This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Good afternoon and welcome to the QRIS second quarter 2021 earnings call. 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, call participants will have an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone telephones. To withdraw your questions, you may press star and two. Please also 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.
spk07: Please go ahead.
spk08: Thank you, and welcome to Kyrus's second quarter 2021 earnings call. Before we begin, I would encourage everyone to go to the investor section of our website at www.kyrus.com to find our second quarter 2021 earnings release in 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 filings. Joining me on today's call are Jim Dentzer, President and Chief Executive Officer, and Bob Martel, our Head of R&D. We will be available for a question and answer period at the end of the call. I'd now like to turn the call over to Jim. Jim?
spk06: Thank you, Bill. Good afternoon, everyone, and thank you for joining us today. I curiously we are focused on developing the next generation of targeted cancer therapies that will meaningfully improve and extend patients' lives. In the second quarter of 2021, we made concrete progress towards that goal and laid the foundational groundwork to expand into additional areas where we believe we can make a difference. As a reminder, our lead asset, a novel small molecule IRAC4 inhibitor called CA4948, is currently being evaluated in nine distinct patient populations, two AML and MDS populations in monotherapy for patients with spliceosome or FLT3 mutations, two AML and MDS populations in combination therapy of CA4948 with azacitidine and venetoclax, and four B-cell cancer populations in combination therapy of CA4948 with ibrutinib. In addition, we are working with Dr. Uwe Platzbecker of the University of Leipzig on the Lucas IST to study CA4948 in monotherapy in patients with lower risk MDS. As many of you have been following, the long isoform of IRAC4 or IRAC4L has been identified as the key driver of disease in the majority of patients with AML and MDS. Curus has the most advanced drug that directly targets IRAC4 in clinical testing for these patients. With each new batch of data, our excitement for CA4948 grows even further with its manageable and predictable safety profile and demonstrated ability to show deepening efficacy the longer patients remain on treatment. At the EHA meeting in June, we were especially pleased to share updated data from the monotherapy arm of the Phase I-II AML and MDS study, highlighting efficacy at multiple study doses, a potentially differentiating factor that may enable us to help even the most extremely sick patients in this historically underserved population. Our second program, our first-in-class monoclonal anti-VISTA antibody, CI8993, has also been making good progress. We've been pleased with patient enrollment in the phase one dose escalation study in relapsed or refractory solid tumors and are on track to provide a substantive initial report on safety by year end, including what we hope to be signs of early success in managing the CRS side effects known to be associated with anti-VISTA therapy. All told, we continue to progress through 2021 as a year of execution for CURUS. With that, let's dig into some detail on our ongoing programs, starting with the IRAC4 program in leukemia. At EHA earlier this summer, we were pleased to present updated data from the monotherapy arm of our AML and MDS study, which reinforced previously observed findings of single agent efficacy across the spectrum of late line AML and MDS patients, despite these patients having already experienced several unsuccessful prior lines of therapy. As a reminder, The data in our EHA presentation identified a subset of patients with specific genetic mutations that make their disease highly amenable to treatment with CA-4948 based on the drug's mechanism of action. Of the four evaluable patients with a spliceosome or FLT3 mutation, all four achieved an objective response. This early success provides a key validation of the scientific thesis that U2AF1 and SF3B1 spliceosome mutations are specific drivers of the oncogenic long isoform of IRAC4, which CA4948 is explicitly designed to target. In the broader patient population, in those patients without a spliceosome or FLT3 mutation, We also saw encouraging signs of efficacy. Nine of 11 evaluable patients in this group achieved tumor reduction or were able to maintain a blast count in the normal range. The next step in our clinical plan is to address this population in combination therapy of CA4948 with azacitidine or venetoclax. We hope that CA4948 with its unique mechanism of action and demonstrated disease-modifying capability will prove an important addition to the combination therapy toolset in the battle against AML and MDS. The data