# ARVINAS, INC. (ARVN) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from ARVINAS, INC.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1655759/000165575924000018/arvn-20231231.htm
Accession: 0001655759-24-000018
Filing date: 2024-02-27
Report date: 2023-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/ARVN/
All MD&A years: /company/ARVN/mda/
Previous year: /company/ARVN/mda/fy2022/ (FY 2022)
Next year: /company/ARVN/mda/fy2024/ (FY 2024)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amount and certainty of cash flows from operations and from outside sources, so as to allow investors to better view our company from management's perspective. You should read the following discussion and analysis of financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth in the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in or implied by these forward-looking statements.

Overview

Our Business

We are a clinical-stage biotechnology company dedicated to improving the lives of patients suffering from debilitating and life-threatening diseases through the discovery, development and commercialization of therapies that degrade disease-causing proteins. We use our PROTAC Discovery Engine, our proprietary technology platform to engineer proteolysis targeting chimeras, or PROTAC targeted protein degraders, that are designed to harness the body’s own natural protein disposal system to selectively and efficiently degrade and remove disease-causing proteins. We believe that our targeted protein degradation approach is a therapeutic modality that may provide distinct advantages over existing modalities, including traditional small molecule therapies and gene-based medicines. We have a robust preclinical pipeline of PROTAC protein degraders targeting a broad range of intracellular disease targets, including those representing proteins that currently cannot be addressed by existing small molecule therapies, commonly referred to as “undruggable” targets. We

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are using our PROTAC Discovery Engine to build an extensive pipeline of protein degradation product candidates to target diseases in areas of unmet need, including oncology (including immuno-oncology), neuroscience and other therapeutic areas. We and our collaborators have initiated programs across multiple therapeutic areas with the goal of developing and delivering life-changing therapies to patients in need. We have three investigational clinical stage programs: Vepdegestrant (ARV-471), a novel PROTAC estrogen receptor, or ER, protein degrader for the treatment of patients with locally advanced or metastatic ER positive / human epidermal growth factor receptor 2, or HER2, negative, or ER+/HER2-, breast cancer and ARV-766 and bavdegalutamide (ARV-110), each an oral PROTAC protein degrader that targets the androgen receptor protein, or AR, for the treatment of men with metastatic castration-resistant prostate cancer, or mCRPC. We also have two preclinical product candidates: ARV-393, a PROTAC degrader designed to target the BCL6 protein, and ARV-102, a PROTAC degrader designed to target the LRRK2 protein. In addition to the programs above and our early-stage collaborations with Pfizer, Inc., or Pfizer, Genentech, Inc. and F. Hoffmann-La Roche Ltd, collectively referred to as Genentech, and Bayer AG, or Bayer (each of which are discussed below), we are conducting exploratory research and development work on multiple other undisclosed targets.

Estrogen Receptor Program: Vepdegestrant (ARV-471)

Vepdegestrant (ARV-471) is an investigational orally bioavailable PROTAC protein degrader designed to target and degrade the ER for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer. We are co-developing vepdegestrant with Pfizer, Inc., or Pfizer, pursuant to a collaboration agreement that we and Pfizer entered into in July 2021. We granted Pfizer worldwide co-exclusive rights to develop and commercialize vepdegestrant.

In preclinical studies, vepdegestrant demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a cyclin-dependent kinase, or CDK, 4/6 inhibitor.

We, along with Pfizer, have several ongoing clinical trials of vepdegestrant, designed to potentially position vepdegestrant as a backbone ER-targeting therapy in breast cancer, including:

•VERITAC-2, a Phase 3 second-line clinical trial of vepdegestrant as a monotherapy, for which we are currently enrolling patients;

•Study lead-in of VERITAC-3, a Phase 3 first-line clinical trial of vepdegestrant in combination with IBRANCE® (palbociclib), for which we are currently enrolling patients;

•VERITAC, a Phase 2 second-line dose expansion clinical trial of vepdegestrant as a monotherapy, for which enrollment of patients is complete, for which we are currently enrolling patients;

•TACTIVE-N, a Phase 2 clinical trial of vepdegestrant as a monotherapy in the neoadjuvant setting, to inform a potential adjuvant trial, for which enrollment of patients is complete;

•TACTIVE-U, a Phase 1b/2 clinical trial of vepdegestrant in combination with multiple targeted therapies including abemaciclib, ribociclib and Carrick Therapeutics, Inc.'s, or Carrick, CDK7 inhibitor, samuraciclib, for which we are currently enrolling patients;

•TACTIVE-E, a Phase 1 clinical trial of vepdegestrant in combination with everolimus, for which we are currently enrolling patients, for which enrollment of patients is complete; and

•TACTIVE-K, a Phase 1b/2 clinical trial of vepdegestrant in combination with Pfizer's CDK4 inhibitor (PF-07220060), for which we are currently enrolling patients.

We, along with Pfizer, also are planning additional clinical trials of vepdegestrant, pending health regulatory feedback on these clinical trials expected in the second half of 2024, including:

•a new first line Phase 3 clinical trial of vepdegestrant in combination with Pfizer's CDK4 inhibitor (PF-07220060); and

•a new second line Phase 3 clinical trial of vepdegestrant in combination with palbociclib and potentially other CDK4/6 inhibitors.

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Additional detail regarding each of these trials is included below and in Part I, Item 1. Business of this Annual Report on Form 10-K.

In the first quarter of 2023, we and Pfizer gained alignment with the U.S. Food and Drug Administration, or the FDA, on an approach for VERITAC-3 and in the second quarter of 2023, we, along with Pfizer, initiated the study-lead in of the VERITAC-3 Phase 3 clinical trial in combination with palbociclib as a first-line treatment in patients with ER+/HER2- locally advanced or metastatic breast cancer. Moving forward, we expect to continue enrollment in the study-lead in of the VERITAC-3 Phase 3 clinical trial to evaluate the dose of palbociclib (100 mg or 75 mg) in combination with 200 mg of vepdegestrant once daily. The objective of this trial is to select a dose of palbociclib (100 mg or 75 mg) that, when dosed with 200 mg of vepdegestrant, results in a similar exposure and safety profile as palbociclib 125 mg in combination with aromatase inhibitors. This approach follows the analysis of data from the ongoing Phase 1b/2 ARV-471-mBC-101 combination trial of vepdegestrant with palbociclib, in which an increase in palbociclib exposure was observed relative to historical palbociclib pharmacokinetic data.

