Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) Q4 2022 Earnings Call Transcript

Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) Q4 2022 Earnings Call Transcript March 28, 2023

Operator: Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Corvus Pharmaceuticals Fourth Quarter and Full Year 2022 Business Update and Financial Results Conference Call. At this time, all participants will be in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. It is now my pleasure to turn the conference over to Zack Kubow of Real Chemistry. Please go ahead, sir.

Zack Kubow: Thank you, operator and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals fourth quarter and full year 2022 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; and James Rosenbaum, Senior Vice President of Research. 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’ Annual Report on Form 10-K, 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?

Leiv Lea: Thank you, Zack. I’ll begin with a quick overview of our fourth quarter and full year 2022 financials and then turn the call over to Richard for a business update. Research and development expenses in the fourth quarter 2022 totalled $4.1 million compared to $4.8 million for the same period in 2021. The decrease of $0.7 million was primarily related to a decrease in personnel cost. R&D expenses for the full year 2022 totalled $24.5 million compared to $29.1 million for the full year 2021. The net loss for the fourth quarter 2022 was $9.8 million, including a $4.6 million non-cash loss related to Angel Pharmaceuticals compared to a net loss of $9.2 million, including a $2.6 million non-cash loss related to Angel for the same period in 2021.

The net loss for the full year 2022 was $41.3 million, including a $10 million non-cash loss related to Angel compared to a net loss of $43.2 million, including a $4.8 million non-cash loss related to Angel for the full year 2021. Total stock compensation expense for the fourth quarter and full year 2022 was $0.6 million and $2.7 million respectively compared to $0.7 million and $4.2 million for the same periods in 2021. At December 31, 2022, Corvus had cash, cash equivalents and marketable securities totalling $42.3 million as compared to $69.5 million at December 31, 2021. Looking forward, we expect full year 2023 net cash used in operating activities to be between $19 million and $22 million. At the midpoint, this is a 24% decrease from 2022 demonstrating our continued focus on prudently managing our cash burn rate by focusing on our most promising opportunities and establishing collaborations that help support development of our candidates.

Based on this trend in our focus on CPI-818, we believe our cash will provide runway into 2024. I’ll now turn the call over to Richard, who will elaborate on our strategy and plans.

Richard Miller: Thank you, Leiv and good afternoon, everyone. Thank you for joining us today for our business update call. Today, I will start by highlighting three important new developments that we believe further underscore Corvus’ opportunity to advance CPI-818 in oncology and support our prioritization of this program. First, strong data; enrolment in our clinical trial is accelerating and data in the peripheral T-cell lymphoma continues to be promising with durable and deep tumor responses. In addition, we have identified a biomarker that should enable us to select patients most likely to benefit from CPI-818, which is important as we plan for our next trial. Two, which brings us to the second new development, pathway to registrational trial.

In a recent communication, the US Food and Drug Administration indicated that they would like us to request a meeting to discuss a randomized Phase III registration clinical trial for CPI-818. We anticipate this meeting will take place in the next few months. And third, expanding to solid tumors; we will present new preclinical data at AACR, demonstrating that 818 stimulates antitumor immune responses to solid tumors, expanding the potential of ITK in addition in cancer. With that as an introduction, I will now review the momentum we have built with 818 over the last several months and the key elements of planned development for T-cell lymphoma CPI-818 is a very specific covalent ITK inhibitor and binds to ITK, similar to the way ibrutinib binds to BTK.

We believe the opportunity with CPI-818 to target T-cells is similar to that of BTK inhibitors and anti-CD20 antibodies that target B-cell for the treatment of B-cell lymphomas and autoimmune diseases. We are using a similar playbook. Data in lymphoma accelerates development, and then we expand into other cancers and immune diseases. Our understanding of the function of ITK in immune system has been strengthened by our ongoing T-cell lymphoma clinical trial and by additional laboratory and preclinical animal studies. Simply stated, as we learn more, we believe 818 has broader opportunities in multiple areas including solid tumors, autoimmunity and allergy. We have shown that ITK is a critical target in the immune system, playing an important role in T helper cell differentiation.

Specifically, at the ASH Meeting in December, we presented data showing that CPI-818 modulates the immune function of T-cells by blocking both Th2 and Th17 cells and skewing toward Th1 cells. This is especially important for cancer therapy because Th1 cells are required for elimination of tumor cells and Th2 and Th17 cells are the culprit cells responsible for many autoimmune and allergic diseases. We are not aware of any other selective ITK inhibitors currently in clinical development, and we believe we have a strong intellectual property position covering 818 ITK inhibitors and methods of use. Based on all of this, we have prioritized the development of CPI-818 and have a focus strategy on T-cell lymphomas to efficiently build value with our existing resources.

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Diving deeper into scientific and clinical momentum for CPI-818, we have checked the number of important boxes that de-risk our lead indication and confirmed the broad potential for ITK in addition across a number of diseases. We successfully elucidated the dosing, biologic and immune effects of 818 in vitro, in preclinical models, and in our Phase 1 clinical trial. This is particularly important with regard to dosing as the induction of Th1 skewing requires different dosing than general blocking of T-cell receptor signalling, a concept that we have pioneered. In cancer, our Phase one T cell lymphoma trial is demonstrating activity in patients with refractory peripheral T-cell lymphoma or PTCL. Since the last data update at ASH in December, enrolment in the 200 milligram cohort has continued and accelerated.

