Arvinas, Inc. Q3 FY2025 Earnings Call

Thank you for joining us for Arvinas' Third Quarter 2025 Earnings Call. Please note that this call is being recorded. Now, I will hand the call over to Mr. Jeff Boyle. You may proceed.

Good morning, everyone, and thank you for joining us. Earlier today, we issued a press release with our third quarter 2025 financial results, which is available in the Investor 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 discussions contain forward-looking statements that involve risks, uncertainties, and assumptions, which are outlined in today's press release and in the company's recent filings with the U.S. Securities and Exchange Commission, which I urge you to read. Our actual results may differ materially from what is discussed on today's call. A replay of today's call as well as an updated corporate deck will be available on the Investor and Media section of our website. And now I'll turn the call over to John.

Thanks, Jeff. Good morning, everyone, and thank you for joining us today. As highlighted in our third quarter earnings release issued earlier this morning, this has been a dynamic and productive period for Arvinas marked by meaningful progress across both our corporate initiatives and clinical development programs. During the quarter, we announced significant developments, both in our pipeline and enhancing efficiency across our organization, all geared at driving value from our portfolio to deliver benefit to patients and value to shareholders. Our deep pipeline provides multiple opportunities for value creation, as we work to address the largest areas of significant unmet need in oncology and neurology. We have entered the beginning of a data-rich period with multiple readouts from our early-stage clinical programs, including recent clinical data from ARV-102, our LRRK2 degrader and preclinical data from ARV-806, our KRAS G12D degrader. We also presented the first preclinical data from ARV-027, our promising new clinical candidate that targets polyglutamine-expanded androgen receptor or polyQ-AR, the root cause of spinal bulbar muscular atrophy or SBMA. In addition, we also anticipate sharing preclinical data from our BCL6 degrader, ARV-393, at the ASH Conference in December and preclinical data from our new HPK1 degrader, ARV-6723 later this week at the SITC Conference. Noah will also share a promising update from our ongoing Phase I monotherapy trial with ARV-393 later in the call today. We have a strong track record of translating promising preclinical results into important successes in the clinic with a platform that has consistently shown its versatility and promise. We continue to build on that record with multiple ongoing and planned clinical trials in areas of high unmet need, a pipeline of high-value assets, a strong research engine, and cash on hand into the second half of 2028 that gives us financial and strategic flexibility. In September, we announced that we and Pfizer will jointly select a third party for the commercialization and potential further development of vepdegestrant with the goal of rapidly bringing it to patients, if approved. Vepdeg's new drug application is currently under review by the FDA, and the agency has issued a PDUFA action date of June 5, 2026. Our goal is to have a partner in place before this date to make sure that Vepdeg, if approved, is launch-ready as a potentially best-in-class therapeutic option for ER-positive/HER2-negative advanced breast cancer in the second-line ESR1 mutant setting of ARV-393. Noah?

