Q3 2023 Corvus Pharmaceuticals Inc Earnings Call
Participants
Zach Kubow; IR; Real Chemistry
Leiv Lea; CFO; Corvus Pharmaceuticals, Inc.
Richard Miller; Co- founder, President & CEO; Corvus Pharmaceuticals, Inc.
James Rosenbaum; SVP, Research; Corvus Pharmaceuticals, Inc.
Aydin Huseynov; Analyst; Ladenburg Thalmann & Co., Inc.
Jeff Jones; Analyst; Oppenheimer & Co., Inc.
Roger Song; Analyst; Jefferies
Presentation
Operator
Good afternoon, ladies and gentlemen, and thank you for standing by, and welcome to the Corvus Pharmaceuticals third quarter 2023 business update and financial results conference call. (Operator Instructions)
It is now my pleasure to turn the call over to your host, Zack Kubow of Real Chemistry. Please go ahead, sir.
Zach Kubow
Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals third quarter 2023 business update and financial results conference call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; James Rosenbaum, Senior Vice President, Research; and Ben Jones, Senior Vice President of Regulatory and Pharmaceutical Sciences.
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's quarterly report on Form 10-Q, which was filed today 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. For that, I'd like to turn the call over to Leiv. Leiv?
Leiv Lea
Thank you, Zach, and I will begin with a quick overview of our third quarter of 2023 financials, and then turn the call over to Richard for a business update.
Research and development expenses in the third quarter of 2023 totaled $4 million compared to $10.4 million for the same period in 2022. The decrease of $6.4 million was primarily related to lower clinical trial and manufacturing costs associated, with the development of mupadolimab, our anti-CD73 antibody.
Net loss for the third quarter of 2023 was $6 million, including a $0.9 million non-cash loss related to Angel Pharmaceuticals, our partner in China. This compares to a net loss of $14.8 million for the same period in 2022, which included a $2.7 million non-cash loss related to Angel Pharmaceuticals.
Total stock compensation expense for the third quarter of 2023 was $0.5 million compared to $0.7 million for the same period in 2022. As of September 30, 2023, Corvus had cash, cash equivalents and marketable securities totaling $32.2 million as compared to $42.3 million at December 31, 2022.
Looking forward, we expect full year 2023 net cash used in operating activities to be between $22 million and $23 million, resulting in a projected cash balance of between $27 million and 28 million as of December 31, 2023.
As stated last quarter, we continue to prudently manage our cash burn rate, by focusing on our most promising opportunities, and establishing collaborations that help support development of our product candidates. Based on this trend, our current plans, and our focus on (inaudible) we believe our cash will provide runway into late 2024.
I will now turn the call over to Richard, who will discuss our clinical progress, and elaborate on our strategy and plans.
Richard Miller
Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our business update call. We continue to make remarkable progress in the development of our selective ITK Inhibitor, soquelitinib, which provides a platform opportunity across hematologic cancers, solid tumors, immune-mediated, and immune-mediated diseases.
Since our last earnings call in early August, we have accomplished the following key milestones. Number one, we met with the FDA in an end of phase, pre-phase, need Phase 3 meeting, to discuss and review registration plans for soquelitinib for the treatment of relapsed peripheral T cell lymphoma or PTCL.
Number two, in this meeting, we obtained alignment and agreement on our plans for a registration Phase 3 trial. Subsequently, a finalized complete protocol has been submitted to FDA, and we now have all FDA regulatory allowances required for starting the clinical trial.
Number three, concurrent with our interactions with FDA, we continued recruitment of leading acting academic sites for the trial, which are now progressing through the usual contract and institutional review board approval processes.
Number four, in terms of our ongoing clinical program, we continued enrollment and follow-up of patients in our Phase 1/1b trial of soquelitinib, and T cell lymphoma with an abstract, accepted for poster presentation at the ASH meeting in December.
Number five, moving to soquelitinib, opportunity in solid tumors, we reached alignment with investigators at the Kidney Cancer Research Consortium on a protocol to evaluate soquelitinib monotherapy, in patients with recurrent renal cell cancer, that have failed checkpoint Inhibitor therapy.