As of February 15, 2023, 20 patients have been enrolled, including 13 valuable for tumor response. The updated data highlights are as follows. There has been one complete response of 24 months duration; one equivocal complete response of 13-plus months duration awaiting a pet scan for confirmation of CR, this was from a patient who had a previous partial response and has continued to demonstrate tumor regression. There’s one nodal complete response of 20 months — 21 months duration and a partial response of seven months duration. 10 patients continue on therapy, including seven who have not yet been evaluated for tumor response. The swimmer and waterfall tumor plots for these patients are shown in our fourth quarter results press release issued today.

Our goal is to present updated data from this cohort at a medical meeting later this year, most likely at the International Conference on malignant lymphomas, which is meeting in June in Logano, Switzerland. Further supporting this opportunity, we believe we have identified an important predictive biomarker that should allow us to enrich our trials for patients that are most likely to benefit from CPI-818. We now know that 818 induces a host antitumor cell mediated response that requires normal functioning T-cells. We have observed that a minimum absolute lymphocyte count or ALC above 900 per cubic millilitre of blood is required for response. Normal ALC ranges from 1,000 to 4,000. Today’s press release summarizes some of the data. Briefly, four of eight patients with ALC above 900 have objective tumor responses and all eight have demonstrated disease control with a median progression-free survival of 28.1 months.

No responses were seen in five patients with ALC below 900 and the PFS in that group is only 2.1 months. This biomarker is easy to measure, fits with 818’s presumed mechanism of action, and based on our experience so far, about 70% of patients meet this criterion. This biomarker has now been incorporated as an eligibility criterion for our ongoing phase one trial. As mentioned in my introduction, we recently received the communication from the FDA regarding our clinical development plans for 818. Based on the current enrolment rate of our ongoing Phase Ib clinical trial, we believe that the number of patients treated in this trial would provide adequate safety and preliminary efficacy data to inform the design of a registration clinical trial.

As recommended by FDA, we now plan to request a meeting with them to discuss a registration clinical trial. Our current strategy is to conduct a randomized trial in refractory PTCL, comparing 818 to standard single agent chemotherapy using our new ALC biomarker for patient selection. Standard single agent chemotherapy has an expected median PFS of three months. We believe 818 can significantly improve on this PFS, which we can demonstrate with a modest size clinical trial on the order of approximately 150 patients total. This trial will potentially deliver definitive randomized data in a similar timeframe to our previously planned single arm Phase II trial that required an interim analysis and related meeting with the FDA. This plan is consistent with guidance for the industry just published by FDA yesterday.

That document discusses considerations for a single randomized controlled trial that can support both accelerated approval based on a surrogate endpoint like response rate and with continued follow up, verify or confirm clinical benefit in support of a full approval using an endpoint such as PFS. Another key update for 818 is a new opportunity in solid tumors. In a few weeks at the AACR Meeting, we will present preclinical data in several models demonstrating that eight 18 enhances anti-tumor immune responses to solid tumors based on the modulation of T-cell differentiation and resulting increase in T effector cells in tumors. Moreover, this has already been seen in our ongoing T-cell lymphoma trial and will be presented at the Lugano Meeting in June.

This work reinforces the importance and value of ITK as a therapeutically actionable target. In immune diseases, we have demonstrated 818 activity including preclinical models of psoriasis, asthma, lupus and fibrosis. We also demonstrated proof of concept for 818 and atopic dermatitis in companion dogs with naturally occurring disease, which is very similar to human disease. In February, we added to the list of potential opportunities with a presentation of new data by researchers from UCSF, demonstrating the potential of 818 to reduce the need for chronic HIV therapy. The UCSF team will continue studying the potential for ITK inhibition to provide anti-proliferative and block and lock HIV tier strategies. This work adds further validation to the critical role of ITK in immune modulation.

In the near term, we will be laser-focused on enrolling in our ongoing Phase I T-cell lymphoma trial and meeting with FDA to discuss a randomized Phase III registration trial. For atopic dermatitis, we have decided to pause this work. This will allow us to intensify our focus on T-cell lymphoma and cancer and conserve cash, while we push forward with our R&D to further strengthen the foundation for use of 818 in immune diseases. We remain excited about the potential of 818 in atopic dermatitis. In an increasingly crowded space, we have a novel approach with many potential advantages. In addition to the anticipated T-cell lymphoma milestones noted above, there are additional potential catalysts from our other two programs; ciforadenant our adenosine 2a receptor antagonist and ipilimumab, our B-cell activating antibody targeting CD73.

is currently in a Phase 1/1b clinical trial as a potential first line therapy for metastatic renal cell cancer in a triplet combination with ipilimumab and nivolumab. This trial is being run by the Kidney Cancer Research Consortium led by MD Anderson with participation from other member institutions, which include Vanderbilt, Beth Israel Boston, Duke University of Michigan, University of Pennsylvania, and UT Southwestern. This trial is based on our publication in 2018, showing synergy of ciforadenant with anti-CTLA-4 antibody in preclinical tumor models and data from our Phase I studies demonstrating antitumor activity of ciforadenant. The trial was planned to enrol up to 60 patients with endpoints of safety, tolerability and antitumor activity.

