Curis, Inc. (NASDAQ:CRIS) Q3 2023 Earnings Call Transcript

Curis, Inc. (NASDAQ:CRIS) Q3 2023 Earnings Call Transcript November 2, 2023

Curis, Inc. beats earnings expectations. Reported EPS is $-2.13, expectations were $-2.32.

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

Diantha Duvall: Thank you, and welcome to Curis’ third quarter 2023 business update call. Before we begin, I’d like to encourage everyone to go to the Investors section of our website at www.curis.com to find our third quarter 2023 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 on today’s call are Jim Dentzer, President and Chief Executive Officer; and Jonathan Zung, our 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 morning, everyone, and welcome to Curis’ third quarter business update call. This quarter marked a key inflection point for the company and for patients as we were able to return our focus to clinical enrollment in our TakeAim Leukemia and TakeAim Lymphoma studies with the removal of the partial clinical hold. Later this morning, abstracts for the 65th ASH Annual Meeting will be unveiled, and we are pleased to have several abstracts under consideration. At ASH, we expect to provide an update from our TakeAim Lymphoma study, including our first look at proof-of-concept data for patients with primary CNS lymphoma, a rare form of extranodal non-Hodgkin lymphoma, for which there are limited treatment options.

A scientist working with petri dishes in a high-tech laboratory for biotechnology research.

In the TakeAim Leukemia study, we have reopened our clinical sites and are working with them to identify and enroll new patients. As a reminder, the TakeAim Leukemia study is a monotherapy study, targeting patients with relapsed or refractory AML with either a FLT3 or spliceosome mutation. Enrollment of new patients has begun, and we expect to have our first look at data from these patients in the first half of 2024. Lastly, we are working with clinical sites and regulatory authorities on advancing a new triplet study of emavusertib in combination with azacitidine and venetoclax in AML. This study is intended to evaluate safety as well as emavusertib’s ability to enhance the effectiveness of azacitidine and venetoclax by studying AML patients who are responding to azacitidine and venetoclax treatment, but still have Minimal Residual Disease or MRD.

Our hope is that with the addition of emavusertib o their treatment regimen, we can help these patients convert from MRD-positive status to MRD-negative. We expect to initiate this study in the fourth quarter and see initial data in the second half of next year. In short, we’re making great progress in advancing the potential of emavusertib as a monotherapy, as a doublet therapy combining with ibrutinib and as a triplet therapy in combination with azacitidine and venetoclax, all of which should have data over the coming four quarters. We look forward to providing those updates. With that, I’ll turn the call back over to Diantha to review our financial results for the quarter. Diantha?

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Q&A Session

Diantha Duvall: Thank you, Jim. For the third quarter of 2023, Curis reported a net loss of $12.2 million or $2.13 per share as compared to a net loss of $13.3 million or $2.83 per share for the same period in 2022. Curis reported a net loss of $35.7 million or $6.6 per share for the nine months ended September 30, 2023, as compared to a net loss of $45.3 million or $9.82 per share for the same period in 2022. Revenues for the third quarter of 2023 and 2022 were both $2.8 million. Revenues for both periods consist of royalty revenues from Genentech. Genentech and Roche’s sales of Erivedge. Revenues for the nine months ended September 30, 2023 and 2022 were both $7.3 million. Research and development expenses were $10.4 million for the third quarter of 2023 as compared to $10.8 million for the same period in 2022.

The decrease in research and development expenses for the quarter is primarily attributable to lower employee-related costs due to a reduction in headcount, partially offset by increased clinical costs. Research and development expenses were $29.5 million for the nine months ended September 30, 2023, as compared to $34.6 million for the same period in 2022. General and administrative expenses were $4.8 million for the third quarter of 2023 as compared to $4.6 million for the same period in 2022. The increase was primarily attributable to higher professional, legal and consulting services costs. General and administrative expenses were $4.8 million for the third quarter of 2023 as compared to $4.6 million for the same period in 2022. The increase was primarily attributable to higher professional, legal, and consulting services costs.

General and administrative expenses were $13.8 million for the nine months ended September 30th, 2023, as compared to $15.3 million for the same period in 2022. Other income net was $0.2 million for the third quarter of 2023 as compared to other expense net of $0.7 million for the same period in 2022. Other income and expense net primarily consists of interest income, partially offset by non-cash expense related to the sale of future royalties. Other income net was $0.4 million for the nine months ended September 30th, 2023, compared to other expense net of $2.5 million for the same period in 2022. As of September 30th, Curis’ cash, cash equivalents, and investments totaled $68.5 million, and there were approximately 5.9 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 open the call for questions. Operator?

Yale Jen: Good morning and thanks for taking the questions and congrats on the progress. Two questions here. The first question is that in terms of the ASH abstract you intend to present, could you give us a little bit color? You mentioned there’s more than one. So, what’s the general context of that? Then I have a follow-up.

Jim Dentzer: Yes. So, thank you, Yale. I appreciate that. So, we’re going to defer most of the comments about the ASH abstract until the abstracts go live. However, what I would say is that we’ve got leukemia and lymphoma ongoing. The leukemia study really got started or restarted in July with the enrollment of new patients. So, those data are really a 2024 story, not an ASH story. Lymphoma is really going to be the new data that are coming at ASH. And as we’ve talked about before, we have, in the past, looked at monotherapy and combination therapy. We’ve established our dose and we’ve targeted the indication of primary CNS lymphoma as the ideal place for us to go. The reason we selected primary CNS was, as you recall, first, it’s an orphan indication within lymphoma.