In the second quarter of 2023, we evaluated and announced preliminary data from Part C of the ongoing Phase 1b/2 clinical trial of vepdegestrant. Preliminary results from the Part C dose escalation trial (November 2022 data cutoff from the Phase 1b combination of vepdegestrant with palbociclib at 125 mg) demonstrated an observed clinical benefit rate, or CBR (rate of confirmed complete response, confirmed partial response, or stable disease ≥24 weeks), of 60.7% (95% CI, 40.6 – 78.5) across all dose cohorts (17 of 28 CBR-evaluable patients; patients are CBR-evaluable if they received their first dose 24 weeks prior to the cut-off). In the fourth quarter of 2023, we presented, with Pfizer, updated data (data cutoff of June 6, 2023) from the Phase 1b trial assessing vepdegestrant in combination with palbociclib, at the San Antonio Breast Cancer Symposium, or SABCS. These data demonstrated a CBR of 63%, (95% CI: 47.5–76.8), or 29/46 patients; at the RP3D of 200 mg (n=21), the CBR was 67% (95% CI: 43.0 – 85.4), or 14/21 patients, an ORR in evaluable patients with measurable disease at baseline (n=31) of 42% (95% CI: 24.5–60.9), or 13/31 patients; at the RP3D of 200 mg (n=15), the ORR was 53% (95% CI: 26.6 – 78.7) and median PFS of 11.1 months 95% CI: 8.2 – NE); 22 of 46 patients across all doses had progression events by time of data cutoff. These data,including the differences in patients with mutant ESR1 or wild-type ESR1 tumors, are discussed in more in Part I, Item 1. Business and below.

Also in the second quarter of 2023, we presented vepdegestrant preclinical data at the American Association for Cancer Research, or AACR, annual meeting that demonstrated the potential utility of vepdegestrant as an endocrine therapy backbone for combination with other targeted agents in early and late-stage ER+/HER2- breast cancer and the potential mechanisms of acquired resistance to vepdegestrant that may be associated with alterations within Receptor Tyrosine Kinase/MAPK signaling pathways rather than ER signaling or E3 ligase machinery.

In addition, in the second quarter of 2023, we announced the inclusion of vepdegestrant in the I-SPY-2 (Investigation of Serial Studies to Predict Your Therapeutic Response with Imaging And moLecular Analysis 2) Endocrine Optimization Platform trial sponsored by Quantum Leap. The I-SPY-2 trial was designed to include a vepdegestrant monotherapy arm and a vepdegestrant plus letrozole arm. We were also awarded Innovation Passport Designation for vepdegestrant by the U.K. Innovative Licensing and Access Pathway Steering Group in the third quarter of 2023.

We entered into a collaboration agreement with Pfizer and Carrick to evaluate samuraciclib in combination with vepdegestrant as part of the TACTIVE-U study in the second quarter of 2023. In the third quarter of 2023, we received a Study May Proceed letter from the FDA for the planned Phase 1b/2 clinical trial evaluating vepdegestrant in combination with Pfizer's CDK4 inhibitor, and we and Pfizer initiated this trial in the fourth quarter of 2023. We also initiated an additional arm of the Phase 1b combination umbrella trial with Carrick's CDK7 inhibitor in the first quarter of 2024.

In the fourth quarter of 2023, at the European Society for Medical Oncology, or ESMO, we presented updated dose escalation data from the Phase 1/2 clinical trial with vepdegestrant showing continued strong anti-tumor activity and highly differentiated tolerability.

Also in the fourth quarter of 2023, at SABCS, we presented interim data from the Phase 1b trial of vepdegestrant in combination with palbociclib. The interim data presented showed signs of efficacy as follows:

•Objective response rate: 42% (ESR1 mutant, 47%; ESR1 wild-type, 42%)

◦Median duration of response: 10.2 months

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•Median PFS: 11.1 months (ESR1 mutant, 11.0; ESR1 wild-type, 11.1)

•Clinical benefit rate: 63% (ESR1 mutant, 74%; ESR1 wild-type, 53%)

The interim data presented also showed that safety was manageable, with standard on-label dose reductions of palbociclib resulting in a 72% decline in Grade 4 neutropenia in subsequent cycles. In addition, no cases of febrile neutropenia were reported and there were low rates of discontinuation. Among 36 patients who had at least one palbociclib dose reduction, only five (13.9%) had Grade 4 neutropenia after the last palbociclib dose reduction. While there was a higher occurrence of Grade 4 neutropenia in this trial, discontinuation rates of palbociclib and rates of infection were in line with historical palbociclib data.

We completed enrollment in the TACTIVE-N Phase 2 clinical trial of vepdegestrant as a monotherapy in the neoadjuvant setting in patients with ER+/HER2- localized breast cancer in the first quarter of 2024 and we expect to complete enrollment for the VERITAC-2 Phase 3 trial of vepdegestrant as a monotherapy in patients with metastatic breast cancer in the second half of 2024.

Also in the first quarter of 2024, the FDA granted Fast Track designation for the investigation of vepdegestrant for monotherapy in the treatment of adults with ER+/HER- locally advanced or metastatic breast cancer previously treated with endocrine based therapy.

Androgen Receptor Programs: ARV-766 and bavdegalutamide (ARV-110)

ARV-766

ARV-766 is an investigational orally bioavailable PROTAC protein degrader designed to target AR with a different profile than bavdegalutamide (ARV-110), as discussed in further detail below, as a potential treatment for men with mCRPC and MCSPC. In preclinical studies, ARV-766 degraded all tested resistance-driving point mutations of AR, including L702H, a mutation associated with treatment with abiraterone and other AR-pathway therapies.

We have several ongoing clinical trials of ARV-766 including:

•a Phase 2 dose expansion clinical trial in the post-novel hormonal agent, or NHA setting;

•a Phase 1 dose escalation clinical trial in the post-NHA setting; and

•a Phase 1/2 clinical trial in combination with abiraterone in the pre-NHA setting.

Additional detail regarding our clinical development of ARV-766 is discussed in Part I, Item 1 Business Section and below.