Number six, outside of oncology, we published a pre-print in bioRxiv, presenting research conducted by an international group of scientists, demonstrating robust activity of soquelitinib in several animal models of immune diseases, and a description of a novel mechanism that provides the rationale, for the potential utility of ITK inhibition in multiple inflammatory, and immune-mediated diseases.
And last, we continued enrollment in the Phase 2 portion of a Phase 1b/2 trial with ciforadenant, combined with ipilimumab, and nivolumab in relapsed renal cell cancer.
I will now provide further details on some of these accomplishments, starting with our progress towards our Phase 3 registration clinical trial of soquelitinib and PTCL. Since our update call in early September, we have refined the study protocol to incorporate FDA's feedback. We recently finalized the study protocol and submitted to FDA.
I can confirm that there were no substantial changes from what we proposed in the design of the trial, or our registration strategy and plans. From a regulatory perspective, we are clear to initiate the trial. Briefly the trial was planned to enroll a total of 150 patients with relapsed PTCL, 75 patients per arm, that have received one to less than or equal to three prior therapies.
The restriction on number of prior therapies is important, because it also identifies immunocompetent patients, which are those with absolute lymphocyte counts above 900. Patients will be randomized to receive soquelitinib 200 milligrams, two times a day, or the standard of care chemotherapy agents.
The standard of care agents will be physician's choice between pralatrexate, belinostat, or gemcitabine. The primary endpoint will be progression-free survival, determined by an independent review committee. Secondary endpoints will include objective response rate and overall survival. The study also will include an interim analysis. Our trial should support FDA approval of statistical significance is achieved, and the study is well conducted.
Concurrent with finalizing the protocol, we have been recruiting investigators for this study. We have found very strong interest in participating in the study from a number of leading centers in the United States, and we are in the process of executing contracts, securing IRB approvals, and the other usual steps needed to initiate the study.
The interest from US sites is exemplified by the quality of centers involved so far, and includes Memorial Sloan Kettering; Stanford Dana-Farber, UCSF; City of Hope, MD Anderson; Fred Hutchinson Cancer Center, and many others.
The high level of interest from US centers is reducing our needs for utilizing centers outside the US. We believe the greater participation from US sites provides several advantages, including greater control over data quality, stronger package for regulatory approval in the US, reduced execution risk, and reduced costs. We anticipate about 40 centers will participate in the trial. The vast majority will be in the United States.
We are making good progress on all fronts, and anticipate that we can initiate the soquelitinib Phase 3 trial by the second quarter of 2024. We are also continuing on with our Phase 1/1b clinical trial in T cell lymphoma.
We and collaborators at the Beijing Cancer Center, plan to present additional data from the Phase 1/1b clinical trial of soquelitinib and T cell lymphoma, along with correlative data in a poster presentation at the ASH meeting in December.
On a related note, there is a growing body of evidence, supporting the potential of selective ITK inhibition in oncology. In July, we published our pre-clinical data on soquelitinib, that highlighted its potential to enhance anti-tumor immune response to hematologic and solid tumors, and provide a novel approach to cancer immunotherapy.
In September, an independent academic group led by a team from Erasmus University Medical Center in Rotterdam, published a paper confirming and extending the potential of ITK inhibition for the treatment of solid tumors.
The pre-clinical and laboratory results were aligned with our preclinical and clinical data on soquelitinib, and provide additional evidence confirming the potential of selective ITK inhibition, to enhance immune responses to solid tumors. We remain on track for the initiation of a Phase 1b/2 solid tumor clinical trial in relapsed renal cell cancer in early 2024.
I will now pass the call to Dr. Jim Rosenbaum, to review recent developments for soquelitinib in inflammatory and immune diseases.
James Rosenbaum
Thank you, Richard. One of the more remarkable discoveries with our ITK inhibitor platform is that, we continue to generate evidence supporting its potential as a novel treatment approach, for a multitude of immune-mediated diseases.