Thanks, John, and good morning, everyone. I'll begin with ARV-102, our oral PROTAC LRRK2 degrader, specifically designed to be brain penetrant. Enthusiasm from key opinion leaders and investigators, most recently about the biomarker data we presented at MDS, has further strengthened our belief that this is a truly differentiated program. Let me begin with some background about ARV-102's target and what has come into focus as potential diseases of interest. LRRK2 is a multi-domain protein with three key functions of kinase, GTPase, and scaffolding activities. These activities help it regulate endolysosomal trafficking. When LRRK2 expression or activity is elevated, it disrupts lysosomal function, impairing the clearance of aggregated pathologic proteins that would normally be degraded through the pathway. Degrading LRRK2 may restore endolysosomal homeostasis and provide therapeutic benefit in disorders characterized by lysosomal dysfunction. Unlike inhibitors that only inhibit LRRK2's kinase activity intermittently, ARV-102 eliminates the entire LRRK2 protein. This is important because the three key functions, not just kinase activity, may be linked to neuroinflammation and lysosome dysfunction. Increased activity, scaffolding, and expression of LRRK2 have been implicated in the pathogenesis of neurological diseases, including idiopathic Parkinson's disease, a prevalent neurodegenerative disease, and progressive supranuclear palsy or PSP, a rapidly progressing neurodegenerative disease that is typically fatal within five to seven years of diagnosis. We believe that eliminating all three functions of LRRK2 through PROTAC-mediated degradation offers the potential for deeper and more durable therapeutic benefit versus traditional inhibitors. At the MDS Conference last month, we were pleased to share data from two ongoing Phase I clinical trials with ARV-102: one in healthy volunteers and one in patients with Parkinson's disease. Both trials included single ascending and multiple dose portions. ARV-102 is generally well tolerated in both trials. In the healthy volunteer study, ARV-102 was well tolerated at single doses up to 200 milligrams and multiple daily doses up to 80 milligrams with no discontinuations due to adverse events or serious adverse events observed in the study population. In the Parkinson's disease study, single doses of ARV-102 at 50 milligrams or 200 milligrams were well tolerated with only mild treatment-related adverse events, which were generally lumbar puncture procedure related and with no serious adverse events. Pharmacokinetic data were also excellent across both trials. ARV-102 demonstrated dose-dependent PK in both periphery and the CSF, the latter indicating brain penetration. In terms of pharmacodynamic effects in healthy volunteers, repeated daily dosing of ARV-102 led to LRRK2 reductions of up to 90% in peripheral blood mononuclear cells or PBMCs and more than 50% in the CSF. Repeated daily doses of ARV-102 resulted in reduced concentrations of phospho-Rab10T73 in PBMCs and urine concentrations of BMP. Both of these are important biomarkers for modulation of the lysosomal pathway downstream of LRRK2. In patients with Parkinson's, we showed that single doses of ARV-102 resulted in median PBMC LRRK2 protein reductions of 86% with the 50-milligram dose and 97% with the 200-milligram dose. Perhaps most interestingly of all, in healthy volunteers treated with 80 milligrams of ARV-102 once daily for 14 days, unbiased proteomic analysis of CSF showed decreases in many lysosomal pathway markers such as GPNMB and neuroinflammatory microglial markers like CD68. A recently published proteomics analysis showed the same panel of biomarkers was elevated in patients with LRRK2-related Parkinson's disease. We are aware of inhibitor data showing the movement of some of these biomarkers, but only in patients with Parkinson's disease and only after at least a month of treatment to engage the intended disease pathway even in healthy volunteers where the biomarkers would not be expected to be elevated and after only 14 days of treatment is direct evidence that our approach is working as designed. This rapid pathway biomarker response suggests that our total protein degradation approach may have best-in-class impact on underlying disease processes compared to kinase-only targeting inhibitors. We believe that in totality, our data to date set a very high bar and further strengthen our belief in the promise of ARV-102. The multiple dose cohort of our trial in Parkinson's patients is ongoing, and we look forward to sharing data, including CSF LRRK2 degradation data, at a medical conference in 2026. We also intend to initiate a Phase Ib trial in patients with PSP in the first half of 2026. I'll now turn to ARV-393, our investigational oral PROTAC designed to degrade B-cell lymphoma 6 protein or BCL6. 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 an exciting therapeutic target with initial clinical validation emerging. With its iterative activity, ARV-393 potently and rapidly degrades the BCL6 protein, which is critical to overcoming its rapid resynthesis rate and sustaining antitumor activity. Preclinically, ARV-393 has shown robust in-vitro potency and in-vivo efficacy as a monotherapy. And earlier this year, we presented preclinical data showing enhanced antitumor activity with ARV-393 in combination with five classes of small molecule inhibitors in models of aggressive diffuse large B-cell lymphoma or DLBCL. Our development plan for ARV-393 includes combination strategies in DLBCL. And at next month's American Society of Hematology Annual Meeting, we will present new preclinical data showing the combinability of ARV-393 with glofitamab, a CD20xCD3 bispecific antibody, and an emerging standard of care for DLBCL. BCL6 degradation has the potential 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 intend to initiate a combination trial with glofitamab next year and look forward to updating you on our progress. Turning to our clinical progress to date, enrollments in our Phase I monotherapy trial is ongoing. This is a first-in-human dose escalation trial, and we have not yet achieved the predicted efficacious exposure level. However, this morning, I'm pleased to report that even in exposure levels below those predicted to be efficacious, we have already seen responses in early cohorts in both B- and T-cell lymphomas. We also see evidence of robust BCL6 degradation and the safety profile of ARV-393 has supported continued dose escalation. We are very pleased with these early data, which we believe support an emerging and differentiated therapeutic benefit of ARV-393. We look forward to sharing additional data from the Phase I trial at a medical congress in 2026. With that, I'll now turn the call over to Angela.

