Filing Details

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D
Under the Securities Exchange Act of 1934

(Amendment No. )*

 

ARCUS BIOSCIENCES, INC.

(Name of Issuer)

 

Common Stock, par value $0.0001

(Title of Class of Securities)

 

03969F109

(CUSIP Number)

 

Gilead Sciences, Inc.

333 Lakeside Drive

Foster City, California 94404

650-574-3000

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

July 8, 2020

(Date of Event Which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box o.

 

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7(b) for other parties to whom copies are to be sent.

 

*The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

SCHEDULE 13D

 

CUSIP No.  03969F109

Page 2 of 8 Pages

 

1	NAME OF REPORTING PERSONS   Gilead Sciences, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) o (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions)   OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER   29,498,424 (1)
		8	SHARED VOTING POWER   0
		9	SOLE DISPOSITIVE POWER   29,498,424 (1)
		10	SHARED DISPOSITIVE POWER   0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   29,498,424 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   35% (2)
14	TYPE OF REPORTING PERSON (See Instructions)   CO

 

(1)         Consists of (i) 2,200,000 shares of common stock of Arcus Biosciences, Inc. (the Issuer) purchased in the Issuers most recent public offering that closed on June 2, 2020, (ii) the initial purchase of 5,963,029 shares of common stock of the Issuer pursuant to a Common Stock Purchase Agreement, dated May 27, 2020, between Gilead Sciences, Inc. and the Issuer (the Purchase Agreement) and (iii) the number of shares of common stock that would result in Gilead Sciences, Inc. holding 35% of the Issuers then-outstanding common stock pursuant to a five-year option to purchase additional shares of common stock contained in the Purchase Agreement (the Option Shares).  Based upon 56,982,788 shares of common stock of the Issuer issued and outstanding upon the closing of the Issuers most recent public offering (assuming the underwriters have not exercised their option to purchase additional shares), as reported in the Issuers prospectus dated May 28, 2020 (the Final Prospectus) filed with the Securities and Exchange Commission (the SEC) on May 29, 2020 pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the Securities Act), the number of Option Shares is currently equal to 21,335,395.

 

(2)         Based upon 56,982,788 shares of common stock of the Issuer issued and outstanding upon the closing of the Issuers most recent public offering (assuming the underwriters have not exercised their option to purchase additional shares), as reported in the Final Prospectus filed with the SEC on May 29, 2020 pursuant to Rule 424(b)(5) under the Securities Act, adjusted to account for the initial purchase of 5,963,029 shares of common stock pursuant to the Purchase Agreement and assuming the immediate exercise in full by Gilead of its option to purchase the Option Shares.

 

 

CUSIP No.  03969F109

Page 3 of 8 Pages

 

Item 1.           Security and Issuer

 

This Schedule 13D (the Schedule 13D) relates to the common stock, par value $0.0001 per share (the Common Stock), of Arcus Biosciences, Inc., a Delaware corporation (the Issuer). The Issuers principal executive offices are located at 3928 Point Eden Way, Hayward, California 94545.

 

Item 2.                                 Identity and Background

 

(a)           This Schedule 13D is being filed by Gilead Sciences, Inc., a Delaware corporation (Gilead or the Reporting Person).

 

(b)           The principal business address of the Reporting Person is 333 Lakeside Drive, Foster City, California 94404.

 

(c)           The principal business of the Reporting Person is to develop and commercialize innovative medicines in areas of unmet medical need and engage in any other activity or business lawfully carried on by a corporation organized under the laws of the State of Delaware.

 

The directors and executive officers of the Reporting Person are set forth on Schedule I, attached hereto.  Schedule I sets forth the following information with respect to each such person:

 

(i)            name;

 

(ii)           business address;

 

(iii)          position with the Reporting Person and present principal occupation or employment and, for persons not employed by the Reporting Person, the name, principal business and address of any corporation or other organization in which such employment is conducted; and

 

(iv)          citizenship.

 

(d)  (e) During the last five years, neither the Reporting Person nor any person named in Schedule I has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

(f)            The jurisdiction of organization of the Reporting Person is set forth in subsection (a) above. The citizenship of each of the individuals referred to in Schedule I is set forth on Schedule I.

 

Item 3.                                 Source and Amount of Funds or Other Consideration

 

Gilead acquired from the Issuer 2,200,000 shares of Common Stock in the Issuers most recent public offering (the Public Offering) at the public offering price of $27.50 per share.  The Public Offering was completed on June 2, 2020.  The total consideration paid by Gilead for these shares of Common Stock was $60,500,000, and such consideration was obtained from the available cash resources of Gilead.