presented at EHA also highlighted the strong safety profile of CA4948 with no dose-limiting toxicities related to myelosuppression and no overlap in dose-limiting toxicities with azazitidine or venetoclax, which are planned work combination studies with CA4948. The dose-limiting side effect at higher doses consisted of uncomplicated rhabdomyolysis, or elevated CPK and muscle soreness, which was manageable, quickly and easily detected, readily reversible, and did not limit further treatment at a reduced dose level. Of note, Those patients who did experience rhabdomyolysis at higher doses generally had predisposing factors, such as taking statins or strenuous exercise. And lastly, we were also pleased to report at EHA an update of the pharmacokinetic analysis for CA4948. At the 300 milligram BID dose, we are achieving pharmacokinetic exposure in patients that correlates to 98% target inhibition in preclinical models. These impressive data further our confidence in CA4948 as a novel and robust IRAC4 inhibitor that has the potential to significantly advance therapeutic options for patients with AML and MDS. In first-line patients whose bone marrow has not been irrevocably damaged by cancer or by prior cytotoxic treatment, it has been shown that clear and substantial hematologic recovery is achievable within a few months if leukemic blast levels are effectively reduced. In contrast, for the late-line patients in our study, it is important to remember that they already have deeply scarred dysfunctional marrow, which may delay or even prevent successful hematologic recovery. GA-4948 like other cancer therapies, addresses the underlying cancer, but it is not by itself a marrow stimulating agent. We are therefore very pleased to see signs of hematologic recovery in these extremely sick patients after only a few months of treatment. From a regulatory perspective, our goal is to have 10 to 20 patients with spliceosome mutations on drug by year end. Assuming the data remain consistent, we hope to be in a position to reach out to the FDA in the first half of next year to discuss the potential for a rapid approval path. Given the compelling data observed to date and the impressive pace of enrollment, we are optimistic that we can meet this goal. The spliceosome population is only one of the nine population groups we are studying with CA4948, but we believe these may be the data which mature the quickest, enabling the earliest discussions with FDA. While the monotherapy studies push ahead, the incremental positive safety findings showing no overlapping dose-limiting toxicity with azacitidine or venetoclax were an important next step in the development of CA4948 in combination therapy for the broader population of AML and MDS patients. These findings underscore the relevance and importance of the updated preclinical data also presented at EHA, which highlighted CA4948's synergistic antitumor activity when used in combination with azacitidine and venetoclax in leukemia cell lines. Before moving on from leukemia, I would like to briefly touch on the ongoing phase two Lucas IST for patients with lower risk MDS, being led by the co-chairman of EHA's scientific working group on MDS, Dr. Uwe Platzbecker. As a reminder of the study's rationale, if successful, it could lead to a potential breakthrough in the MDS field. Current standard of care with EPO-stimulating agents can be effective for patients with lower-risk MDS. However, this effect is often transient, it is not disease-modifying, and it does not affect further disease complication and progression to AML. With its direct targeting of IRAC4 and strong safety profile, we believe CA4948 could potentially offer a safe and disease-modifying alternative for patients at earlier stages of disease. With that, let's move on to lymphoma. We reported updated clinical data from our phase one dose escalation study of CA4948 for the treatment of patients with relapsed or refractory NHL or other hematologic malignancies at ASH last December. These data highlighted durable reductions in tumor burden in six of seven evaluable patients treated with 300 milligrams of CA-4948 twice daily, following a median of four prior lines of therapy. It is important to reiterate that seeing clear efficacy with a novel monotherapy agent and seeing that this efficacy is durable over such an extended period of time for these extremely sick patients is enormously encouraging and provided powerful affirmation of our intention to launch the current combination study evaluating CA4948 with ibrutinib. As a reminder, enrollment in the combination study began in Q1 of this year with CA4948 doses starting at 200 milligrams and escalating to 300 milligrams BID. We expect to report initial data from this study at a medical meeting in the first half of 2022. Lastly, I'd like to turn to our VISTA program with CI8993, our first in class monoclonal antibody for the