Last week, we published results in bioRxiv supporting the potential of ITK inhibition across several preclinical models, including acute asthma, chronic asthma, psoriasis, pulmonary fibrosis, scleroderma, and graft versus host disease. This paper is available on our website, and provides an in-depth review of the data supporting each of these models.
The key finding is that selective ITK inhibition blocks production of key cells, that are critical in the pathophysiology of many immune-mediated diseases. We believe that soquelitinib, and our second and third generation ITK inhibitors get to the root cause of many of these diseases, by inhibiting the production of a wide range of inflammatory cytokines produced by these cells.
More specifically, the mechanism of action described in our paper involves the blockade of Th2 and Th17 cell differentiation, and the subsequent inhibition of their production of cytokines such as interleukin 4, IL-5, IL-13 and IL-17. These are the same cytokines targeted by a range of established successful medicines. They cut across medical categories and indications.
Soquelitinib and ITK inhibition provide a small molecule, orally administered, targeted approach with a novel mechanism, that works upstream, to block the production of multiple inflammatory mediators. At the same time, soquelitinib spares Th1 cells, play a vital role in responding to infection. As a consequence, opportunistic infection has not been observed to date in our lymphoma trial, treating patients with a compromised immune system.
As noted previously, the activity of soquelitinib, and our other second and third generation compounds, are amplified by blocking the T cells responsible for production of multiple mediators. Contrast this with administration of a soluble receptor, or antibody that blocks a single cytokine. This is still a key metric or one to one relationship, as opposed to blocking the source of multiple cytokine production.
I encourage you to review the paper, and our accompanying press release for details. I will now turn the call back to Richard.
Richard Miller
Thanks, Jim. Given the broad potential of ITK inhibition in inflammatory and immune mediated diseases, we plan to partner with biotech or pharma companies, that have established development and commercialization capabilities that match up with the various opportunities.
We believe we are in a strong position to attract partners, given the unique features of ITK inhibition, human safety data with soquelitinib from our lymphoma work, large and diverse market opportunities, and our strong intellectual property position. We will continue to focus on cancer where we have expertise and a track record of success.
Turning to our partner lead programs, the Kidney Cancer Research Consortium is currently enrolling patients in a Phase 2 portion of the Phase 1b/2 clinical trial, evaluating ciforadenant, our adenosine 2A receptor inhibitor, as a potential first line therapy for metastatic renal cell cancer, in combination with ipilimumab and nivolumab. The clinical trial is expected to enroll up to 60 patients and based on current timelines, we anticipate initial interim data in early 2024.
At this time, I am pleased to report that the deep response rate exceeds our 32% benchmark, based on 8 evaluable patients that have received at least one follow-up assessments. Recall, deep response rate is complete responses plus partial responses that exceed 50% tumor volume reduction. This endpoint has been shown by others, to predict prolonged progression-free survival and is 32% with the ipilimumab combination.
For mupadolimab, our partner, Angel Pharmaceuticals, is continuing to enroll patients in a Phase 1/1b clinical trial in China, with move mupadolimab alone, and together with pembrolizumab in patients with non-small cell lung cancer and head and neck squamous cell cancers.
Taken all together, we have many opportunities with multiple upcoming catalysts across our pipeline, led by our foundational work on ITK inhibition, and its myriad of biologic activities in the immune system. Over the remainder of the year and into 2024, our upcoming milestones include new interim data from the Phase 1/1b clinical trial of soquelitinib and T cell lymphoma at the ASH meeting in December, the initiation of soquelitinib Phase 3 registration clinical trial by the second quarter of 2024, the initiation of a Phase 1b/2 solid tumor monotherapy trial of soquelitinib and relapsed renal cell cancer in early 2024, and initial interim data from the [sifer] admin Phase 1b/2 trial in frontline metastatic RCC in early 2024.
Let me summarize a few points. Corvus has a pipeline of novel products that address large markets in diverse areas of cancer and immune diseases. We are advancing along the clinical development pathway with one indication about to enter a Phase 3 registration trial.
