the most clinically advanced Fc-silent anti-TIGIT antibody. The Phase 2 EDGE-Gastric study data, released in October 2025, showed the combination with zimberelimab and chemotherapy achieved a median overall survival (OS) of 26.7 months in first-line upper gastrointestinal adenocarcinomas. That's a strong signal, and it validates the company's small-molecule and antibody discovery engine.

Rapid advancement of combination therapy platforms, requiring complex trial design and biomarker-driven patient selection

The future of oncology is combination therapy, and Arcus is structured around this reality. They are running complex, multi-cohort trials like ARC-20 and the Phase 3 PEAK-1, which started in mid-2025, evaluating casdatifan plus cabozantinib in immunotherapy (IO)-experienced ccRCC. Here's the quick math: the combination showed a confirmed Overall Response Rate (ORR) of 46% in IO-experienced ccRCC patients in the ARC-20 trial, significantly higher than a competitor's combination data in a similar setting.

This approach demands sophisticated biomarker development and patient selection to ensure the right drug combination reaches the right patient. The Phase 3 STAR-221 trial for domvanalimab, for instance, is in PD-L1 all-comer first-line metastatic upper GI adenocarcinomas, which is a clear example of using a specific biomarker (PD-L1) to define the trial population. The complexity of managing these global combination studies is reflected in the company's Q3 2025 Research and Development (R&D) Expenses of $141 million.

Expansion of the pipeline into inflammatory and autoimmune diseases, diversifying risk beyond the competitive oncology space

A smart technological move to mitigate the high-risk, high-reward nature of oncology is pipeline diversification. In October 2025, Arcus unveiled five new research and preclinical programs targeting inflammatory and autoimmune diseases (I&I). This expansion leverages their small-molecule expertise, applying it to large, chronic markets like psoriasis and rheumatoid arthritis.

The initial I&I focus includes a small molecule targeting MRGPRX2, which is expected to enter the clinic in 2026. This shift is crucial because while oncology is a $24 billion+ market opportunity for their late-stage programs, I&I offers a different risk profile and revenue stream pathway. You are seeing a deliberate technological pivot to broaden the base.

• MRGPRX2 small-molecule inhibitor: Potential treatment for atopic dermatitis.
• TNF-$\alpha$ (TNFR1) small-molecule inhibitor: Targets rheumatoid arthritis and psoriasis.
• CCR6 small-molecule inhibitor: Focus on psoriasis treatment.
• CD89 monoclonal antibody: Potential for rheumatoid arthritis.

Competitor advancements in next-generation immune checkpoint inhibitors (e.g., subcutaneous PD-1 formulations) raising the bar for market entry

The technology bar for new oncology drugs is rising fast, especially in the immune checkpoint inhibitor (ICI) market, which is valued at approximately $48.69 billion in 2025. The biggest technological challenge isn't just efficacy, but patient convenience.

Competitors like Roche and Bristol Myers Squibb have already secured FDA approval for next-generation subcutaneous (SC) formulations of their established PD-L1 and PD-1 inhibitors, respectively. Roche's Tecentriq Hybreza (atezolizumab and hyaluronidase) was approved in September 2024, and Bristol Myers Squibb's Opdivo Qvantig (nivolumab and hyaluronidase) in December 2024. These SC formulations cut administration time from hours to minutes, setting a new standard for patient care that Arcus's intravenous (IV) TIGIT combinations will eventually have to compete with or match. Plus, the market is quickly moving beyond single-target PD-1/PD-L1 to novel targets like TIGIT, TIM-3, and bispecific antibodies, like AstraZeneca's volrustomig, which Arcus is already collaborating with.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Legal factors

Stringent US Food and Drug Administration (FDA) requirements for accelerated approval pathways, especially for combination therapies.

The regulatory path for Arcus Biosciences is getting defintely tighter, especially for combination therapies like the one being studied in the PEAK-1 trial. The US Food and Drug Administration (FDA) issued new draft guidance in late 2024 and early 2025 on the Accelerated Approval Program, focusing heavily on the need for confirmatory trials to be underway before approval, or face expedited withdrawal.