 

 

CUSIP No.  03969F109

Page 4 of 8 Pages

 

On May 27, 2020, Gilead entered into the Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an initial 5,963,029 shares of the Issuers Common Stock (the Initial Purchase) at a purchase price of $33.54 per share (the Initial Purchase Price), which purchase occurred on July 13, 2020.  The total consideration for the Initial Purchase was $199,999,992.66, and such consideration was obtained from the available cash resources of Gilead.  Under the Purchase Agreement, Gilead also has the right, at its option, to purchase additional shares from the Issuer, up to a maximum of 35% of the Issuers then-outstanding Common Stock, from time to time for a period of five years, at a purchase price equal to the greater of a 20% premium to market (based on a trailing five-day average closing price) at the time Gilead exercises such option and the Initial Purchase Price.  It is expected that the total consideration paid in connection with any exercise of such option will be obtained from the available cash resources of Gilead.  In addition, pursuant to the Investor Rights Agreement (as defined below), Gilead has the right to designate two individuals to be appointed to the Issuers board of directors.

 

Item 4.                                 Purpose of Transaction

 

On May 27, 2020, Gilead and the Issuer entered into an Option, License and Collaboration Agreement (the Collaboration Agreement) pursuant to with Gilead obtained an exclusive option to acquire an exclusive license to all of the Issuers current and future clinical programs during the 10-year collaboration term and, for those programs that enter clinical development prior to the end of the collaboration term, for up to an additional three years thereafter.

 

In addition to the Collaboration Agreement, Gilead and the Issuer entered into a Common Stock Purchase Agreement (the Purchase Agreement) and an Investor Rights Agreement (the Investor Rights Agreement and, together with the Purchase Agreement, the Equity Agreements) pursuant to which Gilead made the Initial Purchase at the Initial Purchase Price.  Gilead also has the right, at its option, to purchase additional shares from the Issuer, up to a maximum of 35% of the Issuers then-outstanding Common Stock, from time to time for a period of five years, at a purchase price equal to the greater of a 20% premium to market (based on a trailing five-day average closing price) at the time Gilead exercises such option and the Initial Purchase Price.  The Equity Agreements also include standstill and lock-up provisions and provide Gilead with certain other stock purchase and registration rights, as well as the right to designate two individuals to be appointed to the Issuers board of directors.

 

The acquisitions by the Reporting Person of the Issuers securities as described herein were effected in connection with entry into the Collaboration Agreement and the Equity Agreements, and because of the belief that the securities of the Issuer represent an attractive investment. The foregoing description of the Equity Agreements is not complete and is subject to and qualified in its entirety by reference to the full text of such agreements, which are attached as Exhibits 99.1 and 99.2 hereto and incorporated herein by reference.

 

Except as otherwise described herein, the Reporting Person currently has no plan(s) or proposal(s) that relate to, or would result in, any of the events or transactions described in Item 4(a) through (j) of Schedule 13D, although the Reporting Person reserves the right, at any time and from time to time, to review or reconsider such position and/or change such purpose and/or formulate plans or proposals with respect thereto.

 

The Reporting Person intends to review from time to time its investment in the Issuer and the Issuers business affairs, financial position, performance and other investments considerations. The Reporting Person may from time to time engage in discussions with the Issuer, its directors and officers, other stockholders of the Issuer and other persons on matters that relate to the management, operations, business, assets, capitalization, financial condition, strategic plans, governance and the future of the Issuer and/or its subsidiaries. Based upon such review and discussions, as well as general economic, market and industry conditions and prospectus and the Reporting Persons liquidity requirements and investment considerations, and subject to the limitations in the agreements described above, the Reporting Person may consider additional courses of action, which may include, in the future, formulating plans or proposals regarding the Issuer and/or its subsidiaries, including possible future plans or proposals concerning events or transactions of the kind described in Item 4(a) through (j) of Schedule 13D.

 

 

CUSIP No.  03969F109

Page 5 of 8 Pages

 

Item 5.                                 Interest in Securities of the Issuer

 

(a)-(b)

 

Number of shares of Common Stock beneficially owned:

 

Gilead

29,498,424 shares

 

Percent of class:

 

Gilead

35

%

 

The number of shares of Common Stock beneficially owned consists of (i) 2,200,000 shares of common stock of the Issuer purchased in the Issuers most recent public offering that closed on June 2, 2020, (ii) the initial purchase of 5,963,029 shares of Common Stock of the Issuer pursuant to the Purchase Agreement and (iii) 21,335,395 Option Shares.

