Corvus Pharmaceuticals, Inc. (CRVS) CEO Richard Miller on Q3 2019 Results - Earnings Call Transcript

Oct. 29, 2019 8:22 PM ETCorvus Pharmaceuticals, Inc. (CRVS)1 Comment
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Corvus Pharmaceuticals, Inc. (NASDAQ:CRVS) Q3 2019 Results Conference Call October 29, 2019 4:30 PM ET

Company Participants

Zack Kubow - IR, Pure Communications

Richard Miller - CEO

Leiv Lea - CFO

Dr. Stephen Willingham - Senior Scientist

Conference Call Participants

Biren Amin - Jefferies

Tony Butler - ROTH Capital Partners

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Corvus Pharmaceuticals Third Quarter 2019 Update and Financial Results Webcast. Today's conference is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time.

It is now my pleasure to turn the call over to Zack Kubow of Pure Communications. Please go ahead, sir.

Zack Kubow

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals third quarter 2019 business update and financial results conference call.

On the call to discuss the results and business highlights for the third quarter 2019 are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; and Mehrdad Mobasher, Chief Medical Officer. Also joining the call are Corvus' Senior Scientist, Dr. Stephen Willingham and Dr. Drew Hotson. 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 10-Q filed 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 Leiv Lea. Leiv?

Leiv Lea

Thank you, Zack. I'll begin with a quick overview of our third quarter financials, and then turn the call over to Richard for a business update.

At September 30, 2019, Corvus had cash, cash equivalents and marketable securities totaling $86.4 million, as compared to $114.6 million at December 31, 2018. Research and development expenses in the third quarter 2019 totaled $9 million compared to $8.4 million for the same period in 2018. The increase of $0.6 million was primarily due to an increase in CPI-006 and CPI-818 program costs and personnel costs, partially offset by reduced ciforadenant costs. I would like to note that we continue to carefully manage our expenses and currently expect full year 2019 net cash used in operating activities to be between $38 million and $40 million with the 2019 year-end cash balance between $75 million and $77 million. The net loss for the third quarter of 2019 was $11.0 million compared to a net loss of $10.5 million for the same period in 2018. Total stock compensation expense for the third quarter of 2019 and 2018 was $1.8 million.

I will now turn the call over to Richard.

Richard Miller

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our third quarter 2019 business update.

During the quarter, we continued advancing all three of our clinical programs. Our Adenosine A2A receptor antagonist, ciforadenant, our anti-CD73 CPI-006, and our ITK inhibitor CPI-818. Enrollment in all three clinical studies continues to go very well, and we look forward to providing updated CPI-006 clinical data in an oral presentation and updated clinical data with ciforadenant and posters at the SITC meeting in November. We are also planning to present data related to ciforadenant and CPI-818 programs at other medical meetings over the next four months. On today's call, I will provide a brief preview of our SITC presentations, followed by an update on our other programs, ciforadenant and CPI-818. In short, we believe that our precision medicines, biomarker-driven studies and efficient clinical designs will allow us to advance multiple products deeper into clinical developments. As a reminder, CPI-006 is a novel, first of its kind anti-CD73 antibody.

We created and are developing it because it possesses unique immunobiology properties. Dr. Jason Luke from the University of Pittsburgh, presented the first human clinical evidence of these properties in an oral presentation at ASCO earlier this year. His presentation demonstrated that CPI-006 has two important mechanisms of action, combining immune stimulation and adenosine blockade, which are expected to be synergistic. Briefly, the key highlights from ASCO included CPI-006 binds to a site on the CD73 protein that blocks its enzymatic activity, blocking the production of immunosuppressive adenosine. CD73 is also a co-stimulatory molecule on immune cells. CPI-006 interacts with the site on the molecule that leads to activation of immune cells. This process is independent of adenosine. Clinically, the early results presented at ASCO demonstrated dose-dependent disease control in patients with advanced refractory disease, when administered as a monotherapy and in combination with ciforadenant. CPI-006 achieved tumor control and regression in patients with very advanced cancers, who are resistant to current treatment approaches. In particular, we saw early signs of activity in prostate and renal cell cancer.

