Corvus Pharmaceuticals, Inc. Q3 FY2025 Earnings Call

Good afternoon, everyone. Thank you for joining us, and welcome to the Corvus Pharmaceuticals Third Quarter 2025 Business Update and Financial Results Conference Call. It is now my pleasure to introduce Zack Kubow of Real Chemistry. Please proceed.

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals Third Quarter 2025 Business Update and Financial Results Conference Call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; Jeff Arcara, Chief Business Officer; 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, including the risks and uncertainties described in Corvus' quarterly report on Form 10-Q for the quarter ended September 30, 2025 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 brief overview of our third quarter 2025 financials and then turn the call over to Richard for a business update. Research and development expenses in the third quarter of 2025 totaled $8.5 million, compared to $5.2 million for the same period in 2024. The $3.3 million increase was primarily due to higher clinical trial and manufacturing costs associated with the development of soquelitinib as well as an increase in personnel-related costs. The net loss for the third quarter of 2025 was $10.2 million, including a noncash loss of $300,000 related to Angel Pharmaceuticals, our partner in China. This compares to a net loss of $40.2 million for the same period in 2024, which included a $32.8 million noncash loss related to the change in fair value of Corvus' warrant liability and a $700,000 noncash loss related to Angel Pharmaceuticals. Total stock compensation expense for the third quarter of 2025 was $1.2 million, compared to $700,000 in the same period in 2024. As of September 30, 2025, Corvus had cash, cash equivalents and marketable securities totaling $65.7 million, as compared to $52 million at December 31, 2024. Consistent with our last quarter, we expect our current cash to fund operations into the fourth quarter of 2026. 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 update call. Our primary focus continues to be on the development of soquelitinib for both atopic dermatitis and T cell lymphomas, and we have several important milestones upcoming for these programs. First, we have completed enrollment in the extension Cohort 4 of our Phase I trial, and we expect to have the results of the full data set in late December. Given the proximity to the holidays, we plan to report results in January. Second, the initiation of our Phase II atopic dermatitis trial is on track for early Q1 2026. We believe soquelitinib is strongly positioned as an oral medication with a novel mechanism of action that so far has shown a favorable safety and efficacy profile. There has been increasing interest in drugs with novel mechanisms to address atopic dermatitis and other inflammatory diseases. Our confidence in soquelitinib is bolstered by our belief that the data to date not only stands up favorably against recent data sets from other approaches, but indicates that we have the potential to be a leader in this space. We are also encouraged that the clinical evidence obtained to date with soquelitinib in both atopic dermatitis and in T cell lymphoma bode well for the potential of ITK inhibition in a broad range of immunology and inflammatory indications, and we continue to explore potential next opportunities for our platform. On today's call, I will provide an overview of extension Cohort 4 and our plans for reporting this data, and the status of our planned Phase II trial in atopic dermatitis. I will also discuss the relevance of our soquelitinib ASH oral presentation for our Phase III peripheral T cell lymphoma trial and its implications for I&I indications, including atopic dermatitis. And I will provide a brief recap of other operational progress and updates. Let me start with a reminder of the key data reported to date for soquelitinib in atopic dermatitis. In June, we reported data from Cohort 3 of the Phase I trial evaluating a 200-milligram twice-per-day oral dose for 28 days of treatment, building on the encouraging results we had already reported with a lower dose level from cohorts 1 and 2. All of the treatment cohorts demonstrated a favorable safety and efficacy profile compared to placebo. The Cohort 3 efficacy data was especially remarkable, demonstrating earlier and deeper responses compared to cohorts 1 and 2. At day 28, Cohort 3 showed a mean percent reduction of EASI score of 64.8%, compared to 54.6% for the combined cohorts 1 and 2 and 34% for placebo. In Cohort 3, 50% of patients achieved EASI 75, 8% achieved EASI 90 and 25% achieved IGA 0 or 1. No placebo patients achieved EASI 75 or IGA 0/1. We also saw an impact on itch with a number of Cohort 3 patients reporting steep drops in patient-reported PP-NRS score beginning at day 8. In terms of the kinetics of response, Cohort 3 showed earlier and deeper separation from placebo starting at day 8, compared to cohorts 1 and 2, with the EASI score improvement continuing through day 15 and 28. The continuous downward slope of the curve suggests that longer treatment duration could potentially deepen responses further, which we are now exploring with the extension Cohort 4. We have