treatment of patients with relapsed or refractory solid tumors. We believe CI8993 is the most advanced anti-VISTA antibody currently in clinical development and has the potential to be a game-changing cancer therapy. In June, we hosted a virtual symposium gathering industry thought leaders and respected academics to discuss the emerging understanding and opportunities surrounding this immune checkpoint. The excitement and interest in our program in both the clinical and academic communities is very high, and we look forward to reporting an initial update by year end. Briefly, I'd like to give you a sense of why we're so excited about this program. Existing major checkpoint inhibitors function to enhance T cell priming, such as anti-CTLA-4 antibodies, or relieve T cell exhaustion, such as anti-PD-1 or PD-L1 antibodies. All of these have two key limitations. First, CTLA-4 and PD-1 checkpoints cannot act on T cells that are stuck in a quiescent state. Second, it is known that CTLA-4 and PD-1 effectiveness is actively impaired by myeloid-derived suppressor cells, or MDSCs, which promote T cell exhaustion and suppress pro-inflammatory macrophages. In VISTA, we find the checkpoint whose primary role is enforcing T cell quiescence. In addition, VISTA is a known driver of MDSCs. With this dual-pronged effect, VISTA can sequester a large proportion of T cells in a quiescent state and prevent them from being acted upon by anti-CTLA-4 or anti-PD-1 antibodies. Finally, we know that the expression of VISTA can increase dramatically as a compensatory mechanism during treatment with anti-CTLA-4 or anti-PD-1 or PD-L1 therapy. For these reasons, we believe that therapeutic targeting of VISTA will be a crucial addition to the immune oncology arsenal. To wrap up, I'd like to extend my utmost appreciation to the entire QRIS team who continue to work tirelessly in pursuit of these paradigm altering breakthroughs. We're eager to build upon our efforts in the quarters to come. and advance our next generation targeted cancer programs to help patients in need. With that, I'll turn the call over to Bill to review our financial results for the quarter. Bill?
spk08: Thank you, Jim. For the second quarter, 2021, we reported a net loss of $10.8 million, or 12 cents per share, on both a basic and diluted basis. as compared to a net loss of $6.7 million or 17 cents per share on both a basic and diluted basis for the same period in 2020. Revenues for the second quarter of 2021 and 2020 were $2.3 million and $2.4 million, respectively. Revenues for both periods comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of AeroVeg. Operating expenses for the second quarter of 2021 were $12.9 million, as compared to $7.8 million for the same period in 2020. Cost of royalty revenues were $0.1 million for both the second quarter of 2021 and 2020. Research and development expenses were $8.8 million for the second quarter of 2021, as compared to $5.3 million for the same period in 2020. The increase in research and development expenses for the quarter is primarily attributable to increased clinical and manufacturing costs for our programs, as well as increased employee-related costs as a result of additional headcount. General and administrative expenses were $4.1 million the second quarter of 2021, as compared to $2.4 million the same period of 2020. The increase in general and administrative expense was driven primarily by higher costs for stock-based compensation, personnel, professional and consulting services, and legal services. The second quarter of 2021, in 2020, total other expense was $.2 million and $1.3 million, respectively. Total other expense primarily consisted of imputed interest expense related to future royalty payments, partially offset in the second quarter of 2021 by a gain related to the extinguishment of debt. As of June 30, 2021, there were approximately 91.6 million shares of common stock outstanding. As of June 30, 2021, QRIS's cash, cash equivalents, and investments totaled $160.7 million. We expect that our existing cash, cash equivalents, and investments should enable us to maintain our planned operations into 2024. With that, I'd like to open the call for questions. Operator?
spk05: Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset before pressing the numbers to ensure the best sound quality. Once again, that is star and then one to ask a question.
spk07: We'll pause momentarily to assemble the roster. Our first question today comes from Justin Walsh from B Reilly Securities.
spk05: Please go ahead with your question.
spk04: Hi, guys. Thanks for taking the questions. Congrats on the progress. To start off, as the VISTA safety data approaches, can you remind us what changes were made to this trial versus prior Janssen trials that increase your confidence that the asset will prove safe? and what would you view as a good outcome for the safety readout?
