Corvus Pharmaceuticals (NASDAQ:CRVS) Q4 2021 Earnings Call

0:01 Greetings. Welcome to Corvus Pharmaceuticals' fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Zach Kubo of Real Chemistry. Thank you. You may begin.

0:31 Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals fourth quarter 2021 business update and financial results conference call. On the call to discuss the results and business updates are Richard Miller, chief executive officer, and Leif Lea, chief financial officer. 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' annual report on Form 10-K, which was filed today with the SEC, and other filings the company makes with the SEC from time to time.

1:25 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? Thank you, Zach.

1:37 I will begin with a quick overview of our fourth quarter and full year 2021 financials and then turn the call over to Richard for a business update. At December 31st, 2021, Corvus had cash, cash equivalents, and marketable securities totaling $69.5 million as compared to $44.3 million at December 31st, 2020. Research and development expenses in the fourth quarter of 2021 totaled $4.8 million compared to $7.2 million for the same period in 2020. The decrease of $2.4 million was primarily due to a decrease in clinical trial and personnel costs. R&D expenses for the full year 2021 totaled $29.1 million compared to $31.8 million for the full year 2020.

2:27 The net loss for the fourth quarter 2021 was $9.2 million compared to net income of $27.3 million for the same period in 2020. Net income in the fourth quarter 2020 included a non-cash net benefit of $37.2 million from the establishment of Angel Pharmaceuticals, which we co-founded in October 2020. Excluding this item, that loss would have been $9.9 million. The net loss for the full year 2021 was $43.2 million compared to a net loss of $6 million for the full year 2020, which also included the non-cash benefit from the establishment of Angel Pharmaceuticals.

3:12 Total stock compensation expense for the fourth quarter and full year 2021 was $0.7 million and $4.2 million, respectively, compared to $1.2 million and $5.7 million for the same periods of 2020. Looking forward, we expect full year 2022 net cash used in operating activities to be between $34 million and $36 million. I will now turn the call over to Richard.

3:42 Thank you, Leif, and good afternoon, everyone. Thank you for joining us today for our fourth quarter and full year 2021 business update. In 2021, we advanced our programs and the laboratory and clinical data we generated has enabled us to identify opportunities for our product candidates that we believe could represent important new therapeutic approaches to several types of cancers. We entered 2022 with three clinical programs focused on targets of high interest that we plan to advance into patients in earlier lines of therapy, and into mid to later stage clinical trials. I will now elaborate further on each of our pipeline opportunities and plans.

4:32 As you know, there is now heightened interest in antibodies targeting CD73 following the recent data from AstraZeneca in stage 3 lung cancer that demonstrated a benefit of adding their anti-CD73 oleclumab to durvalumab, an anti-PDL1 antibody. More recently, in February, AZ announced data from the NeoCoast trial, a randomized Phase II neoadjuvant trial in lung cancer that confirmed the benefit of adding oleplumab to dovalumab. There are now several companies pursuing development of an anti-CD3 agent for cancer and other diseases. We believe we have a very differentiated antibody.

5:19 demonstrated by the substantial laboratory and clinical data behind it. We also have discovered key biologic properties of the CD73 target that are helping us develop and expand clinical opportunities, not only in cancer, but other diseases as well. Briefly, the key differentiators for mupidolimab include, number one, it binds to CD73 with picomolar affinity and completely blocks the adenosine production. Two, its binding to CD73 is concentration dependent and plateaus without a hook effect. Three, its binding does not cause antigen internalization. There's no loss of antigen.

6:08 Four, it binds to a unique epitope on the CD73 protein and this has now been confirmed by cryo-electron microscopy studies which enabled us to determine the molecular structure at atomic resolution. Five, most importantly, its binding to B cells results in their activation and differentiation into antibody-producing plasma cells and into memory B cells. This property is not dependent on adenosine. I want to repeat that. This property is not dependent on adenosine. Our results demonstrating B cell activation and differentiation have been presented at meetings and published.

6:53 Several recently published papers by others are confirming the importance of B cells in the tumor microenvironment. Briefly, the presence of B cells and plasma cells confers a favorable prognosis and is predictive of response to immuno-oncology agents. Six, last in clinical trials involving over 100 patients, we have determined safety, dosing, PK, PD, and immunologic effects. We have reported early signs of anti-tumor activity in lung cancer and other tumors. The data have led us to a therapeutic approach of combining mupidolamab, which serves to step on the gas or drive immune responses, combined with checkpoint blockade to release the brakes on the immune system.