We also reported a positive safety profile as CPI-006 was well tolerated at all dose levels with no dose limiting toxicities observed so far. We continue to enroll patients with advanced cancer in the Phase 1/1b study with a focus on the first two arms of the study, single agent and in combination with ciforadenant. Since ASCO, we have selected our optimal dose at 18 milligrams per kilogram every three weeks for CPI-006 monotherapy, one of the main goals of the study. Based on the experience to date, we believe this dose provides sustained pharmacokinetics and full occupancy of the CD73 sites in blood and in tumors. This dose provides the basis for the expansion cohorts in the current trial and future trials focused on assessments of efficacy. On Friday, November 8, at 3:45 PM Eastern Time, Dr. Luke will build on the evidence presented at ASCO with updated data from the CPI-006 Phase 1/1b trial in an oral presentation at SITC, with more patients and longer follow-up for both the monotherapy and ciforadenant combination arms, further highlighting the immunobiology and clinical activity of CPI-006. This will include dose escalation data on approximately 14 patients. While the follow up is short for patients treated at dose levels near or at 18 milligrams per kilogram, the optimal dose, we are pleased to see indications of tumor activity in some of these patients.

Similar to prior results, we continue to see dramatic effects on circulating immune cells, with B-cell and T-cell mobilization and redistribution. B-cells are specifically activated into antibody producing cells both in-vitro and in-vivo, and these effects are adenosine independent and are related to the immunomodulatory properties of our CPI-006 antibody. We are not aware of any other agent, antibody or small molecule targeting CD73 that has exhibited these properties. We will highlight and discuss these results for those that are not able to attend Dr. Luke's SITC talk at an investor reception on Friday, November 8, from 6:00 PM to 7:30 PM Eastern Time. For those that will be at the meeting, the event will take place at the Gaylord National Hotel & Convention Center, and we will also webcast the event for those that cannot attend in person. If you would like to attend, please reach out to Leiv.

In addition to the presentation by Dr. Luke, we will also present two posters at SITC, covering our adenosine programs, CPI-006 and ciforadenant. The first will be presented by Dr. Stephen Willingham, a very talented Senior Scientist here at Corvus. Dr. Willingham and Dr. Drew Hotson have pioneered the identification and elucidation of our Adenosine Gene Signature in renal cell cancer. This work is now in press in a major medical journal. Dr. Willingham's poster will be presented on Friday the 8th, and will highlight the scientific basis for the Adenosine Gene Signature biomarker, which we believe can be used to predict a response to adenosine pathway therapies. This research has deepened our understanding of the interplay between CD73, AMP or adenosine monophosphate, and adenosine and has important implications for therapies targeting the adenosine axis as well as immunotherapy in general. This poster will provide an update on the correlation of our Adenosine Gene Signature with tumor response to ciforadenant in patients with renal cell cancer. I will touch more on this in a moment -- in a moment.

The second poster will be presented on Saturday by Dr. Mehrdad Mobasher, our Chief Medical Officer. His poster will cover the details of the design of our ongoing trials with CPI-006. Overall, we anticipate that the data presented at SITC will reinforce our position as a leader in the development of adenosine pathway based therapeutics and in the development of second-generation targeted biomarker driven immuno-oncology medicines.

Turning now to ciforadenant, our oral small molecule drug that is an antagonist of the adenosine A2A receptor, ciforadenant is the most advanced candidate in development across the landscape of A2A receptor antagonists, with more than 300 patients receiving treatment-to-date. It has demonstrated antitumor activity as monotherapy and in combination with atezolizumab in patients that have failed a median of three prior therapies, with a strong safety and PK-PD profile. This includes some patients experiencing durable responses and disease control out to over 30 months, with several patients who have now been on ciforadenant for more than two years. We continue to enroll patients in our Phase 1b/2 clinical trial evaluating ciforadenant in combination with atezolizumab. This study has most recently been focused on patients with advanced refractory renal cell cancer and in patients with prostate cancer.

