Corvus Pharmaceuticals, Inc. Q1 FY2024 Earnings Call

Good afternoon, ladies and gentlemen, and welcome to the Corvus Pharmaceuticals' Business Update and Reports First Quarter 2024 Financial Results Conference Call. This call is being recorded on Monday, May 6, 2024.

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals' First Quarter 2024 Business Update and Financial Results Conference Call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer; Leiv Lee, Chief Financial Officer; Jeff Arcara, Chief Business Officer; Jim Rosenbaum, Senior Vice President of Research; and Ben Jones, Senior Vice President of Regulatory and Pharmaceutical Sciences. The executive team will open the call with some prepared remarks, followed by a question-and-answer period. I would 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. 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 Lee. Leiv?

Thank you, Zack. I'll begin with a quick overview of our first quarter 2024 financials and then turn the call over to Richard for a business update. Research and development expenses in the first quarter of 2024 totaled $4.1 million compared to $4.6 million for the same period in 2023. The net loss for the first quarter of 2024 was $5.7 million, including noncash income of $0.2 million related to Angel Pharmaceuticals, our partner in China. This compares to a net loss of $7.9 million for the same period in 2023, which included a $1.7 million noncash loss related to Angel Pharmaceuticals. Total stock compensation expense for the first quarter of 2024 was $0.7 million compared to $0.5 million for the same period in 2023. As of March 31, 2024, Corvus had cash, cash equivalents, and marketable securities totaling $22.1 million as compared to $27.1 million at December 31, 2023. Today, we closed a $30.6 million financing that included a premier group of biotech investors as well as some members of the Corvus leadership team. Including the proceeds from this financing, pro forma cash at March 31, 2024, was approximately $52.7 million, extending our cash runway into Q4 of 2025. I will now turn the call over to Richard, who will discuss our clinical progress and elaborate on our strategy and plans.

