Corvus Pharmaceuticals, Inc. Q1 FY2020 Earnings Call

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Corvus Pharmaceuticals First Quarter 2020 Business Update and Financial Results Webcast. Please note, today's conference is being recorded. And at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. It is now my pleasure to turn the conference over to Zack Kubow of Pure Communications. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals first quarter 2020 business update and financial results conference call. On the call to discuss the results and business highlights for the first quarter 2020 are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; and Mehrdad Mobasher, Chief Medical Officer. The executive team will open the call with some prepared remarks, followed by a question-and-answer period. I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the risks and uncertainties described in Corvus' quarterly report on Form 10-Q which was filed today with the SEC and other filings the company makes with the SEC from time to time. The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. With that, I'd like to turn the call over to Leiv Lea. Leiv?

Thank you, Zack. I will begin with a quick overview of our first quarter 2020 financials and then I'll turn the call over to Richard for a business update. At March 31, 2020, we had cash, cash equivalents, and marketable securities totaling $68.7 million as compared to $78 million at December 31, 2019. Research and development expenses in the first quarter of 2020 totaled $10.2 million compared to $9.4 million for the same period in 2019. The increase of $0.8 million was primarily due to a $1.3 million increase in CPI-006 clinical trial expenses, partially offset by a $0.9 million reduction in CPI-818 drug manufacturing costs. The net loss for the first quarter of 2020 was $12.9 million compared to a net loss of $11.6 million for the same period in 2019. Total stock compensation expense for the first quarter of 2020 was $1.8 million compared to $2 million for the same period in 2019. I'd like to note that we continue to carefully manage our expenses, especially in light of the COVID-19 pandemic. Enrollment in our trials with our three programs has been strong, in some cases ahead of schedule. This allows us to focus on monitoring and follow-up that makes us less dependent on new patient enrollment, which has been affected by COVID-19. As Richard will discuss, we believe the overall impact of this slowdown will have a minimal impact on our ability to continue advancing our lead program, ciforadenant. Given the COVID-19 situation and our advancement of the ciforadenant program with over 300 patients enrolled to date, we intend to deepen our focus on our lead asset as we develop our registration strategy and head towards a planned pivotal trial. As a result, we now expect full year 2020 net cash used in operating activities to be between $29 million and $31 million. This is an approximate $10 million reduction compared to our previous expectations of net cash used in operating activities of between $39 million and $42 million. I'll now turn the call over to Richard.

