Curis, Inc. (NASDAQ:CRIS) Q2 2023 Earnings Call Transcript

Curis, Inc. (NASDAQ:CRIS) Q2 2023 Earnings Call Transcript August 3, 2023

Curis, Inc. misses on earnings expectations. Reported EPS is $-0.12 EPS, expectations were $0.12.

Operator: Good afternoon and welcome to the Curis’ Second Quarter 2023 Business Update Call. All participants will be in a listen-only mode. [Operator Instructions] After the company’s prepared remarks, call participants will have the opportunity to ask a question. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Diantha Duvall, Curis’ Chief Financial Officer. Ms. Diantha, please go ahead.

Diantha Duvall: Thank you, and welcome to Curis’ second quarter 2023 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 second quarter 2023 business update 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 on today’s call are Jim Dentzer, President and Chief Executive Officer; and Jonathan Zung, Chief Development Officer. We will also be available for a question-and-answer period at the end of our call. I’d now like to turn the call over to Jim.

Jim Dentzer: Thank you, Diantha. Good afternoon everyone, and welcome to Curis’ second quarter business update call. Big news this quarter is of course the removal of the partial clinical hold on our TakeAim Leukemia study and getting that done a full quarter faster than we expected. It’s a testament to the hard work of our team at Curis and the strong support of our clinical investigators. I’d like to take this moment to express my gratitude and appreciation to everyone involved. In our discussions with FDA, we were also able to confirm that 300 milligrams BID is the recommended Phase 2 dose for monotherapy in leukemia. With that confirmation, we’re excited to announce that we are expanding monotherapy enrollment in the TakeAim Leukemia study at 300 milligrams BID for relapsed/refractory patients with spliceosome or FLT3 mutation.

In addition, we’re working with our clinical investigators on a frontline study combining emavusertib with azacitidine and venetoclax to treat all patients with AML regardless of their mutation status. We expect to have data from both the monotherapy and combination studies in 2024. Now let’s transition to our TakeAim Lymphoma study where we’re focusing on patients with primary CNS lymphoma. There’s a high unmet need in this patient population and we believe combining emavusertib with ibrutinib could potentially address the problem of ibrutinib resistance and provide a meaningful new therapeutic option for these patients. We’re currently enrolling patients and expect to have data in 2024. On the financial front, we were able to further strengthen our balance sheet with a $15 million equity financing achieved with no discount and no warrant coverage.

I’m sure everyone on this call knows how rare this is in the current market. All-in-all, it was a terrific quarter for Curis and we’re excited to be back in the clinic at the recommended Phase 2 dose of 300 milligrams and closely collaborating with our clinical investigators to develop a novel therapeutic with the potential to be a cornerstone therapy in heme malignancies. With that, I’ll turn the call back over to Diantha to review our financial results for the quarter. Diantha?

Photo by national cancer institute on Unsplash

Diantha Duvall: Thank you, Jim. Curis reported a net loss of $12 million or $0.12 per share as compared to a net loss of $15.9 million or $0.17 per share for the same period in 2022. Curis reported a net loss of $23.5 million or $0.24 per share for the six months ended June 30, 2023, as compared to a net loss of $32 million or $0.35 per share for the same period of 2022. Revenues for the second quarter of 2023 were $2.2 million as compared to $2.4 million for the same period in 2022. Revenues for the six months ended June 30, 2023 and 2022 were both $4.5 million. Research and development expenses were $10 million for the second quarter of 2023 as compared to $12.3 million for the same period in 2022. The decrease in research and development expenses for the quarter is primarily attributable to a decrease in personnel costs.

Research and development expenses were $19.2 million for the six months ended June 30, 2023 as compared to $23.8 million for the same period in 2022. General and administrative expenses were $4.2 million for the second quarter of 2023 as compared to $5.1 million – excuse me, as compared to $5.1 million for the same period in 2022. The decrease in general and administrative expenses was driven primarily by a decrease in personnel costs. General and administrative expenses were $9 million for the six months ended June 30, 2023 as compared to $10.8 million for the same period in 2022. For the second quarter of 2023 other income net was $0.2 million as compared to other expense net of $0.9 million for the same period in 2022. The other income net was $0.2 million for the six month end of June 30, 2023 as compared to other expense net of $1.9 million for the same period in 2022.

