ARVN — Q2 2026 Financial Report Analysis

A $169 million profit made almost entirely of one-time deal accounting

Arvinas swung to a second-quarter net income of $169.4 million ($2.58 per diluted share) from a $61.2 million loss a year earlier, on revenue of $249.7 million versus $22.4 million. Almost none of that is a running business. The quarter was dominated by two events: the FDA's approval of VEPPANU (vepdegestrant), Arvinas's breast cancer drug, and the hand-off of that drug to Rigel Pharmaceuticals. Together they triggered a $50.0 million approval milestone, a $62.5 million Rigel license gain, and an accounting catch-up that recognized $126.4 million of old Pfizer upfront cash all at once. Arvinas does not sell VEPPANU itself and books no product sales. Cash, cash equivalents and marketable securities still fell to $567.9 million from $685.4 million at the start of the year.

Arvinas develops PROTAC drugs. A PROTAC (proteolysis-targeting chimera) is a type of drug that tags a disease-causing protein so the cell's own disposal system destroys it, rather than just blocking the protein. VEPPANU is the first PROTAC ever approved by the FDA.

At a glance

• $238.9 million of the $249.7 million in revenue came from three one-time items (deferred-revenue catch-up, Rigel license, approval milestone). That leaves about $10.8 million of ordinary revenue, and the main source of that, Pfizer cost-sharing, has now ended.
• R&D spending fell 23% to $52.6 million. Most of the cut came from staff costs after two rounds of layoffs, which removed about 33% and then another 15% of the workforce. Spending on the newer pipeline drugs went up.
• $567.9 million in cash and securities, which management says lasts into the second half of 2028. Operating cash outflow was $117.5 million in the first half even though the company reported $111.8 million of net income for the period.

Key figures

n/m = not meaningful. A swing from loss to profit, or revenue driven almost entirely by one-time items, does not produce a useful percentage. Cash, cash equivalents and marketable securities were $567.9M at June 30, 2026, compared with $685.4M at December 31, 2025.

Where the revenue came from

A biotech without product sales earns "collaboration revenue" when partners pay for rights to its drugs. Under the accounting rules, upfront cash is usually recorded as revenue gradually over the years the company works on the program, not when the money arrives. That is why this line can jump around so much from quarter to quarter.

What each line actually reflects, according to the 10-Q:

• The $133.7M from the Pfizer collaboration is mostly a catch-up. Pfizer paid Arvinas $650 million upfront in 2021, and part of it was still waiting on the balance sheet as deferred revenue. Once VEPPANU was licensed to Rigel, Arvinas concluded its remaining obligations to Pfizer were satisfied, so it recognized the remaining $179.1 million of deferred revenue all at once. It then subtracted a $52.7 million liability to help fund Pfizer's ongoing VEPPANU studies. That left a net $126.4 million. Only $7.3 million was ordinary, period-by-period recognition from before the Rigel deal.
• The $62.5M from Rigel has two parts. The first is $42.5 million: Arvinas's half of Rigel's $70.0 million upfront payment plus a $15.0 million transition payment that has not yet been paid. The second is $20.0 million: Arvinas's half of Rigel's commitment to reimburse up to $40.0 million of ongoing development costs.
• The $50.0M milestone was triggered by the FDA approval. At June 30 it was still uncollected and recorded as a receivable; accounts receivable rose to $50.3 million from $1.0 million.
• The $3.5M from the Pfizer research deal was also the last of its deferred revenue, because that program's research term has ended.

Deferred revenue on the balance sheet is now zero, compared with $205.6 million at the start of the year. The gradual flow of revenue from old upfront payments, which supported Arvinas's reported revenue in past quarters, is finished.

R&D: spending shifts from vepdegestrant to the newer pipeline

The 10-Q attributes the $16.0 million decrease "primarily" to an $11.0 million drop in compensation and personnel costs. Spending on the newer drug candidates rose: ARV-806 by $3.9 million, ARV-027 by $3.2 million and ARV-393 by $2.3 million. That roughly offset a $10.6 million fall in vepdegestrant spending. In other words, external spending on drug programs was flat at about $24 million, while the cost of running the company shrank. Stock-based compensation, a non-cash expense, inside R&D fell to $0.9 million from $8.5 million.