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our first quarter 2020 business update. In the first quarter, we continued to advance our pipeline of precisely targeted oncology therapies, enrolling patients in our ongoing studies and presenting updated data on ciforadenant, Adenosine Gene Signature, and CPI-818 at medical meetings. At the same time, COVID-19 has caused a global pandemic that changed the daily lives for most people, healthcare providers, patients, and businesses in the United States. At Corvus, the health and safety of our employees, clinical partners, and the patients they serve is our highest priority. Accordingly, we have worked quickly to communicate and collaborate with our clinical trial sites to adapt our protocols to accommodate potential disruptions for patients enrolled in our studies. The updates we made were in line with FDA's guidance for conducting clinical trials during the COVID-19 pandemic and focused on ensuring patient safety and maintaining the integrity of the studies. In addition, we have been in regular communication with our manufacturing partners and there is currently no significant impact on our drug supply. I would like to thank our clinical trial sites for their partnership during this difficult period and I am pleased that there has been a minimal impact to our study so far. To date, we have not received any reports of major treatment or follow-up interruptions for patients already enrolled in our studies. Specifically, we have no instances of missed disease assessments and very few significant variances in safety monitoring. There has been an impact on special studies, such as detailed pharmacokinetic assessments and on-treatment tumor biopsies, as clinical sites shifted towards preparing and caring for the potential surge of COVID-19 patients. There has been an impact on enrollment of new patients in some of our studies. However, we believe the overall impact of COVID-19 on Corvus has not been significant to date. Prior to the emergence of COVID-19, we had very robust rates of enrollment in all of our trials, positioning us now to focus primarily on monitoring and planning for subsequent trials. CPI-006 is an excellent example. Following the presentation of positive initial results from the study at ASCO last year, we saw an increase in interest and enrollments. As a result, we are tracking ahead of our internal enrollment plans for this program, having moved into the third and fourth arms of the study with CPI-006 in combination with pembrolizumab, which is now fully enrolled, and the triplet arm in combination with ciforadenant and pembrolizumab, both ahead of schedule. With ciforadenant, we have already completed enrollment of a 25-patient study designed to confirm activity in our biomarker-positive population. Overall, our current efforts are now focused on patient follow-up and monitoring, with the aim of collecting data, analyzing results, and designing follow-up studies. Notably, we will be analyzing our ciforadenant data in renal cell cancer in preparation for a meeting with the FDA later this year to discuss our registration strategy and a pivotal trial. Turning to an update on our programs, starting with ciforadenant, which is our small molecule inhibitor of the A2A receptor, we are approaching a very exciting period for this program. We have a key abstract accepted for presentation at ASCO in late May. This data will provide an update on ciforadenant in combination with atezolizumab for the treatment of renal cell cancer and the role of the Adenosine Gene Signature as a potential predictive biomarker for patients most likely to respond to this therapy. Our confidence in the biomarker signature is enhanced by independent work from other groups that confirm its potential, including an abstract that will be presented at ASCO from a leading academic institution. In that study, the prognostic value of the Adenosine Signature in renal cell cancer is confirmed. We plan to meet with the FDA in the third quarter to discuss the study design and plans for a ciforadenant randomized pivotal study in second, third, or later line renal cell cancer using the Adenosine Gene Signature biomarker. We will also be exploring the potential for a single-arm study based on the Adenosine Signature. As you recall, the signature identifies a very unfavorable group of patients, a new subset of renal cell cancer. We believe positive biomarker-identified patients will do better with ciforadenant and do poorly with standard therapies. This provides a potential option in an area of unmet need. Moving to CPI-006, our B-cell activating anti-CD73 antibody, we continue to be enthusiastic about this novel immunomodulatory antibody, which has demonstrated dramatic effects on circulating immune cells with B-cell and T-cell mobilization and redistribution. We are not aware of any other agent, antibody, or small molecule targeting CD73 or any other target that has exhibited these properties. As we have previously reported, CPI-006 has profound effects on B-cells leading to activation, transformation to plasmablast, and secretion of IgM and IgG antibodies. In total, we have enrolled over 75 patients to date in our CPI-006 study, which is evaluating the antibody alone, in combination with ciforadenant, in combination with pembrolizumab, and a triplet combined with ciforadenant and pembrolizumab. We intend to present an update on this work at the SITC meeting in November later this year. One tantalizing new area is the potential to use CPI-006 as a therapy to enhance antibody responses. We have seen anti-tumor antibodies produced in some of our cancer patients treated with CPI-006. Lastly, on CPI-818, our ITK inhibitor, we have established its safety, pharmacokinetics, receptor occupancy, and optimal dose along with early signs of anti-tumor activity. Based on patient responses from the first portion of the Phase 1/1b study, we plan to move forward with the next portion of the study, with an initial focus on cutaneous T-cell lymphoma. So far, this trial has succeeded in providing important information about the dose, selectivity, PK, and target occupancy. This now positions us well for future studies not only in lymphoma but also in autoimmune diseases. In summary, we continue to make good progress with our pipeline. We have accomplished this with a very efficient use of capital across three programs in the clinic. Importantly, we have the potential to initiate a pivotal study of ciforadenant used with the Adenosine Gene Signature in renal cell cancer in early 2021. We'll make an important step towards this with the presentation of the latest data on the program at ASCO. We look forward to providing an update at that time. I will now turn the call over to the operator for questions and answers.

Thank you. Our first question today will come from Mara Goldstein with Mizuho.

Okay, Mara?

Hi, your line is open. Sorry about that.

Just a couple of questions. The first is just on the ITK inhibitor. When you think about sort of advancing into next — and the clinical path for that drug, what would be the most likely scenario in terms of clinical trial and understanding that you might not have a comparator, but how it fits into the treatment paradigm? And then I'm just curious about in the triplet combination for CD73, ciforadenant, and pembrolizumab. Is that one fully enrolled yet?

The treatment is almost fully enrolled. I think we still have one or two patients to go in it, but they've all been identified. That will be fully enrolled, and Mehrdad, jump in here if I'm missing something within the next week or two. So the...

No, you're accurate.