Thanks, Noah, and good morning, everyone. I'm pleased to share compelling preclinical data we recently presented that reinforces our confidence in our ability to deliver differentiated treatments across our oncology and neuroscience pipeline. I'll begin with ARV-806, our novel PROTAC degrader targeting KRAS G12D. KRAS G12D is a well-characterized oncogenic driver associated with poor prognosis and recalcitrant to standard treatments across several major tumor types, including pancreatic, colorectal and non-small cell lung cancers. There are currently no approved targeted therapies for KRAS G12D. At the Triple Meeting in October, we shared preclinical data highlighting the high potency of ARV-806 and its clear differentiation from both KRAS inhibitors and degraders currently in the clinic. These preclinical data showed dose-dependent robust antitumor activity with regressions across preclinical models of KRAS G12D mutant cancers. ARV-806 forms productive ternary complexes with the on-and-off states of KRAS G12D, demonstrated in vitro picomolar potency with near complete degradation and high selectivity. ARV-806 demonstrates antiproliferative activity approximately 25x greater than KRAS inhibitors and the leading clinical stage degrader. Importantly, ARV-806 induces durable degradation greater than 90% for seven days after a single dose with efficacy across pancreatic, colorectal, and lung cancer models. We also presented early and very promising preclinical data from our oral pan-KRAS degrader and look forward to sharing more as this program advances. We are rapidly enrolling a Phase I clinical trial of ARV-806, reflecting strong interest from clinical investigators and underscoring the high unmet need for effective KRAS-targeted therapies. We look forward to sharing initial clinical data from this trial next year. Finally, I'd like to briefly mention updates from two other promising programs that you'll hear more about in 2026. First, at World Muscle in October, we shared exciting preclinical data for ARV-027, a PROTAC degrader designed to target polyglutamine-expanded androgen receptor or polyQ-AR in skeletal muscle. This degrader will be developed for patients with spinal and bulbar muscular atrophy or SBMA, a rare genetically defined neuromuscular disease with no approved treatments and significant unmet need. Second, this week at SITC, we will introduce our first immuno-oncology focused PROTAC degrader, ARV-6723. ARV-6723 targets HPK1, which functions as a negative regulator of T-cell signaling causing tumor microenvironment immune suppression and could be relevant for numerous solid tumors. Our preclinical work to date suggests that degrading HPK1 leads to differentiated biology versus HPK1 inhibitors and anti-PD-1 therapies. We anticipate beginning first-in-human studies for ARV-027 and ARV-6723 in 2026. As we begin those studies, we look forward to providing full updates on the unmet need for each disease, the rationale for each high-impact target, and why we believe that our PROTAC degraders will represent highly differentiated therapies for patients. With that, I'll turn the call over to Andrew to review our quarterly financial information.

Thanks, Angela, and good morning, everyone. I'm pleased to provide financial highlights for the third quarter ended September 30, 2025, and expand on our approach to capital allocation, capital returns, and development strategy. As a reminder, detailed financial results for the third quarter are included in the press release we shared this morning. I'll begin by briefly touching on some key financial highlights for the third quarter of 2025. At the end of the third quarter, we had approximately $787.6 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 three months ended September 30, 2025, totaled $41.9 million compared to $102.4 million for the three months ended September 30, 2024. The decrease of $60.5 million was driven by the Novartis License Agreement, which was entered into during the second quarter of 2024 with revenue recognized through the end of 2024, offset by the recognition of a milestone payment from Novartis of $20 million this quarter as part of the same agreement. General and administrative expenses were $21 million in the third quarter, compared to $75.8 million for the same period of 2024. The decrease of $54.8 million was primarily due to a decrease of $43.4 million from the termination of our lease of 101 College Street in August 2024, a decrease in personnel and infrastructure-related costs of $7.3 million and professional fees of $3.6 million. Total non-GAAP G&A for the quarter was $14.6 million, compared with $64.8 million in the prior year. Research and development expenses were $64.7 million in the third quarter compared to $86.9 million for the same period of 2024. The decrease of $22.2 million was primarily driven by a decrease in the vepdeg program of $5.4 million, a decrease in the luxdeg program of $4.7 million, and a decrease in personnel expenses and non-program-specific expenses of $15.1 million, offset by an increase in the KRAS program of $4.3 million. Total non-GAAP R&D for the quarter was $56.9 million compared to $73.2 million in the prior quarter. Total non-GAAP expenses were $71.5 million in the quarter. We expect expenses to continue to decline as we work with Pfizer to ramp down our spend on vepdeg and as our cost reduction programs take full effect. Our goal is to continue with a quarterly run rate spend below $75 million, which will allow us to manage non-GAAP expenses below $300 million in fiscal year 2026. In September, we announced that our Board had authorized the repurchase of up to $100 million of our outstanding common stock. This authorization underscores the Board's confidence in our long-term strategy and its belief that our current share price is undervalued relative to our long-term opportunity. As of the end of September, we have bought back approximately 2.56 million shares at an average share price of $7.91 per share. Details of our stock repurchase program can be found in our 10-Q. At the same time, we announced further cost reductions that allowed us to maintain our prior cash runway guidance into the second half of 2028. We remain committed to 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 goal of progressing our very promising early pipeline. With that, I'll turn the call over to John for closing remarks.