completed enrollment in the extension Cohort 4 of the Phase I trial, which is evaluating 24 patients at the Cohort 3 dose of 200 milligrams twice per day given for 8 weeks, with an additional 30-day follow-up without therapy. The 24 patients were randomized in a blinded fashion 1-to-1 with placebo, 12 active and 12 placebo. As mentioned earlier, we plan to report the 8-week data set on 24 patients in January. Our objective with this additional data is to confirm the results obtained in our earlier cohorts in a larger number of patients and to determine if the longer treatment duration of 8 weeks leads to better efficacy. The second upcoming milestone for soquelitinib in atopic dermatitis is the initiation of our planned Phase II clinical trial, which we anticipate will begin early Q1 2026. The trial will be randomized, placebo-controlled and double-blinded, involving approximately 70 clinical trial sites globally. The trial was designed to enroll approximately 200 patients with moderate to severe atopic dermatitis that have failed at least 1 prior topical or systemic therapy. I would like to emphasize that we are including patients who have failed previous systemic therapies, such as Dupixent or JAK inhibitors. We are interested in this population of patients because soquelitinib has a mechanism of action that is different than currently available agents and prior use of these agents would not be expected to lead to resistance to soquelitinib. The patients will be randomized equally into 4 cohorts, 50 patients each, receiving soquelitinib 200 milligrams once per day, 200 milligrams twice per day, 400 milligrams once per day, or placebo. The treatment duration will be 12 weeks and patients will be followed for an additional 90 days without therapy. The primary endpoint will be the mean percent reduction in EASI score from baseline to week 12. This is the typical endpoint for Phase II clinical trials in atopic dermatitis. Secondary endpoints will include the percent of patients achieving EASI 75 or IGA 0/1 at week 12, impact on itch measured by the percent of patients achieving greater than or equal to 4-point decrease in PP-NRS at week 12, and safety. Photographic documentation of disease at baseline and response to therapy will be mandated on the study and reviewed by independent experts. In oncology, we continue to enroll patients in our registrational Phase III trial of soquelitinib in patients with relapsed PTCL, driving towards interim data in late 2026. In addition, we are pleased to report that the final results from our Phase I/Ib clinical trial of soquelitinib for the treatment of relapsed/refractory T cell lymphomas will be presented in an oral session at the Annual Meeting of the American Society of Hematology meeting in December. This presentation will report on the clinical data and supporting preclinical work that drives us to continue advancing the program for PTCL, as well as providing the rationale and safety information motivating us to focus on immune and inflammatory diseases. In particular, we will report on the durability of progression-free and overall survival. We believe the presentation at ASH adds to the growing clinical evidence that soquelitinib is a safe and active agent working through a mechanism that supports its utility in both T cell lymphoma and immune-mediated diseases. As a reminder, some patients in the Phase I trial were treated beyond 2 years in the same daily dose range as is being studied in atopic dermatitis. And complete durable tumor responses were seen in patients with highly aggressive tumors. We also have a growing body of preclinical data supporting the potential of ITK inhibition in a broad range of additional indications across dermatology, rheumatology, pulmonary medicine, solid cancers and other diseases. Briefly on other operational updates. In October, we appointed Mr. David Moore to our Board of Directors, building on the addition of Richard van den Broek in April. David is Executive Vice President, U.S. Operations, at Novo Nordisk and President at Novo Nordisk. His experience leading one of the most successful GLP-1 franchises, along with his broad expertise across strategy, commercial, market access, business development and investing, is anticipated to be an important strategic resource as we work to maximize the potential of our ITK inhibitor platform. In closing, we remain very optimistic about the potential of soquelitinib in atopic dermatitis. In addition, the knowledge and experience from our current trial motivates us to think beyond atopic dermatitis, to a broad range of other immune diseases. We believe we may have the opportunity to establish selective blockade of ITK as a new therapeutic approach to autoimmune inflammatory diseases based on modulation or rebalancing of cellular immunity. We look forward to providing soquelitinib updates in the coming months. First, at ASH for our T cell lymphoma program, and then in January for the extension Cohort 4 data for our atopic dermatitis program. Combined with the planned initiation of our Phase II atopic dermatitis trial in early Q1 2026 and the ongoing enrollment in our Phase III PTCL trial, we are building significant momentum for soquelitinib coming into the new year.