Yes, so that's done. I think that we've done actually that. Did that — that's been fully enrolled. Now the question about ITK and how to think about it? So first of all, the patients who have been enrolled in our study to date are patients who failed everyone, every approved agent for those diseases. So any activity we see in the T-cell lymphoma patients and in cutaneous T-cell lymphoma patients in our studies is noteworthy because there are no other therapies for these patients. These patients are quite sick. Just to elaborate further, as you know, there's a lot of therapies for lymphomas. Some have curative potential for these kinds of lymphomas, but they have some minimal activity. The recent patients coming into our trial are with most of them, in fact, with greater than five lines of prior therapy, so these patients are pretty depleted. So we think that activity — any activity in the patients that we've been treating is noteworthy. Of course, the aim of our Phase I study of the portion of the trial we've done, which is important to emphasize, has been to determine dosing, safety, target occupancy, and effects on the immune system. We've learned a tremendous amount about this target and our drug. Importantly, there has never been to our knowledge a specific ITK inhibitor, and we are learning about what the impact of very specifically blocking that target is. So that's where we are.

Okay. And just to confirm, you — those selection of 450 are full?

So we're going forward with 600 milligrams...

You are, okay. And just do you have a sense of the size of that kind of trial, given PTCL, that patient population to begin with, and the fact that you ... these patients are going to have failed so many therapies? Around what size study will you be looking for?

Before we even try to — well first of all we're still in the 1b part of this. So we're going to treat some more patients. We're going to get a feel for the activity and then we'll design the new trial and go from there. The nice thing about 818 is that it's been very safe so far. Some patients have been on this treatment for several months now. It's very attractive to think about this not only as a single agent but also in combinations. We're also beginning to think about what kind of therapies to put it together with, how to move it up earlier in the treatment paradigm, etc.

Okay, all right. Thanks. Appreciate it, I will hop off with somebody else back.

Your next question will come from Tony Butler with Roth Capital.

Richard, a couple of questions as well. I want to go back to the CPI-006 study. And correct me if I'm wrong, but in clinical trials, there were actually six cohorts. Is that correct? And within the presumption of 378 patients to be enrolled is that divided equally among those cohort 1a 2c and of course cohort 2a3c? So that's the first question. And then the second question again from the registration — of the presumed registration trial for ciforadenant, which you hope to start next year in second, third, or fourth line RCC. So I'm curious how you — what form do you think that takes? Is it just previous failures as you know Atezo and/or a PD-1 have been used increasingly front-line? Will you simply use standard of care plus cifo, or would you throw Atezo in conjunction? I'm just curious how you think about that from both a control standpoint and also from a registration standpoint. This is regardless of what you do with the single-arm trial. And obviously those patients will be all having Adenosine Signatures. Thanks very much.

Okay. So Mehrdad, do you want to address both of those questions?

Sure. The second question in terms of the landscape, you're right. Almost all patients now do get immunotherapy in frontline PD-1s in front line. But remember what we have shown is that the signature is that this signature identifies the patients who are not going to do well with the immunotherapy. So what we are doing is that we are giving them ciforadenant, and the idea is that it will be in combination with the PD-1, PD-L1 given what we know also from the mode of action and resistance mechanisms for those. And that's how these patients will be rescued. The study will be powered for signature-positive patients. Did I answer your second question?

So maybe if…

Go ahead, Richard.

I think we're being a bit indiscernible, around positive. So the first question if I remember correctly, but basically Tony, we added some cohorts to this after it was started. So basically there were four cohorts. There are four cohorts in the study: 006 monotherapy, 006 together with ciforadenant, the idea being that we brought two adenosines into the pathway. The third element was a doublet of 006 with pembrolizumab. The fourth arm is all three together: 006, cifo, and pembro. We've enrolled all of those except for the final cohort now, the triplet, which is almost enrolled as I mentioned earlier. So after founding, there were dose escalations in each of those cohorts because you have to establish safety in each of the monotherapy and the combinations, although they were staggered a bit. We found 18 milligrams per kilogram IV every few weeks to be the right dose for all across the board. So that's the base we're using for each of the four cohorts. Now within each of those cohorts, there's the ability to extend to look at renal cell and lung and prostate, and I think there's another category. We've enrolled many of those. But as we've been conducting the trial, we've tended to shift patients over, because that's one of the beauties of this trial is that we can find our patients over to maybe getting more carefully at the combination versus the monotherapy. We're not going to show up every bucket of every four cohorts because we don't think that's necessary and we've seen evidence that maybe some of the combinations are more important.

Agreed. If I may just continue on that theme. Correct me if I'm wrong, but I believe it is actually the triplet which had demonstrated some of the better data that we've seen often in small populations to date. So I can understand why you shift patients, but I just want to confirm that that was what you were seeing as well.