spk06: Thanks, Justin. Really appreciate the question. Bob, you're probably the best person to talk to that.
spk02: Yeah, thanks, Justin. So, as you know, the Janssen trial was run a number of years ago. Since that time, There's been a lot of study of cytokine release syndrome, which was the dose-limiting toxicity that they had experienced in one patient on that study. With the CAR-T therapies coming out in the oncology field, cytokine release syndrome has been much more manageable, and clinicians understand much better how to deal with this. In fact, a number of guidelines have been published since that time, including NCCN guidelines and others. So we've implemented a number of factors around those guidelines into our protocols. I think also very importantly, we've and Immunex have done quite a few preclinical experiments to better understand cytokine release and how to potentially mitigate that. So to that end, we've determined that performing a fairly quick desensitization for patients, at least in preclinical models, in those models we were able to reduce or even completely mitigate cytokine release findings. And so we've implemented a brief sort of desensitization or dose escalation that takes about a week for patients on a couple of different infusions. And we do that prior to starting the dosing and believe that that will help mitigate this. You know, the end result that we hope to see is that we're able to manage, you know, these patients who have a brief cytokine release syndrome at the beginning, during, and slightly after their infusion. Generally, this goes away fairly quickly. And what we've found and what Janssen actually found also is that the intensity and frequency of getting some cytokine release symptoms after dosing reduces on subsequent doses. So initially, we'd like to see that we can get through that initial dosing and then continue on with treatment of these patients once they become desensitized to the cytokine release.
spk06: You mentioned what would be the success factor really for year-end for this. There are really two big catalysts for VISTA. The first one is the one we're going to address this year, that's safety. Of course, the longer-term one would be efficacy. The first one was, obviously, in Jansen's study, they ran into CRS early on, and our thesis is CRS is manageable for all the reasons Bob said. So this year, by year end, what we want to be able to do is fundamentally de-risk that program from a safety perspective. Effectively, that with five more years under our belts, both, you know, Curis, Dartmouth, and and Immunex, but also the industry as a whole and our knowledge of CRS, that we can manage CRS and we can get this drug up into the therapeutic range. And then, of course, the next goal will be sometime next year, and that is now we begin the hunt for efficacy, somewhere in between that 0.5 and 2.0 mg per kg. But first things first, this year is all about de-risking the program, hitting that first really important catalyst of value creation, and that is proving that this drug can be dose escalated and that CRS can be managed.
spk04: Got it. Thanks. And one last question for me. So we previously expected the CA4948 plus ibrutinib data by the end of this year, but it looks like we won't get it until the first half of next year now. Has enrollment been challenging, or are we just seeing the timelines being honed as we move forward?
spk06: No, I think everything's moving really quite a pace. We're really pleased with that. I think it's a reflection of we want to make sure to present these data at a meta-conference and just the timing of the medical conferences means if you're going to get the data submitted and all of that, that's going to be a first half of 2022 conference. I think our focus for this year end continues to be on the splice zone patients in the AML and MDS study. But all nine studies, I think we're really pleased with the pace of movement on them all, and specifically in the enrollment with the combo with ibrutinib. Perfect. Thank you. That's all the questions for me.
spk05: Sure. Our next question comes from Alethea Young from Cancer Fitzgerald. Please go ahead with your question.
spk01: Hi. Thanks for taking our questions, and congrats on the progress. This is Nina on for Alethea. We were wondering for Vista, can you just like characterize where you are in the dose escalation process? Yeah. Oh, sorry. Go ahead.
spk06: No, no, no. Go ahead.
spk01: Sorry. And second, if you could just share more on why you picked these particular monotherapy populations for CA4948 and the rationale behind that.
