Curis, Inc. (NASDAQ:CRIS) Q1 2024 Earnings Call Transcript

Curis, Inc. (NASDAQ:CRIS) Q1 2024 Earnings Call Transcript May 7, 2024

Curis, Inc. misses on earnings expectations. Reported EPS is $-2.0534 EPS, expectations were $-1.94. CRIS isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, ladies and gentlemen, and welcome to the Curis First Quarter 2024 Business Update. At this time all lines are in listen-only mode. Following the presentation we will conduct a question-and-answer session [Operator Instructions]. This call is being recorded on Tuesday, May 7, 2024. I would now like to turn the conference over to Diantha Duvall. Please go ahead.

Diantha Duvall: Thank you, and welcome to Curis’ First Quarter 2024 Business Update Call. Before we begin, I would like to encourage everyone to go to the Investors section of our website at www.curis.com to find our first quarter 2024 business update press release and related financial tables. I would also like to remind everyone that during the call, we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results may differ materially. For additional details, please see our SEC filings. Joining me today on today’s call are Jim Dentzer, President and Chief Executive Officer; Bob Martell, Chief Scientific Officer; and Jonathan Zung, Chief Development Officer. We will also be available for a question-and-answer period at the end of the call. I’d now like to turn the call over to Jim.

Jim Dentzer: Thank you, Diantha. Good morning, everyone, and welcome to Curis’ Q1 business update call. This quarter, we made significant progress in advancing emavusertib in our three key areas of focus. First, as a monotherapy in patients with relapsed refractory AML and with a FLT3 or splicing factor mutation in our TakeAim Leukemia study. Second, as a doublet therapy for patients with relapsed/refractory primary CNS lymphoma, combining emavusertib with ibrutinib in our TakeAim lymphoma study. And third, as a triplet therapy in frontline AML for all comers regardless of mutation status, that combines emavusertib with azacitidine and venetoclax. Next Tuesday, in connection with the EHA conferences publication of accepted abstracts, we expect to provide a top line update of clinical data from our TakeAim leukemia study.

Previously, we had disclosed data for five patients. Three patients with a FLT3 mutation and three patients with a splicing factor mutation, including one patient with both a FLT3 and a splicing factor mutation who was included in both populations. Our update next week will report data for 25 new patients, bringing the total to 30 relapsed/refractory AML patients treated with emavusertib as a monotherapy. A mutation status for these patients is 12 patients with a FLT3 mutation and 20 patients with a splicing factor mutation, including two patients with both a FLT3 and a splicing factor mutation who are included in both populations. We look forward to discussing the top-line data for these patients on an investor call when the data are released, followed by more detailed presentations at the ASCO and EHA medical conferences that more fully explore emavusertib’s potential to outperform, as a single agent the benchmarks for existing therapies in genetically targeted AML populations.

In the relapsed refractory FLT3 population, the benchmark for FLT3 inhibition is gilteritinib which its FDA label demonstrates, can achieve a 21% CR/CRh rate in patients who have failed frontline therapy. With emavusertib, our goal is to beat that benchmark. We think this is possible, even though the majority of patients in our study have failed prior treatment with a FLT3 inhibitor because unlike existing treatments, emavusertib targets both FLT3 and IRAK4, the [escape path] (ph) for FLT3. This is the central hypothesis of the molecules designed and is demonstrated in the preclinical data. With the 12 patients we’ll be showing at ASCO EHA, we hope to further support that hypothesis, namely that emavusertib has a potential to establish a new and best-in-class benchmark for the FLT3 AML population.

As we move to the relapsed/refractory splicing factor population, we find that the benchmark is unfortunately for these patients far lower. There are no drugs approved. Expected survival is only a few months and existing treatments are ineffective. The only study published for relapsed/refractory AML patients with a splicing factor mutation, was for patients treated with the Aza-ven doublet. It was a very small study with only five patients, and the response rate was 0. This is especially notable as Aza-ven is standard-of-care in frontline AML for patients ineligible for intensive induction. We hope emavusertib’s novel mechanism can show clear single agent activity in this very challenging population. Anything that shows emavusertib can be 0% benchmark set by Aza-ven would be positive.