We have prudently managed our cash, while effectively advancing our products. The breadth of indications and products provides potential partnering opportunities. In closing, we look forward to providing updates on our programs in the coming quarters. I will now turn the call over to the operator for questions and answers.
Question and Answer Session
Operator
Thank you. (Operator Instructions)
Aydin Huseynov, Ladenburg.
Aydin Huseynov
Good afternoon, Richard and Corvus team. Congratulations with the quarterly results and the progress. I've couple of questions. So regarding the upcoming ASH conference next month. Could you give us a flavor of kind of data we expect -- we should expect there, I think previously Corvus reported 43% or our 6 out of 14 responses, and disease control rate 86%. But how many more patients data -- how many more patient data are you planning to report at ASH? And do you expect the overall numbers to change in either direction?
Leiv Lea
Is that the first question or the second question?
Richard Miller
Okay. I'll take the first question. So the first question, what are we going to present the ASH meeting?
So the poster -- the abstract and the poster was submitted in collaboration with our colleagues at Peking University, Beijing Cancer Center, and what they focus mostly on single-cell RNA sequencing to elaborate on the mechanism of action of soquelitinib. And they've been confirming on various biopsy and blood samples that indeed we do, induce these Th1 cells and block Th2 and Th17, which leads to more cytolytic T cells, more or less things that you've heard before.
In parallel with that, Corvus intends to issue in its press release, an update on the clinical data. Now, there'll be a couple of things that we're going to include in that update, one is patients a number of responses, stable disease and durations, waterfalls of swimmers. Well, also because we had questions on this absolute lymphocyte count versus and using prior therapies to identify suitable candidates or eligibility candidates for our Phase 3 trial. So we'll be showing data on that.
So I don't expect a substantial change in response rate. We do have more follow-up I think that more or less our response rate and durability of responses are consistent and holding up.
Aydin Huseynov
Thank you. Thank you. That is helpful. And the previously reported CRs or NPRs, are they still ongoing?
Richard Miller
I believe there's not really been a change in the duration of those. I think the CR is definitely still ongoing down positive of, and that's out now at over 21 months or so. And I just can't off the top of my head, I can't recollect the duration on those other patients.
Aydin Huseynov
Okay. Understood. All right. And another question (multiple speakers)
Richard Miller
Let me just -- the durability is very good on our responses. And I think that you're putting your finger on a really important point, because the standard therapies have been notable in that they have had very short durations of disease control.
Aydin Huseynov
Right, right. Yes, this is helpful. And so another question I have is on soquelitinib or renal cancer monotherapy trial design. So obviously, the expectation or for any monotherapies that have or are, so what do you think is the sort of minimum threshold or are on in renal cancer? Can we expect similar types of responses as we saw in PTCL, or do you think this is a it's a little bit a different type of cancer and the threshold is different here?
Richard Miller
Well, I think that's a difficult question to answer without knowing exactly what kind of patients are coming into the study. So eligibility is you have to have failed a checkpoint inhibitor, and we're allowing one or two prior therapies. So a lot will depend on the patient selection.
But I would say Aydin, any responses in a relapse patient following CTLA-4, PD-1 would be notable. I would I would say, hey, if you saw a 15% response rate to monotherapy in that setting with a novel mechanism of action oral drug, that's quite well tolerated. I think that would be a big breakthrough. I mean, ultimately the drug, of course, would be evaluated in combinations. But this is a novel mechanism of action, such that it's a little bit difficult to say, what my threshold would be, I would say, 10%, 20% ,you'd have yourself a very interesting molecule.
Aydin Huseynov
Right. Yeah, it makes sense. Makes sense. Okay. All right. Thanks so much for taking questions, and congratulations with the progress.
Richard Miller
Thank you, Aydin.
Operator
Jeff Jones, Oppenheimer.
Jeff Jones
Good afternoon, guys, and thanks for taking the question. Richard, just a quick question on that ASH related press release for the updated data. Is that point to be do you have, sort of a feel for timing on when that announcement will come out.
