Corvus Pharmaceuticals (NASDAQ:CRVS) Q2 2020 Earnings Call

0:00 Thank you for standing by. This is the conference operator. Welcome to the Corvus Pharmaceuticals Second Quarter 2020 Business Update and Financial Results Webcast Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Zach Kubo of Pure Communications. Please go ahead. Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals second quarter 2020 business update and financial results conference call. On the call to discuss the results and business highlights for the second quarter 2020 are Richard Miller, Chief Executive Officer, Leiv Lea, Chief Financial Officer, and Mehrdad Mobasher, Chief Medical Officer.

1:04 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' quarterly report on Form 10Q, which was filed today, and 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 Leif Lea. Leif?

1:53 Thank you, Zach. I'll begin with a quick overview of our second quarter 2020 financials and then turn the call over to Richard for a business update. At June 30, 2020, Corvus had cash, cash equivalents, and marketable securities totaling $59.3 million as compared to $78 million at December 31, 2019. Research and development expenses in the second quarter of 2020 total $7.9 million compared to $10.6 million for the same period in 2019. The decrease of $2.7 million was primarily due to a $.5 million decrease in Sephora clinical trial expenses, a $1.7 million decrease in CPI-006 drug manufacturing costs, a $.5 million decrease in CPI 818 drug manufacturing costs and a $.8 million decrease in outside service costs. This is partially offset by a $1.1 million increase in CPI 006 clinical trial expenses.

3:00 The net loss for the second quarter of 2020 was $10.6 million compared to a net loss of $13.0 million for the same period in 2019. Total stock compensation expense for the second quarter 2020 was $1.4 million compared to $1.9 million for the same period in 2019. Looking forward, we expect net cash used in operating activities for the second half of 2020 to be between $12 million and $14 million, a reduction from $18.8 million of net cash used in operating activities in the first half of 2020. This reduction is mainly due to careful management of expenses combined with strong prior enrollment in our clinical studies and the focus on patient monitoring and follow-up in these studies. Our current forecast also includes the incremental activity related to our Phase 1 study of CPI-006 in COVID-19, which is relatively less costly than our core oncology programs.

4:04 I will now turn the call over to Richard. Thank you Leiv and good afternoon everyone. Thank you for joining us today for our second quarter 2020 business update. We made good progress in the second quarter, advancing our pipeline of precisely targeted oncology therapies and working to initiate a promising new clinical program for a novel immunotherapy approach for patients with COVID-19. Corvus now has four active programs in the clinic. all of which are uniquely positioned and are expected to have meaningful updates in the second half of the year. It is an exciting time for Corvus and I want to thank our entire team for the excellent work and dedication that brought us to this point in spite of the challenges created by COVID-19.

4:55 Overall, we are fortunate that COVID-19 pandemic has had minimal impact on the company's progress. With our core oncology programs, our activity in Q2 and into the second half of the year has been focused primarily on patient monitoring and planning for subsequent trials. High enrollments in our trials enabled us to treat patients and acquire the necessary data prior to disruption caused by COVID. This enabled us to remain on track with updated cifaradmin data in renal cell cancer presented at ASCO, and no significant interruptions for patients enrolled in our clinical studies. Moreover, as we recently announced, we have filed an IND and initiated a clinical trial investigating our CPI-006 B-cell activating antibody in COVID-19.

5:51 This study is proceeding as planned. Looking forward, we will work closely with our investigators to advance our studies with additional data updates expected later this year. We will do this while continuing to prioritize the health and safety of our employees, clinical partners, and the patients they serve. Also in support of our studies, we have been in regular communication with our manufacturing partners, and there is currently no significant impact on our drug supply. Turning to an update on our programs, starting with cifiradine, our small molecule inhibitor of the adenosine 2A receptor, At the end of May, we presented updated clinical data from the Phase 1B2 clinical trial of cifir-admin in patients with advanced refractory renal cell carcinoma, or RCC, as part of the ASCO20 virtual scientific program. The ASCO data confirms and builds on the cifir-admin study published in Cancer Discovery in January 2020 that highlighted the discovery and potential of the adenosine gene signature, a novel biomarker discovered by Corvus to identify patients likely to respond to treatment with cifiradmin.

7:11 The data, which covered 51 patients, demonstrated a 17% overall response rate by resist criteria with cifiradmin in 30 evaluable patients identified by the adenosine gene signature. In addition to the five partial responses reported in the 17% response rate, there were six additional patients that had tumor regression not meeting the criteria for PR. These 30 patients had a median of three prior therapies, including 86% that failed a prior anti-PDE1 therapy. Among the remaining 21 patients in the adenosine signature negative group, there were no responses.