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our business update call. Since our Q4 update in mid-March, we have continued to make progress against two key value drivers that we are focused on for 2024. First, for our planned registrational Phase III trial of soquelitinib for patients with relapsed peripheral T-cell lymphoma, we remain on track to begin enrollment in the third quarter. Our confidence in this trial continues to grow as two additional patients in our Phase I/Ib trial recently achieved objective responses at first follow-up. Second, for our placebo-controlled Phase I trial of soquelitinib for patients with moderate to severe atopic dermatitis, we began patient enrollment in April, which keeps us on track to report early data from the trial before the end of the year. In addition to these two priorities with soquelitinib, today, we are reporting encouraging initial data from our Phase Ib/II trial of ciforadenant, our adenosine A2A receptor antagonist, in frontline metastatic renal cell cancer. Based on the significant deep response rate seen in the initial set of patients, the protocol-prespecified statistical criteria for expanding the study have been met, and the Kidney Cancer Research Consortium is enrolling additional patients. Combined with our ongoing business development efforts aimed at further unlocking the potential of ITK inhibition in a broad range of oncology and autoimmune indications, we believe Corvus is positioned to continue building value and advancing our unique pipeline to help improve clinical outcomes for patients. Now I will provide more detail on our progress, starting with soquelitinib for PTCL. While we are no longer enrolling new patients in our Phase I trial, the data continues to evolve as patients on therapy complete their scheduled follow-up assessments. In the most recent data cutoff from May 3, 2024, we had two additional patients that achieved an objective response at their first follow-up visit. The first was a complete response confirmed by PET CT scan, and the second was a partial response with over 80% tumor volume reduction. These patients both had multiple sites of disease and had failed two prior therapies. Both of these patients are continuing on therapy. With these additional evaluable patients, the objective response rate for the Phase III eligible patients is now 9 out of 23 or 39%, including five complete responses and four partial responses. Although not studied head-to-head, the complete response rate for soquelitinib at 22% is approximately double that seen with belinostat or pralatrexate, the standard chemotherapies for PTCL that we will be comparing to in our Phase III trial. Similarly, the disease control rate, progression-free survival, and overall survival for this group compare favorably to the results seen with belinostat or pralatrexate. The median PFS for our patients is 6.2 months. This is substantially better than reported results for the standard agents, which is 1.6 and 3.5 months for belinostat and pralatrexate, respectively. The durability of our responses is impressive, with some of the earlier enrolled patients maintaining their responses for more than 24 months. We plan to begin patient enrollment in our soquelitinib registrational Phase III clinical trial in relapsed PTCL in the third quarter of 2024. We are working with leading centers in the United States and Canada. We anticipate about 40 centers will participate in the trial. The vast majority will be in the United States. Now for an update on soquelitinib for atopic dermatitis. In April, we initiated patient enrollment in the first patient cohort of the trial. There is high interest in our trial from physicians due to several attractive features of soquelitinib. First, this is a first-in-class drug with a novel mechanism of action. Soquelitinib acts upstream by blocking Th2 and Th17 cells and thereby results in inhibition of many different cytokines involved in disease. Second, it is an oral therapy and, in our cancer studies, has been shown to have a very good safety profile. Third, it may have broad utility across many different autoimmune and inflammatory diseases, and this trial may provide proof-of-concept for the treatment of other immune diseases. The trial is designed to enroll 64 patients with moderate to severe atopic dermatitis that have progressed on at least one prior therapy. The study is randomized, placebo-controlled, and blinded to patients and treating physicians. There will be four sequentially enrolled cohorts of 16 patients with patients in each cohort being randomized 3:1 to different dosing regimens of soquelitinib or placebo given for 28 days. The primary endpoint is safety and tolerability, and efficacy is measured using the Investigator Global Assessment and the clinically validated measurement of improvement in Eczema Area and Severity Index score. It should be noted that while the trial is double-blind, the company is not blinded. We plan to evaluate the data in an ongoing manner as successive cohorts complete enrollment. We also will be measuring the levels of various serum cytokines at baseline and on treatment. These measurements may provide useful biomarkers. Based on current enrollment trends, anticipated site activations, and follow-up timelines, we believe data from the initial cohorts will be available before the end of 2024 with study completion in early 2025. Outside of our PTCL and atopic dermatitis trials, we're still planning a soquelitinib solid tumor trial as a single agent and in combination with nivolumab in relapsed RCC. We remain active with our corporate partnering discussions. Our business development strategy is to find partners with development and commercialization expertise in immune diseases as well as seek regional partnerships in oncology that would be complementary to our focus and expertise in cancer. I'm excited to update you on the progress with ciforadenant, our adenosine A2A receptor antagonist. We have been one of the leaders in the development of adenosine A2A receptor antagonism for the treatment of cancer. Over the past few years, published preclinical and clinical studies have demonstrated the antitumor activity of ciforadenant as a monotherapy and when given in combination with checkpoint inhibitors. In particular, in our preclinical studies published in 2018, we found that the anti-CTLA-4 antibody combination with ciforadenant produces striking antitumor efficacy in several animal models. Further research has revealed the probable mechanism for this synergy, which involves modulation of the tumor microenvironment, specifically the blocking of myeloid-derived suppressor cells. We believe that anti-CTLA-4 antibodies are a much better combination partner for A2A antagonist than anti-PD-1s. These findings led to our collaboration with the Kidney Cancer Research Consortium. This group of institutions brings together leading physicians and researchers in kidney cancer whose goal is to discover improved therapies for patients with renal cancer. Our Phase Ib/II clinical trial, which is led by Dr. Katy Beckermann from Vanderbilt University Medical Center, is evaluating ciforadenant as a potential first-line therapy for metastatic renal cell cancer in combination with ipilimumab and nivolumab. The study is now open at MD Anderson, Vanderbilt, Duke, and the University of Pennsylvania. The clinical trial is currently in the Phase II portion and is designed to enroll up to 60 patients. There are currently over 27 patients enrolled. The trial employs a stringent efficacy endpoint, deep response rate. Deep response rate is the complete response rate plus the partial response rate only counting partial responses that achieved greater than 50% tumor volume reduction. Data from the KCRC has shown that deep response rate correlates with long-term progression-free survival and overall survival. In their previous studies, it has been 32% with ipilimumab and nivolumab. In an interim analysis, our protocol-defined prespecified statistical threshold for efficacy is the demonstration of at least a 50% increase above the 32% deep response rate seen with previous ipilimumab/nivolumab combination trials in renal cell cancer conducted by the Kidney Cancer Research Consortium. This means we need to exceed a deep response rate of 48%. As of May 2, 2024, the interim analysis indicates that we have met the statistical threshold for efficacy, so the trial continues to enroll patients. We are excited about these results, given the positive clinical implications for patients. In addition, they are consistent with our laboratory and preclinical findings and may represent a novel immunotherapy approach. Summarizing the outlook for the remainder of 2024 with our recent financing, our current cash gives us runway into late 2025, allowing us to achieve several near-term milestones, including starting our registrational Phase III clinical trial of soquelitinib in PTCL in the third quarter; generating interim results from our soquelitinib Phase I atopic dermatitis trial before year-end, followed by final data in early 2025; reporting additional data from the ciforadenant Phase Ib/II clinical trial later this year; and initiating a Phase II clinical trial with soquelitinib in solid tumors in the fourth quarter with initial data anticipated in the second half of 2025. We look forward to providing updates on our programs in the coming quarters.