Thanks, Andrew. We are focused on continuing to deliver innovative and differentiated assets in areas of high unmet need. We are operating with scientific rigor and building on our proven track record of success from discovery to clinical to collaborations. We have a deep pipeline with multiple clinical candidates for near-, mid-, and long-term value creation and the potential to be differentiated with critically important therapies for patients. Arvinas is entering a pivotal phase in its growth trajectory. Our clinical pipeline offers a rich set of catalysts throughout the balance of the year and into 2026 with multiple study initiations and data readouts anticipated across our neuroscience and oncology franchises. With our PDUFA date now confirmed for next year, we are approaching a historic moment with the potential for the first ever approval of our PROTAC therapy. We are well positioned to deliver significant value for our shareholders, our partners, and for the patients we serve. With that, I'll turn the call over to Jeff to begin the Q&A portion of the call.

Before I turn the call over to the operator, I'm going to ask that you limit yourself to one question per cycle to make sure we're able to give everyone the appropriate time. You can feel free to join the queue afterwards for a follow-up question. So with that, operator, can you please open up the queue?

Your first question comes from the line of Etzer Darout with Barclays.

I have a quick question about the BCL6 degrader program. We are expecting some updated data from ASH. Could you comment on the differentiating factors they are exploring and discuss the dosing profile you envision for the molecule? Additionally, are there any long-term differentiation opportunities you see for this molecule?

Great. Thank you so much for the question. And yes, we're very excited about our BCL6 program, and we do believe that we have a profile that will differentiate itself as the compound continues to be developed. Noah, do you want to add some comments?

Sure. Thanks, John, and thanks for the question. Yes, the drug is being dosed once daily as an oral medication. Differentiation occurs on a couple of different levels. Firstly, we have already demonstrated and will continue to show at ASH a differentiated profile for combinations of the drug and even for monotherapy in preclinical settings. We have noticed that we can achieve complete responses in various models, while competitors are seeing only tumor growth inhibition. In our program, we are explicitly focused on monotherapy for AITL and are interested in developing a combination with the bispecific for DLBCL. Currently, several competitors have entered the market, with one already reporting data while others appear to have just filed their IND. We believe, and have shared data indicating, that we have monotherapy activity in T-cell and B-cells, which has not been reported by the competitor that has shared B-cell malignancy responses. This presents a potential point of differentiation for the future.

Your next question comes from the line of Yigal Nochomovitz with Citi.

This is Caroline on for Yigal. On your LRRK2 program, can you tell us about the first types of signals you'd be looking for in the Parkinson's disease MAD Phase I? And how long do you hypothesize you'll need to dose for the PK effects that you've already observed in healthy volunteers in Parkinson's patients to translate to clinical benefit?

Yes. No, thank you, Caroline. Great question, and I'll hand back to Noah.

Thank you, John, and Caroline. I appreciate the question. We're excited about our LRRK2 degrader and the positive feedback from a recent conference at MDS. We're currently advancing through a Phase I study for Parkinson's disease that involves 28 days of dosing. We expect this to primarily produce biomarker-related data, although we may also begin to gather some clinical efficacy data, which isn’t typically anticipated within this timeframe. We've already shown pathway engagement in ways that competitor LRRK2 inhibitors have not reported. In healthy volunteers, we've impacted endolysosomal trafficking and neuroinflammation through microglial pathways. As we examine our Parkinson's disease patients, our goal is to observe patients with significantly elevated baseline levels of LRRK2 in their cerebrospinal fluid. This indicates heightened activation of those pathways. It will be crucial to see how the degradation we observed in healthy volunteers translates to this Parkinson's disease population and how we can measure pathway engagement. We plan to provide an update on those pathway markers early next year. The next step for clinical data will occur after more than 28 days of treatment, for which we are progressing through the chronic toxicology study. As we submit our IND next year to advance into Progressive Supranuclear Palsy, we are preparing for continued chronic treatment of patients, which will give us an opportunity to demonstrate clinical benefits in PSP and possibly Parkinson's disease.