7:59 We also continue to work on refining the predictive value of our biomarker, and an ORR overall response rate of 26.7% was reported at ASCO utilizing the CD68 marker present on myeloid cells. The ASCO presentation was consistent with previous data confirming the anti-tumor activity of ciforabinant in RCC in heavily pretreated patients, and continues to support the value of the adenosine signature as a biomarker that can be used to predict patients most likely to respond to treatment with cifir adenine. We plan to meet with FDA in the fourth quarter of this year to discuss the study design and plans for a cifir adenine randomized pivotal study in second, third, or later line renal cell cancer using the refined adenosine gene signature biomarker.

8:54 We will also be exploring the potential for a single-arm study based on the adenosine signature, since this group of patients does very poorly with standard therapies such as IO agents and TKIs. As a reminder, the signature identifies a very unfavorable group of patients, a new subset of RCC, and we believe a positive biomarker-identified patient group will do well with ciferadenate and do poorly with standard therapies. providing a potential option in an area of unmet need. Moving to CPI-006, our B-cell activating anti-CD73 antibody, and starting with our oncology program.

9:42 In total, we have enrolled over 90 patients to date in this study, which is evaluating CPI-006 alone, in combination with cifiradinib, in combination with pembrolizumab, and a triplet, We have completed enrollment in the first three groups and continue to enroll in the triplet combination arm. We remain on track to present an update on this work later this year. Shifting outside of oncology, we are also making good progress with patient enrollment in our Phase I dose escalation study of CPI-006 in COVID-19 patients.

10:27 We believe CPI-006 has the potential to be a novel immunotherapy for the treatment of COVID-19. Its mechanism of action is unlike any other therapies being studied for COVID-19 that we are aware of, stimulating the body's adaptive immune response to increased levels of anti-SARS-CoV-2 antibodies and memory B cells. This could benefit patients by reducing the severity and duration of their infection and potentially enhancing long-term immunity to repeat infection. If successful, we believe CPI-006 will be an important option for a range of COVID-19 patients beyond the initial study group with mild to moderate symptoms.

11:17 And our clinical trial may provide proof of concept for use in future outbreaks of the current or related strain of coronaviruses or other viruses. We initiated this study at the beginning of July and plan to enroll up to 30 hospitalized patients in four cohorts receiving a single dose of 0.3, 1.0, 3.0, or 5.0 milligrams per kilogram. Patients will receive standard care for COVID-19 for the duration of the study. The primary efficacy endpoint is the change in serum immunoglobulin, IgM and IgG, anti-SARS CoV-2 titers at day 28 compared to baseline.

12:07 We will also follow antibody levels for six months to assess effects on long-term immunity. The study will also examine safety and other clinical endpoints, including time to resolution of symptoms, for the clearance of virus by PCR and duration of hospitalization. As of today, we have enrolled four of five patients in the second cohort of the study. In fact, just a few minutes ago, I heard we enrolled the fifth patient out of five in our second cohort. So in total now, we have enrolled 10 patients. To date, we have seen no toxicities, and early anti-SARS-CoV-2 antibody response data is very encouraging with relatively high titers of IgM and IgG to both spike and receptor binding domain viral proteins observed.

13:05 In the first two patients tested at the lowest dose of CPI 006, we find day seven IgG titers to spike protein of greater than 1 to 25,000 and greater than 1 to 50,000. One of these patients has completed day 14 testing and showed the titers to both viral spike protein NRBD increased to over 100,000, greater than 100,000. These are very high titers, especially at such early time points. Significant levels of IgM antibodies were also detected. We will be tracking these patients over time to evaluate the duration of immunity and the effects on memory B cells. Based on our progress to date and current trends, we believe we remain on track to quickly enroll the study and report 28-day follow-up data on antibody titers for patients sometime in the later part of this year, possibly at CITSE in November, which now has sessions devoted to COVID-19.

14:18 If the study meets its objectives, Cordis intends to work with FDA to conduct a double-blind, placebo-controlled, randomized pivotal study to support a regulatory submission for FDA approval. Our plans include evaluating CPI-006 in both the outpatient and inpatient setting. Outpatient treatments are of great interest as this group of patients is becoming an increasing part of the COVID-19 pandemic. on CPI818, our ITK inhibitor. We have completed enrollment in the dose escalation portion of the Phase 1 1B clinical trial, which included patients with several types of advanced refractory T cell lymphomas.