Your first question comes from Graig Suvannavejh from Mizuho.

Congratulations on the progress in the quarter. I had a couple of questions. First, on your ASH abstract and the data that you will be presenting next month. I'm wondering, we saw very impressive OS data, and with that in mind, with other information that was in that abstract, could you perhaps put in context the comparability that obviously leads to your enthusiasm for the prospects of soquelitinib in peripheral T cell lymphoma? And I'll come back with a second question.

First of all, the data on progression-free survival and overall survival being presented at the ASH meeting is quite impressive, especially considering this is a Phase I trial using a treatment that has not been tested before for this disease. As you are aware, T cell lymphoma is a serious condition with a median survival of about six months in relapsed cases. Our results are significantly better than that, and we are excited about it. We have gained valuable insights from this trial regarding immunobiology, safety, pharmacokinetics, pharmacodynamics, and mechanisms of action related to immune diseases. One key point I will discuss in the ASH abstract and expand upon at the meeting is our observation of responses in T cell lymphomas that are GATA3-positive. GATA3 is a transcription factor known as the master regulator of Th2 function. Th2 cells are crucial in various immune diseases, including atopic dermatitis. Overall, we believe this information is promising not only for the T cell lymphoma program but also for a variety of immune diseases. It reinforces our belief in having a drug with a new and novel mechanism of action that is oral, appears very safe, and shows significant activity signals in patients with cancers of their immune system that involve the same cells linked to these other immune diseases. I hope that answers your question.

You did. And then if I could just go to soquelitinib and your atopic dermatitis readout that's coming in the early part of the year. As you have expanded the treatment duration and as you've expanded the number of patients, is it fair for us to assume that what you saw previously will have an improvement on the efficacy that you saw? And if you don't see an improvement versus what you saw previously, does that change in any way your enthusiasm for the prospects of soquelitinib in atopic dermatitis?

We believe, and many outside experts agree, that the data we obtained in Cohort 3 with 28 days of treatment was promising. It was safe and quite effective. Our goal is to demonstrate two things with the expanded cohort. Firstly, we want to establish consistency and validate our previous findings in a larger group of patients, which will include more placebos and more individuals receiving the active drug. Placebos are crucial for evaluating these conditions. The second objective is to determine if extending the treatment duration enhances the results. We want to see consistent data compared to our earlier results, and ideally, we would like to observe improvement as we extend beyond 28 days. Additionally, confirming safety and other factors is important to us. This is what we aim to present when the data is released in January.

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

Congrats on the real progress you're making here. One on soquelitinib. Richard, as you mentioned, you've seen and been generating data in a number of other indications in the I&I space. What are your plans to take soquelitinib forward in other indications at this point, sort of indications and timing?

Okay. So just to be clear, Jeff, soquelitinib in humans is being studied in the registration Phase III trial and, of course, in our Phase II atopic dermatitis trial. We also have a trial in lymphoproliferative disease called ALPS that you know about. Now we have many preclinical models that we've evaluated soquelitinib, everything from asthma, atopic dermatitis, psoriasis, scleroderma, systemic sclerosis, et cetera. We are making definite plans to move into other immune-related diseases. I'll be talking more about that early next year. The key diseases for us now appear to be asthma, and probably another dermatologic condition, yet to be defined.