Other income and expense net primarily consists of interest income partially offset by expense related to future royalty payments. Including the proceeds from the July financing, Curis’ cash, cash equivalents and investments totaled $77.4 million and there were approximately 117.7 million shares of common stock outstanding. We continue to be in a strong cash position and expect that our existing cash, cash equivalents and investments should enable us to maintain our planned operations into 2025. With that, I’d like to turn the call over for questions. Operator?

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Q&A Session

Operator: Thank you. [Operator Instructions] And the first question will come from Soumit Roy with Jones Trading. Please go ahead.

Soumit Roy: Hi. Good afternoon everyone, and congratulations on all the progress, really a solid quarter.

Jim Dentzer: Thank you. Soumit.

Soumit Roy: Would love to get a little bit of color on how the conversation with the FDA went and where they got back the confidence in putting 300 milligram BID to the go forward dose?

Jim Dentzer: Sure, happy to. So it really went exactly the way we were hoping it would go. It just went faster. What we said when we were originally put on hold, as you know, the first questions they had were about the patient death 15 months ago. They very quickly came to the same conclusion we did that that was due to underlying disease, not to drug. And then we immediately flipped into a project optimist discussion, and that’s why it’s been over a year of work. Their view was that they liked the decision process that we had made of testing the three doses, 200 milligrams, 300 milligrams and 400 milligrams, they agreed all three doses were safe and all three doses led to a response, sort of a high class headache. And while they liked 300 milligrams better than 400 milligrams for just the reason we said it looked like we were getting the same responses in both levels.

At 200 milligrams, their view was we didn’t have enough patients tested. So all they really asked was put more patients on drug, and as you know, they asked for nine more, so put more patients on drug, run the data, rerun the analysis and let us know if you come out in the same place. And the answer was really quite straightforward. We did exactly what they asked. We put nine more patients on drug, we compiled the data, produced the report, sent it off to FDA and it was really a very straightforward discussion. 200 milligrams is a good dose, it’s an active dose, but 300 milligrams looks to be a little bit better. So I’m pleased it came out where we expected it would come out. And obviously I’m very pleased that the FDA moved more quickly than we anticipated.

Soumit Roy: Great. This is a really good news.

Jim Dentzer: Yes.

Soumit Roy: So when is the next data update at least from the 200 milligram, a longer-term, or should we think that it’s all going to be mid to later half of 2024 with 300 milligram and the combination trial?

Jim Dentzer: Yes. We’re a little hesitant to commit to exactly which date we’re going to have. As you know, in the update we gave in the press release, we said 2024. And the fact of the matter is we go to every major medical conference. So we’re always out there talking to our investigators and to analysts, of course, and we want to get data out as fast as you want to see it. So the issue for us on our end is now that we know our dose is 300 milligrams, we’ve got to get the sites up running and enrolling as fast as we possibly can. So it seems like in this early stage, it was too early to commit to we are definitely going to have data by year end. That’s why we said 2024, but which conference in 2024 remains to be seen. We’ll hopefully give an update on that later this quarter as we have a better eye towards enrollment.

Soumit Roy: Got it. No, that’s totally understandable. And on the combination trial venetoclax in the frontline setting, I’m assuming you would continue to genotype the patients and hold the record if patients have the IRAK4 mutations, FLT3 and the other mutations and show the data in the following subgroups if need be.

Jim Dentzer: Yes. So we’re continued to look at those data and learn more about emavusertib in that population. As you know as we have made more public, we now have a very clear strategy going forward as a result of our discussions with FDA. We know that this drug very consistently from mechanism of action to preclinical data to clinical data works exactly where we would expect it would as a single agent. It works in patients with FLT3 or spliceosome mutation and so that’s where we’re going for monotherapy. But you also remember that IRAK4 Long is not just the single largest genetic driver of disease in this AML/MDS spectrum, but it’s also over expressed in the entire population. Half the population has so much of it, that monotherapy works, the other half still has a significant amount, it’s just not quite as much as the monotherapy crap.

So what we’re planning on doing with this drug is in the rifle shot genetic populations where this drug ought to be differentially active and so far looks to be, we’re going to go single agent relapsed/refractory setting, again, FLT3 and spliceosome. For everybody else, we’re going to go frontline combination because we think that that’s what makes sense. In AML, the standard of care is aza/ven. So we are going to go aza/ven frontline in combination with emavusertib, all comers, doesn’t matter what mutation you have. In MDS with the recent magro release from Gilead, I would say the standard of care question is a little more open. We’re still waiting for the output of the aza/ven study, but it’s not clear exactly what that standard of care regimen is.