15:04 The results included a confirmed and durable complete response in one patient with peripheral T cell lymphoma who previously failed chemotherapy and high-dose chemotherapy followed by autologous bone marrow transplantation. We have selected the CPI 818 optimum dose and are enrolling patients in the next portion of the study with a focus on patients with PTCL, peripheral T cell lymphoma, and cutaneous T cell lymphoma. This now positions us well for future studies not only in lymphoma but also in autoimmune diseases. We plan to provide data on CPI-818 for T cell lymphomas at the ASH meeting in December.

15:53 In summary, we continue to make good progress with our pipeline, and the second half of the year is expected to include important updates for all of our programs. The key milestones in the second half include our FDA meeting to discuss a pivotal biomarker-driven study for CIFRA admin and RCC, which could be initiated early next year, updated data for CPI-006 and CPI-818 at upcoming oncology meetings, and the continued enrollment and data readouts from our phase one study of 006 for COVID-19. We look forward to updating you on our progress later this year. I will now turn the call over to the operator for Q&A.

16:40 Operator? Certainly. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. Our first question comes from Mara Goldstein with Mizuho. Please go ahead. Can you hear me? Hello? Hello?

17:26 Hi, Richard. Can you hear me? Yes, now I can. Great. Awesome. Thanks. Hey, can you give us just a little bit more detail around the patient who had the CR and the 818 trial and What the trial will look like in CTCL? Will it be consistent with what you saw for the PTCL cohort? Color around the peripheral T-cell lymphoma patient, pretty straightforward. A patient with widespread lymphadenopathy that had failed CHOP chemotherapy, which is a routine therapy for PTCL. then she went on to get high dose chemotherapy and a bone marrow transplant. She failed shortly thereafter. She had growing disease when she came on our trial.

18:15 She was on our trial receiving 818, one pill twice a day and was on it for several months and slowly over time had complete resolution of lymphadenopathy documented on CT scan and on PET scan and confirmed on follow-up scans. by resist criteria or any lymphoma criteria you want to use. And in terms of subsequent studies, we're going to enroll more PTCL and CTCL patients to just get more numbers on those two subsets. Those are the two of the most common subsets of T cell lymphoma.

19:01 They're very different. PTCL is a more rapidly aggressive tumor. CTCL was more chronic. We want to get a little bit more data on those two. We have seen in CTCL responses not quite yet meeting in our dose escalation, not quite meeting resist criteria yet or Chesson criteria or Lugano criteria, but very close and we're continuing to follow those patients and we're going to explore those efficacy signals further in the subsequent patients. and let's see, what was the rest of your question? I think I would respect that, but if I could just ask just on the RCC trial and the adenosine gene signature, you know, what the realm, I suppose, of possible outcomes would be in terms of how you would use adenosine signature, you know, post-discussion with FDA. So if we think about, you know, is it with all-comer and you would just have different you know, stratification categories based on that, or are you seeking to be able to enroll patients just based on adenosine signature?

20:17 I'll let Dr. Mobacher, who has been doing a lot of work on that, answer that question. Murdad? Great, thank you. Sure. Yes, hi. So the current thinking is that for the Phase III, we will enroll all Comer patients, but we will have the adenosine signature status at study enrollment and Patience will be stratified based on the signature. However, the study will be powered based on the innocent signature positive population and will have the utility for the negative population. That will give us a lot of information about the negative population and also help us in further understanding of the signature and other biomarkers. All right. Thank you. I appreciate it. Sure.

21:03 Our next question comes from Tony Butler with Roth Capital Partners. Please go ahead. Richard, three questions really. If you were to do a trial with an A2A receptor antagonist today that was not an RCC, would you still use adenosine signature as a biomarker or does it pertain more to an RCC trial with an A2A receptor antagonist. That's question one. Second question is with 06, and given that three cohorts have been, have completed dosing and are being monitored, could you give us some thought as to what might be demonstrated later this year when you do present some data?

21:55 Will it be from all four cohorts, that is, and will it just be, you know, will we be able to make a distinction between one of the four cohorts, or maybe two, versus the other one or two? That's the second question. The third question is, in funding 006 for COVID, is there a mechanism behind which either DARPA can help you with some of that funding, or would you just take it all by yourself? Thank you. Okay. Well, this is a test of my memory, Tony, so I'll try to answer all three questions. So the first question is yes. The second question is combo. And the third question is yes.

22:44 No, seriously, the answer to your first question is yes. We would use the adenosine signature in other tumors. The adenosine signature is present in many other tumors. albeit to different degrees. We definitely would explore that in other solid tumors. I don't know if I would restrict enrollment based yet on that because we just don't have enough information on the predictive value of the adenosine signature in other tumors. But it's definitely something to look at. So basically any patient, I would say, alert here, anybody using an adenosine mediator, blocking agent for anything, would be wise to look at the adenosine signature, including CD73.