spk06: Sure. Well, first and foremost, thank you for joining the call. I appreciate it. and for the questions, of course. So let me address the dose escalation question in VISTA simply by saying that we're really going to postpone any discussion of our progress in that until we get to year end. We've been pretty consistent, you know, over the course of this year that our goal is to have that update at year end. And we frankly want to make sure that while we're very pleased with the progress to date, We want to make sure we've got enough experience under our belt by the time we get to year end to be able to definitively say that we have de-risked the asset, that it can be managed and safely dose escalated. And I frankly want to wait on getting any sort of progress update on that program until we get to that point. On the next question on CA-4948, there are a couple of things that are important about the different populations that we're testing in and why we're selecting the ones that we did. I'll start with the data on this program have been really exciting, not just for us and, of course, for investors, but the investigators have been really excited about it. And it's why we've blown the doors out on investing in this program. It's why we've got nine separate populations ongoing. All of this work really being initiated leading up to ASH last year, but with the positive data at ASH and the money we were able to raise, we were able to put our foot on the accelerator and run all of these studies simultaneously. So that's the first really exciting thing. And the next thing is all of these studies really, I think, had the ability to generate an incredible amount of value and represent a significant value creation opportunity and therapeutic option for these patients. In AML and MDS, the focus for monotherapy is going to be for those patients who are part of a population that's directly targeted by the drug. And you may remember the drug has a dual targeting mechanism for AML and MDS purposes. It's IRAC4 and FLT3. So, of course, the patient populations we've chosen there are the IRAC4 population, or the spliceosome mutation patients, and patients with a FLT3 mutation. Everybody else is going to get this in combination therapy in AML and MDS. That's with azacitidine. and venetoclax, because those are the drugs that clinicians would look to today. We want to make sure that we can combine safely with them, and then our unique mechanism of action would further their improvement in that broader population. As you go to ibrutinib in B-cell cancers, we look to use this drug wherever you find ibrutinib is being used, period, long-term. That's the commercial strategy that If you're on ibrutinib today, you are on it precisely because it downregulates NF-kappa-B. Well, there are two pathways that drive NF-kappa-B. One is the BCR pathway. That's addressed with ibrutinib. The second is the toll-like receptor pathway. That's addressed by our drug, by 4948. In our view, if you want to downregulate NF-kappa-B, you want to stomp on it as hard as you can with both feet. That's with a BTK and it's with 4948. So everybody longer term, in our view, ought to be considering hitting NF-kappa-B as hard as you can and going on combination therapy, 4948 and ibrutinib. For regulatory purposes, it gets a little more complicated because of what you want is to get the highest probability study going in as fast as you can, get an answer as fast as you can. So you want to try and identify comparatively aggressive indications, meaning indications where you can see an effect of the drug more quickly, and also a subset of those indications where ibrutinib gets used where, frankly, ibrutinib doesn't do as well. So think of those applications or those indications where the NF-kappa B activity is being driven on balance more from the toll-like receptor side than the BCR side. So that's why we've chosen the three first indications of the four being assessed in combination with ibrutinib. So there's the BTK-naive bucket for marginal zone lymphoma, there's primary CNS lymphoma, and of course, ABCD, DLBCL. These would be three comparatively aggressive indications where ibrutinib gets used, but they're also indications which have been associated with either toll-like receptor activity or mid-88 activity, activities which should be amenable to therapy with an IREC4 inhibitor. And then, of course, the last bucket is anybody who has responded to ibrutinib in the past who has since become relapsed refractory. Those patients, of course, if you had gotten a response in the past on ibrutinib, you know that shutting down NF-kappa-B was effective. and for whatever reason has stopped being effective, if you can add 4948 to that regimen, attack NF-kappa B from a different angle through the Toll-like receptor path, and bring that patient back under control, we think that's a really compelling case where you could say clearly the difference was adding 4948. So that's really the walkthrough. The story is, of course, a complex one as you look across the breadth of AML and MDS and B-cell cancers. But in all cases, it's taking advantage of 4948's properties as a novel targeting drug going after IRAC4.
spk01: Okay, that makes sense. And thank you for the detail.
spk05: Sure. Once again, if you would like to ask a question, please press star and one. Our next question comes from Yeo Jin from Lead Law and Company. Please go ahead with your question.