Great, I appreciate that. The Kidney Cancer Research Consortium reported an update on the cifo trial at ESMO. I'm curious about the next steps there. The trial is still ongoing, and there are still patients being followed up. How are you viewing ciforadenant in relation to renal cell cancer and beyond?

So as you know, the cifo trial was done in collaboration with the Kidney Cancer Consortium, who pay for most of the trial. I don't think we have any other expenses related to that. There were 19 patients still on treatment and on follow-up, 19 out of 50, 40% or so almost. So we're going to continue to follow those people, and we'll decide what to do once we see how the rest of the data evolves. But that's our current plan for that.

Your next question comes from the line of Li Watsek from Cantor.

Congrats on the progress. I have a couple of questions here. First, maybe just in terms of baseline characteristics of the Cohort 4 versus prior 3 cohorts. Is it reasonable for us to assume they're pretty similar to Cohort 3? Or is there any difference that we should keep in mind? And I have a follow-up.

It is very reasonable for you to assume that the characteristics are very similar to Cohort 3. And to elaborate on that, the enrollment in the trial is 17 centers, all U.S. centers, the same centers that were utilized for the first 3 cohorts. None of the criteria for eligibility have been changed. And yes, we know the demographics already of our patients, very, very similar to those of Cohort 3.

Okay. Great. And then for the Phase II trial, just given the patient population that you'll be enrolling, it sounds like the patients can be exposed to JAK inhibitors and Dupi. So just given this demographic, what should be the bar for the EASI score?

Okay. First, when we move to Phase II, it's a larger trial with 200 patients, and it would be quite challenging and time-consuming to enroll all of them in the U.S. Therefore, we will significantly depend on sites outside the United States, especially in Europe, which is what many companies are currently doing. We are somewhat unique in that we are including patients who have not responded to Dupilumab, JAK inhibitors, and other systemic therapies, within certain limits. We don’t want patients who have failed multiple therapies. We are doing this because we have observed some patients in our initial cohorts who have not succeeded with those systemic therapies and are still responding to our medication. I'm unsure of the final response rates, whether they will be similar to first-line therapies or not, making it difficult to define what the benchmarks should be. To my knowledge, there isn't published data on how these drugs perform in patients who have previously failed a JAK inhibitor or Dupilumab. While existing studies do sometimes include patients who had an EASI score of 50 and treat them over extended periods, that's a different kind of investigation. It seems a bit premature to establish a benchmark for Phase II at this stage. Let’s evaluate our Phase I results and review the outcomes for patients who failed Dupilumab and JAK inhibitors before we discuss this more. It's a significant point, and I appreciate your question, as our Corvus patient population is somewhat distinct. We are intentionally focusing on these patients because we believe our drug's mechanism of action may not be affected by the resistance mechanisms related to Dupilumab or JAK inhibitors, and we need to determine that. The positive aspect is that this broadens the potential applications of our drug; we believe it could be suitable for both first-line treatment and for those who have relapsed.

Your next question comes from the line of Aydin Huseynov from Ladenburg.

Congratulations on the progress this quarter, and I appreciate the opportunity to ask questions. I have a couple. Richard, you're currently running a trial for atopic dermatitis, and I'm interested in your thoughts on potential other dermatologic indications such as hidradenitis suppurativa, vitiligo, psoriasis, or any others. Can you conduct multiple dermatologic trials at the same time? I would like to hear your thoughts on this.