We also continue to investigate the potential for our Adenosine Gene Signature to serve as a predictive biomarker for patients that will respond to therapy with ciforadenant. As we have reported previously, in RCC, renal cell cancer, we have seen both -- that in monotherapy and -- or in combination with atezolizumab, a positive Adenosine Gene Signature is associated with response and a negative Signature is associated with lack of response. We believe the Signature reflects the presence of adenosine in the tumor microenvironment. The immunosuppressive adenosine limits existing IO therapies such as with anti-PD-1s. Addition of an A2A receptor antagonist counteracts this immunosuppression. Importantly, in the Genentech study by McDermott published in June in Nature Medicine 2018, which involved over 400 patients with renal cell cancer, patients with tumors expressing the Adenosine Gene signature, referred to as the myeloid signature in that paper had poor outcomes with atezolizumab therapy in front line renal cell cancer patients.

Note, the myeloid signature and the adenosine signature, which were discovered independently are composed of an identical eight genes. Signature positive patients do poorly with anti-PD-1s, but they are the patients who are most likely to respond to our A2A inhibitor, ciforadenant. So the combination of ciforadenant and atezolizumab has a strong rationale as it is aimed at overcoming a resistance mechanism to PD-1 therapies. With our preliminary data, we believe we are seeing this play out in our studies. We see responses in our biomarker selected patients with renal cell cancer.

The Adenosine Gene Signature appears to be present in about 50% to 60% of renal cell cancer patients. Its presence in many other types of solid tumors suggest that a similar strategy may apply to those tumors as well. We are also enrolling patients with prostate cancer. We have seen activity in this disease for both ciforadenant monotherapy and in combination with atezolizumab. We have submitted an abstract to the ASCO Genitourinary Cancers Symposium, a meeting in February in San Francisco, where we expect to present data in prostate patients treated with cifo and atezolizumab -- ciforadenant and atezolizumab. In short, ciforadenant has a known molecular mechanism, a predictive biomarker and has shown activity in several different cancers. It also has encouraging potential when used in combination with CPI-006.

Outside of the adenosine pathway, we are enrolling our Phase 1/1b study of CPI-818, our small molecule ITK inhibitor. This trial is in patients with T-cell lymphomas, including peripheral T-cell lymphoma, cutaneous T-cell lymphoma and other varieties of T-cell lymphoma. We believe CPI-818 has the potential to be directly cytotoxic to T-cell lymphomas, and also may lead to enhancement of the immune system by increasing the Th1 immune response. Some of our research also indicates that this drug may be an attractive candidate to examine in autoimmunity. As a reminder, the development of CPI-818 was based on a similar targeting strategy to that of BTK inhibitors, and members of the scientific team at Corvus, including myself led the development of the first BTK inhibitor, ibrutinib, which is approved for the treatment of several types of B-cell lymphomas.

We continue to enroll patients in the CPI-818 study at sites in the United States, Australia and South Korea. The drug has been well-tolerated so far with no dose limiting toxicitism and we are very pleased with the PK and PD findings, which to date has been as we predicted. We have a poster accepted for presentation at the American Society of Hematology meeting in December and a presentation at the T-cell Lymphoma Forum in La Jolla in January. In summary, we continue to believe Corvus is well-positioned with three unique candidates in the clinic. Each of these agents has precisely defined molecular targets and biomarkers that should allow for an enrichment of patients, most likely to benefit from therapy. We continue to hold worldwide rights to all three agents.

In addition, ciforadenant and CPI-006 appear to be complementary with attractive potential as a combination therapy. We are excited to continue to presenting clinical data from ciforadenant and CPI-006 at SITC in November from ciforadenant at the GU ASCO meeting in February and initial data on CPI-818 at the ASH meeting in December and at the T-Cell Forum in January. Our team is focused on advancing our pipeline and we look forward to 2020, when we expect to advance one or both of our adenosine programs into later stage perhaps pivotal trials. Outside of our three programs in the clinic, we are also advancing our pipeline assets, but the majority of our focus continues to be on our clinical work. We look forward to providing updates on our progress with our pipeline at upcoming medical meetings and in future business update calls. I will now turn the call over to the operator for questions and answer period. Operator?