What the headline numbers hide

• Without the deal items, this was a normal loss-making quarter. Remove the $238.9 million of one-time revenue and the $9.0 million royalty owed to Yale under its license that those items triggered (booked as "cost of license revenue"). The result is an operating loss of roughly $65.8 million, compared with $71.5 million a year earlier. The real improvement is about $6 million a quarter, and it comes from cost cuts, not revenue.
• Most of the profit brought in no cash this quarter. The $126.4 million catch-up is money Pfizer paid back in 2021. The $50.0 million milestone was still a receivable at quarter-end. Part of the Rigel revenue is recorded as payments still to come: Arvinas's $7.5 million half of the $15.0 million transition payment, and the $20.0 million cost reimbursement. For the first half, the company reported $111.8 million of net income but used $117.5 million of cash in operations.
• There is a new obligation. Arvinas now carries a $52.7 million collaboration liability ($28.4 million due within a year) to fund half of Pfizer's ongoing VEPPANU development work. This is a future cash cost that came with the deal.
• The prior-year half was distorted too. First-half 2025 revenue of $211.2 million included a $150.2 million one-time boost. It came from a change in accounting estimate after two Phase 3 combination trials were dropped from the plan. Neither year's first-half profit tells you much about the underlying business.
• Share count and EPS: diluted shares fell about 10% to 65.7 million because Arvinas bought back 10.0 million shares for $91.9 million in the second half of 2025. With a loss turning into a profit, this has no meaningful effect on the EPS comparison.
• Smaller items: interest income fell $4.8 million, to $5.5 million. General & administrative expense includes a $3.1 million non-cash write-off of the remaining asset tied to the costs of signing the 2021 Pfizer deal, and $1.3 million of restructuring charges.

Takeaway: Q2 2026 was the quarter Arvinas turned VEPPANU into cash and accounting gains: a $50 million milestone, about $62 million from Rigel, and a $126 million deferred-revenue release. That leaves Arvinas largely a royalty holder on its approved drug. From here, results depend on Rigel's VEPPANU sales, which Arvinas does not control, and on early-stage data from ARV-393, ARV-806, ARV-102 and ARV-027. The cash runway runs into the second half of 2028, and the reported profit does not change it.

What VEPPANU now means for Arvinas

The FDA approved VEPPANU for adults with ER+/HER2- breast cancer that has an ESR1 mutation and that has progressed after at least one line of hormone-based ("endocrine") therapy. It was approved based on the Phase 3 VERITAC-2 trial, in which median progression-free survival was 5.0 months versus 2.1 months on fulvestrant. Progression-free survival is how long patients lived without the cancer getting worse. On May 8, 2026 the NCCN, the main US cancer treatment guidelines body, added it to its breast cancer guidelines.

Arvinas will not sell the drug. Under the Rigel agreement, Rigel handles the US launch and owns global rights. Arvinas and Pfizer split everything equally: Arvinas's half amounts to up to $160 million in future milestones (half of $320 million), plus half of royalties in the mid-teens to mid-20s percent of worldwide net sales. Those Rigel payments replace any unearned future milestones that Pfizer would have owed Arvinas under the 2021 deal. The 10-Q says plainly that Arvinas's VEPPANU income "will be entirely dependent on Rigel" and that it "may never" realize profits from the out-license.

Outlook: catalysts and runway

Management's timeline from the filing (as of the August 4, 2026 10-Q):

• ARV-393 (lymphoma): early monotherapy data at a medical congress in the second half of 2026, mostly from doses below the expected effective range. More monotherapy data and first data combining it with glofitamab (an antibody lymphoma drug) are expected in mid-2027.
• ARV-806 (KRAS G12D tumors): Phase 1 dose-escalation data in the second half of 2026. Arvinas plans to out-license any further trials rather than fund them itself.
• ARV-102 (neurology): more biomarker data in Parkinson's disease in Q4 2026. The planned US Phase 1b trial in progressive supranuclear palsy (PSP), a rare brain disease, is on clinical hold while the FDA reviews requested information and final animal toxicology data. Arvinas now targets starting PSP trials in 2027.
• ARV-027 (SBMA, a rare neuromuscular disease): multiple-dose cohorts started in Q3 2026, with first muscle-degradation data in the first half of 2027.
• ARV-6723 (immuno-oncology): Phase 1 start planned for Q3 2026.
• Other changes: Genentech terminated its remaining collaboration effective August 8, 2026. Chief medical officer Noah Berkowitz left on July 3, 2026, and the search for a successor is ongoing.

Our read: with deferred revenue gone, Arvinas's reported revenue from Q3 onward will likely be small and irregular. It will consist of milestone or royalty payments from Rigel and Novartis when they come. Quarterly operating losses will likely look more like the roughly $66 million underlying figure above than this quarter's profit. The $567.9 million cash pile and cuts to staff costs support the 2028 runway. But no drug the company still controls is past Phase 1, so the company's value now depends on the data readouts above and on how fast VEPPANU sells under Rigel. The ARV-102 clinical hold is the main near-term risk to the stated timeline.