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.

Li Watsek: Thank you.

Operator: Your next question comes from the line of Yale Jen with Laidlaw. Your line is now open.

Yale Jen: Good morning. And thanks for taking the questions. I just want to have on the last question, just asked which you mentioned that the aza-ven is the — I guess, fair line for three inhibitor patients. So you mentioned about the survival. What about the ORR because I think that probably will be a benchmark actually you might have compared to as well.

Jim Dentzer: Yes. Actually, again, Bob, you’re probably better to take that one.

Robert Martell: So the response rate sort of — there’s not a lot of data on splicing factor mutation post aza-ven. There is one really interesting study looking at first-line treatment with AML that demonstrates splicing factor mutations have an extremely low response rate. So patients who don’t have a splicing factor mutation have approximately 80% response rates. And only maybe — 20% who can achieve that, whereas almost 80% of the patients with a splicing factor mutation are unable to achieve a [CR] (ph) in the first-line, it’s dramatically reduced. In terms of a FLT3 subset of population that is roughly similar, although there aren’t as detailed data on that. Does that answer your question?

Jim Dentzer: Yes. And that was frontline by the way, Yale. So of course, in relapsed refractory, it gets far worse across the board, right? So it’s one of the reasons why we’re excited about the populations that we’re going after is that they’re cylinder served. The hurdle to show something is lower. And we are excited to talk about the age and activity that we’re seeing in that population. Again, it’s relapsed/refractory, in our case not front-line. Even though in both settings, there is a dramatic drop-off in performance for existing therapies.

Yale Jen: Right. And it’s just a hypotheses to think what are these patients will be — I mean, in this patient population, would you anticipate potentially accelerate growth pathway if the data was robust?

Jim Dentzer: So it’s interesting that you say that. The — we look at the precedents in AML, specifically for gilteritinib for IDH1 and for IDH2. In all three cases, the FDA approved those drugs on four trials that were single-arm studies, based on a CR/CRh endpoint and that led to full approval, not even accelerated approval. So we can’t, of course, put words in the FDA’s mouth. We need to have the discussion with the FDA. But we believe that those precedents reflect an understanding at FDA that these diseases are really underserved by existing therapies, and these patients are in need of new therapies. So our hope would be that if we can bring a data set to FDA that can show that we can see single-agent activity and pair it with early but still indications of survival that the FDA will hopefully be in a position to agree to a registration path that can get these drugs in the hands of physicians and patients as quickly as possible.

Yale Jen: Maybe last question here, again a little bit forward-looking type of thoughts, which is that in terms of the FLT3 patients would you — I mean if the data is robust, would you consider a combination in other words to move up to the first-line instead of in the refractory patients at this stage of development.

Jim Dentzer: Yes. So in fact, the answer is we’ve already started that, right? And it’s not just for FLT3, it’s for all comers, whether you have a FLT3 mutation or not. And the reason for that, of course is that our drug, emavusertib, will start to target does target FLT3, but it also targets IRAK4. It targets the CLKs, CLK 1, 2 and 4, targets [derek] (ph), mean this is a multi-targeted drug to hit a number of targets of interest in the context of AML. So — and that is precisely why we’ve already started the frontline study, the triplet study of EMA in combination with aza-ven. So our hope would be with this initial study that we can chose safety. And with those safety data in hand, by the time we get to year-end, we’ll be in a position to have the drug be what I would call partner ready.

We’ll have a mature data set in splicing factor patients and FLT3 patients as a monotherapy, and we will have shown hopefully, by the time we get to ASH, and even though it’s just in a handful of patients that adding Ema to the aza-ven doublet in frontline is safe. And if we can do that I think we can make the case with the regulatory authorities that we are prepared to go simultaneously in the relapsed/refractory setting as a monotherapy and the frontline setting in combination. And I think we’ll be in a position to have a conversation with partners to get access to, obviously, non-dilutive financing, but access to a broader clinical infrastructure so that we can accelerate the pace of clinical development and increase our ability to maximize commercial launch.

So all of those things are part of our thinking at this point in time.

Yale Jen: Okay. Great. That’s very helpful. And I look forward to see the data next week and congrats.

Jim Dentzer: Thank you very much. Appreciate it.

Operator: Your next question comes from the line of Bill Jahangiri with Truist. Your line is open.