 

The percentage ownership was calculated based upon 56,982,788 shares of Common Stock of the Issuer issued and outstanding upon the closing of the Issuers most recent public offering (assuming the underwriters have not exercised their option to purchase additional shares), as reported in the Final Prospectus filed with the SEC on May 29, 2020 pursuant to Rule 424(b)(5) under the Securities Act, adjusted to account for the initial purchase of 5,963,029 shares of common stock pursuant to the Purchase Agreement and assuming the immediate exercise in full by Gilead of its option to purchase the Option Shares.

 

Number of shares as to which such person has:

 

(i)Sole power to vote or to direct the vote:

 

Gilead

29,498,424 shares

 

(ii) Shared power to vote or to direct the vote:

 

Gilead

0 shares

 

(iii) Sole power to dispose or to direct the disposition of:

 

Gilead

29,498,424 shares

 

(iv) Shared power to dispose or to direct the disposition of:

 

Gilead

0 shares

 

 

CUSIP No.  03969F109

Page 6 of 8 Pages

 

To the best knowledge of the Reporting Person, none of the individuals listed on Schedule I beneficially owns any of the Issuers Common Stock.

 

(c)           Except as reported in this Schedule 13D, neither the Reporting Person nor, to the best knowledge of the Reporting Person, any of the individuals listed on Schedule I have effected any transactions in the Common Stock during the past sixty (60) days.

 

(d)           Not applicable.

 

(e)           Not applicable.

 

Item 6.                                 Contracts, Arrangements, Understandings or Relationship with Respect to Securities of the Issuer

 

Except as disclosed in Items 3 and 4 of this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) to which the Reporting Person is a party with respect to the securities of the Issuer.

 

Item 7.                                 Materials to Be Filed as Exhibits

 

Exhibit 99.1	Common Stock Purchase Agreement, dated May 27, 2020, between Arcus Biosciences, Inc. and Gilead Sciences, Inc. (incorporated by reference to Exhibit 99.1 of Arcus Biosciences, Inc.s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2020).
Exhibit 99.2	Investor Rights Agreement, dated May 27, 2020, between Arcus Biosciences, Inc. and Gilead Sciences, Inc. (incorporated by reference to Exhibit 99.2 of Arcus Biosciences, Inc.s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2020).

 

 

CUSIP No.  03969F109

Page 7 of 8 Pages

 

SIGNATURE

 

After reasonable inquiry and to the best of the undersigneds knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Date: July 17, 2020	GILEAD SCIENCES, INC.
	By:	/s/ Andrew D. Dickinson
	Name:	Andrew D. Dickinson
	Title:	Executive Vice President and Chief Financial Officer

 

 

CUSIP No.  03969F109

Page 8 of 8 Pages

 

Schedule I

 

The name and present principal occupation of each of the executive officers and directors of Gilead Sciences, Inc. are set forth below.  Unless otherwise noted, each of these persons have as their business address c/o Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, California 94404.

 

Name		Title		Citizenship		Principal Occupation and, if  not employed by Gilead  Sciences, Inc., Name,  Principal Business and  Address of Employer
Daniel P. ODay		Chief Executive Officer, Chairman and Director		United States		*
Jacqueline K. Barton, Ph.D.		Director		United States		Professor, California Institute of Technology
Sandra J. Horning, M.D.		Director		United States		Retired Chief Medical Officer of Roche, Inc.
Kelly A. Kramer		Director		United States		Executive Vice President and Chief Financial Officer, Cisco Systems, Inc.
Kevin E. Lofton, FACHE		Director		United States		Retired Chief Executive Officer, CommonSpirit Health
Harish Manwani		Director		Singapore		Retired Chief Operating Officer, Unilever
Javier J. Rodriguez		Director		Mexico		Chief Executive Officer, DaVita, Inc.
Richard J. Whitley, M.D.		Director		United States		Professor, University of Alabama at Birmingham
Per Wold-Olsen		Director		Norway		Retired President, Human Health and Intercontinental Division, Merck & Co., Inc.
Andrew D. Dickinson		Executive Vice President and Chief Financial Officer		United States		*
Johanna Mercier		Chief Commercial Officer		United States		*
Merdad V. Parsey, M.D., Ph.D.		Chief Medical Officer		United States		*
Brett A. Pletcher		Executive Vice President, Corporate Affairs, General Counsel		United States		*

 

* The present principal occupation for each of these individuals is officer of Gilead Sciences, Inc. and officer, trustee and/or director of other affiliated entities.