Your next question comes from the line of Michael Schmidt with Guggenheim.

This is Sarah on for Michael. I wanted to ask about your KRAS G12D. You've mentioned before and we have seen evidence of KRAS amplification as a resistance mechanism to inhibitors, and the possibility that the iterative activity of a PROTAC might address that. I wanted to know if you plan to test ARV-806 or perhaps even a pan-KRAS in the clinic with a KRAS amplified population.

Yes. Great questions, Sarah. I'm going to ask both Angela Cacace, our CSO, and Noah to give you two parts to that answer.

Great. Thank you for the question. We have been studying our G12D degrader ARV-806 in resistant settings. We see amplification of KRAS G12D, and we can durably repress KRAS in all conditions. For our pan-KRAS degrader, we've also been analyzing the wild-type amplified setting and are pleased to report some early data indicating significant tumor growth inhibition. In certain PDX models, we've also observed regression. We are advancing rapidly with our pan-KRAS degrader program, and I'll turn it over to Noah for the clinical perspective.

Thank you, Angela. Sarah, regarding your question about amplification and our observations, in our ongoing Phase I study, we have excluded patients who have previously received KRAS inhibitors. Therefore, we will not encounter this in the dose escalation phase of our study, as we aim for the clearest signal possible. This decision is based on sound reasoning that anyone would understand. Over the past year, we've gathered insights from external data indicating that amplification often serves as a key mechanism of resistance following KRAS inhibitor treatment. As Angela mentioned, we've conducted research in our models to demonstrate that this presents a significant opportunity for us. We anticipate providing updates throughout the next year concerning our potential extensions in targeting in this area. The science behind this is indeed compelling.

Your next question comes from the line of Derek Archila with Wells Fargo.

This is Hal calling in for Derek from Wells Fargo. So I guess we have a question on the ARV-102. For the SAD data, do you see any CSF degradation for LRRK2? And then for the MAD data next year in 2026, just wanted to see do you have any expectations? Is more than 50% in healthy volunteer you wanted to repeat or just some expectation for us to set up?

So thanks for the question. Absolutely. So Noah, do you want to take that?

Sure. We've indicated that we will share our LRRK2 degradation data once we finish the MAD in Parkinson's disease patients. That’s essentially what we will be guiding towards for next year.

Your next question comes from the line of Jeet Mukherjee with BTIG.

Just coming back to ARV-806. Based on your learnings from other G12D inhibitors and degraders in development, are there any molecular features or attributes that may be correlated to or linked to the GI tolerability and elevated liver enzymes we've seen with some of these molecules? And if yes, does ARV-806 avoid those features?

Yes. Thanks for the question. I think certainly our G12D compound has a very exciting profile. Obviously, the molecule is different from other G12D inhibitors. Maybe Angela, do you want to discuss what features you think contribute to the profile that we see?

Sure. So as we described, our ARV-806 G12D PROTAC really does have some very nice features from a molecular perspective. It binds to both the on- and the off-state and is 25x more potent than all mechanisms that are currently in the clinic that we've tested to date. But given what we've seen with the clinical degrader, we're also several orders of magnitude more potent at engaging the target and degrading the target durably. So with that in mind, we expect to have greater potency which should translate clinically. And I'll let Noah go ahead and take the liver and other questions.

Yes. So I think our strategy there right now based on the science that's available is to win on that potency issue, meaning we already know from a competitor's degrader that they were limited in their ability to escalate their dose because of transaminitis that was seen. So the fact that we can engage our target at much lower concentrations suggests that we have the potential not to run into those types of toxicities and still get the significant degradation we're shooting for. So we're looking for more than 80% degradation of our target. We could probably do significantly better than that. And we'll provide updates as we go through our dose escalation cohorts.

Your next question comes from the line of Sudan Loganathan with Stephens Inc.

This is Keith Alve on behalf of Sudan. I have a quick question about ARV-806. Are you evaluating how PROTAC-mediated KRAS G12D degradation may complement or differ from combination strategies like the cetuximab pairing observed with Verastem's KRAS12 G12D inhibitor?

Yes. So preclinically, we have evaluated combination with anti-EGFR inhibitors like cetuximab. And so we think this is a big advantage because we have a selective approach to degrading G12D KRAS. We combine very well in that case, and we'll be sharing the preclinical data that we've generated in those combinations within the year. Noah?