For combination regimens, the FDA's July 2025 draft guidance is clear: you must demonstrate the contribution of each drug's effect to the overall clinical benefit. This is a high bar for the casdatifan plus cabozantinib combination in the Phase 3 PEAK-1 study, and the casdatifan plus volrustomig combination in the eVOLVE-RCC02 study. The pressure is on to ensure the Phase 3 trials are robust enough to meet this new, more stringent standard, moving beyond the promising Phase 1/1b data from ARC-20, which showed a 46% confirmed Overall Response Rate (ORR) for the casdatifan/cabozantinib combination in IO-experienced patients.

Here's the quick look at the regulatory landscape's impact on Arcus's key programs:

• PEAK-1 (Casdatifan + Cabozantinib): Must clearly show casdatifan's added benefit over cabozantinib monotherapy.
• eTID (e.g., Etrumadenant): FDA feedback in March 2025 confirmed a registrational path for etrumadenant, but the Phase 3 was ultimately not pursued, showing the high capital and strategic hurdles even with positive regulatory input.
• New FDA Guidance: Emphasizes timely completion of confirmatory trials to verify clinical benefit.

Need for robust intellectual property (IP) protection and patent life extension for key assets like casdatifan against generic competition.

With Gilead Sciences allowing its option rights to casdatifan to expire in early 2025, Arcus Biosciences now retains full ownership of this potential best-in-class asset, which management estimates has a $5 billion market opportunity. This makes the intellectual property (IP) portfolio the single most valuable legal shield for the company.

The core IP for casdatifan is anchored by key composition-of-matter patents. For example, the foundational US patent, US11407712B2, was granted in August 2022. While patent term extension (PTE) under the Hatch-Waxman Act can add up to five years to the life of a patent, Arcus must aggressively defend and manage its global IP portfolio to maximize exclusivity against generic competitors.

The estimated patent expiration timeline for related filings is a critical metric:

This long-term IP protection is the financial bedrock that supports the company's $225 million to $235 million full-year 2025 revenue guidance.

Compliance burdens for global Phase 3 trials (e.g., PEAK-1, PRISM-1) across multiple regulatory jurisdictions.

Running multi-regional, registrational Phase 3 trials like PEAK-1 (casdatifan) and PRISM-1 (quemliclustat) significantly increases the legal and operational compliance burden. These trials involve sites across numerous countries, each with its own regulatory authority, ethics committees, and data privacy laws (like GDPR in Europe).

The complexity is managed through strategic partnerships. For instance, in the PRISM-1 study for quemliclustat, partner Taiho is responsible for operationalizing the Japanese sites and reimbursing Arcus Biosciences for their portion of the global study costs. Similarly, the eVOLVE-RCC02 study is sponsored and operationalized by AstraZeneca. This outsourcing helps distribute the compliance risk but requires rigorous oversight of partner adherence to Good Clinical Practice (GCP) standards globally.

Ongoing legal scrutiny over clinical trial data integrity and reporting standards in the biopharma sector.

The biopharma sector faces constant, intense scrutiny over clinical trial data integrity, especially following high-profile regulatory actions against other firms. For Arcus Biosciences, this means every data readout, including the 26.7 months median Overall Survival (OS) data from the Phase 2 EDGE-Gastric study presented at the 2025 ESMO Congress, must be impeccable.

The legal risk is not just about fraud; it is about the reliability and consistency of the data. Arcus's own forward-looking statements acknowledge the risk that 'interim clinical data not being replicated in other studies for casdatifan' could cause material delays or failure, which is a key data integrity concern in the eyes of regulators and investors. The Audit Committee is tasked with reviewing the adequacy of disclosure controls and procedures and compliance with legal and regulatory requirements, confirming this is a core governance focus.

You need to be aware that the regulatory environment demands complete transparency, so any discrepancy in the data from the 121 patients in the ARC-20 casdatifan monotherapy cohorts, for example, could trigger significant regulatory delays or investigations.