And then in terms of the data itself on, as Aydin had mentioned, you've previously shown in or around 43%, and or around 40%. And there's an abstract at ASH with the similar [ORR]. So I guess similar to what was just asked on the RCC, how are you thinking about the efficacy bar for soquelitinib and PTCL?
Richard Miller
So regarding to the timing of the announcement, we will put that out concomitant with the disclosure of the poster. So around when is ASH, December 9 or so, around that date.
Regarding the data, I think the data is pretty consistent. Now you asked what do I consider a good response. I consider anything above 25%, again with durability and safety, oral drug to be a good outcome.
Jeff Jones
Okay, now appreciate that. And then on partnering, as you discussed in your prepared remarks, and would this be limited to soquelitinib and the autoimmune inflammatory indications? Or would you also consider oncology partnerships for soquelitinib or other programs in oncology, perhaps by territory?
Richard Miller
I think what we're thinking now, Jeff, is that the inflammation immune disease represents a good partnering opportunity, because we have a series of backup molecules that are pretty close to the clinic. We know they work in animal models. They have desirable pharmaceutical properties. They're separate from the oncology molecule, which a lot of people want, and it's such a novel approach, and potentially advantageous over the other approaches. That's as Dr. Rosenbaum mentioned.
And I think we have a really strong intellectual property position. I and we're already getting a significant inbound interest on partnering the immunology part of it, the immune disease part of it. Now we like that because, our expertise is cancer, and autoimmune disease. As you know, there are many different types of autoimmune disease across disciplines like pulmonary medicine in dermatology and rheumatology, et cetera.
So we think of a company at our stage, with our resources, partnering the immune disease aspects, makes the most sense, and allows us to continue to focus on T cell lymphoma and solid tumors. So that's sort of our strategy now. Now things could change, obviously, depending on the interest of partners and so forth.
Does that answer your question?
Jeff Jones
Yeah. Now appreciate it. Thanks, Richard. And I'll jump back in the queue.
Operator
Roger Song, Jefferies.
Roger Song
Great. Thanks for the update and taking our question. Maybe a quick one -- two quick question. So one is which you said, you will start a Phase 3 PTCL trial in second quarter next year. Maybe just help us to understand what's left before the initiation. And I think you're talking about IRB approval, any other logistic, kind of steps you need to complete.
And the other thing is -- another quick question is regarding the runway and the funding. In all, your runway is towards the later part of the 2024, while you're starting Phase 3, how should we think about the funding of the Phase 3? Thank you.
Richard Miller
Okay. Thanks, Roger.
The first -- the answer to the first part -- the first question is, from a regulatory perspective, protocol, you know, all that sort of stuff, everything is complete. The reason it takes a few months to complete protocols, to get through IRBs. Most institutions now in (laugh) they have a research committee.
So that's just the paperwork is getting through these centers. We're not anticipating any problem, most of these institutions now will not evaluate. They will not consider a study unless it has been gone through the FDA approval process and we've done that.
So really there's no -- there's really no hurdles with respect to getting the study going. And as I mentioned, we have had a very good response to people who want to be involved in the study, really the best people in the country. And I'll let Leiv answer the second question.
Leiv Lea
So Roger, we know we're going to need to raise additional capital. We're very excited about the broad potential of soquelitinib, in both oncology and inflammatory and immune-mediated diseases. Thus as Richard mentioned, it opens up partnering opportunities for us.
We believe our pipeline of novel products that address large markets and diverse areas of cancer and immune disease, will enable us to finance Corvus, to benefit both the company and its stockholders. So we like our product candidates, we're very excited about soquelitinib. And we'll finance the company as appropriate to benefit both the company and the stockholders.
Roger Song
Yep, that makes sense. Thanks for taking the question.
Richard Miller
All right, I think, I don't see any more questions. So I want to thank everyone for participating in the call. We look forward to updating you on our future progress. Thanks, everyone.
Operator
This concludes today's conference you may disconnect your lines at this time, and we thank you for your participation.