I would like to highlight that there is growing evidence suggesting that using combinations of inhibitors with chemotherapy, and as you noted, with an EGFR inhibitor, can result in cumulative toxicity, which may limit the use of this drug. However, this also presents an opportunity for us. If we manage to introduce our drug, which currently requires weekly dosing and might eventually allow for biweekly dosing with lower quantities, we may avoid the high toxicity often associated with combinations. This could lead to a more favorable benefit-risk profile. We are progressing rapidly with our monotherapy dosing and hope to begin exploring combinations next year, with more updates to come.

And just to briefly add that tackling the pan-KRAS mechanism is a challenge in that combination setting largely because they're also hitting an HRAS. And that becomes a big challenge for adding on an EGFR-based mechanism. So our KRAS G12D degrader would avoid that.

Your next question comes from the line of Tyler Van Buren with TD Securities.

This is Francis on for Tyler. So for the BCL6 asset, what combination partners do you believe are most exciting? And where do you think it's most likely to exist in the lymphoma treatment paradigm if successfully developed?

Thanks for the question. Yes, there's a lot of potentially exciting combinations that we can carry out with BCL6. I'll ask Noah to maybe give an overview of where we're thinking.

We've shared data about the ability to combine this drug, which takes a different approach from many existing agents approved for B-cell malignancies. We see excellent synergies and compatibility with EZH2 inhibitors, BTK inhibitors, BCL2 inhibitors, and anti-CD20 agents in preclinical studies. This presents numerous opportunities for combination therapies. As the field evolves, we see a significant role for bispecific therapies targeting CD20, particularly in the first-line setting, but also in the second- and third-line settings for large B-cell lymphoma. We aim to focus on this area, recognizing it as a major opportunity where we can combine therapies with non-overlapping toxicities. While we need to identify any potential toxicities, we believe we can favorably combine with bispecifics, which may present a risk of cytokine release syndrome. That's part of our strategy, and we plan to advance our Phase I study with bispecific combinations next year.

Your next question comes from the line of Li Watsek with Cantor Fitzgerald.

A strategy question for me. It looks like you're moving more programs into the preclinical clinical settings and then maybe deepening your footprint in the neuromuscular space and expanding into I-O. So just curious, number one, your BD strategy here, given that you got five programs. And then two, your approach to resource allocation.

Thank you for the question. Over the past few months, the company has undergone a significant reset, particularly with the decision to seek a new partner or out-license vepdegestrant, which has allowed us to concentrate on the remainder of our pipeline. KRAS G12D, LRRK2, and BCL6 are our next assets moving quickly from Phase I to Phase II. Additionally, we have two programs that should enter the clinic soon: one focused on SDMA and the other on HPK1, which falls under immuno-oncology. We see substantial potential for HPK1 in this area. This variety of programs enhances our options across both oncology and neuro. We remain open to business development opportunities, especially as some of our targets align well with them. Currently, our entire portfolio, including vepdegestrant, is fully owned, with a successful partnership with Novartis on luxdegalutamide. We are moving forward with confidence and anticipate exciting data in the coming months, which will help us position our portfolio effectively, potentially including selective partnerships.

Your next question comes from the line of Srikripa Devarakonda with Truist.

Maybe a follow-up question to the previous one. With nearly $800 million in cash and a runway into the second half of 2028, could you clarify not only the timeline for expenditures but also what studies you can undertake with this cash? Additionally, as you progress with your pipeline, do you plan to continue focusing on PROTACs in both oncology and CNS, or do you believe it's necessary at this time to prioritize certain therapeutic areas?

Thank you for the question. I will pass it to our CFO, Andrew, to address the first part. Regarding the balance, our company has always focused on oncology since its inception, and one of our early targets was in neuroscience. We have been involved in neuroscience from the start, and we believe that the development of brain-penetrant PROTACs presents significant advantages in treating neurodegenerative diseases. We plan to pursue this as we advance our programs, such as LRRK2. We are also enthusiastic about exploring neuromuscular targets like SBMA. While oncology and neuroscience may seem like distinct therapeutic areas, we see valuable insights and opportunities to leverage PROTACs in both fields, which we believe will yield differentiated options. For the moment, we will continue down this path while remaining open to other opportunities. Now, I will hand it over to Andrew, who can discuss our program funding after the adjustments we made.