The primary endpoint is the percent of patients who achieve deep responses defined as CRs and PRs with greater than 50% reduction in tumor volume. This reflects our goal to raise the plateau on PFS and improve survival by adding ciforadenant. Historical data have shown that deep responses, correlate with prolonged progression-free survival and are seen in approximately 32% of patients receiving IPI and nivo. The complete response in those groups is only about 10%. As a reminder, this is an open label single arm trial, so we anticipate — we anticipate that we will get a good feel for efficacy early in the trial. For mupadolimab, our partner Angel Pharmaceuticals have started enrolling a Phase I/Ib clinical trial in China with mupa alone and together with pembrolizumab in patients with relapse refractory non-small cell lung cancer and also in patients with head and neck squamous cell cancer.

In closing, we believe Corvus is uniquely positioned with a prioritization of 818, the most advanced ITK inhibitor in development. The key upcoming milestones for our program includes continued enrolment in our Phase I/Ib at the 200 milligram dose, including the use of our new biomarker, updated data from our 818 Phase I T-cell lymphoma trial will be presented at the Lugano meeting in June, meeting with FDA to discuss a randomized Phase III registration trial and from our partner-driven programs, we anticipate interim data from the trial by mid-year. We look forward to providing updates on these key initiatives in the coming quarters. I will now turn the call over to the operator for questions and answer period. Operator?

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Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. Our first question comes from Aiden with Ladenburg. Please go ahead.

Unidentified Analyst: Hello. Good afternoon; Richard, Leiv. Thank you very much for the update and congratulations with the biomarker — pretty good biomarker. So, it seems that all eight patients had above 900 count. Those who responded at stable disease, but what about the others? I believe there were 11 patients. What was the ALC for the Alpha three patients? Just curious?

Richard Miller: So four out of eight patients had ALC of patients where we have tumor evaluations. Four out of eight sorry — eight had ALCs above 900. Four of those eight had objective responses PRCs or CRs. Eight out of eight, that is the other four, had stable disease. So all eight had disease control; four of the eight objective tumor responses. Of the other five patients who had ALCs below 900, they zero had objective responses and how many had disease control two. And of course, if you look at the PFS curves, there’s remarkable difference in the duration of the time to progression, as I mentioned, 28 months versus two months and the two months by the way, is very similar to what you see with chemotherapy. So we think — we like this biomarker a lot.

Here’s why. Number one, it’s consistent with the mechanism of action. If you don’t have normal lymphocytes, you can’t — you can’t stimulate your immune system. Number one. Number two, easy to measure. This is a freebie and a CBC. So when you get a complete blood count, then differential, you calculate the absolute lymphocyte count based on that, and that’s done every day in every patient. And the third — the third reason is ALC is kind of well-known to oncologists. We know other tumors where absolute lymphocyte count is also a prognostic feature.

Unidentified Analyst: Okay. That makes sense. Yeah.

Richard Miller: One, one final thing, Aiden, I forgot to mention. Yeah. All of the new patients on the trial now, in our ongoing trial, the seven patients, I think you can look at our swimmer plot in the press release, the seven arrows down at the bottom of that swimmer plot, those are all patients who were selected with our new criterion. That is, they have more than 900 lymphocytes per cubic millimeter.

Unidentified Analyst: Understood. And what does it say about potential combination of the ITK inhibitor with chemotherapy as possible at all, or, and what does it say about moving to the earlier lines of therapy? Would you probably expect patients having ALC in their early lines of treatments, right?

Richard Miller: Absolutely, true. It portends that more patients will be eligible if you select them earlier. No question about that. The less lines of chemotherapy have had, the less be up you are, the higher your lymphocyte count’s going to be. So that’s for sure. I would say. Secondly, in terms of chemotherapy, even patients who get chemotherapy tolerate better if they have absolute lymphocyte counts that are higher. So I think that I think that as you know, T-cell lymphoma by its very nature is a very immunosuppressive disease. These patients have a lot of immune problems, and on top of that, if they’re lymphopenic, if their normal lymphocytes are low, they’re really incapacitated from an immune standpoint. So this really does fit nicely with our presumed mechanism of action, which as I tried to indicate in my talk, we now believe can be extended beyond T-cell lymphoma to other cancers.

Unidentified Analyst: Yeah. This is indeed interesting if it’s yeah applicable tumors as well.

Richard Miller: Yeah. At the Lugano Meeting, our colleagues, well both here in our collaborators at Peking University done biopsies and done single cell RNA sequencing and show that there’s not only an increase in effector cells in the tumors, but their cytolytic capacity, their ability to kill has increased.