So it’s also not clear what we would want to add emavusertib to. So we – at this point, what we’re doing is engaging our physicians and KOLs to try and figure out what is the most appropriate strategy for this drug. But long-term, our review generically is this drug is going to get used as a single agent wherever it makes sense, that’s going to be spliceosome and FLT3 mutation, and everywhere else it’s going to go frontline, all comers, no filter needed. That was a really long answer. I hope that was helpful.

Soumit Roy: No, that was incredibly helpful. Thank you. Thank you again for taking the questions and congratulations.

Jim Dentzer: Thank you. I really appreciate it. Thank you for calling in.

Operator: The next question will come from Yale Jen with Laidlaw & Co. Please go ahead.

Yale Jen: Good afternoon, and I also add my congrats on the progress.

Jim Dentzer: Thank you.

Yale Jen: My first question is in terms of TakeAim Lymphoma regarding the PCNSL. Could you give us a little bit more color in terms of the current study design process and eventually that the timeline in terms of data release? And any other color, so would be very helpful.

Jim Dentzer: Sure. So in primary CNS lymphoma, so let’s step back for a second. Just as in AML and MDS IRAK4 is important because it binds really hard to the myddosome and MYD88 in particular in the toll-like receptor pathway and shuts it down. That’s important on the AML/MDS side, because IRAK4 Long is the largest genetic driver of disease. On the lymphoma side, it’s an indirect target. So NF-κB is the problem in primary CNS lymphoma and NHL more broadly. The current treatment is ibrutinib that shuts down the BCR pathway, which is one of two pathways driving NF-κB. Our drug emavusertib shuts down the toll-like receptor path, which is the other pathway driving NF-κB. So our strategy in lymphoma is these patients who really want to downregulate NF-κB over activity, today they’re looking at using ibrutinib or a BTK inhibitor to do that work.

We’ve got a drug that could be seen as an alternative. In fact, we tested it as a single agent, but rather than to pick one NF-κB down regulator versus another, we found that they work synergistically. So what we’re looking to do is find those indications within NHL where the disease is sufficiently aggressive that we can get an answer quickly, where the unmet need is critical, where these patients really don’t have very good options and ideally where it’s an orphan sized indication where we can get a very attractive regulatory path. Well, all three of those boxes get checked with primary CNS lymphoma. Our mechanism of action supports that that’s a great indication or great setting for this combination. Our preclinical data of course backed that up.

And there are early treatment or early days in the clinic show that not only is that true, but it looks like small-n we may be able to address ibrutinib resistance, which is a particular problem in PCNSL, it’s a problem in NHL more broadly, but it’s a particular problem in primary CNS lymphoma. So that’s where we’re headed. It’s going to be the combination of ibrutinib plus emavusertib in the orphan indication of primary CNS lymphoma.

Yale Jen: So that would be post-ibrutinib treatment. And what do – what’s the size of the study initially you are planning and what sort of endpoint you are thinking?

Jim Dentzer: That’s right. So it’s post-ibrutinib. So these patients, in general, ibrutinib can give nice responses. As you know, in NHL, oftentimes ibrutinib can get a partial response. It doesn’t very often get a complete response, but it can really help patients for a period of time. But typically these patients all relapse. We are going to capture them at that point and then add emavusertib to the therapy and hope to regain that response that they had once had and hopefully deepen it. So that’s the plan. We’ve got a small number of patients to-date that we’ve reported out. Our goal is to try and get to 20 patients. If we can get 20 patients of data, and we can show that, again, reasonable sized population, but still small, that it looks like this is a compelling therapy.

That it looks to be something that’s a good option for these patients that have relapsed on ibrutinib. We would want to go to the FDA to have a discussion about what the pivotal design needs to look like at that point. So look for an N equals 20 is our goal for this study.

Yale Jen: So would you anticipate more of the PR or actually maybe some – convert to CR or how should we, overall thinking about in terms of the threshold you feel that’s worth to discuss with the FDA?