23:43 So, yes, we would use it, but its role in other tumors is not as well understood as we have it for renal cell cancer. Renal cell cancers, clearly, I mean, you don't need any statistics for this. You have, you know, approximately 20% good responses versus zero. Now, your second question on the O6, we've looked at monotherapy, we've looked at combo with cifaridin, we've looked at combo with PEMRO, and we've looked at triplet. Combinations look better. And the triplet is looking very interesting. But I think that's all I can say now. There's another component to this which is also interesting. Remember now, we've looked at all different kinds of cancers, and each of these individual arms is not powered to showed that one is better than the other, there's just not enough patients and there's multiple different cancer histologies.

24:36 But I think something that's gonna be very interesting in the cancer story is the induction of antibodies to certain tumors and the role that induced antibodies might have in tumor response. Now the third question was COVID-19 and exploring government funding applications. We are looking at that. We are and have prepared certain applications. But at the moment, we need to get more data. This is a completely new area. Our plan is to get more clinical data, more safety data. The antibody data we're getting in vivo is quite interesting. Concomitant with that, we have some absolutely fabulous stuff happening in vitro In other words, you can modulate B cells and antibody responses even in vitro. I'm hoping that we have a very nice presentation on all of that together at the SITC meeting in November.

25:40 But the biology here is quite interesting. Remember, my team at Corvus has some knowledge of B cells, having worked on a couple of drugs you may have heard of, rituxan, Ibrutinib, and now 006. And Richard, if I may, and thank you for that, I appreciate the explanation, but if we go back to the 006 combinations in oncology, the reason I ask is because there might be, for example, PD-1, if you're doing refractory patients, which you are, PD-1 clearly may not work in a number of those cohorts, and and therefore there could be a number of patients who are refractory to PD-1, yet you may actually have better outcomes perhaps in one combination or in the triplet than you may have in the other combination.

26:37 And that's really where I'm trying to drive this question, if you will. Yeah. Yeah, so I don't, I mean, I know what you're asking. Can you take a PD-1 refractory tumor, you know, like colon cancer or something and suddenly make it responsive? I mean, I don't know if we're going to have that kind of information, but I get where you're going. But it may be a non-small cell lung cancer. Or you could take a PD-1 responsive tumor that failed or something like that and restore responsiveness. I mean, that seems to be the case with the renal cell. I mean, the conclusion you can draw on renal is you take a PD-1 failure. And we see both kinds of patients. We see patients who've who are truly refractory to PD-1. That is, they grow right through a PD-1 and then we give them a combination and they respond. We also see people who respond to a PD-1, then fail, and then you recapture it later when you put it together.

27:37 And those could be very different mechanisms, as you know. Thanks very much for the call. Thank you for the questions. I think... Do we have any other questions? I see another question up there. Once again, if you have a question, please press star then 1. We have one more question from Arthur He with HC Wingright. Please go ahead. Hey, good afternoon, everyone. Can you guys hear me? Yes. Thanks for taking my question. So I have two. So first, regarding the RCCT of the study design, I just want to clarify, are you guys planning to use the original adenosine signatory proposed as a biomarker, or you are also going to use to the CD68 plus as a biomarker?

28:42 Could you guys clarify for that? And the second one is regarding to the, The second one is regarding the CPI-06 in the COVID study. I'm just curious, have you guys evaluated the neutralizing antibody titer? Yeah. Okay, so let me take those questions. The first one on the signature, so we're doing a lot of work on the signature, and it's going to be some combination of what you've discussed. In other words, you can incorporate all those into the same kind of gene signature. So we've continued to refine that a little bit, and we're still looking at that. But basically, it's focused on these genes that are expressed in myeloid cells, including those CD68 cells.

29:36 Now, the second question on neutralizing antibodies, yes, these patients are making neutralizing antibodies. I mentioned in my call that and Paul, we just had, that this day 14 patient had an anti-RBD of greater than 100,000. When you have a titer of greater than 100,000 to the receptor binding domain, I guarantee you, you will have very high neutralization. There's all the studies are showing very close correlation with anti-RBD and neutralization. I mean, eventually people won't do neutralization because it's a much more difficult assay. and the RBD is much simpler. But the correlation is very good.

30:22 But when you get titers of 100,000 to RBD, that's for sure going to be neutralizing. Thank you for that. Thanks. Okay. This concludes the question and answer session. I would like to turn the conference back over to management for any closing remarks. Well, thank you everyone for attending the conference call. Of course, we look forward to providing more updates on all the programs as the year progresses. Thanks very much. This concludes today's conference call. You may disconnect your line.

31:11 Thank you for participating and have a pleasant day.