So that means a relatively small number of patients would be needed on the regulatory path. Second, there is a very clear unmet need. There is an established benchmark for what ibrutinib looks like in monotherapy in primary CNS lymphoma, ibrutinib attained a 19% CR rate. And then third, it really is going to establish what I hope to be a nice opportunity for us to demonstrate first, whether we can be an additive benefit, can we increase the CR rate by adding our drug to ibrutinib. But also, can we get CRs in patients who have progressed on BTK treatment. Can they be resensitized? That has always been the hypothesis for emavusertib and IRAK4 inhibition this will be the first time we can see data to see whether or not that’s possible. So that would be my expectation for reviewing the data at ASH.

Leukemia is a 2024 story. The ASH story is going to be lymphoma.

Yale Jen: Okay. Great. That’s helpful. And the second question here is that you have mentioned earlier that before that high risk and MDS development will depends on what you see — what the sort of standard of care potentially could be established, so you will set after for doing that and what’s your current thoughts in terms of that aspect.

Jim Dentzer: No, that’s exactly right. So and by standard of care, as you know, the standard of care in AML is the azacitidine and venetoclax doublet. Today as we stand, the standard of care in MDS is azacitidine monotherapy. The azacitidine venetoclax study is still pending. That’s the VERONA study. And those results presumably are imminent. So we’re waiting to see, of course, is if that study is positive or negative, if that study is positive, and the doublet is also the standard of care in MDS we will want to proceed with a triplet. If on the other hand, it’s negative and azacitidine remains as monotherapy is the standard of care, then we would look to proceed with the doublet. Is that helpful?

Yale Jen: Oh, absolutely.

Jim Dentzer: Great.

Yale Jen: That’s very, very helpful. And maybe what — any timeline you can sort of, speculate at this point?

Jim Dentzer: We don’t run that study. So unfortunately, no, I mean, I think what the broader world is expecting is that it’s sometime over the next few months, whether that’s ASH or sometime in early 2024. Of course, we don’t know any more than you do, but we are eagerly awaiting the outcome of those data.

Yale Jen: Okay, great. That’s very helpful. And again, congrats on the progress. I look forward to seeing that.

Jim Dentzer: Thank you very much, Yale.

Operator: Your next question comes from Lee Warwick from Cantor Fitzgerald. Lee, please go ahead.

Q – Unidentified Analyst: Hey, good morning. Thanks for taking our questions. Jim, maybe can you just frame the expectations for us a little bit for the data update in first half of next year, particularly in AML and MDS, what the bar will be?

Jim Dentzer: Yes. So in AML and MDS it’s going to be separate, right? So we are proceeding with monotherapy in patients in the relapse refractory setting for FLT3 and spliceosome patients. And MDS, as Yale asked about, we’re really awaiting news of the VERONA study to make sure we understand the path forward. In FLT3 and spliceosome, the benchmarks are pretty clear. FLT3 CR rate with GILTEritinib, and GILTEritinib, as you know, is the market leader for FLT3 inhibitors, is 12%. So, of course, we would want to improve on that. Their CR-CRH rate was 22.6%. And, of course, we would want to improve on that. In spliceosome patients, it’s not clear that there are any treatments capable of getting a CR rate. As far as I know, there’s never been anything published.

The only data in the literature addressing spliceosome patients is that they have the worst of the worst prognosis. So as you know, in relapsed refractory AML, the survival is unfortunately quite poor. Median survival in studies ranges from two to four months. And what we understand from the literature is that the lower end of that range is for the spliceosome patients. But as far as we know, nobody’s ever demonstrated you can get a response. So in FLT3, what we’re looking to do is can we improve upon FLT3 inhibitors as a class with our FLT3 IRAK4 targeting molecule, M of usurtive, and that would be beating a 12% CR rate or a 22.6% CR-CRH rate. And in spliceosome patients it would be anything that would be greater than 0. Presumably, something north of 10 would be very exciting in that setting.

Is that helpful?

Q – Unidentified Analyst: Okay. Yes. And I have another question for the triplet. Do you think you need to do more dose work for the combination? And also, do you anticipate any drug-drug interaction with a triplet regimen?

Jim Dentzer: Excellent question. So the answer to the second one of, do we expect any DDI, drug-drug interaction, I’d say we don’t expect it based on the work we’ve done in the lab and the clinical work we’ve done to-date, we don’t see that there’s an overlapping safety profile. That said, of course, that’s why you’re on the sites to see whether or not that stays consistent. In terms of our expectation, could you remind me where you were headed with that first part of the question in the triplet?

Unidentified Analyst: Do you need to do more dose work?

Jim Dentzer : That’s right. So the answer to that is yes. I mean, our first foray into the triplet study, we’re going to be evaluating both safety and efficacy. So we think we know the right dose. We certainly know the right dose for monotherapy. We think we have the right dose in combination with ibrutinib and venetoclax, but this will be the first time we’ve studied the triplet in the clinic of ASA and Ven and Ella. So I think based on the results of those, one of the things we’re going to want to see is, can we determine the appropriate dosing regimen for emavusertib in that setting. Any other questions Yale?

Unidentified Analyst: No, that’s great. Thank you.

Jim Dentzer : Excellent. Thank you.

Operator: Your next question comes from Dane Leone from Raymond James. Dane, please go ahead.

Jim Dentzer : Dane, look, not there.

Operator: He disconnected from the line. Your next question comes from A.J. Rashid [ph] from Columbia Eagle [ph]. A.J., please go ahead.

Unidentified Analyst : On the overland dispute.

Jim Dentzer : That last one broke up. I’m sorry about that. Are there any other questions in the queue?

Operator: Okay. It appears there are no further questions. So this concludes our question-and-answer session. I’d like to turn the conference back over to the company’s President and Chief Executive Officer, James Dentzer for any closing remarks.

Jim Dentzer : Thank you, Colin, 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 tireless commitment and to our partners at Origin and the NCI for their ongoing health and support. We look forward to updating you again soon. Colin?

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.