spk03: Good afternoon, and thanks for taking the questions as well as congrats on the progress. I'm just going to follow up the previous question regarding 49-48 in lymphoma. You have naive patients. Also, you have resistant patients. What's your sort of expectation and the hope, the kind of improvement you would like to see considered as a very positive outcome, even at this pretty stage of the trial.
spk06: Yeah. First, thank you, Yale, for the question. I appreciate that. Actually, Bob, if you wouldn't mind, you might be a good person to talk to that.
spk02: Yeah, thanks. So, if we think about the different populations that Jim mentioned, let me start with the last population you mentioned, the adaptive resistance. In this case, the patient's disease has been altered ultimately such that the BTK inhibitor is much less or not effective. Yet, as Jim mentioned, we know that that disease is driven by NF-kappa B. We also know from a variety of preclinical studies done by both us and outside academic investigators that have shown really strong synergy in multiple different systems by targeting IRAC4 or the mitosomal pathway in combination with targeting the BTK pathway. And so in that situation, if a patient has developed resistance on ibrutinib, for example, and then we continue with ibrutinib and add on 4948, what we would expect to see would be actual responses. by adding on this additional hit on NF-kappa-B and knowing that that has synergy, we'll hope to start to see objective responses on that study. And that's in a population that's resistant or refractory to ibrutinib or other DTK inhibitor. In the other settings, For example, ABCDLBCL or primary CNS lymphoma, these are populations where the midosomal pathway is favored. So, for example, in primary CNS lymphoma, we know that the majority of patients have a mid-88 mutation. In ABCDLBCL, probably 40% of those patients have a mid-88 mutation. In these populations, ibrutinib and other BTK inhibitors are somewhat effective, but tend not to get very deep or durable responses. And so here we would expect to see a significant number of durable and deep responses. We ultimately will, once we get those data, discuss them with the FDA in terms of ultimately what type of benefit the patients are seeing. So we haven't, you know, made a statement of what specific response rate we want to see at this point. But those are the types of endpoints that we'll be looking for.
spk03: Okay, that's very, very helpful. And maybe it's one more question here. in terms of 49-48 in all this leukemia study which anticipated to start in the second half of this year. Are you guys having any sort of a timeline or more fine-tuned timeline in terms of when some of these studies might start? And thanks.
spk06: Yeah, thank you, Yael. So, as you can imagine, we are moving as aggressively as we can across the board. So, as you know, We've got these nine studies moving. In the leukemia side, I think we're especially interested in getting the data on the targeted monotherapy crowds, the spliceosome mutation and FLT3 mutation populations. So those are moving, of course, the fastest. I think we're also very excited about the studies that you mentioned that are starting in this second half, a combination with azazitamine and venetoclax. the data that we've been able to present at EHA that are in our current corporate deck, you can see the combination data pre-clinically is really compelling. We think we've got a very strong case for rapid approval, a rapid approval path with monotherapy, with spliceosome and FLT3. We should have data in spliceosome patients, as they say, by year end. And then the combination therapy, that will take a little longer. But of course, that gets to every other population, the broader commercial story, where every patient that's with AML and MDS ought to be looking for an IRAC4 inhibitor. And we, of course, have the lead. So our view would be, let's get all of these studies going simultaneously. The one that goes the fastest is probably the spliceosome crowd, but they're all really important. And we want to make sure that as we're sprinting down the fastest regulatory path, We are following it up very quickly with data that will support the broad application across the spectrum.
spk03: Okay, great. That's very helpful. And again, congrats on the rapid progress.
spk06: Thank you so much, Yael. Really appreciate your support.
spk05: And ladies and gentlemen, with that, we'll conclude today's question and answer session. I'd now like to turn the floor back over to the company's president and chief executive officer, James Spencer, for closing remarks. Thank you, operator.
spk06: And thank you, everyone, for participating in today's call. And as always, thank you to the patients and families participating in our clinical trials, to our team at Curus for their hard work and commitment, and to our partners at Orogene, Immunext, and the NCI. for their ongoing help and support. We look forward to updating you again soon. Operator?
spk05: Ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.
Disclaimer