I will now turn the call over to the operator for a questions-and-answer period. Operator?

Congratulations on the progress and, most importantly, with two additional responses on partial response and complete response. They're quite unexpected from Phase Ib. So regarding soquelitinib in PTCL, you got 23 patients, disease control rate 61%, 5 CRs, 4 PRs. Could you remind us what is the standard of CRs in other PTCL trials, belinostat, pralatrexate, or any other agents?

Thank you, Aydin, for the question. The approval studies for both belinostat and pralatrexate were single-arm studies. Those drugs received accelerated approval about 15 years ago. They each had CR rates of about 10% and overall response rates of about 25% to 30%. They had progression-free survivals of about 1.5 to 3.5 months.

Okay. That's helpful. And with the new responses, how much is this going to increase your preliminary progression-free survival and overall survival? I know you reported previously 6.2 months in PFS, 20 months OS. Is it going to increase significantly?

The current overall response rate is 39%. In lymphoma, we apply the Lugano criteria, which sets the threshold for a partial response at 50%. The partial response I mentioned shows an 87% reduction in tumor size, and one tumor has completely disappeared. I believe this patient could soon achieve a complete response. We anticipate that progression-free survival will improve as the last few patients complete the median.

Okay. Understood. And regarding the data from the Phase III trial, when do you think we will have a first glimpse on the readout? I know this is a randomized trial, blinded trial. But when do you think we'll have the first look at it?

It is a randomized trial, not a blinded trial. We know who gets chemotherapy and who gets our drug, as it's hard to disguise that in an oncology trial since these drugs have side effects. The median PFS for pralatrexate and belinostat is short, only a few months. Therefore, the study is not that long. It's 150 patients. We think we could probably enroll that in about 18 months, and then you'd need some follow-up after that to get to the final data. There is an interim analysis, which is conducted when half of the events occur, but that occurs so late in the study that we would probably wait for the end of the study to make a final determination. We have an outside data monitoring committee. If the results were compelling, you could have an ethical reason to discontinue the study.

Okay. Makes sense. And the last one if I may...

I think you will have data from this trial in 24 months.

Okay. Like 26? So I'm trying to understand these drugs seem to be working, but there is 40% who don't respond, essentially, right? Is there any way to come up with some potential biomarkers to screen patients who would be more likely to respond?

Well, we are working on that. We're looking for mutations in baseline immune status, etc. Several months ago, we implemented criteria regarding the immune status at baseline, using the absolute lymphocyte count and number of prior therapies. I'm happy to report that since we've implemented those eligibility criteria, we have seen not only more responses but also a faster kinetics of the response. Those moves were based on our better understanding of the mechanism of action. I expect that in a Phase III trial, we will get better patients with better immune status to start with.

Your next question comes from the line of Jeff Jones from Oppenheimer.

Congrats on the news, guys. That's great. And congrats on the financing as well. One question on soquelitinib. There are a number of responders in the Phase I that were cutaneous T-cell lymphoma patients. Can you remind me if cutaneous T-cell lymphoma patients are included in the Phase III and what impact that might have on the PFS?

There are a couple of patients included in our 23 that had cutaneous T-cell lymphoma. Both patients had transformed cutaneous T-cell lymphoma, which portends a very bad prognosis. CTCL patients will not be enrolled in our Phase III trial as it is treated with different drugs. We see responses in cutaneous lymphomas, anaplastic lymphoma, peripheral T-cell lymphomas, as well as angioimmunoblastic lymphoma, which have different patterns of spread and mutations. The fact that we see activity in this diverse group of T-cell lymphomas is consistent with our mechanism, which is to induce a host antitumor response. This motivates us to explore solid tumors.