Billal Jahangiri: Hi, congratulations on progress. I have a couple of questions here. Your split for FLT3 and spliceosome patients inside the study, is that representative of the [real world] (ph). And then also — I’m going to move on over to the triplet study. Is there a way to, I don’t know maybe pick a subgroup of patients to derisk on the safety since this is the first time we’ll be seeing a triplet. And, I guess that’s a question. And then for PCNSL, are you guys still enrolling BTK — BTK-naive patients as well that we can compare and contrast those two data sets between experience [indiscernible] later this year.

Jim Dentzer: Yes. Thank you. Appreciate it, Bill. Thanks for joining us. So let me try and knock off those three questions in a row. So first, the split on FLT3 patients versus spliceosome patients. So this one is really, really interesting. And I think it reflects the unmet need in AML. Both of these studies are recruiting quickly, as you may recall, we came off our partial clinical hold midyear last year, got our sites up and running. And we are seeing really strong enrollment rates across the board at our sites. There’s a real pent-up demand in AML for a novel target. In particular, as you note the pace of spliceosome has been really interesting. So FLT3 constitutes roughly one-third of AML, one-third of AML patients have a FLT3 mutation.

Patients with a splicing factor mutation make up a much smaller portion of that community, maybe 10% of AML patients have a splicing factor mutation. And yet — that has outpaced enrollment in FLT3. And I think, it is precisely what we said. There are no drugs available. Not only is nothing approved, nothing works for these patients. This is the first time people are seeing activity. And to see that kind of activity with a single agent is really compelling. So we look forward to sharing our results with you next week in those two populations. And we look forward in having the discussions with FDA as well. We — we’ve got to our data set in 20 patients with spliceosome. We are going to add another couple in FLT3 and follow these patients and take those data to the FDA and begin the discussions on registrational design, and we’re looking forward to that.

The second question was about triplet safety. So the design of this study, as you may remember, I think is really interesting, and it’s all about, as I mentioned to Yale, ensuring that our leukemia program is partner ready. So we will have, by year-end, mature data sets in two distinct genetically driven populations in FLT3 and splicing factor mutation. The study we just started in triplet is a study that enrolls patients who are currently on aza-ven in the frontline setting who have achieved CR but are still MRD positive. We’re going to then take those patients into the study and add emavusertib to their therapy, turning the doublet into a triplet. Of course, what we are hoping is that we can see efficacy and get those patients to MRD negativity.

But the key is that we will have been able to isolate the safety effect of adding emavusertib to that aza-ven doublet to the current standard-of-care. So that by the time we get to year-end, obviously we are always hoping to see signs of efficacy. But what we really want to be able to say is we have got a drug that’s hitting a novel target in IRAK4. That novel target clearly matters because we are seeing single-agent activity. We know that the existing standard-of-care of aza-ven doesn’t hit it. And then we hope to add to the discussion by year-end, we can add a drug emavusertib to that doublet that allows the current standard-of-care to address this new novel target of IRAK4, and we would hope of course, that we would then see in the clinic in that setting, what we saw in the preclinical data, which is we have the potential to establish a new benchmark and establish a new standard-of-care in frontline therapy and AML across the board, all comers, FLT3 mutation or not.

Then your third one was on BTK-naive patients in the study in lymphoma. So just as a reminder we have tested the combination of emavusertib with gilteritinib in multiple indications within NHL, and specifically with primary CNS lymphoma in BTK naive patients, as well as BTK experienced patients. The underlying logic of the drug is that patients who are on ibrutinib or NHL patients who are on ibrutinib are on it precisely because it allows them to down-regulate NF-kappaB over activity by blocking the BCR pathway. There are 2 pathways that are driving NF-kappaB over activity in these patients. There are a lot of BTK-inhibitors today. There’s only one drug that blocks TLR pathway, that second pathway driving NF-kappaB over activity, and that’s emavusertib.

Our view would be blocking both of those pathways that are driving NF-kappaB, which is driving disease in NHL. Blocking both pathways is always going to be better than blocking either one alone. So if we can then take that mechanistic logic into the preclinical setting and see the hypothesis is supported, which we’ve already done. And now go into the clinic and compare and contrast, as you say, BTK naive and BTK experienced patients, being able to show both as good and we already have. But we think it’s even more powerful. If all we had were BTK naive patients, someone might wonder whether the efficacy was coming from the BTK inhibitor. But because we know these patients are on a BTK and then fail, either relapsed or refractory, you would, of course, expect that to immediately rechallenge them with ibrutinib yet again, the response rate is probably going to be 0.