7:47 Together, we believe these complementary therapies may improve the immunotherapy of cancer. This is now being tested in ongoing Phase 1V2 trials in advanced refractory lung and head and neck cancers. We anticipate presenting data from these cohorts in the second half of 2022. To build on this, We plan to initiate a randomized blinded phase two study in the frontline treatment of patients with stage four non-small cell lung cancer. Approximately 150 patients will be randomized to therapy with mupidolumab in combination with pembrolizumab and chemotherapy or to therapy with pembro and chemo alone, which are approved standard of care therapies for this indication.

8:41 The primary endpoint will be progression-free survival, and secondary endpoints include response rate and overall survival. Chemo and PEMBRO are approved for stage 4 lung cancer regardless of PD-L1 expression on the tumor, so a very high proportion of patients with stage 4 lung cancer are eligible for this trial. We anticipate that we can start this trial in the third quarter of 2022. Let me now discuss CPI818, our ITK inhibitor. ITK is a homolog of BTK and is involved in T cell activation and T cell proliferation.

9:26 As you may know, BTK inhibitors are now widely used in the treatment of B cell lymphomas, and several members of the Corvus team played crucial roles in the discovery and development of ibrutinib, the first BTK inhibitor. The idea here is that CPI-818, which is a small molecule orally administered drug, will block malignant T cell proliferation and be useful in T cell lymphomas and perhaps in autoimmunity and allergy by blocking the proliferation or activation of T cells that are involved in these diseases. At the ASH meeting, American Society of Hematology meeting in December 2020, we presented data in patients with peripheral T cell lymphoma, or PTCL, treated with 818. We saw one complete response and one partial response out of seven patients with very advanced refractory PTCL.

10:27 I might add that that CR lasted 19 months. Additional laboratory studies demonstrated that CPI 818 is having rather remarkable effects on lymphocyte populations and functions. Our partner in China, Angel Pharmaceuticals, has licensed CPI-818 for the Greater China Territory, and we are working with them to conduct expanded clinical trials in China and in the U.S. and other countries. A key motivation here is that T cell lymphomas are more common in Asia than in North America and Europe. Angel is now enrolling patients in a Phase 1 1B trial of CPI 818. I am happy to report that the initial anti-tumor activity we reported on at ASH has been confirmed in the Angel clinical trial.

11:21 I will also add that Angel has enlisted the top academic clinical centers in China, led by the Beijing Cancer Center at Peking University. Looking forward, both Corvus and Angel will continue to enroll patients in these Phase 1-1B trials, and we are aiming to present data from these studies in the second half of this year. We are advancing our third clinical program, Ciferadenate, in frontline renal cell cancer in a triplet combination with an anti-PD-1 and anti-CTLA-4 therapies. We believe there is very strong rationale for this novel combination, which is based on our publication in cancer immunology research in 2018.

12:09 Briefly, in those studies, we showed in several animal tumor models that cifiradmin combined with anti-CTLA-4 and anti-PD-1s were highly active, resulting in a high proportion of cured animals even in the setting of treatment of established tumors. In addition to the preclinical studies noted here, We have published and presented clinical data in very advanced refractory patients with renal cell cancer, demonstrating anti-tumor activity with SIFO as monotherapy and together with anti-PD-L1 therapy. As you may recall, we also identified a biomarker, the adenosine gene signature, that predicts response to adenosine blockade.

12:55 These findings have now been confirmed by other academic groups. Based on our preclinical and clinical results and recent emerging clinical data showing that the combination of ipilulimab and nivolumab produce long-term plateaus on progression-free survival and overall survival curves, the Kidney Cancer Clinical Trial Consortium and Corvus plan to conduct a Phase II trial in frontline renal cell cancer focused on the triplet combination of cifir adenine plus ipi and nevo. The trial will enroll about 60 patients, and the primary endpoints will be deep responses and progression-free survival. Deep responses are complete responses and partial responses with greater than 50% tumor reduction.

13:48 The rationale behind this trial is to raise the plateau on progression-free survival and survival by adding ciferadenate. The Kidney Cancer Consortium is led by MD Anderson and includes several leading centers, such as Vanderbilt, Beth Israel in Boston, Cleveland Clinic, UT Southwestern, and others. This study is on track to begin in late April of this year. Since this is an open-label trial, I anticipate that we will get a good feel for efficacy early in the trial. To summarize our near-term opportunities, mupidolamab is a differentiated anti-CD73 antibody that we are developing for lung cancer initially.

14:34 It is being utilized in a novel immunotherapy approach based on B-cell activation, and long-term, we believe it has broad applications in other cancers and in infectious diseases. We also are exploring partnering opportunities to expand mupidolamab's development scope. CPI-818 is being studied for T-cell lymphomas, and these studies are elucidating dramatic effects on T-cell function, which we believe bode very well for other diseases like autoimmunity and allergy. Together with ANGEL, we continue to treat patients in our trial here in the United States, Canada, Australia, South Korea, and in China with a goal of initiating a global phase two study.