Okay. So the preclinical models and the data we have in the lab tell us that asthma should be a very good indication for us. We also think that a disease like hidradenitis suppurativa would be a very good disease for us. It's in the dermatology space and that's a disease that's both Th2 and Th17 driven. So let's think about that a little bit. A Dupixent, for example, or a STAT6 inhibitor or whatever, is going to get your Th2-type cytokines, but it's not getting Th17 because that doesn't signal through STAT6. So we think we have a distinct advantage here for a disease like HS because we hit 17 and Th2. There are other reasons as well. So other diseases we're thinking about are prurigo nodularis, that's a Th2 and Th17 disease as well. That's not as common, but there's even more of an unmet need there. Alopecia areata, we've considered. It's a very competitive space. JAK inhibitors work well. But that's still on our list and we're still doing some work on that. Now your question, can we run more trials? We intend to run multiple trials in immune disease. We intend to push this drug in multiple areas, as I mentioned on my talk, not just in dermatology, pulmonary medicine, oncology, rheumatology, et cetera, et cetera. Now of course, we know at some point here, we're going to have to raise some money to do that. And we're optimistic that with the data that we have coming out, that we'll be in a position to raise money to fund those activities.

Very helpful, Richard. I have one more question about the Phase II registration trial. I want to better understand the timelines, potential readout, and the possible launch of the drug. Given all the developments with soquelitinib, I believe this is the first indication for the drug launch. I would like to get a clearer picture of the immediate commercial opportunity and the timelines for soquelitinib in PTCL.

Our timeline is for an interim analysis by the end of 2026, with full data likely available by the end of 2027. The launch should occur relatively quickly because this trial is a single registration, randomized trial that could lead to full approval if the endpoints are met. It includes 150 patients, which is a relatively small trial with short endpoints. The expected median progression-free survival for the chemotherapy control arm is about 2 to 3 months. We are excited about this, as lymphoma is my area of expertise, and I ran a clinic at Stanford for over 25 years focused on lymphoma patients. Currently, there are no effective treatments for this disease, and there is no competition at this stage, even at the research level. We believe that if this drug is approved, it will be used immediately across all T cell lymphomas, regardless of treatment line, because there are really no alternatives. While the patient population isn't comparable to atopic dermatitis, the lack of competition and the shorter timelines to approval present a significant opportunity that we think is less recognized than it should be.

Your next question comes from the line of Etzer Darout from Barclays.

This is Jordan Becker on for Etzer Darout. Thanks for taking our questions and congrats on the updates. Two questions. You alluded to it, but I just want to double-click on this. Do you plan to do any post hoc analysis following the Cohort 4 completion to look at efficacy in Dupi and JAK-naive and refractory populations? And then two, can we expect a similar analysis in terms of biomarker correlates of clinical efficacy with the updated data?

The answer is yes and yes, Jordan. Thanks for the question. We, of course, will be doing post hoc analysis trying to figure out how the drug is working, how to make it work better, all sorts of things. So clearly, looking at the effects of prior therapy, prior systemic therapies, all those clinical variables will be evaluated. We do have a pretty aggressive biomarker program. We're minimizing biopsies of the lesions on patients only because that does hurt enrollment, and we don't want to do that. But we have a pretty extensive program now looking at single-cell RNA sequencing of blood, and that's revealing a lot of interesting things. I mean there's a lot of new things that are coming out on this. I think the same old, same old look at IL-13 or whatever, that's going to go bye bye, TARC, et cetera. Those are not good biomarkers, everybody knows that. The best biomarkers for these diseases are yet to be defined because they're heterogeneous diseases and we don't really know what the cause is. So we're looking at a lot of that. We'll report on what we find. The biomarker game is a tough game. There's a lot of variables to look at, and hard to make much of anything when you have a small number of patients. But we certainly will hope to get clues and signals that we can validate in larger trials. Okay?

Your next question comes from the line of Sean Lee from H.C. Wainwright.

I just have a couple of quick ones on the design of the upcoming Phase II AD study. So what's the reasoning behind the settling on a 12-week duration treatment rather than the 8 weeks that you're testing in the Cohort 4? And are there any notable differences between the enrollment criteria of the Phase II compared to the patients that you're enrolling in Phase I?