So if we can show that we can get activity in those patients, even though they’ve just failed BTK, then it’s obviously either the performance of emavusertib alone or emavusertib’s synergistic combination with BTK and its ability to resensitize patients to BTK, that is driving that. And so we think that’s a really powerful thing to do. Thank you for asking that question. I guess that was pretty long. I hope it answered your question thoroughly.

Billal Jahangiri: It did. It did. I just one more on the comparison front, but back in the triplet I know it’s meant to be safety, but I guess, just for those of us who is our job, right? So how would we – again I think all of you to not give a [milestone] (ph) to some of these patients for the sake of comparison, right? So are there any historical benchmarks that you can point to get as aza-ven and then have MRD positivity and how they fare off, just so that we have something to compare to when that time comes.

Jim Dentzer: Yes. Actually, within the leukemia setting, Bob, maybe you’re a better person to talk to that.

Robert Martell: Yes. I don’t have the details right in front of me, but clearly, it’s a major problem for AML induction because if a patient continues to have molecular evidence of disease, that implies that the disease has not been taken care of. So a significant portion of patients are able to get to MRD negative, but there’s also, I’d say, a significant majority of patients who can’t achieve that, who maybe they achieve a CR or a CRh but when we do a molecular analysis, it is not MRD negative, and that correlates very strongly with relapse. And so that’s what we’re ultimately would be looking to achieve. In this early study, like Jim said, we are looking mainly for safety. And so we don’t have that as a goal for this particular study, but ultimately, that would be the long-term goal ultimately in earlier sort of upfront situation where we would start out the study in combination with aza-ven from the beginning.

Billal Jahangiri : Thanks appreciate it.

Operator: Your next question comes from the line of Sean McCutcheon of Raymond James. Your line is open.

Sean McCutcheon: Hi, guys. Thanks for taking my question. Definitely look forward to the top-line next week. Correct me if I’m wrong, but you said previously that the potential pivotal cohort in the relapsed/refractory AML setting, you are probably going to end up having to go after either FLT3 or spliceosome in a single study with the co-mutations maybe going into the same bucket. So first, is this consistent with your current understanding or your current plan, can you walk us through the decision between FLT3 and spliceosome in that context, what factors you are considering, obviously FLT3 a bit more well established in terms of the scale and scope of the data set that you’ll need. Thanks.

Jim Dentzer: Yes. No, thank you, Sean, and thanks for the question. So yes, you are right. In the past, we have certainly said that, and I would say the same thing today with the very significant caveat that we need guidance from FDA on this issue. Our expectation is that it’s very clear for patients that have a FLT3 mutation only or a splicing factor mutation only. They’re going to go into their respective studies. And as we’ve talked about, it’s roughly one-third of the population in AML has a FLT3 population and roughly 10% have a splicing factor mutation. There are a small number of patients, and we have seen it in our 30 patients, we’ve got two. So there are going to be a small number of patients who would qualify for both studies.

And I suspect again we haven’t had that conversation with FDA. But I suspect what they are going to ask is that we put patients with dual mutation in one study and not in both studies. But we need to have that conversation with them to make sure that that’s what they’d like to see. How you decide which one they go in that’s — again, that’s going to be a subject of discussion with FDA, but those patients would presumably be eligible for both populations.

Sean McCutcheon: Thanks. Yes. And just a quick point of clarification, sorry if I miss this, but will the EHA and ASCO data set be the same data cut?

Jim Dentzer: Yes is the short answer to that question. It’s the same data cut for both populations. We’ll talk about that more next week when the data come out. But absolutely. There are going to be different presenters at both conferences, sort of the behind the scenes — story of working at a biotech company and managing a novel target. Is that you — high-class headache, you get a lot of physicians on both sides of the pond that want to present your data. And so we are going to have different people at different conferences. But the data set, the data cutoff is the same.

Sean McCutcheon: Great. Thank you.

Operator: There are no further questions at this time. I’ll turn the call over to Jim Dentzer. Please continue.

Jim Dentzer: Thank you, operator. And as always, thank you to the patients and families participating in our clinical trials. To our team at Curis for their hard work and commitment and to our partners at Aurigene and the NCI for their ongoing help and support. We look forward to updating you again soon. Operator?

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.