Jim Dentzer: Yes, so what we’d be looking for is a couple things. First, obviously it would be great to have a higher ORR. It would be great within the responses to have more of those PRs become CRs. And then lastly, we’d be looking at duration. In this group, because they will have already relapsed on ibrutinib any of those outcomes is positive outcome. And of course, we’ll be examining those data very closely.

Yale Jen: Okay, great. That’s very helpful and congrats. You can starting the trial in both sides of the chemo and cancers and we look forward to readout in the future.

Jim Dentzer: Thank you very much, Yale and appreciate your support. Thank you for calling in.

Operator: The next question will come from Li Watsek with Cantor Fitzgerald. Please go ahead.

Unidentified Analyst: Hi Jim and Diantha, this is Rosemary on for Li. Firstly, congrats on a great quarter again.

Jim Dentzer: Thank you.

Unidentified Analyst: A couple questions from us. So I know your last update was fairly recently. And you mentioned that you get the sites up and running with 300 mg dose. Do you by chance happen to have a sense of enrollment speed yet, or maybe how long it would take you to reach your end of 20?

Jim Dentzer: Yes, we really don’t yet. Obviously we just heard from the FDA and while we’re excited about it, now we have to go back to the sites and we have to get back through their IRBs and then it’s a lot of blocking and tackling at the clinical site to get enrollment up and running. So it’s a little early to be able to say that they’re all off and running again. I think we’re trying to do two things simultaneously from an operational perspective. The first one is we want to increase the number of sites. As you may remember, we had nine sites at the beginning of the year. We’d love to end the year with double that. So we’re working with new sites, identifying new KOLs and trying to see if we can expand our network of clinical sites period.

With all sites, we’re trying to get them up and running as fast as possible, identify the patients, screen them, and then enroll them into the study. My hope is that by the end of Q3, we’ll have a pretty good sense of where our enrollment rate is going and where our process of getting new sites up and running is going. So we can be a little more granular on which of the medical conferences makes the most sense for a data update. At this point in time, we’re obviously very confident it would be sometime in 2024, but we can’t really get more granular until we have a better sense of what – where enrollment’s headed.

Unidentified Analyst: Sure, sure. Thank you. So built upon what the data you already have at the RP2D. Can you remind us about the bar for success for both FLT3 mutant and spliceosome mutated patients? And I don’t know if this changes with the recent approval of crizotinib in first-line?

Jim Dentzer: Yes, so I would say first, our most recent data is in our corporate presentation on our website. So for you and for everybody else that’s on the call, I would encourage you to go to curis.com and if you scroll down, you’ll see our corporate presentation deck. You can open it up and we have the most recent data there, and I think it’s pretty compelling. We’ve got data on 84 patients, which includes all-comers, all dose levels, but we also show the rifle shot of, now that we know our patient populations, that’s AML patients with spliceosome mutation and AML patients with FLT3 mutation, that’s going to be the population we go after with monotherapy. And we know our dose, we know it’s 300 milligrams. We’ve highlighted on in that deck on a slide exactly how many patients have had that combination and what they look like.

So what we’re looking to do right now is we’ve got three patients at 300 milligrams, one to two prior lines, which is the group we’re looking for with a spliceosome mutation and three in with a FLT3 mutation. Of the three with a spliceosome mutation, two of the three have a CR or CRH. And of the FLT3 patients, two of the three have a CR. Now, I’m not suggesting that we’re going to get a 66% CR rate. That would be outrageous that that’s not what they get frontline. What I am suggesting is that our goal in each of these population groups is N equals 20. What you really need in order to have a good discussion with FDA, that you’ve got a single agent that shows compelling activity is we probably need four or five CRs, CRHs in those groups to have a nice discussion.

So in each of these groups of N equals 3, we’ve got two of three so far, we need two or three more in the next 17 patients, in each of those groups. And if we can get that and we can make a pretty compelling case that this novel therapeutic does seem to offer a compelling benefit worth discussion.

Unidentified Analyst: Got it. Understood. Thank you so much, and congrats again.

Jim Dentzer: Thank you very much. I appreciate it. Thank you for your support.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to the company’s President and Chief Executive Officer, Mr. James Dentzer for any closing remarks. Please go ahead, sir.

Jim Dentzer: Thank you, operator, and thank you everyone for joining today’s call. 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, ImmuNext and the NCI for their ongoing collaboration and support. We look forward to updating you again soon. Operator?

Operator: The conference is now concluded. Thank you again for your participation. You may now disconnect.