In our expanded data set, we’ll be looking for blast count reductions, neutrophil increases platelet increases, objective responses and ultimately, of course, extended survival. As we turn to our TakeAim lymphoma study, we see significant progress there as well. At the most recent ASH conference, we presented data for five patients with relapsed/refractory primary CNS lymphoma, who had failed prior treatment with a BTK inhibitor. We expect to provide an update with additional data later this year, most likely at the ASH conference in December. Previously, we have said we expected to report data on 10 to 15 patients. Today, we are pleased to refine that estimate to the high end of the range, as we now expect to report data for approximately 15 relapsed/refractory primary CNS lymphoma patients, who have failed prior treatment with a BTK inhibitor.

We are also pleased to announce the advancement of our triplet study in all comers in frontline AML. We have begun enrollment and expect to have preliminary safety data later this year again, most likely at the ASH conference in December. The excitement around this frontline study stems from the novel targeting of IRAK4, and builds upon the clear anticancer activity we are seeing in our monotherapy studies. We know IRAK4 is an important target in AML and that neither azacitidine nor venetoclax addresses it. So the logical next step is to explore the [Aza-ven] (ph) triplet and its potential to establish a new benchmark for frontline therapy in all comers in AML. In summary, we’re encouraged by our progress across the board in leukemia and lymphoma and we look forward to reporting our updated leukemia data next week.

With that, I’ll turn the call back over to Diantha to review our results for the quarter. Diantha?

Diantha Duvall: Thank you, Jim. For the first quarter of 2024, Curis reported a net loss of $11.9 million or $2.05 per share as compared to a net loss of $11.6 million or $2.39 per share for the same period in 2023. Research and development expenses were $9.6 million for the first quarter of 2024 as compared to $9.1 million for the same period in 2023. The increase in research and development expenses were primarily attributable to higher employee related costs. General and administrative expenses were $4.9 million for the first quarter of 2024 as compared to $4.8 million for the same period in 2023. As of March 31,2024, Curis’ cash, cash equivalents and investments totaled $40.7 million and there are approximately 5.9 million shares of common stock outstanding.

We continue to be in a solid cash position and expect that our existing cash, cash equivalents and investments should enable us to maintain our planned operations in 2025. With that, I would like to open the call for questions. Operator?

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Q&A Session

Operator: Thank you, ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Soumit Roy with Jones Research. Please go ahead.

Soumit Roy: Congratulations on progress on multiple fronts, really, really clearly presented. A couple of questions on the data — expected data next week. I don’t know, if I missed it — are you going to present data for both the FLT3 mutant and spliceosome mutants in the relapsed/refractory setting? And what kind of details could we expect? Are you going to give us fair details around baseline blast count levels, how much percent reduction and response rate neutrophil recovery, et cetera?

Jim Dentzer: Hi, Soumit. Thanks for joining. So yes, we are absolutely going to be presenting data for both the FLT3 and the splicing factor mutation populations. It is going to be a top-line review of data. Obviously, we need to be a little sensitive to the conference. We can talk to the abstract, but of course, we are going to need to wait for the poster to come up to have the more detailed decent. So we think there is some exciting news next week. We are looking forward to talking about it. And we look forward to having the conversations at both ASCO and EHA in a more detailed and granular level.

Soumit Roy: Totally understandable. My last question is around path forward for these Spliceosome mutant patient population in the relapsed/refractory setting. So the FLT3 population, I think the [registration] (ph) is much clearer. On the Spliceosome mutation, how are you planning to go forward? Are you going to develop any companion diagnostic? Or is it included a fairly routinely screen for that mutation. If you can give us any color.

Jim Dentzer: Sure. So we need, of course, to have a discussion with FDA. So I want to be careful here that we’re giving you our thoughts. But it is going to really depend on how the conversation with FDA goes. The complicating factor here, I would say, at the highest level, when we think about the design of the study, is we need to put into context, nothing approved because nothing works. This is the first drug that’s shown single-agent activity in this population. So whether or not the FDA looks for something like an objective response rate, whether they look for survival, whether they want a single arm study or whether it would be comparing to something else. All these questions are great questions, and we’ve got some thoughts on those but it’s really going to depend upon a conversation with FDA.