Well, the triplet is — we don't have enough data yet. The triplet is the last of the cohorts that we've been enrolling. So that has the least mature data and the least number of patients at this point in time, but that of course will mature as we go on. There are something like over 30 patients on this trial now, still on active therapy. This is a work in progress. One of the things that Leiv emphasized in his introduction, and I tried to emphasize, is because our enrollment and our execution has been so good over the past year or two, we've really now loaded the fuel tank and so we can run and treat these patients and start to look at the safety and efficacy data and the biomarker data and start to make some decisions. I don't think this COVID pandemic has impacted us very much, because we have really gotten most of what we needed from enrollment before that happens. Now it’s a matter of letting this data mature. We have a lot of patients on therapy now across our trials. Now it's a question of likely getting mature analysis and then, as I said, go to the next steps after we figure out the answers. Does that make sense?

Yes, it did. Thank you very much, Richard. I appreciate it. Mehrdad.

So if you ask me, which is — so you ask me, which of the four cohorts is better yet? I mean, there's a suspicion that the combination is better. But I wouldn't say there's proof of any of that. One thing that is absolutely no question, absolutely no question now, is the impact on the immune system, we believe in a very positive way. The impact on B-cells on lymphocyte trafficking, on humoral immunity is profound. It's really, really amazing. That occurs even at a dose of one milligram per kilogram. There's new biology here that has never been described before and it’s not about adenosine. I can't rule that out, but we see these effects in vitro even when we take adenosine out of the equation. We have other antibodies to CD73 that also block adenosine production. It has nothing to do with that. Recent antibody 006 is reacting with a different part of the CD73 protein that has an immunostimulatory effect, which by the way was first described back in the 1990s. To our knowledge, we don’t think any small molecule or any other antibody that we've heard about or seen has this property.

Richard, thank you very much. Appreciate the color.

Our next question will come from Swayampakula Ramakanth with H.C. Wainwright.

Thank you. Thank you, Richard. How are you doing this afternoon? I have a couple of questions. Since I've been jumping between calls, you might have answered this, but nevertheless, let me ask you this. So on the ciforadenant program in the Phase 1b/2 study, there was some data expected at ASCO. What sort of data should we expect at that conference? And also what's the path forward beyond the Phase 1b/2 study that you're talking about? The second question is on the 818 of Phase 1b study. What's the timeline for data there? And what are the expectations for the next — for the development process from here?

Okay. So let me start with the ciforadenant and then I might ask Mehrdad to comment as well. Recall that we published in January in Cancer Discovery, Larry Fong from UCSF is the first author. He published data on 68 patients with advanced refractory mostly PD-1 failure renal cell cancer. In that paper, we showed in patients who were Adenosine Signature-positive there was a 17% response rate by resist criteria. There were also many patients who didn't quite meet the criteria for PR that had substantial tumor regression. We also showed that there was a nice plateau, a long-lived plateau on the progression-free survival curve, statistically significantly associated with Adenosine Signature, and nobody responded, zero, in the Adenosine Signature-negative population. We, of course, knew about this data before the publication in January. So we said, okay, let's prospectively corroborate that. We set out to enroll approximately 25 patients. I think we've enrolled 26 or so. Those 26 additional patients are both Adenosine Signature-positive and negative. We have to confirm the data not only for the positives but for the negatives. Those additional patients, with the follow-up that we have, again some of the follow-up is short on those additional 25, 26 patients, are going to be the subject of our ASCO abstract. The data is holding up very nicely. In addition at ASCO, as I mentioned in my remarks, there's a very nice paper by workers at Sloan-Kettering, where they essentially looked at the Adenosine Signature independent of us and found that if you're Adenosine Signature-positive, you have a very bad outcome. Our work together with Sloan-Kettering supports the signature strongly. I should mention that we’ve found out about 60% of patients with renal cell cancer are Adenosine Signature-positive. My most recent data suggests it's around 68%. So we're identifying a new disease, and this is the population that our drug is active in. This sets us up for a very nice trial, where we can take everybody and do some sort of hierarchical analysis so we can just focus on the signature-positives. Those are the things that we'll be deciding in the coming months. Dr. Mobasher is working with the experts in the field in renal cell cancer. They're well on the way. There's a protocol that would define and guide a pivotal randomized trial. I'll let him comment some more.

Yeah. As we mentioned, the plans are based on the initial data that we have identified this COVID patient population that actually needs new treatments. Based on our data, we think these are the patients who would benefit from our treatment. So we have formed a steering committee. We are working on our pivotal data that will be powered in signature patients. That's the path that we think is meaningful. That will be discussed without the party.