Yes, that was really helpful. Appreciate it. I've always wondered about those cutaneous responses.

The responses we see in these cutaneous patients reflect more than just skin disease, as they have circulating tumor cells and lymphadenopathy. They are not just cutaneous.

Got it. In the atopic dermatitis study, you mentioned patients had been on two prior lines of therapy. Are you including patients who have previously had dupilumab and failed?

We're not being that specific. They have failed at least one prior therapy. We expect some patients to have failed dupilumab, but it's not a requirement. Some may have also failed other therapies. The trial is really intended to show that the drug is well-tolerated and looking for activity. Yes, we are measuring efficacy against the placebo.

Got it. Appreciate the clarity. Last question on ciforadenant. You mentioned 27 patients were enrolled, but you didn't specify how many were included in that interim efficacy analysis.

There are 18 patients in that. Some of them haven't returned for their first visit yet. This protocol was prepared by the KCRC. The results so far are promising. We're organizing a meeting at ASCO to discuss adding a control arm and the next steps.

Just one clarification. You mentioned 27 were enrolled and expanding that trial. What did you mean about going up to the 60 planned? Is there potential expansion beyond those 60 patients?

There is no expansion beyond the 60. When I mentioned expanding, it could involve adding a control arm, but that raises the question of whether to do a randomized Phase II or go straight to Phase III.

Your next question comes from the line of Graig Suvannavejh.

I have two questions. First, regarding your second asset, I know you mentioned that you successfully met the criteria to move forward. I'm not sure if I missed it, but could you clarify how much your results exceeded that minimum threshold based on the 18 evaluable patients? Secondly, congratulations on the recent cash raise. Can you clarify if this funding will last you through the Phase III trials for soquelitinib in PTCL?

The statistical threshold was a 50% increase. We exceeded the 48% deep response rate. I cannot give you the exact number securely yet, as the KCRC prefers not to disclose that until we’re more confident. Now your second question, I'll let Leiv answer.

Graig, associated with our financing, we also sold warrants. The exercise price of those is $3.50, expiring June 30, 2025. If all those warrants were exercised, we could raise about $60 million. The combination of the $30 million with the potential $60 million should get us through the Phase III trial.

Your next question comes from the line of Roger Song from Jefferies.

Just a few questions from us. So first one, soquelitinib, the modified inclusion criteria. So about the absolute lymphocyte count, about 900. If I remember it correctly, there are big overlaps in the patient population. Could you clarify what, in general, this population looks like?

The 900 absolute lymphocyte count was determined early in the trial to recognize that those patients performed better. You see, patients above 900 generally did better, and we recognized those patients had no more than three prior therapies. Therefore, this is the criteria we are using because they are less immunocompromised. In a Phase III trial, we expect to see patients right after they fail their first or second-line therapy.

Got it. So our second question is about the AD study. You mentioned we could expect some early data readout by year-end. How much data should we expect from there?

You can expect data from the first couple of cohorts. The first dose is 100 milligrams BID, and it's a dose that occupies the target. The second cohort receives 200 milligrams. We hope to see some signs of efficacy soon, possibly around the end of summer, alongside the biomarkers' effects.

Just in general, how should we think about the soquelitinib dosing regimens in AD compared to T-cell lymphoma?

We know what it takes to saturate the T-cell target in both lymphoma and non-lymphoma contexts. We are testing what it takes to affect the immune response in patients with atopic dermatitis. The trial is designed to find that balance.

Just one more question. Regarding the ITK inhibitors, you have a couple more coming up in the pipeline. What are the key differences between this one, soquelitinib, and the other candidates?

We have over a dozen other ITK inhibitors that we've been evaluating, some with completely different chemical structures. Some are covalent and some are non-covalent. The interesting biological features indicate some seem to affect T-cell subsets more than others, which provides a strong intellectual property basis.

For atopic dermatitis, do you have a benchmark in terms of improvement in Eczema Area and Severity Index?

No, we don't have a benchmark.

And then for your next-gen ITK inhibitors, do you plan to generate any human data for BD discussions or just the clinical?

We're doing both in parallel. We're selecting some of these backup ITK inhibitors and moving down parallel tracks with IND-enabling studies.

I think that exhausts our questions here for now. I want to thank everyone for participating in today's conference call. We look forward to updating you on subsequent calls and appreciate your interest. Take care. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.