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] First question will come from Biren Amin with Jefferies.

Biren Amin

Hi, guys. Thanks for taking my questions. Richard, maybe if I could just start in terms of thresholds for the prostate cancer program. How should we think about it as we get data the next year at ASCO GU in terms of -- what is good data with ciforadenant plus Atezo, in order to move the program forward into the next stage of studies?

Richard Miller

Okay. Thanks, Biren. That's a good question. We've thought a lot about that and we have discussed it with our experts who are involved in our clinical trials. So we think that a response rate in hormone refractory patients with metastatic castration-resistant prostrate cancer, in excess of 20%, 25% objective response would be a very good result. Obviously, durability and safety are also key components of that, duration of response of six months or so, alternatively drops in PSA of around 50% or so would be seen in 20%, 25% would also be good results. So I think the threshold here is 20%, 25%. Keep in mind that you have a completely novel mechanism of action here. Also keep in mind that PD-1s, whether it be anti-PD-1 or anti-PD-L1 have had very low response rates in similar patient populations on the order of around 5% or even less. So our targets here is 20%, 25% ORR.

Biren Amin

So when you look at 20%, 25% ORR, are you talking about that being measured by a recess in patients with measurable disease?

Richard Miller

Yes.

Biren Amin

Okay.

Richard Miller

That would be in this criteria.

Biren Amin

Okay. That's helpful. And then I guess as it relates to the RCC program, last year at SITC, you presented on I think top of Atezo, and we saw PFS in the combination arm of about 5.5 months across 31 patients. Are you going to update us on, you know with that cohort, in terms of PFS or is that basically -- is that, sorry, basically finished now?

Richard Miller

No. The study is continuing. We are enrolling, Biren, part of your question, I think came in and out, so I'm not sure I captured it all. But I'll try my best to answer your question. I think, I knew where you were going. So in our ongoing renal cell cancer patient study with Atezo and cifo, keep in mind again, these are patients who've third-line therapy and fourth-line therapy. Most of them, if not all of them have failed PD-1s, their PD-L1 negative is bad group of patients. Now, we're using the adenosine signature looking at patients who are adenosine signature positive or negative. At the SITC meeting, we'll update you on the ORR in the positive versus negative, and I can tell you that adenosine signature continues to hold up and predict responsiveness in renal cell cancer patients. The target, if you're looking for a target for RCC in that kind of population, our target for wanting to proceed beyond this study perhaps in a pivotal trial would be 20% or more ORR by resist in a patient population that is similar to this, or perhaps slightly earlier, because we've got a lot of really end stage patients in our current study. And we probably would exclude those in a future trial. So I think we're looking for a 20% response rate or higher by resist in the Adenosine Signature Positive population, which would be about 50% or 60% of renal cell cancer patients.

Biren Amin

And what about correlation of the Gene Signature to duration of response in those patients that are -- to achieve a response, do you expect…

Richard Miller

Okay. That's a great question and it's also discussed in our paper and press. It turns out that the -- and I forget the number exactly, but the frequency of patients who are the long-term remitters, those who are the tail on the PFS curve, those are all Adenosine Signature Positive. I mean, I think just about every one of them. The Adenosine Gene Signature predicts durability and response, very well in renal cell cancer. The question that we are now beginning to look at is, does that Signature apply to prostate and other cancers, and it's just really too early to say that.

Biren Amin

Got it, great. Thanks for taking my questions.

Operator

[Operator Instructions] Next we will hear from Tony Butler with ROTH Capital Partners.