Yes. Thanks, John. So the way I think about capital allocation for at least the next year or two, the company has had significant spend on the vepdegestrant Phase IIs the last several years. You're going to see those costs start to ramp down. And what's going to happen is that those costs are going to be replaced by a series of Phase I early phase studies, right? So we're making a bet on the early-stage programs. We love them. We can't obviously right now tell you which ones we're going to take through on our own and which ones we're going to license. We're going to push on all of them. We think that many of them are highly, highly promising. And we'll be making decisions on those as we go through the development pipeline. So we look at these programs all the way out. Obviously, we've known our programs for a long time. So they've been incorporated into our spend even before we announced that they were coming into the clinic. So this is not a surprise to us. And we're just delighted. So we're going to continue pushing on our Phase I programs, and we'll make decisions as we go through based on which ones we think make the most sense for us to keep and which ones make the most sense for us to partner potentially.

Your next question comes from the line of Tazeen Ahmad with Bank of America.

Just as it relates to 102, just given the current data that you have in biomarkers, how do we think about the translatability of those into clinical endpoints as it relates to PD? And then I just wanted to know about once you show the PD data in 2026, what do you think is going to be your area of focus that will allow you to support the advancement into a Phase Ib study into PSP?

Thank you. Great question. Noah?

Sure. Thanks, John, and it’s great to hear from you, Tazeen. We’re really excited about ARV-102 because we’ve been focused on both oncology and neuroscience. We recently had a successful registration study for VEP-2, out-licensed luxdegalutamide to Novartis, and are progressing with two oncology drugs. Now, with ARV-102, we've shared some remarkable results that push us toward targeting PSP and possibly Parkinson's disease. Over the years, significant investments have been made in the communities studying Parkinson's and PSP to reveal the pathways driving these neurodegenerative diseases. One major biomarker study, PPMI, has shown the natural progression of Parkinson's and identified predictive markers such as GPNMB, IBA1, and CD68, which indicate neuroinflammation and neurodegeneration due to protein mistrafficking linked to endolysosomal function. These markers are elevated in the disease. We recently shared study results at MDS that garnered significant interest, showing we could reduce these biomarkers in healthy volunteers. We're now conducting a study in Parkinson's disease focusing on these biomarkers, expecting that a significant degradation of LRRK2—a 75% reduction achieved in healthy volunteers—should allow us to decrease these harmful biomarkers linked to neuroinflammation and protein mistrafficking, like tau. Based on the data from healthy volunteers, we are preparing to disclose our findings on LRRK2 degradation and biomarkers in Parkinson's disease. If everything goes well, we plan to start a PSP study next year. PSP also involves tau mistrafficking and our drug can potentially correct this issue while reducing the neuroinflammation that's a fundamental cause of PSP. We will treat patients continuously, rather than just for 28 days, to gather more biomarker data and relate that to clinical measures such as PSPRS. We hope to quickly share results from that Phase Ib study. If everything aligns, we might even start a Phase II study before completing the Phase Ib study—aiming for a study of registration quality. However, we will need to wait for activation of our IND and the initiation of the Phase Ib study to determine when that can commence.

And just to add to that, we do know that human genetics point to LRRK2 and LRRK2 is elevated in the brain of patients in idiopathic Parkinson's disease in microglia as Noah stated. And then also in progressive supranuclear palsy, these same SNPs that elevate LRRK2 also drive increased progression in a clinically meaningful way and time to death. And so by going in with a clear way to modulate the LRRK2 pathway, we feel that we stand the best chance of proving the LRRK2 hypothesis in disease in both progressive supranuclear palsy and potentially Parkinson's disease.

Your next question comes from the line of Paul Choi with Goldman Sachs.

I wanted to check if you might have any additional dosing cohorts for ARV-393 at the upcoming ASH Meeting, including ones that might potentially be in the target therapeutic range where that you're aiming for. And then on ARV-027, I'm just curious if you thought of other CAG repeat related diseases as being potential areas to explore, including Huntington's or other neuromuscular diseases beyond spinal cerebellar that you focused on initially.

Yes. Thank you. Noah and Angela can probably cover those.

Sure. Regarding ARV-393, we had hoped to provide a complete update at ASH this year on our dose escalation for ARV-393. However, we are not yet in the expected efficacious range. Interestingly, we are observing significant responses, including complete responses in both T-cell and B-cell malignancies. We believe it's not wise to report solely on the low dose levels we are currently testing. Typically, studies share results when they have confidently reached their target and can demonstrate the full effectiveness of the drug. While we didn't want to leave you without information, we thought it was important to highlight our progress and that we are seeing efficacy and tolerability with the drug. Now, for the question about ARV-027, I will pass it back to Angela.

