Arvinas outlines plan for $100M share buyback and targets sub-$75M quarterly run rate amid pipeline expansion

Earnings Call Insights: Arvinas, Inc. (ARVN) Q3 2025

MANAGEMENT VIEW

* John Houston, Chairperson, CEO & President, stated that the third quarter marked "a dynamic and productive period for Arvinas marked by meaningful progress across both our corporate initiatives and clinical development programs." He highlighted recent and upcoming clinical data readouts, including ARV-102 for LRRK2 degradation, ARV-806 for KRAS G12D, and ARV-027 targeting polyQ-AR in SBMA. Houston also noted the company's entry into "a data-rich period with multiple readouts from our early-stage clinical programs."
* Houston announced the joint decision with Pfizer to select a third party for the commercialization and potential further development of vepdegestrant, aiming for a partner to be in place before the FDA's PDUFA action date of June 5, 2026. He said, "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."
* CFO Andrew Saik stated, "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." Saik detailed that Q3 revenue was $41.9 million, and explained the decline was due to the timing of Novartis license revenue recognition, offset by a $20 million milestone payment from Novartis this quarter. He also noted a reduction in expenses, saying, "General and administrative expenses were $21 million in the third quarter, compared to $75.8 million for the same period of 2024." Saik highlighted that the Board authorized the repurchase of up to $100 million in common stock and that "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."

OUTLOOK

* Houston indicated that Arvinas is anticipating "multiple study initiations and data readouts" across neuroscience and oncology franchises through the balance of 2025 and into 2026. The company expects to initiate a Phase Ib trial in PSP for ARV-102 in the first half of 2026 and first-in-human studies for ARV-027 and ARV-6723 in 2026.
* Saik stated, "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."

FINANCIAL RESULTS

* Saik reported cash, cash equivalents, and marketable securities of $787.6 million at the end of Q3. Revenue for the quarter was $41.9 million, compared to $102.4 million for the same period in 2024. General and administrative expenses fell to $21 million from $75.8 million year-over-year, primarily due to the termination of a lease and a reduction in personnel costs. Research and development expenses were $64.7 million, down from $86.9 million for the same period in 2024, with non-GAAP R&D for the quarter at $56.9 million. Saik stated, "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."
* The company has initiated a $100 million share repurchase program, buying back 2.56 million shares at an average price of $7.91 per share.

Q&A

* Etzer Darout, Barclays, asked about differentiation and dosing for BCL6 degrader. Berkowitz responded that ARV-393 is dosed once daily and that "we have monotherapy activity in T-cell and B-cells. That has not been reported by the competitor that's already reported out some B-cell malignancy responses."
* Caroline (for Yigal Nochomovitz, Citi) inquired about signals in ARV-102's Phase I and dosing duration. Berkowitz explained that the current focus is on biomarker data and that more clinical efficacy data will require longer dosing, with updates on pathway markers expected early next year.
* Sarah (for Michael Schmidt, Guggenheim) asked about ARV-806 and testing in KRAS amplified populations. Cacace noted preclinical evidence supporting efficacy in resistant settings, and Berkowitz said future clinical expansion is under consideration.
* Hal (for Derek Archila, Wells Fargo) questioned CSF degradation in ARV-102 studies. Berkowitz said, "We will provide our LRRK2 degradation data when we've completed the MAD in the Parkinson's disease patients."
* Jeet Mukherjee, BTIG, asked about GI tolerability and liver enzyme elevation in KRAS G12D degraders. Cacace and Berkowitz emphasized the greater potency of ARV-806 and suggested this may allow for lower dosing and reduced toxicity.
* Multiple analysts probed the capital allocation and BD strategy given the $800 million cash position. Houston affirmed investment across both oncology and neuroscience, with Saik adding, "The company has had significant spend on the vepdegestrant Phase IIIs the last several years. You're going to see those costs start to ramp down."

SENTIMENT ANALYSIS

* Analysts' tone was largely neutral to slightly positive, focusing on differentiation, clinical progress, and capital allocation, but probing for specifics on timelines and competitive positioning.
* Management maintained a confident and optimistic tone, frequently referencing upcoming catalysts, strong early data, and financial flexibility. Houston repeatedly stressed "confidence" in the pipeline and "flexibility" in strategic options.
* Compared to the previous quarter, management's tone is more forward-looking and less defensive, with fewer references to restructuring or cost cuts. Analyst sentiment remains focused on clarity around pipeline progress and monetization.

QUARTER-OVER-QUARTER COMPARISON

* In the current quarter, guidance language has shifted toward operational efficiency, cost reduction, and capital returns (notably, the $100 million buyback). Last quarter focused more on restructuring and CEO succession planning.
* Strategic focus has pivoted further from vepdegestrant toward early-stage pipeline assets, with more emphasis on neuroscience and immuno-oncology expansion.
* Analysts in both quarters raised questions on program specifics and competitive differentiation, but the current call included more discussion of resource allocation and partnering.
* Key metrics show a continued reduction in expenses and a notable decrease in revenue, driven by lapping of Novartis deal revenue.
* Management's confidence appears to have increased, with ongoing emphasis on catalysts, cash runway, and pipeline optionality. Analyst tone remains consistent, with some incremental positivity regarding operational progress.

RISKS AND CONCERNS

* Management cited the ongoing need to secure a commercialization partner for vepdegestrant, with the FDA PDUFA date set for June 5, 2026.
* Declining revenue due to the completion of Novartis license deal was noted as a driver of year-over-year decreases.
* The company is working to manage costs and maintain a sub-$75 million quarterly run rate, but continued investment in early-stage programs could affect future expense trends.
* Potential clinical risks remain as several lead assets are still in early-stage development, and clinical readouts are pending.

FINAL TAKEAWAY

Arvinas management emphasized their entry into a "data-rich period" with multiple clinical and preclinical catalysts on the horizon, signaling robust progress in both oncology and neuroscience pipelines. Financial discipline was reinforced by explicit targets for a sub-$75 million quarterly spend and a $100 million share buyback, while the company seeks a commercialization partner for vepdegestrant ahead of its June 2026 PDUFA date. The focus on advancing differentiated assets, maintaining a strong cash position, and capital returns underlines Arvinas' commitment to delivering long-term shareholder value as it prepares for key milestones in 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/arvn/earnings/transcripts]

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