Now on the — you also asked about the 818 timeline. The 818 timeline is we're going to enroll some more. We're following the patients that are on the study now. We're going to enroll some more patients with cutaneous T-cell lymphoma only, because we think that's a very appropriate disease for this drug. Frankly, you could make an argument to enroll more patients with the other T-cell lymphomas as well, but we're trying to focus a little bit here. We're also getting very, very interested as other people are in some of the other immune disease applications. We're starting to look at that. We believe this might be a very interesting disease in other immune diseases. We think ASH meeting might be a good place for us to give an update on that, but we'll see how things go there.

Great. Appreciate that, Richard. Thanks.

Thank you. Next, we'll hear from Gabriel Fung with Mizuho Securities.

Hello, guys. Yeah. This is Gabriel from Mizuho Securities, actually in addition to Mara. Congrats to the team. It's good to hear a pivotal program around the corner. And just a follow-up on what you said on the pivotal study. Do you think that will be required for a ciforadenant — sorry for outcome results to be compared directly to the Adenosine Signature-selected arm? And how do you think that will change the market opportunity? I mean, you mentioned already that it will be 68%. Approximately 68% of the patients are adenosine-positive. How do you think this could actually maybe be used in earlier lines if that's the — given that this works, Mehrdad?

Thank you. So, Mehrdad, do you want to take that?

Sure. In terms of whether a fairer study would be enrolling everyone or just the signature-positive patients, all data until now suggests that signature-positive patients are the ones who have objective responses. As Richard mentioned earlier, they have actually pretty long duration of progression-free survival that has given us a tail in that curve. From the operational perspective, both are viable options. That's what we are trying to fine-tune in cooperation with our steering committee and the health authority. I think that was the first part of your question. For the second part, we think this would be a perfect treatment in terms of treatment landscape for second-line and third-line patients, because these are the patients that are getting immuno-oncology treatment. Based on the mode of action, we believe these are the patients who would not respond and they will respond well to our treatment. But in oncology, typically, you want to rescue patients early on. There is a potential to move this treatment in combination with ciforadenant, whatever the background will be is frontline as well, but that is not our focus now. But that's something we're looking into in the future.

Yeah, that's a good point, Mehrdad. I would like to just add to that. One of the nice things about ciforadenant and we now have data from over 350 patients. We have patients who've been taking this drug now for over a year, and I think we have some who've been on it for over two years, or three years. This drug, and we've already been asked about this, would be very, very easy to combine from a safety standpoint with frontline therapies. So there's no question there. Like many drugs, we try to get approval in the late-line and then we move it up earlier. Now renal cell cancer is changing a lot. Obviously, the landscape is changing very quickly. Patients are living longer, so they may attempt second, third, fourth, or fifth lines of therapy. It's becoming somewhat like chronic lymphomas in a sense. You're starting to think about not just the entrance of the disease but the prevalence. This is something we actually predicted three or four years ago. Now in terms of the market, I think the market for us for renal cell would be very, very good. Certainly as a small company, it's attractive. Don't forget the Adenosine Signatures exist in other tumors. We've been looking at that. In fact, we have a paper that was just submitted for publication looking at the distribution of the Adenosine Signature from TCGA data. It's present in other tumors. This leads us to identify which tumors or drugs will be applicable based on the use of that signature. So there's more work to be done in the future. I think it would be wrong to limit this to just renal cell cancer therapy. The biology is very, very similar for all those tumors.

Awesome. Actually that leads me to a really quick follow-up, because I know you have also programs that are not wrapped around cancer and prostate. What are your sense — what are you seeing from those?

So, well prostate, we just presented data on that a couple of months ago. We see activity in prostate. I think other people are reporting some activity in prostate. With that, however, our patients on that trial, we're following them. We're looking — we're interested in what the long-term outcome is on those patients. We'll probably do more work in that area, but I'm not sure what that will entail right now. Again, we're looking at prostate as a competitive area. Lots of good treatment. It’s not good enough to just be active; you have to have some advantage. On the lung cancer, we're following patients on the most of these programs with Genentech. I think there's some plans to maybe present that data at ESMO. I'm not sure about that. It's a small number of patients, so I don't really know what to expect from that.

Got it. Thank you.

All right.

And at this time, we have no further questions in our queue. I'll turn the conference back over to our speakers for any additional or closing remarks.

Okay. Thank you, operator. First of all, thank you very much for joining us today. This is an unusual time. We're happy that all of you could participate in this call. I enjoyed speaking with you and we look forward to giving future updates very soon at ASCO and beyond that. Thank you very much.

Thank you. And that does conclude our conference for today. We thank you for your participation.