In the second quarter of 2023, we presented ARV-766 preclinical data and compound structure at the AACR annual meeting and we shared data from the Phase 1/2 dose escalation and expansion trial of ARV-766 for the treatment of men with mCRPC. The Phase 1 dose escalation portion of the ARV-766 trial was designed to assess its safety, tolerability, and pharmacokinetics in men with mCRPC who have progressed on standard of care therapies, as well as to identify recommended Phase 2 doses for further dose optimization. The Phase 2 expansion cohort was designed to evaluate the antitumor activity of ARV-766 at the two recommended doses (100 mg and 300 mg) and determine the appropriate dose for future development.

Data from the Phase 1/2 dose escalation and expansion trial (data cut off April 2023) showed that ARV-766 was well-tolerated and demonstrated promising activity in a heavily pre-treated, post-receipt of NHAs, all-comers patient population. In both the Phase 1 dose escalation and Phase 2 dose expansion, 100% of patients were previously treated with at least one or more NHA. Patients had a median of four prior lines of therapy in the Phase 1 portion of the trial and five prior lines of therapy in the Phase 2 portion of the trial. Multiple prior therapies have been associated with a decreased responsiveness to AR-directed therapies and an increase in tumor heterogeneity. AR ligand binding domain, or LBD, mutations were present in 28% (13 of 47) of patients’ tumors in the Phase 1/2 trial as determined by plasma DNA analysis. Overall, 42% of patients with AR LBD mutations achieved reductions in PSA levels of greater than or equal to 50%, or PSA50, in the trial. In all patients with L702H mutations, three of five patients with achieved PSA50, and three of three patients with co-occurring T878/H875/L702 mutations achieved PSA50. Response Evaluation Criteria in Solid Tumors, or RECIST, partial responses were observed. Of four patients with AR LBD mutations where RECIST was evaluable, one achieved a confirmed partial response, and one achieved an unconfirmed partial response.

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ARV-766 was well tolerated and the majority of treatment related adverse events, or TRAEs, were Grade 1 or 2, with no Grade ≥4 TRAEs and no dose limiting toxicities. Forty-seven patients across the Phase 1 and 2 trials were evaluable for safety and, of these patients, one patient discontinued treatment due to a TRAE in Phase 2 and two of 47 patients, both in Phase 1, were dose reduced due to TRAE.

As announced at ESMO in the fourth quarter of 2023, interim data from an updated analysis of the ongoing Phase 1/2 trial of ARV-766 (data cut-off August 23, 2023), demonstrated broad signals of efficacy and favorable tolerability in mCRPC patients with tumors harboring any AR LBD mutations, including AR L702H. The data showed a PSA50 of 41% amongst 17 patients with tumors harboring any AR LBD mutation and a PSA 50 of 50% in patients with any tumor harboring an AR L702H mutation. ARV-766 was well-tolerated in data across 84 patients who were treated as of the last data cut-off, with no grade 4 TRAEs. The most common TRAEs were grade 1 or 2 and included fatigue (29%), nausea (14%), vomiting (11%), and diarrhea (11%). The discontinuation rate due to TRAEs was 4%.

Based on signs of superior tolerability and efficacy of ARV-766 in clinical settings to date as compared to bavdegalutamide (ARV-110), early in the fourth quarter of 2023, we determined to prioritize the initiation of a Phase 3 clinical trial with ARV-766 in mCRPC instead of the previously planned Phase 3 clinical trial for bavdegalutamide and expect to initiate discussions with regulatory authorities to align on the Phase 3 program for this Phase 3 clinical trial by the second quarter of 2024. We expect to continue enrollment of the Phase 2 dose expansion trial with ARV-766, with progression free survival, or PFS, data anticipated in mid-2024. We also initiated a Phase 1b/2 trial for ARV-766 in combination with abiraterone in patients with AR-dependent tumors who have not previously received NHAs in the fourth quarter of 2023.

Bavdegalutamide (ARV-110)

Bavdegalutamide (ARV-110) is an investigational orally bioavailable PROTAC protein degrader designed to target and degrade the AR for the treatment of men with mCRPC.

In preclinical studies, bavdegalutamide demonstrated activity of AR mutation or overexpression, both common mechanisms of resistance to currently available AR-targeted therapies. In 2019, we initiated a Phase 1/2 clinical trial of bavdegalutamide designed to assess the safety, tolerability and pharmacokinetics of bavdegalutamide and which trial also included measures of anti-tumor activity as secondary endpoints, including reduction in prostate specific antigen, or PSA, a well-recognized biomarker of prostate cancer progression.

In the third quarter of 2023 we completed enrollment in the Phase 1b combination trial of bavdegalutamide and abiraterone.

In the fourth quarter of 2023, we presented interim data at ESMO from the Phase 1/2 trial with bavdegalutamide (data cut-off date August 11, 2023). In a post-NHA (median prior therapies = 4) mCRPC population, bavdegalutamide at the recommend Phase 2 dose (420 mg, oral, once daily) demonstrated:

•Median radiographic progression free survival, or rPFS of 11.1 months in patients harboring AR 878/875 mutations (n=26) and median rPFS of 8.2 months in patients with tumors harboring any AR LBD mutation except L702H alone (n=45)

•PSA50 rates of 54% in patients with tumors harboring AR 878/875 mutations and 36% in patients with tumors harboring any AR LBD mutation except L702H alone

•The presence of AR L702H mutations greatly diminished the efficacy of bavdegalutamide

◦In patients with any tumor harboring an AR L702H mutation the PSA50 was 8%

•Bavdegalutamide had a manageable tolerability profile with no grade 4 treatment-related adverse events (TRAEs). The most common TRAEs were nausea (56%), fatigue (35%), vomiting (33%), decreased appetite (25%) and diarrhea (24%). The discontinuation rate due to TRAEs was 12%.

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Each of vepdegestrant (ARV-471), ARV-766 and bavdegalutamide (ARV-110) has demonstrated potent and selective protein degradation in our preclinical studies. We believe favorable clinical trial results in these initial oncology programs could provide validation of our platform as a new therapeutic modality for the potential treatment of diseases caused by dysregulated intracellular proteins regardless of therapeutic area. While we have determined to prioritize the initiation of a Phase 3 clinical trial with ARV-766 in mCRPC instead of the previously planned Phase 3 clinical trial for bavdegalutamide, we expect to continue ongoing trial activities with bavdegalutamide (ARV-110-101 and ARV-110-103) as planned.