So far, the eligibility criteria are quite similar. We're opting for a 12-week duration because we want to evaluate that. Most therapies are currently at 16 weeks. However, data from various studies indicate that most efficacy is achieved within the first 12 weeks, and going longer doesn't provide significant additional benefit. That’s the rationale for our 12-week study. My goal is to shorten the treatment duration, not extend it. In my experience running a clinic for over 30 years, I’ve never met a patient who prefers to take medication for a longer period. I am focused on finding ways to reduce treatment length while also aiming for maximum effectiveness, including achieving total disease clearance, which corresponds to EASI 100%. Most studies show that extending treatment from 12 to 16 weeks yields minimal additional benefits. Some may extend to 6 months or even a year, but that’s only worthwhile if you are willing to take a medication for such a long time for a marginal advantage.

Your next question comes from the line of Cha Cha Yang from Jefferies.

This is Cha Cha on for Roger Song. I was hoping that you could give us some color on any of your plans for potential partnerships or licensing deals for soquelitinib in the coming future, or if you plan to raise money and take this forward yourselves in either AD and oncology.

Okay. So thanks for the question, Cha Cha. I can tell you that ITK as a target is on the radar of every major company that works in this area. I know that because we're talking to them. We'll evaluate partnering opportunities as they arise, whether it be in oncology or immune diseases. At this time, however, we're pushing forward with our cancer program and our immunology program. We, as I mentioned just a few minutes ago, we do recognize that we're going to have to raise more money to maximally develop all these programs. We're optimistic about our data and we think there will be ample opportunity to raise funding, whether it be through offering stock or partnerships at the appropriate time.

Next question is from the line of Graig Suvannavejh from Mizuho.

I was very curious, as you think about your ITK portfolio and comments around potentially advancing next-generation ITK, I was wondering, Richard, if you could share kind of the vision or strategy around the potential of adding another indication for soquelitinib versus moving forward with a next-generation ITK inhibitor with perhaps a similar indication in mind. Just how do you balance that kind of strategy?

Thank you for the question. That's a good question. Clearly, moving forward with soquelitinib, which now has extensive safety and efficacy data from hundreds of patients, will progress faster than introducing one of our backup compounds, which still need to go through IND-enabling studies. Additionally, in the immunology space, we must conduct normal volunteer single-dose and multi-dose studies, which takes time. Nonetheless, we are focusing on PTCL, atopic dermatitis, and soon other immune diseases. We are also exploring different dosage forms and formulations of soquelitinib and are currently working on that. We are investigating soquelitinib-like ITK degraders that we have created in the lab. Interestingly, we've discovered that soquelitinib, being a covalent drug, causes some degradation of the ITK target. This is a new finding for us. We are considering all these avenues, but clearly, advancing our lead compound will be the quickest path forward.

Your last question is from the line of Jeff Jones from Oppenheimer.

Just a quick one. Digging a little bit deeper into the Dupi and JAK-exposed patients that could be enrolled in the Phase II study. Would you guys be powering the study to really do a subgroup analysis that could be statistically significant again and separate those systemically exposed patients versus systemic therapy naive patients?

No, we would not be doing that. We don't have enough information yet to make a commitment like that. However, we will stratify the studies to look at that subgroup. This means we will have a defined subgroup and will stratify randomization based on whether a patient has failed a prior systemic therapy. We want those patients equally distributed in both the placebo and active arms. Without knowing the efficacy signal yet, it's difficult to determine how many patients would be needed and what effect we're looking for, so it's a bit premature to go that route. I would prefer to conduct a study that includes everyone to achieve the best outcome and have a positive study based on our predefined endpoint. If it were a Phase III trial, we would seek approval for everyone.

Thank you very much. As there are no further questions at this time. I would like to turn the call back to Mr. Richard Miller for closing comments. Sir, please go ahead.

Thank you very much, operator. Thank you, everyone, for participating in this call. We look forward to advancing the soquelitinib programs and our other programs. And we look forward to updating you on our progress as we move forward into 2026 and beyond. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.