15:23 And Cifradant is now positioned to begin clinical evaluation in first line renal cell cancer using a novel approach aimed at increasing complete remissions and deep responses. One final point to highlight, working with ANGEL and the Kidney Cancer Consortium allows us to conduct multiple comprehensive clinical trials very cost efficiently. Combined with a solid balance sheet, we have the resources to execute on our three clinical programs through several key milestones over the next couple of years. I will now turn the call over to the operator for Q&A. Operator? Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

16:17 You may press star 2 if you would like to remove your question from the queue. And for a participant using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Lee Wacek with Cantor Fitzgerald. Please proceed.

16:36 Hey, guys. Thanks for taking my questions. I guess first one will move. I guess for the long trial, it seems like you plan to do a phase two instead of to do a phase two, three. So maybe just talk a little bit about what's behind the plan here. And then you mentioned that you'll initiate a phase two trial in, I guess, third quarter of this year. So just wondering what are the gating steps here? Thanks.

17:05 Okay, Leigh. We decided to go with a randomized blinded phase two trial because that gives us more abilities to look at the data. It's not a registration trial. It's not viewed as a registration trial by the FDA. So we're able to look at the data and evaluate efficacy along the way. Now, we're not going to be looking at the data on a continuous basis. We have built into the phase two trial interim points where we will take controlled looks at at what's going on from an efficacy standpoint. We have a phase three trial teed up and ready to go. The minute we are convinced that there's a good signal from an efficacy standpoint, we fire up the phase three trial, which would be a larger study.

17:53 Basically, this is a way to efficiently manage phase two moving into phase three, conserving capital and being able to look at the data. start the phase three, of course. We can't look at the data until the trial is done. Now you're, sorry, the second question was on the... Oh, what are the gating items for starting? The gating items are just getting our sites lined up, getting IRB approvals, vendors, et cetera. I mean, there's no... you know, more logistical items than anything else.

18:38 Okay, thank you. Our next question is from Mara Goldstein with Mizuho. Please proceed.

18:49 Oh, thanks so much for taking the questions. I just wanted to ask just on the expansion cohorts for the Mupidolumab that was in process, where you are now in terms of enrolling up to those 15 patient cohorts in those specific indications. I think it was non-small cell lung cancer and the head and neck cancer indication, if you don't mind me asking. And then do you have a sense of when there might be data from CPI 818 that will be available to share?

19:21 Okay, the expansion cohorts with MUPA are enrolling. Head and neck is enrolling very nicely. Hope to report some data on those later this year. Now keep in mind, those are very different patients than our randomized phase two I mentioned. The randomized phase two in lung is front line. The lung and head and neck that we're enrolling now is second, third, fourth, fifth line therapy. So very, very different patients. And I don't consider that information to be gating on our phase two at all and other people are seeing that too. These late line patients are very, very different. Now your question on 818, let me just say 818 is an exciting product and we're enrolling patients and we're gonna present data later this year, maybe ASH or something like that.

20:13 I think that the biology that's coming out of this is extraordinary. I think that this is a really pretty cool target.

20:26 Okay. If I could just ask, the clinical program there, is the sort of global design, is that a function of maybe what occurred at the Centilumab FDA adcom, or was that always anticipated to enroll patients outside of Asia?

20:45 Well, Centilumab's got nothing to do with Our plan was always to enroll patients in North America and Australia, and we did the deal. We formed ANGEL to accelerate our global development. We don't intend to just enroll a trial with Chinese patients. I mean, this is the majority of patients in what we're doing now are going to be from North America.

21:11 Okay. Thanks so much. Our next question is from Roger Song with Jefferies. Please proceed.

21:23 Great. Thank you for taking our questions. So maybe for the first one, for the MUPA Phase II first line, mouse cell line, Rich, can you just tell a little bit about the powering assumption for these 150 patients? Also, you mentioned you potentially will have a multiple kind of internal look just to confirm from those internal logs, if you see the efficacy signal there, you can start a phase three?

21:55 Okay, so first of all, it's 150 patient trial. It's not a registration trial, the phase two part of this, so I'm not sure what the, where you're going with power or p-values, but We would be able to look at this data after 75 events, let's say, 75 to 100 events, events being progression. In a Phase II trial with 150 patients, the power calculations and p-values are a little bit different. I think if we had a hazard ratio between the treatment and control groups of patients 0.7, that would be very, very good. But of course, we'll look at response rate and other things. Now, keep in mind that chemo plus pembro for all comers with lung cancer wild type, not excluding ALK and EGFR mutations, has a PFS median of about eight months. By the way, that's not very good, which is why we're interested in this trial, because we think adding MUPA I mean, there's a good chance we think adding a third agent to that could improve upon that.