In the second quarter of 2023, we presented in vivo and in vitro data at the AARC-Targeting RAS Special Conference demonstrating our KRAS G12D PROTAC degraders are potent, selective and led to tumor stasis in mouse xenograft model with intermittent dosing and degradation of KRAS G12D provides an advantage versus inhibition in in vitro and in vivo. Our KRAS G12D-targeted PROTAC degrader is currently in IND-enabling studies.

We also presented preclinical data at the CHDI Foundation’s Annual Huntington’s Disease Therapeutics Conference showing our PROTAC degraders potently and selectively degraded soluble mutant huntingtin (mHTT) in multiple cellular readouts, including rodent neurons, while sparing wild-type HTT.

In the fourth quarter of 2023, the FDA and the European Medicines Agency, or EMA, respectively, cleared our investigational new drug application, or IND, for ARV-393, a PROTAC degrader designed to target the BCL6 protein, and our clinical trial application, or CTA, for ARV-102, a PROTAC degrader designed to target the LRRK2 protein. We initiated the first in-human Phase 1 clinical trial for ARV-102 in the first quarter of 2024, and we plan to initiate first-in-human Phase 1 clinical trial for ARV-393 in the first half of 2024.

Our Operations

We commenced operations in 2013. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential product candidates, undertaking preclinical studies and clinical trials and establishing arrangements with third parties for the manufacture of initial quantities of our product candidates. To date, we have not generated any revenue from product sales and have financed our operations primarily through sales of our equity interests, proceeds from our collaborations, grant funding and debt financing. Since inception through December 31, 2023, we raised approximately $1.7 billion in gross proceeds from the sale of equity instruments and the exercise of stock options, and had received an aggregate of $783.0 million in payments primarily from collaboration partners.

We are a clinical-stage company. Vepdegestrant (ARV-471), ARV-766 and bavdegalutamide (ARV-110) are each in clinical development and we are planning to initiate clinical development for ARV-393 and ARV-102, Our other drug discovery activities are at the research and preclinical development stages. Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Since inception, we have incurred significant operating losses and expect to incur increasing operating losses for at least the next several years due to costs associated with our ongoing and anticipated preclinical and clinical activities for vepdegestrant (ARV-471), ARV-766, and ARV-393, ongoing clinical activities for bavdegalutamide, ARV-102 development activities, research activities in oncology, neurological and other disease areas to expand our pipeline, hiring additional personnel in research, clinical trials, quality and other functional areas, increased expenses incurred with CMOs to supply us with product for our preclinical and clinical studies and CROs for the synthesis of compounds in our preclinical development activities, as well as other associated costs including the management of our intellectual property portfolio.

We do not expect to generate revenue from sales of any product for many years, if ever. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research or product development programs or any future commercialization efforts, or to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

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Financial Operations Overview

Revenue

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. Our revenues to date have been generated through research collaboration and license agreements. Revenue is recognized ratably over our expected performance period under each agreement. We expect that any revenue for the next several years will be derived primarily from our current collaboration agreements and any additional collaborations that we may enter into in the future. To date, we have not received any sales-based milestone payments or royalties under any of the collaboration agreements.

Genentech License Agreement

In September 2015, we entered into an Option and License Agreement with Genentech, focused on PROTAC targeted protein degrader discovery and research for target proteins, or Targets, based on our proprietary platform technology, other than excluded Targets as described below. This collaboration was expanded in November 2017 through an Amended and Restated Option, License and Collaboration Agreement, which we refer to as the Restated Genentech Agreement.

Under the Restated Genentech Agreement, Genentech has the right to designate up to ten Targets for further discovery and research utilizing our PROTAC platform technology. Genentech may designate as a Target any protein to which a PROTAC targeted protein degrader, by design, binds to achieve its mechanism of action, subject to certain exclusions. Genentech also has the right to remove a Target from the collaboration and substitute a different Target that is not an excluded Target at any time prior to us commencing research on such Target or in certain circumstances following commencement of research by us.

At the time we entered into the original agreement with Genentech, we received an upfront payment of $11.0 million, and, at the time we entered into the Restated Genentech Agreement, we received an additional $34.5 million in upfront and expansion target payments. We are eligible to receive up to an aggregate of $27.5 million in additional expansion target payments if Genentech exercises its options for all remaining Targets. We are also eligible to receive payments aggregating up to $44.0 million per Target upon the achievement of specified development milestones; payments aggregating up to $52.5 million per Target (assuming approval of two indications) subject to the achievement of specified regulatory milestones; and payments aggregating up to $60.0 million per PROTAC targeted protein degrader directed against the applicable Target, subject to the achievement of specified sales milestones. These milestone payments are subject to reduction if we do not have a valid patent claim covering the licensed PROTAC targeted protein degrader at the time the milestone is achieved. We are also eligible to receive, on net sales of licensed PROTAC targeted protein degraders, mid-single digit royalties, which may be subject to reductions.

Pfizer Research Collaboration Agreement

In December 2017, we entered into a Research Collaboration and License Agreement with Pfizer, setting forth our collaboration to identify or optimize PROTAC targeted protein degraders that mediate for degradation of Targets, using our proprietary platform technology that are identified in the agreement or subsequently selected by Pfizer, subject to certain exclusions. We refer to this agreement as the Pfizer Research Collaboration Agreement.

Under the Pfizer Research Collaboration Agreement, Pfizer has designated a number of initial Targets. For each identified Target, we and Pfizer will conduct a separate research program pursuant to a research plan. Pfizer may make substitutions for any of the initial Target candidates, subject to the stage of research for such Target.

In the year ended December 31, 2018, we received an upfront, non-refundable payment and certain additional payments totaling $28.0 million in exchange for use of the technology license and to fund Pfizer-related research, as defined within the Pfizer Research Collaboration Agreement. We are eligible to receive up to an additional $37.5 million in non-refundable option payments if Pfizer exercises its options for all targets under the Pfizer Research Collaboration Agreement. We are also entitled to receive up to $225.0 million in

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development milestone payments and up to $550.0 million in sales-based milestone payments for all designated targets under the Pfizer Research Collaboration Agreement, as well as mid- to high-single digit tiered royalties, which may be subject to reductions, on net sales of PROTAC targeted protein degrader-related products. In 2021 and 2020, we received payments totaling $1.2 million and $4.4 million, respectively. Pfizer selected additional targets and initiated additional services totaling $1.0 million and $3.5 million in December 2022 and 2021, respectively, which were included in accounts receivable as of December 31, 2022 and 2021.