Tony Butler

Richard, once upon a time there was the notion and perhaps it still exists. So I'd like to refresh the molecular understanding of the need to put an A2A in addition to an anti-CD73 on board perhaps plus or minus PD-1, PD-L1. In that perhaps there is some adenosine leak if you were using one or the other. And I'm just curious if you could speak to the notion of and let's just call it adenosine leak such that you get maximum abrogation of adenosine by using the combination. Thanks again.

Richard Miller

So, there are many sources of adenosine production, not just through CD39, CD73. So we've always thought that blocking the final receptor, the A2A receptor was the best strategy and that's why we initiated our work in that area first. Blocking CD73 will also improve upon that potentially, because it will reduce the levels of adenosine. But as I mentioned, there are other pathways. Now, Dr. Willingham's posters specifically will address this question because when you block CD73, and I don't want to give his poster away because he is going to give me dirty looks there. If it blocks CD73, you get a build-up of AMP. And AMP has other consequences that are interesting and it turns out that using anti-CD73 and an A2A together make a lot of sense for a lot of reasons. Main reason being there are multiple pathways of adenosine production but a buildup of AMP also has other consequences that you'll hear about in his poster.

Now, keep in mind that our strategy combining CPI-006 and the A2A receptor antagonist together has yet another strategy, which I think is even more important. If you can block the A2A receptor adequately that's probably a very good thing to do, but we think that the more important thing we're doing with CPI-006 is we're stimulating immune cells and eliciting primary immune response. That together with removing the immunosuppression of adenosine could be an awesome combination and that's sort of our strategy, which is a little bit different than others.

So, I guess the summary to your question is using both in combination, we feel using both in combination even if you're just focused on adenosine is a good idea but I think where Corvus has an advantage here is this other immunostimulatory ability on top of that. Now if you want to throw PD-1, anti-PD-1 in there as well that's a reasonable thing to do, because that's yet another pathway to block or another pathway to think about in terms of immune stimulation. But I think Stephen Willingham's poster -- Stephen Willingham's poster will address and presents really new findings about the consequences of blocking CD73 that I don't want to divulge right here.

Tony Butler

And my second question. Thank you for that by the way, Richard. My second question is around other immune cells in that microenvironment, for example, does blocking -- if you were to block this anti-CD73, for example, forget about A2A for the moment inhibition, but do you actually have an increase or decrease in macrophages at the site when in fact you do get rid of adenosine and is it different even in-vitro, if you use both agents versus one or the other? Thank you.

Richard Miller

Yes, I'm not sure we have -- and jump in here guys if you have question -- some knowledge on this. I'm not sure we have data -- convincing data showing from biopsies, you're asking a tough question that requires biopsies, you know with our adenosine blockade or with A2A receptor antagonist or CD73 whether we have a demonstration of any change in myeloid or monocytic cell infiltrate, certainly in some cases and it's in our paper and press, we see in many patients an increase in T-cells, but that's really hard to study, very hard to be sure about. But if you recall and I'm going to let Stephen comment on this. He is just falling out of his seat here and answer this question. The Adenosine Gene Signature also known as the myeloid gene signature is set of genes that are myeloid-cell derived. So you're putting your finger on really critical cell type, the myeloid cell is probably very important in all of this -- Stephen, you want to add something to that?

Dr. Stephen Willingham

Only that. Yes, we see very big differences in-vitro when we use an anti-CD73 alone versus anti-CD73 plus our A2A antagonist and that's in part what I'll be presenting at the SITC Conference.

Tony Butler

Stephen and Richard, thanks very much. I appreciate it.

Richard Miller

Okay.

Operator

And with no further questions in the queue, I'd like to turn the call back over to Richard Miller, for any additional or closing remarks.

Richard Miller

Okay. Well, first of all thank you to everyone for participating in the call. We look forward to our presentations at the Society of Immunotherapy of Cancer or SITC meeting in November 8 and hope that for those who can't attend, you can come to our reception that evening, Friday evening or listening to our webcast. Thank you very much and good afternoon.

Operator

Once again, that does conclude our call for today. Thank you for your participation. You may now disconnect.

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