Curis (NASDAQ:CRIS) Q1 2020 Earnings Call

0:01 Good afternoon, everyone, and welcome to QRIS first quarter 2020 earnings file. All participants will be in a listen-only mode. Should you need assistance, please email a conference specialist by pressing the star key followed by zero. After the company's prepared remarks, all participants will have an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please note today's event is being recorded. At this time, I'd like to turn the conference call over to the company's chief financial officer, Bill Steinkraus. Sir, please go ahead.

0:39 Thank you, and welcome to Curious' first quarter 2020 earnings call. Before we begin, I would encourage everyone to go to the investor section of our website at www.curious.com to find our first quarter 2020 earnings release and related financial tables. I would also like to remind everyone that during the call, management 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 filer.

1:28 Joining me on today's call are Jim Dentzer, President and Chief Executive Officer, and Bob Martell, Head of R&D. We will also be available for Q&A at the end of the call. I'd now like to turn the call over to Curious' CEO, Jim Dentzer. Jim? Thank you, Bill.

1:50 Good afternoon, everyone, and thank you for joining us today. Before we recap the quarter, I'd like to make a few general comments about the COVID-19 situation and its impact on our work, both internally and with respect to our ongoing clinical studies. As we seek, along with the rest of the world, to adapt to the new rules of life under this pandemic, we remain steadfastly committed to our mission of bringing innovative, targeted cancer therapeutics to patients are still very much in need. Our team has responded to challenges stemming from the pandemic with resiliency and dedication, and I'm very proud of the strength of our organization.

2:39 We continue to monitor institutional, regional, and national guidance so we can remain flexible and abreast of new developments as they arise. We are fortunate to be able to productively and efficiently advance our business while adhering to public health guidelines and working remotely. On the clinical side, we are working closely with our partners, CROs, manufacturers, and study investigators and staff at each of our clinical sites to protect patients' health and safety and ensure they receive uninterrupted access to study drugs in a manner that preserves the integrity and rigor of our clinical trials.

3:25 With that, I'd like to review our clinical development program. Let's start with our IRAC4 program with CA4948. As a reminder, we are currently evaluating CA4948, an IRAC4 kinase inhibitor, in an ongoing phase one dose escalation study for the treatment of patients with relapsed or refractory non-Hodgkin's lymphoma, including patients with diffuse large B-cell lymphoma, Waldenstrom's macroglobulinemia, and oncogenic 988 mutation. While the pace of enrollment has slowed, as certain sites have temporarily halted enrollment due to the pandemic, several of our phase one study sites remain open and are recruiting new patients.

4:17 At the moment, we are evaluating patients being treated with 300 milligrams twice daily after observing clear dose response and tumor reductions at previous dose levels. We are pleased with the results from the study so far, and we remain on track to provide updated safety and efficacy data and declare the recommended Phase II dose later this year. I'd also like to touch on our second program for CA4948. In patients with acute myeloid leukemia, or AML, and myelodysplastic syndrome, or MDF. The AML and MDF community was excited by the groundbreaking presentation by Dr. Amit Verma of Einstein at the ASH conference in December, in which he highlighted the role of specific spliceosome mutations as key drivers of IRAC4L expression.

5:15 Further, he identified IRAC4L the oncogenic long isoform of IRAC4 as the first and to date only known driver of disease that affects over half the population of patients with AML and MDS. We provided CA4948 to Dr. Verma to explore in his lab, and in preclinical studies, he found that blocking this long isoform of IRAC4 with a treatment of CA4948 was shown to dramatically reduce the formation of leukemic black. These preclinical data demonstrated for the first time a clear genetic driver of disease affecting the majority of the AML and MDS patient population.

6:10 It is also uniquely exciting for Cura given that our drug directly targets and this oncogenic kinase, IRAC4L. We are currently working with our clinical sites and investigators to initiate a phase one study of CA4948 in AML and MDS patients. While the coronavirus pandemic has certainly made everything more challenging, we expect initiation of this study later this quarter. I'd like to remind you of our clinical program for CI8993, a monoclonal antibody designed to antagonize the VISTA signaling pathway.

6:59 In January 2020, we entered into an option and license agreement with Immunext for the development and commercialization of anti-VISTA antibodies, including its lead compound, CI8993. Vista is a meaningful and exciting target in oncology, and we look forward to leveraging our insights and experiences from prior Vista study as we advance CI 8993. We expect to initiate our phase one dose escalation study as early as the second half of this year. I'll now turn the call over to Bill for a summary of our financial results for the quarter.

7:45 Bill?

7:47 Thank you, Jim. For the first quarter of 2020, Cura supported a net loss of $9.7 million, or 28 cents per share on both a basic and diluted basis, as compared to a net loss of $9.9 million, or 30 cents per share on both a basic and diluted basis for the same period in 2019. Revenues for the first quarter of 2020 were $2.7 million as compared to $1.8 million for the same period in 2019. Revenues for both periods comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of AeroVeg.

8:35 Operating expenses for the first quarter of 2020 were $11.2 million as compared to $7.3 million for the same period in 2019. The royalty revenues were $0.1 million for both the first quarter of 2020 and 2019. Research and development expenses were $7.5 million for the first quarter of 2020 as compared to $4.1 million for the same period in 2019. The increase was primarily due to in-license expenses incurred from our option and license agreement with Immunix, and increased costs related to clinical activities, including consulting, outside lab expenses, and CRO services.

9:29 General and administrative expenses were $3.6 million for the first quarter of 2020, as compared to $3.1 million for the same period in 2019. The increase was driven primarily by higher legal services during the period. Net other expense was $1.2 million for the first quarter of 2020 as compared to $4.3 million the same period in 2019. Net other expense in 2020 consisted primarily of imputed interest expense related to future royalty payments. Whereas, in 2019, the expense related primarily to a one-time loss on extinguishment of its corporate debt.

10:16 As of March 31st, 2020, Keras's cash, cash equivalents, marketable securities, and investments totaled $12.5 million, and there were approximately 36.6 million shares of common stock outstanding. Keras expects that its existing cash and Ashley Koblenz should enable it to maintain its planned operation into the second half of 2020. With that, I'd like to open the call for questions. Operator? Ladies and gentlemen, at this point, we'll begin the question and answer session. To ask a question, you may press star and then 1 using your telephone.

11:02 If you are using a speakerphone, we do ask that you please pick up the hand step before pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, to ask a question, that is star and then one. We'll pause momentarily to assemble the roster. And gentlemen, at this time, in showing no questions, I'd like to turn the conference call back over to the company's president and chief executive officer, James Dentzer, for any closing remarks.

11:39 Thank you, Jamie. I'd like to end today's call by thanking all of the patients and families who continue to participate in our clinical trials, as well as our internal team of curates for their hard work and commitment, and our partners at Origen and Immunex for their support. Thank you for joining our call today, and we look forward to updating you again soon. Ladies and gentlemen, that does conclude today's conference call. We do thank you for joining today's presentation. You may now disconnect your lines.