Bayer Collaboration Agreement

In June 2019, we entered into a Collaboration and License Agreement, or the Bayer Collaboration Agreement, with Bayer, setting forth our collaboration to identify or optimize PROTAC targeted protein degraders that mediate for degradation of Targets, using our proprietary platform technology, that are selected by Bayer, subject to certain exclusions and limitations. The Bayer Collaboration Agreement became effective in July 2019.

Under the Bayer Collaboration Agreement, we and Bayer conduct a research program pursuant to separate research plans mutually agreed to by us and Bayer and tailored to each Target selected by Bayer. Bayer may make substitutions for any such initial Target candidates, subject to certain conditions and based on the stage of research for such Target. During the term of the Bayer Collaboration Agreement, we are not permitted, either directly or indirectly, to design, identify, discover or develop any small molecule pharmacologically-active agent whose primary mechanism of action is, by design, directed to the inhibition or degradation of any Target selected or reserved by Bayer, or grant any license, covenant not to sue or other right to any third party in the field of human disease under the licensed intellectual property for the conduct of such activities.

Under the terms of the Bayer Collaboration Agreement, we received an aggregate upfront, non-refundable payment of $17.5 million and an additional $12.0 million in research funding payments from inception through December 31, 2023. We are also eligible to receive up to $197.5 million in development milestone payments and up to $490.0 million in sales-based milestone payments for all designated Targets. In addition, we are eligible to receive, on net sales of PROTAC targeted protein degrader-related products, mid-single digit to low-double digit tiered royalties, which may be subject to reductions.

Pfizer ARV-471 Collaboration Agreement

In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound vepdegestrant (ARV-471), or the Licensed Products.

Under the ARV-471 Collaboration Agreement, we received an upfront, non-refundable payment of $650 million. In addition, we are eligible to receive up to an additional $1.4 billion in contingent payments based on specified regulatory and sales-based milestones for the Licensed Products. Of the total contingent payments, $400 million in regulatory milestones are related to marketing approvals and $1.0 billion are related to sales-based milestones.

We and Pfizer share equally (50/50) all development costs (including costs for conducting any clinical trials) for the Licensed Products, subject to certain exceptions. Except for certain regions described below, we will also share equally (50/50) all profits and losses in commercialization and medical affairs activities for the Licensed Products in all other countries, subject to certain exceptions.

We will be the marketing authorization holder and, subject to marketing approval, book sales in the United States, while Pfizer will hold marketing authorizations outside the United States. We will determine with Pfizer which, if any, regions within the world will be solely commercialized by one party, and in such region the parties will adjust their share of all profits and losses for the Licensed Products based on the role each party will be performing.

Unless earlier terminated in accordance with its terms, the ARV-471 Collaboration Agreement will expire on a Licensed Product-by-Licensed Product and country-by-country basis when such Licensed Products are no longer commercialized or developed for commercialization in such country. Pfizer may terminate the ARV-471 Collaboration Agreement for convenience in its entirety or on a region-by-region basis subject to certain notice periods. Either party may terminate the ARV-471 Collaboration Agreement for the other party’s uncured material

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breach or insolvency. Subject to applicable terms of the ARV-471 Collaboration Agreement, including certain payments to Pfizer upon termination for our uncured material breach, effective upon termination of the ARV-471 Collaboration Agreement, we are entitled to retain specified licenses to be able to continue to exploit the Licensed Products.

Subject to specified exceptions, we and Pfizer have each agreed not to directly or indirectly research, develop, or commercialize any competing products outside of the ARV-471 Collaboration Agreement anywhere in the world during the term of the ARV-471 Collaboration Agreement.

Operating Expenses

Our operating expenses since inception have consisted solely of research and development costs and general and administrative costs.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:

•salaries, benefits and other related costs, including travel and stock-based compensation expense, for personnel engaged in research and development functions;

•expenses incurred under agreements with third parties, including CROs and other third parties that conduct research and preclinical activities on our behalf as well as third parties that manufacture our product candidates for use in our preclinical studies and clinical trials;

•costs of outside consultants, including their fees, stock-based compensation and related travel expenses;

•the costs of laboratory supplies and developing preclinical studies and clinical trial materials;

•facility-related expenses, which include direct depreciation costs of equipment and allocated expenses for rent and maintenance of facilities and other operating costs;

•costs incurred in the development of intellectual property; and

•third-party licensing fees.

We expense research and development costs as incurred.

We typically use our employee and infrastructure resources across our development programs, and as such, do not track all of our internal research and development expenses on a program-by-program basis. The following table summarizes our research and development expenses for our AR program, which includes ARV-766 and bavdegalutamide (ARV-110), ER program, which includes vepdegestrant (ARV-471), and all other platform and exploratory research and development costs:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(dollars in millions)","2023","","2022","","2021"],["AR program development costs","$","79.5","","","$","57.5","","","$","41.8"],["ER program development costs","113.7","","","72.1","","","30.9"],["Other research and development costs","186.5","","","185.4","","","107.7"],["Total research and development costs","$","379.7","","","$","315.0","","","$","180.4"]]
[[/GREPCENT_TABLE]]

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we continue to conduct our ongoing clinical trials for vepdegestrant (ARV-471), ARV-766 and the initiation of clinical trials for ARV-393 and ARV-102, and continue to discover and develop additional product candidates. Research and development expenses related to vepdegestrant (ARV-471) are shared equally with Pfizer from July 22, 2021, the effective date of the Vepdegestrant (ARV-471) Collaboration Agreement. The ER program development costs in the table above reflect the cost sharing with Pfizer.

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We cannot determine with certainty the duration and costs of future clinical trials of vepdegestrant, ARV-766, ARV-393, ARV-102 or unexpected costs of ongoing clinical trails for bavdegalutamide, or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

•successfully completing preclinical studies and clinical trials;

•receipt and related terms of marketing approvals from applicable regulatory authorities;

•obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

•making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our product candidates;

•establishing sales, marketing, market access and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others;

•acceptance of our products, if and when approved, by patients, the medical community and third-party payors;

•obtaining and maintaining third-party coverage and adequate reimbursement;

•maintaining a continued acceptable safety profile of the products following approval; and

•effectively competing with other therapies.

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation for personnel in our executive, finance, business development and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support increased research and development activities relating to our product candidates and develop our commercial operations. We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq Stock Market and Securities and Exchange Commission requirements; director and officer insurance costs; and investor and public relations costs.