23:18 So now in the phase three trial, Roger, that would be a trial with, I don't know, 700 patients and an interim look maybe a third of the way through. There you might be looking at a hazard ratio of 0.8. That would be 90% power, you know, to get yourself a P.025. That makes sense?

23:43 No, that's great. That's a very good kind of a color on those hazard ratio thresholds. Okay, so that's very good. And then just to clarify for the A1A data, you say second half this year, maybe around ASH, will that include your own Phase 1B data as well as the NGO kind of China data, or that's just from one or the other?

24:11 I think it would include both. But there's a lot of parts to this. There's the clinical data, and there's a lot of very interesting biologic data. You have to realize that this has never been done before, right? ITK inhibition, just like when my group did BTK, that was a completely pioneering work. and that's what we're seeing here. And all I can say is that this is a really interesting target. And we're going to be very cautious in how we talk about this because there's a lot of interesting science, there's a lot of new targets that come about as you investigate this, new strategies, new diseases.

25:12 So this is something that I think you'll be hearing more about in the future.

25:21 Got it. Okay. Great. Maybe just one last one, if I may. For the adenosine gene signature biomarker, how will that be incorporated into this clinical trial consortium phase two or You have some other kind of a way to kind of enhance the .

25:44 Okay, great question, Roger. So first of all, let me say that the adenosine gene signature has been confirmed by one major academic group, and it's a publication that's in press now by this other academic group. So that signature appears to be very important in renal cell cancer. Now, we are going to measure it in our frontline renal cancer study with the Kidney Cancer Consortium, but we're not going to gate on it. We're not going to exclude people based on it. As you recall, in patients with metastatic recurrent disease, it's about half of the patients that are positive for this gene signature. Now, in the frontline setting, there's a lot to be learned.

26:31 I don't know how common it will be in the frontline, and its predictive value could be different. which is why we don't want to gate on it. We need to collect that information. And so we'll have outcomes on patients who are adenosine gene signature positive and negative. And we'll see.

26:48 Got it. Yeah, thank you for the comment. Really helpful. And congrats for that collaboration. Thank you. As a reminder, this is star one on our telephone keypad if you would like to ask a question. Our next question is from Arthur He with HC Wainwright. Please proceed.

27:11 Hey, good afternoon, Richard and Leiv. So I just want to follow up on the trial for the first line lung cancer. I believe for AstraZeneca's COASTA study, it was the stage three lung cancer patient. And if I recall correctly, you mentioned the stage four. So could you work us through your thought in processing why you choose stage 4 versus stage 3 for this trial?

27:46 Sure. So one of the reasons AstraZeneca did stage 3 lung cancer is because their Valumab, their anti-PD-L1, was approved for stage 3 frontline. So it was more business reason than anything else. and they, while being a dominant anti-PD1 for stage three, it is not a dominant antibody for stage four. Stage four is far more common, by the way. Stage four disease is metastatic disease and that's way more common. Stage three is patients who have locally advanced disease They get chemotherapy and radiotherapy, and then they went on adjuvant durvalumab or durvalumab-oleclumab.

28:37 So it's a very different clinical setting. It's a little earlier, but there would be no reason to think that the biology, that the immunobiology of the lung cancer cells in stage three versus stage four is different. We selected stage four because it's far more common. We have some responses we've seen in metastatic disease with MUPA. alone, and in patients who have failed PD1s. And we're going to partner our MUPA with Pembrolizumab, which, as you know, is an approved agent for stage 4 lung cancer. So those are the reasons. It's not really...AZ's focus on stage 3 has to do with the fact that that's where they found their position back a couple of years ago with their PACIFIC trial.

29:31 Okay. Oh, gotcha. Thanks for that clarification. And I'm just curious for the potential registration trial for MoPath for the first line lung cancer, are you guys open to the design to including even possible for the triplet including the Cephra?

29:52 I'm sorry, the triplet including what?

29:56 Cephra retinine.

29:57 Oh, adding the A2A blocker to it? Yeah. Well, I mean, we'd be open to considering it, but I mean, right now we have, you know, this is a pretty straightforward design, both for our phase two and potential phase three. It's PEMBRO and chemo, which is approved for all stage four lung cancer, except for the EGFR and ALK mutations, and, you know, adding MUPA on top of that. Now, if you want to have two experimental agents on top of it, that gets a little bit more complicated.

30:31 Okay, thanks. Thanks for the addition of color.

30:36 All right. Okay. First, thank you all for participating in the call. We look forward to updating you on our future progress. Thank you very much. Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.