Arcus Biosciences, Inc. (RCUS) - PESTLE Analysis: Environmental factors

You might not think of a clinical-stage biotech like Arcus Biosciences, Inc. as a major environmental player, but the reality is that the Environmental factor is a significant, costly, and non-negotiable part of the Research and Development (R&D) budget. The core issue is waste: specifically, the highly regulated disposal of experimental drugs and biohazardous materials from clinical trials.

For a company that reported R&D expenses of $141 million in the third quarter of 2025, compliance costs are a constant drain on cash. Your focus here must be on mitigating regulatory risk and demonstrating a clear, auditable trail for every compound, because a single compliance failure can lead to massive fines and program delays.

Strict US Environmental Protection Agency (EPA) and Resource Conservation and Recovery Act (RCRA) regulations for disposing of investigational drug waste

The EPA and the Resource Conservation and Recovery Act (RCRA) treat unused or expired investigational drug products as hazardous waste, which means Arcus Biosciences must follow stringent cradle-to-grave tracking. This is a complex, multi-state logistical challenge, not a simple trash pickup.

The entire process is now managed through the EPA's electronic Manifest System (e-Manifest), which is fully operational in fiscal year 2025. This system tracks every shipment of hazardous waste from the generator (Arcus) to the final disposal facility, and the EPA anticipates collecting approximately $20.0 million in user fees for this system in FY 2025. That electronic trail is defintely a double-edged sword: it reduces paperwork burden but creates a perfect audit log for regulators.

Need for specialized, high-heat incineration for biohazardous clinical trial materials and unused/expired drug product

The disposal of biohazardous clinical trial materials-like used syringes, patient samples, or any materials contaminated with the drug-requires specialized treatment, usually high-heat incineration. This process is necessary to ensure the complete destruction of the compound and any potential pathogens, often requiring temperatures between 850°C and 1200°C.

This is where the cost hits hard. Disposing of regulated medical waste (RMW) is estimated to cost anywhere from 7 to 10 times more than disposing of regular solid waste, so any poor segregation practices at a clinical site immediately inflate your R&D overhead. You're paying a premium for every clinical site that doesn't sort its trash perfectly.

Here is a quick breakdown of the core waste compliance mechanisms:

Investor focus on Environmental, Social, and Governance (ESG) criteria, pressuring the company to document supply chain and R&D sustainability

While Arcus Biosciences is a clinical-stage company, institutional investors like BlackRock still scrutinize its Environmental, Social, and Governance (ESG) profile. The focus is less on carbon footprint and more on the E-risk factors inherent in R&D, like waste management and chemical use. As of September 3, 2025, Arcus Biosciences has an ESG Risk Rating from Sustainalytics, indicating that investors are actively measuring this exposure.

To be fair, the broader investment landscape is shifting. BlackRock, for example, has significantly reduced its support for prescriptive environmental and social shareholder proposals, backing only 4% of such proposals from July 2023 to June 2024, down from 47% in 2021. This means the pressure is less about hitting arbitrary green targets and more about showing that the company is effectively managing the material financial risk of non-compliance.

• Manage R&D waste as a financial risk, not just a compliance issue.
• Document all waste streams clearly for ESG reporting.
• Ensure compliance is embedded in all clinical trial agreements.

Compliance with Drug Enforcement Administration (DEA) rules for the secure handling and destruction of any controlled substances used in research

If any of Arcus Biosciences' investigational compounds are classified as controlled substances (Schedule I-V), the DEA imposes another layer of strict, non-negotiable regulation. The DEA requires a method of destruction that renders the substance 'non-retrievable,' permanently altering its physical or chemical condition to prevent diversion.

This involves a chain of custody that must be documented using specific forms, such as DEA Form 41, which is the official record of controlled substances destroyed. Most companies use licensed reverse distributors for this, adding cost and complexity to the supply chain management, but it is the only way to ensure security and compliance. You simply cannot afford a breach in the controlled substance chain of custody.