Interest Income (Expense)

Interest income consists of interest earned on our cash, cash equivalents, restricted cash and marketable securities. Interest expense consists primarily of interest paid or accrued on our outstanding debt with the State of Connecticut.

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Income Taxes

Since our inception in 2013, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in any year or for our federal or state earned research and development tax credits, due to our uncertainty of realizing a benefit from those items.

As of December 31, 2023, we had $235.9 million of federal net operating loss carryforwards which may be carried forward indefinitely, but the deductibility of such carryforwards is limited to 80% of our taxable income in the year in which carryforwards are used, $250.0 million of state and local net operating loss carryforwards which expire at various dates beginning in 2035, $29.1 million of federal tax credit carryforwards and $18.7 million of state tax credit carryforwards as of December 31, 2023 which expire at various dates beginning in 2040.

As of December 31, 2023, Arvinas, Inc. had four wholly owned subsidiaries organized as C-corporations: Arvinas Operations, Inc., Arvinas Androgen Receptor, Inc., Arvinas Estrogen Receptor, Inc., and Arvinas Winchester, Inc. Prior to December 31, 2018, these subsidiaries were separate filers for federal tax purposes. Net operating loss carryforwards are generated from the C-corporation subsidiaries’ filings. We have provided a valuation allowance against the full amount of the deferred tax assets since, in the opinion of management, based upon our earnings history, it is more likely than not that the benefits will not be realized.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We recognize revenue under Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers. Our revenue is generated through research collaboration and license agreements with pharmaceutical partners. The terms of these agreements contain multiple goods and services which may include (i) licenses, (ii) research and development activities and (iii) participation in joint research and development steering committees. The terms of these agreements may include non-refundable, upfront license or option fees, payments for research and development activities, payments upon the achievement of certain milestones and royalty payments based on product sales derived from the collaboration. Under ASC 606, we evaluate whether the license agreement, research and development services and participation in research and development steering committees represent separate or combined performance obligations. We have determined that these services within our existing contracts represent combined single performance obligations.

The research collaboration and license agreements typically include contingent milestone payments related to specified preclinical and clinical development milestones and regulatory milestones. These milestone payments represent variable consideration that are not initially recognized within the transaction price as they are fully constrained under the guidance in ASC 606. We continually assess the probability of significant reversals for any amounts that become likely to be realized prior to recognizing the variable consideration associated with these payments within the transaction price.

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Revenue is recognized ratably over our expected performance period under each respective arrangement. We make our best estimate of the period over which we expect to fulfill our performance obligations, which includes access to technology through the license agreement and research activities. Given the uncertainties of these collaboration arrangements, significant judgement is required to determine the duration of the performance period.

For the years ended December 31, 2023, 2022 and 2021, the transaction price allocated to the combined performance obligations identified under the individual research collaboration and license agreements was recognized as revenue on either a straight-line basis over the estimated performance period under the arrangement or over the estimated performance period based on our best estimate of costs to be incurred. Straight-line basis was considered the best measure of progress for certain agreements in which control of the combined obligation transfers to the customers, due to the contract containing license rights to technology, research and development services, and joint committee participation, which in totality are expected to occur ratably over the performance period.

Our contracts may also call for certain sales-based milestones and royalty payments upon successful commercialization of a target. In accordance with ASC 606-10-55-65, we recognize revenues from sales-based milestone and royalty payments at the later of (i) the occurrence of the subsequent sale, or (ii) the performance obligation to which some or all of the sales-based milestone or royalty payments has been allocated has been satisfied (or partially satisfied). We anticipate recognizing these milestones and royalty payments if and when subsequent sales are generated by customers from the use of the technology. To date, no revenue from these sales-based milestone and royalty payments has been recognized for any periods.

Amounts received prior to satisfying the above revenue recognition criteria are recorded as contract liabilities in our accompanying consolidated balance sheets.

Research and Development Contract Costs and Accruals

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our applicable personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically confirm the accuracy of these estimates with the service providers and make adjustments, if necessary. Examples of estimated accrued research and development expenses include fees paid to:

•vendors in connection with clinical development activities; and

•CROs and investigative sites in connection with pre-clinical, non-clinical, and human clinical trials

We base the expense recorded related to external research and development on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that supply, conduct and manage clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment streams. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

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New Accounting Pronouncements

For information on new accounting standards, see Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Results of Operations

Comparison of Years Ended December 31, 2023 and 2022

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(dollars in millions)","2023","","2022","","$ change"],["Revenue","$","78.5","","","$","131.4","","","$","(52.9)"],["Research and development expenses","(379.7)","","","(315.0)","","","(64.7)"],["General and administrative expenses","(100.3)","","","(79.6)","","","(20.7)"],["Other income","37.6","","","12.2","","","25.4"],["Income tax expense","(0.9)","","","(20.9)","","","20.0"],["Loss from equity method investment","(2.5)","","","(10.6)","","","8.1"],["Net loss","$","(367.3)","","","$","(282.5)","","","$","(84.8)"]]
[[/GREPCENT_TABLE]]

Revenue

Revenues for the year ended December 31, 2023 totaled $78.5 million, compared with $131.4 million for the year ended December 31, 2022. The decrease of $52.9 million was primarily due to adjustments to revenue from changes in contract estimates related to our Pfizer ARV-471 Collaboration Agreement, Pfizer Research Collaboration Agreement and Bayer Collaboration Agreement, net of current year revenues, totaling $39.7 million, a decrease in revenue recognized from our Genentech License Agreement of $5.1 million and a decrease of $8.1 million in previously constrained deferred revenue recognized in 2023 related to our Oerth Bio joint venture.

Research and Development Expenses

Research and development expenses for the year ended December 31, 2023 totaled $379.7 million, compared with $315.0 million for the year ended December 31, 2022. The increase of $64.7 million was primarily due to investments in our platform and exploratory programs of $1.1 million and increases in expenses related to our AR and ER programs of $22.0 million and $41.6 million, respectively. The increase in spending over all of our programs was primarily driven by clinical trial costs and related drug manufacturing costs of $33.8 million as we expanded our AR and ER programs into additional clinical trials. Expenses related to our platform and exploratory targets also increased by $16.0 million as we continued to expand the number of protein targets in the exploratory and lead optimization phases and continued to make investments into our platform discovery efforts. Additionally, personnel and infrastructure related costs increased by $14.8 million.

