ARVN

ARVINAS, INC. (ARVN) - 10-Q Summary for Period Ended June 30, 2026

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. Arvinas, Inc. is a biotechnology company focused on developing PROTAC protein degraders. The quarter was defined by the FDA approval of VEPPANU (vepdegestrant) for advanced breast cancer and the subsequent out-licensing of global commercialization rights to Rigel Pharmaceuticals, Inc. The company operates as a single segment focused on discovery, development, and commercialization of protein degradation therapies.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Surge: Q2 2026 revenue increased by $227.3M compared to Q2 2025. This was driven by the recognition of $126.4M in remaining deferred revenue from the Pfizer collaboration upon entering the Rigel License Agreement, $62.5M in upfront revenue from the Rigel deal, and a $50.0M milestone payment for VEPPANU FDA approval.
• Profitability Shift: The company swung from a net loss of $61.2M in Q2 2025 to a net income of $169.4M in Q2 2026, primarily due to the non-recurring revenue recognition described above.
• Expense Reduction: Research and Development (R&D) expenses decreased by $16.0M in Q2 2026 compared to the prior year, largely due to workforce reductions (15% reduction completed in Q2 2026) and decreased spending on the vepdegestrant program following the out-license.
• Liquidity: Cash and cash equivalents decreased from $142.9M at year-end 2025 to $94.3M at June 30, 2026, though total liquid assets (including marketable securities) remain at $567.9M.

Guidance, Outlook, and Risks

• Outlook: Management believes current cash, cash equivalents, and marketable securities ($567.9M) are sufficient to fund operations into the second half of 2028.
• Commercialization: Arvinas has no control over the commercialization of VEPPANU; all decisions regarding pricing, access, and sales are now the responsibility of Rigel. Future revenue from VEPPANU is entirely dependent on Rigel's performance.
• Pipeline Progress:
  • ARV-393 (BCL6): Phase 1 monotherapy ongoing; combination trial with glofitamab initiated.
  • ARV-102 (LRRK2): Phase 1 in Parkinson's disease completed; Phase 1b in Progressive Supranuclear Palsy (PSP) is on clinical hold pending FDA review of toxicology data.
  • ARV-806 (KRAS G12D): Phase 1 dose escalation completed; company plans to seek an out-licensing partner for further development.
  • ARV-027 (SBMA): Phase 1 in healthy volunteers ongoing.
• Risks:
  • Partner Dependency: Significant risk that Rigel or Novartis may not adequately fund or perform obligations, potentially delaying or preventing product commercialization.
  • Regulatory: ARV-102 PSP trial is currently on hold pending FDA authorization.
  • AI Regulation: New risks associated with the use of AI in drug discovery, including regulatory compliance (e.g., EU AI Act) and cybersecurity.
  • Leadership Transition: Search underway for a new Chief Medical Officer following the departure of Dr. Noah Berkowitz.

Investor Verification Checklist

• Rigel License Agreement Terms: Verify the specific royalty tiers (mid-teens to mid-20s) and the $320M in potential contingent milestones.
• ARV-102 Clinical Hold: Monitor the status of the FDA review for the ARV-102 PSP Phase 1b trial to assess timeline risks.
• ARV-806 Out-Licensing: Track progress on securing a partner for the KRAS G12D program, as Arvinas intends to out-license further development.
• Non-GAAP Reconciliation: Review the reconciliation of GAAP to Non-GAAP expenses, noting the exclusion of stock-based compensation and restructuring charges ($2.7M total restructuring in YTD 2026).
• Deferred Revenue Recognition: Confirm that the $126.4M revenue recognized from the Pfizer agreement is non-recurring and will not repeat in future periods.