So I’m going to help on that one a little bit. If we go forward and we think about any new genetically driven population, I think it’s fair to assume that we’re going to need a companion diagnostic. Again, that will depend on the conversation with FDA of what the timing is for that and how that gets incorporated into a pivotal study, but I’d say stay tuned.

Soumit Roy: Got it. And if I may sneak in one last question is, around the – [bar to beat] (ph) for the relapsed refractory FLT3, you mentioned gilteritinib with CR rate of 21-ish percent. But those went FLT3 experienced patients. So in our mind, the bar to beat was more 11% to 12% response rate. Is that fair? Or are you setting up a high bar for yourself?

Jim Dentzer: Yes. Actually, Bob’s may be the best person to talk to that. Bob, would you mind jumping in?

Robert Martell: Yes. Thanks, Jim. I agree, Soumit, the bar in terms of what we might expect from a new drug in targeting FLT3 in this area would be much lower than 21% because obviously, these patients have demonstrated resistance to FLT3 inhibition. And that’s exactly where emavusertib is so critical because targeting IRAK4 is key. The TLR pathway, as you know, is strongly up-regulated following FLT3 inhibition. In fact, TLR signaling through IRAK4 is a resistance mechanism. And that’s why we think, even though a patient has had resistance to FLT3 inhibition, we can rescue that with this combination. With 21%, we don’t know what the FDA will require as the hurdle for this. We presented that as a prior precedent for approval of gilteritinib in the earlier lines of therapy. It may be that they would accept lower than that. And so that really, as Jim mentioned, will require some discussions with them.

Soumit Roy: Thank you for taking all the questions. I’m looking forward to the data next week.

Robert Martell: Thank you.

Operator: Your next question comes from the line of Li Watsek with Cantor Fitzgerald. Your line is open.

Li Watsek: Hi, good morning. Congrats on the progress. Just a couple of questions here. Should we expect additional sort of data at EHA conference relative to the abstract data cuts and then maybe comment on whether we’re going to see some MRD data and what will be the medium follow-up?

Jim Dentzer: Thank you, Li, and I appreciate the question. So yes there certainly will be additional detail at both conferences compared to what’s in the abstract. So similar to my answer to Soumit’s question, we’re going to have a discussion about top-line detail next week, and we’re really looking forward to that, but it’s going to be limited to data that are in the abstract. There is — by definition, as you can imagine, there’s going to be much more detail that comes at the posters and in the presentations at ASCO and EHA.

Li Watsek: Okay. And the medium follow-up.

Jim Dentzer: Let’s wait and have a discussion about the data when the data are released, if that’s all right.

Li Watsek: Okay. That’s fair. And then if I recall correctly, these patients have less than two prior lines of therapy. Maybe just expand a little bit on what these treatments are for both FLT3 and spliceosome patients enrolled in the study? And how should we think about the impact of prior lines on the response.

Jim Dentzer: Yes. Yes. Thank you. So it’s actually less than three prior lines coming into the study. So yes, typically, in AML well, actually, you know what, Bob, maybe the better person to talk about the lines of therapy that typically happen in these patients in AML.

Robert Martell: Yes. So right. So oftentimes, patients with a FLT3 mutation may get some cytotoxic intensive chemotherapy upfront or a lesser intensive. But generally, they will have had prior FLT3 inhibitor like we were just discussing a bit ago. Patients who are very fit, ineligible for intensive induction. Oftentimes, we’ll get that therapy. But those patients once they fail would go on to aza-ven therapy, and then all of the patients who really are not eligible for intensive induction will get aza-ven. So as you may know patients who fail or progress on aza-ven or are resistant to that have extremely poor outcomes. There’s been a couple of studies that have looked at outcomes following failure of aza-ven and the survival in both of those studies is about two months to three months across the board on those patients. So really a difficult population to treat. And our data should be viewed in that perspective as well, which we are really excited about.