General and Administrative Expenses

General and administrative expenses totaled $100.3 million for the year ended December 31, 2023, compared with $79.6 million for the year ended December 31, 2022. The increase of $20.7 million was primarily due to increased spending in personnel and infrastructure related costs of $11.5 million, an increase in professional fees of $6.3 million and increases related to establishing our commercial operations of $3.5 million, offset in part by reduced insurance costs of $1.0 million.

Other Income

Other income totaled $37.6 million for the year ended December 31, 2023, compared with $12.2 million for the year ended December 31, 2022. The increase of $25.4 million was primarily due to higher interest

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income of $26.8 million from marketable securities and money market accounts, offset in part by $0.5 million of higher year-over-year realized losses. In addition, the elimination of refundable research and development credits from the State of Connecticut reduced other income by $0.7 million.

Income Tax Expense

Income tax expense totaled $0.9 million for the year ended December 31, 2023, compared with $20.9 million for the year ended December 31, 2022. The decrease of $20.0 million in income tax expense was primarily due to revenue recognition for tax purposes from our ARV-471 Collaboration Agreement in 2022.

Loss from Equity Method Investment

Loss from equity method investment totaled $2.5 million for the year ended December 31, 2023, compared with $10.6 million for the year ended December 31, 2022. The decrease of $8.1 million was due to fully recognizing the remaining constrained revenue and the related equity method losses during the year ended December 31, 2023.

Results of Operations — Years Ended December 31, 2022 and 2021

Discussion and analysis of the results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021 is included under the heading "Comparison of Years Ended December 31, 2022 and 2021" in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our 2022 Annual Report on Form 10-K as filed with the SEC on February 23, 2023 and incorporated by reference into this Annual Report on Form 10-K.

Liquidity and Capital Resources

Sources of Liquidity

We do not currently have any approved products and have never generated any revenue from product sales. To date, we have financed our operations primarily through the sale of equity interests and through payments from collaboration partners, grant funding and loans from the State of Connecticut. Since inception through December 31, 2023, we had received an aggregate of $783.0 million in payments from collaboration partners, grant funding and forgivable and partially forgivable loans from the State of Connecticut and raised approximately $1.7 billion in gross proceeds from the sale of equity interests and the exercise of stock options, including:

•October 2018: completion of our initial public offering in which we issued and sold 7,700,482 shares of common stock for aggregate gross proceeds of $123.2 million, before fees and expenses;

•July 2019: sale of 1,346,313 shares of common stock to Bayer AG for aggregate gross proceeds of $32.5 million;

•November 2019: completion of a follow-on offering in which we issued and sold 5,227,273 shares of common stock for aggregate gross proceeds of $115.0 million, before fees and expenses;

•September - December 2020: sale of 2,593,637 shares of common stock in an “at-the-market offering” for aggregate gross proceeds of $65.6 million, before fees and expenses;

•December 2020: completion of a follow-on offering in which we issued and sold 6,571,428 shares of common stock for aggregate gross proceeds of $460.0 million, before fees and expenses;

•September 2021: issuance of 3,457,815 shares of common stock to Pfizer for aggregate gross proceeds of $350.0 million.

•August 2023: sale of 1,449,275 shares of common stock in an “at-the-market" offering for aggregate gross proceeds of $37.2 million before fees and expenses; and

•November 2023: sale of 12,963,542 shares of common stock and pre-funded warrants to purchase 3,422,380 shares of common stock in a private placement for aggregate gross proceeds of $350.0 million before fees and expenses.

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In November 2023, we amended and restated the Equity Distribution Agreement with Piper Sandler & Company and Cantor Fitzgerald & Co., pursuant to which we may offer and sell from time to time, through the agents, up to approximately $262.8 million of the common stock registered under the universal shelf registration statement pursuant to one or more “at-the-market” offerings. During the year ended December 31, 2023, no shares were issued under the amended and restated agreement.

In July 2021, we entered into the ARV-471 Collaboration Agreement with Pfizer, pursuant to which we granted Pfizer worldwide co-exclusive rights to develop and commercialize products containing our proprietary compound ARV-471. Under the ARV-471 Collaboration Agreement, Pfizer made an upfront, nonrefundable payment of $650.0 million.

Cash Flows

Our cash, cash equivalents, restricted cash and marketable securities totaled $1.3 billion and $1.2 billion as of December 31, 2023 and 2022, respectively. We had an outstanding loan balance of $1.0 million as of December 31, 2023 and 2022.

The following table summarizes our sources and uses of cash for the period presented:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(dollars in millions)","2023","","2022","","2021"],["Net cash (used in) provided by operating activities","$","(347.8)","","","$","(273.5)","","","$","559.4"],["Net cash provided by (used in) investing activities","203.5","","","242.8","","","(1,313.6)"],["Net cash provided by financing activities","374.7","","","4.7","","","278.6"],["Net increase (decrease) in cash, cash equivalents and restricted cash","$","230.4","","","$","(26.0)","","","$","(475.6)"]]
[[/GREPCENT_TABLE]]

Operating Activities

Net cash used in operating activities for the year ended December 31, 2023 totaled $347.8 million, primarily due to our net loss of $367.3 million and a decrease in deferred revenue of $74.6 million, driven largely by our ARV-471 Collaboration Agreement with Pfizer, partially offset by non-cash charges of $63.9 million, an increase in accounts payable and accrued liabilities of $17.3 million, and a decrease in prepaid expenses and other current assets of $14.1 million. Non-cash charges consisted primarily of stock compensation expense of $71.6 million, depreciation and amortization of $4.8 million and net accretion of bond discounts/premiums of $16.6 million.

Net cash used in operating activities for the year ended December 31, 2022 totaled $273.5 million, primarily due to our net loss of $282.5 million and a decrease in deferred revenue of $116.8 million, driven largely by the ARV-471 Collaboration Agreement with Pfizer, partially offset by non-cash charges of $91.6 million and a decrease in accounts receivable of $14.0 million, related to payments pursuant to the ARV-471 Collaboration Agreement. Non-cash charges were primarily stock compensation expense of $75.5 million, depreciation and amortization of $6.3 million and net accretion of bond discounts/premiums of $5.7 million.