Sure. Great. 027, we selected based on its unique profile for degrading the polyglutamine repeat androgen receptor in the nucleus and the cytoplasm, which is really important for a disease driver for spinal and bulbar muscular atrophy. And we reported out some very exciting data showing that we rescue muscle function, including grip strength and endurance to end of phenotypes that are really important for patients with that disease. So that's a very exciting opportunity. With respect to polyglutamine repeat expansion disorders, we have a robust approach. We're taking to those repeat disorders. We're taking a two-pronged approach also for Huntington's disease. For Huntington's disease, we have identified selective ligands for mutant Huntington and sparing wild type. So we're continuing our efforts. We're early, but we're making good progress there. And then also the idea of tackling repeat expansion disorders is something we're taking very seriously, and we have a very unique opportunity there as well. So that's early, but very exciting space for Arvinas.

I would like to add one more point. As we begin the SBMA trials, we will start with healthy volunteers, which is the appropriate approach. This condition is a monogenic disease, and we have a clear target in polyQ-AR. We understand how to degrade it. In the healthy volunteer study, we may also conduct muscle biopsies if allowed, which will quickly validate our technology. This setup is ideal for entering the rare disease space, as it allows us to obtain results and build confidence in our engagement pathway through the healthy volunteer studies, presenting a unique opportunity.

Your next question comes from the line of Jonathan Miller with Evercore ISI.

Congrats on all the progress in the early pipeline. I'd like to start with KRAS combos, if I might. You mentioned a couple of interesting potential combo partners for the KRAS program, things that other players in the space maybe had trouble combining with given tolerability profile. How early could we get into combo cohorts? Is this the sort of thing that we could expect to see even in expansion cohorts starting next year? Or should we think about rituximab combos and beyond maybe being a little bit more delayed from that? And then secondly, just on the HPK1 program, that seems like it's obviously very early still, but potentially pretty interesting. I noticed not much on the deck. When would you expect to show us more of that preclinical data and give us a sense for what indications maybe are the most fruitful for early looking there?

Great questions, and I'll use my usual double act here of Noah and Angela to answer that.

Thanks, John, and thank you for the question. Regarding the 806 inquiry, we aren't providing guidance yet on the timing of the combination. It would be speculative on my part, but I enjoy theorizing. The key point is that we are making significant progress with our dose escalation due to strong interest and good tolerability among patients. We plan to begin the combination immediately after completing some preliminary work, and we don’t need to wait until our expansions are fully read out. If everything proceeds quickly, we might be able to start next year, but I can't provide any firm guidance as it will depend on clinical data. That scenario is certainly possible.

Great. And then your next question was about ARV-6723, our HPK1 degrader. And so we're very excited about the opportunity for that degrader. It has a very differential profile with respect to both PD-1 and also the kinase inhibitor, the HPK kinase inhibitor that's in the clinic. So what we've been able to show and what you'll hear about at SITC is the impact to T-cell exhaustion and importantly, the impact to the T-cell microenvironment. We are seeing dramatic changes there and outperforming anti-PD-1 and HPK1 inhibitors in both low and high immunogenic tumor models preclinically. So stay tuned. You'll hear a lot more about our oral immunotherapy that we think will outperform, and also be very useful in the setting that is resistant to checkpoint blockade. So we have a lot of enthusiasm around that asset.

And your final question comes from the line of Andrew Berens with Leerink Partners.

This is Amanda representing Andy. We would like to understand what insights you have regarding drug-drug interactions with vepdeg that reassure you there won't be similar interactions with the new degraders. Specifically, we're interested in how they are metabolized in different or similar ways.

Yes. Thanks for the questions. I mean, in general, PROTACs are no different from small molecules in terms of how you'd analyze them for DDIs. Every single molecule is different. They get metabolized differently. They interact with other molecules differently. So there's not a generic answer on PROTACs because every single PROTAC is going to be unique and different. So yes, some compounds like many drugs, you look at to see how they're metabolized to see if they have a drug-drug interaction, you might see some of that, you might not. That's exactly what we're seeing with PROTAC. So there's no difference between a PROTAC and its DDI potential versus any small molecule.

There are no further questions. I will now turn the call back over to Mr. John Houston for closing remarks.

Well, thank you very much, and thanks for everybody's great questions. As you can tell, we're very excited about this next wave of programs coming through our early development pipeline, and we're going to be excited to tell you more about them in the coming months. We've got a lot of interesting data coming out. So again, thank you for your time.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.