Net cash provided by operating activities for the year ended December 31, 2021 totaled $559.4 million, primarily due to an increase in deferred revenue of $695.5 million driven largely by the ARV-471 Collaboration Agreement with Pfizer, a net increase in accrued expenses and accounts payable of $27.9 million, and non-cash charges of $72.1 million, partially offset by our net loss of $191.0 million, an increase in accounts receivable of $14.0 million related primarily to the ARV-471 Collaboration Agreement, prepaid expenses related in part to clinical trials and drug manufacturing contracts of $13.6 million, and the payment to obtain a contract of $12.9 million related to the ARV-471 Collaboration Agreement. Non-cash charges were primarily stock compensation expense of $57.1 million, net accretion of bond discounts/premiums of $9.4 million and depreciation and amortization of $4.8 million.

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Investing Activities

Net cash provided by investing activities for the year ended December 31, 2023 totaled $203.5 million, attributable to maturities and sales of marketable securities in excess of purchases of $206.4 million, partially offset by purchases of property and equipment of $2.9 million.

Net cash provided by investing activities for the year ended December 31, 2022 totaled $242.8 million, attributable to maturities and sales of marketable securities in excess of purchases of $249.6 million, partially offset by purchases of property and equipment of $6.8 million.

Net cash used in investing activities for the year ended December 31, 2021 totaled $1.3 billion, attributable to purchases of marketable securities in excess of the maturities of marketable securities of $1.3 billion due in part to funds received as part of the ARV-471 Collaboration Agreement and purchases of property and equipment of $4.7 million, partially offset by sales of marketable securities of $7.2 million.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023 totaled $374.7 million, attributable to proceeds from the issuance of shares of our common stock and pre-funded warrants to purchase shares of our common stock in a private placement of approximately $350.0 million, before deducting placement agent fees and offering costs of approximately $15.9 million, proceeds from the issuance of shares of our common stock in an "at-the-market" offering of approximately $37.2 million, less offering costs of approximately $1.1 million, and proceeds from the exercise of stock options and issuance of ESPP shares of $4.5 million.

Net cash provided by financing activities for the year ended December 31, 2022 totaled $4.7 million, attributable to proceeds from the exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2021 totaled $278.6 million, attributable to the proceeds from the issuance of shares of our common stock to Pfizer of $260.0 million (after allocation of a portion of the proceeds to deferred revenue), net of expenses, and proceeds from the exercise of stock options of $18.6 million.

Funding Requirements

Since our inception, we have incurred significant operating losses. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we advance the preclinical and clinical development of our product candidates.

Specifically, we anticipate that our expenses will increase substantially if, and as we:

•continue our ongoing and planned clinical trials of our product candidates vepdegestrant (ARV-471) for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer, our ongoing and planned clinical trials for ARV-766 for the treatment of men with mCRPC, and our ongoing clinical trials for bavdegalutamide for the treatment of men with mCRPC;

•initiate Phase 1 trials for ARV-393, our PROTAC protein degrader designed to target the BCL6 protein, and ARV-102, our PROTAC degrader designed to target the LRRK2 protein;

•progress additional PROTAC protein degrader programs into IND- or CTA-enabling studies;

•apply our PROTAC Discovery Engine to advance additional product candidates into preclinical and clinical development;

•expand the capabilities of our PROTAC Discovery Engine;

•seek marketing approvals for any product candidates that successfully complete clinical trials;

•ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing capabilities to commercialize any products for which we may obtain marketing approval;

•expand, maintain and protect our intellectual property portfolio;

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•hire additional development, including clinical and regulatory, and scientific personnel; and

•add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company.

We had cash, cash equivalents, restricted cash and marketable securities of approximately $1.3 billion as of December 31, 2023. We believe that our cash, cash equivalents, restricted cash and marketable securities as of December 31, 2023 will enable us to fund our planned operating expenses and capital expenditure requirements into 2027. We have based this estimate on assumptions that may prove to be wrong and we could use our capital resources sooner than we currently expect. Our future capital requirements will depend on many factors, including:

•the progress, costs and results of our ongoing and planned clinical trials for vepdegestrant (ARV-471) ARV-766 and any future clinical development of vepdegestrant and ARV-766, and our ongoing clinical trials for bavdegalutamide;

•the scope, progress, costs and results of preclinical and clinical development for our other product candidates and development programs, including ARV-393 and ARV-102;

•the number of, and development requirements for, other product candidates that we pursue, including our other oncology and neurodegenerative research programs;

•the success of our collaborations with Pfizer, Genentech and Bayer ;

•the costs, timing and outcome of regulatory review of our product candidates;

•the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;

•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and

•our ability to establish additional collaboration arrangements with other biotechnology; or

•pharmaceutical companies on favorable terms, if at all, or enter into license, marketing and royalty arrangements, and similar transactions for the development or commercialization of our product candidates.

As a result of these anticipated expenditures, we will need to obtain substantial additional financing in connection with our continuing operations. Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. Although we may receive potential future payments under our collaborations with Pfizer, Genentech and Bayer, we do not currently have any committed external source of funds. Adequate additional funds may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends.

If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

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Borrowings

In January 2014, we entered into an Assistance Agreement with the State of Connecticut, or the 2014 Assistance Agreement, under which we borrowed $2.5 million. Borrowings under the 2014 Assistance Agreement were forgivable if we maintained a minimum number of full-time jobs in the State of Connecticut for a minimum period at a minimum annual salary. Effective in March 2016, the full principal amount under the 2014 Assistance Agreement had been forgiven. While borrowings under the 2014 Assistance Agreement have been forgiven, we remain subject to an ongoing covenant to be located in the State of Connecticut through January 2024. Upon violation of this covenant, we would be required to repay the full original funding amount of $2.5 million plus liquidated damages of 7.50%.

In June 2018, we entered into an additional Assistance Agreement with the State of Connecticut, or the 2018 Assistance Agreement, to provide funding for the expansion and renovation of laboratory and office space. We borrowed $2.0 million under the 2018 Assistance Agreement in September 2018, of which $1.0 million was forgiven upon meeting certain employment conditions. Borrowings under the agreement bear an interest rate of 3.25% per annum, with interest only payments required for the first 60 months, and mature in September 2028. The 2018 Assistance Agreement requires that we be located in the State of Connecticut through September 2028 with a default penalty of repayment of the full original funding amount of $2.0 million plus liquidated damages of 7.5% of the total amount of funding received. As of December 31, 2023, $1.0 million remains outstanding under the 2018 Assistance Agreement.