Curis, Inc.

Welcome to QRIS's third quarter 2021 earnings call. Before we begin, I would encourage everyone to go to the investor section of our website at www.qris.com to find our third quarter 2021 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 filings. Joining me on today's call are Jim Dentzer, President and Chief Executive Officer, Bill Steinkraus, Chief Financial Officer, and Bob Martel, Head of Research and Development. We will also 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?

Thank you, Relief. Good afternoon, everyone. It's my pleasure to welcome you to QRIS's third quarter earnings call. As we look back on the year, we have come so far as a company, making important progress with both of our lead clinical programs, CA4948 and CI8993. Every day at QRIS, we strive to develop the next generation of transformative cancer therapies that meaningfully improve and extend patients' lives. In the third quarter, we made significant progress towards that goal. To start, let me review our lead asset, our novel small molecule IRAC4 inhibitor, CA4948. CA4948 is the most advanced IRAC4 inhibitor in clinical development for cancer and is currently being evaluated in nine distinct patient populations across AML, MDS, and B-cell cancers. There is a critical unmet need for safe, fast-acting treatments for patients with AML, the leading cause of leukemia deaths in the United States. In MDS, the need may be even more critical. as so many patients are left with only supportive care as their best option for treatment. We are excited that the original scientific rationale for CA4948 and IRAC4 inhibition has been followed by consistent and encouraging results in the lab, and so far, consistent and encouraging results in the clinic. In both our B-cell cancer and AML and MDS studies, CA-4948 has continually demonstrated a well-tolerated safety profile and the ability to demonstrate improved efficacy over multiple cycles of treatment. These findings were most recently presented at the EHA meeting in June, where we shared data from the monotherapy arm of our Phase I-II AML-MDS study, demonstrating clear efficacy with no dose-limiting myelosuppression a potentially key differentiating factor that may allow even extremely sick patients with low thresholds for drug tolerability to be treated with CA-4948. Our second lead program is for our first-in-class monoclonal anti-VISTA antibody, CI-8993, a novel immune checkpoint inhibitor that we are developing in collaboration with Immunext. CI8993 is a clinical stage human IgG1 kappa monoclonal antibody designed to antagonize the VISTA signaling pathway by increasing T cell mediated immunity and reducing myeloid derived suppressor cell or MDSC activity. VISTA is a key checkpoint for holding T cells in a quiescent state, preventing their transition into effector cells facilitated by CTLA-4 and PD-1 therapies. In addition, VISTA is a key driver of MDSCs. These are two fundamental and unique roles of VISTA that are not captured by existing immune-mediating therapies. VISTA expression is also believed to be a key resistance mechanism to PD-1 and CTLA-4 therapies, as VISTA expression is dramatically elevated as patients become resistant to those treatments. Finally, VISTA is highly expressed directly on certain tumor cells themselves in addition to the surrounding immune cells, including mesothelioma and subsets of breast, lung, and gynecologic malignancies. Treatment with anti-VISTA antibodies has been shown to suppress the growth of both transplantable and inducible melanoma in preclinical models. CI8993 is currently being evaluated in a phase one dose escalation study for the treatment of relapsed or refractory solid tumors. With that, let's dig into some detail on our ongoing programs, starting with the IRAC4 study in leukemia. As I mentioned, We were pleased to present at EHA earlier this summer our positive updated data from the monotherapy arm of our AML MDS study, which expanded upon 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, We also demonstrated that near total IRAC4 inhibition was achievable at every therapeutic study dose. With these data, we saw that 300 milligrams BID struck the optimal balance of durable anti-cancer activity and extended tolerability. And accordingly, we selected it as the recommended phase two dose going forward. This was in line with the findings from our earlier monotherapy study of CA4948 in NHL, where we also selected 300 milligrams BID as the primary study dose for further evaluation. We continue to be pleased with the pace of enrollment in our monotherapy study of CA4948 in patients with a U2AF1 or SF3V1 spliceosome mutation. As we have noted previously, Our goal is to have 10 to 20 patients with a spliceosome mutation on study by the end of this year. We believe data from these patients may provide for an opportunity to explore discussions with the FDA on the registrational path forward in the first half of 2022. We expect to hit that 10 to 20 patient goal and plan to provide a high level update of safety and efficacy data from a subset of these patients in January. While we obviously don't have data for all 10 to 20 patients just yet, we do expect in January to have initial efficacy data for eight to 10 spliceosome patients and three FLT3 patients, or nearly three times the data we presented at EHA just five months ago. This update will include all patients enrolled by mid-September, which allows the opportunity for at least two disease assessments. to determine marrow response. Not all patients achieve responses this quickly, but we believe this two-assessment view will provide a nice interim snapshot of the clear progress we are achieving in this study. For these patients, we hope to see consistency with the data we shared at EHA. That is, we hope to see clear anti-cancer activity and reduction of tumor burden across the population, that a majority of patients can see their blast counts drop all the way down into the normal range, achieving an objective response, and highlighting CA4948's compelling ability to fight cancer as a monotherapy. Further, we would hope to see additional evidence of hematologic improvement. perhaps even a second patient with complete response, to determine whether some patients may be capable of achieving a CR despite the effects of damaged marrow from both their disease burden and from their prior treatments. Additionally, we would like to see that the finding of rhabdomyolysis previously seen at higher doses does not limit treatment at the recommended phase two dose of 300 milligrams BID. So this will be an early look at the data. We expect to have a more comprehensive data update with the full 10 to 20 patients at a medical conference next year. On the heels of our promising monotherapy data, we were very excited to be able to announce the recent initiation of our Phase 1-2 combination therapy trial of CA4948 in AML and MDS. With the positive preclinical data in combination therapy that we presented at EHA featuring CA4948's synergistic antitumor activity when used in combination with azazitidine and venetoclax, we are optimistic that this combination study will allow us to advance CA4948 as a new treatment for patients with AML and MDS across the broader AML and MDS patient population. where there remains a great unmet need with many patients ineligible for intensive chemotherapy. The combination portion of this study includes two arms, CA4948 plus azacitidine for patients naive to HMA and CA4948 plus venetoclax for patients naive to venetoclax. The primary goal of this combination study is to determine the recommended phase two dose for CA4948 in combination with azazitidine and in combination with venetoclax based on safety, tolerability, and biologic activity, including pharmacokinetic and pharmacodynamic findings from the study population. We expect to have initial data from this combination study in 2022. I would like to briefly touch on the ongoing Phase II 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. We realize there's a lot of interest in this study because success in this study could lead to a potential breakthrough in the MDS field. So even though we have a longer time horizon for this study, and it is not a company-controlled study, we hope to be able to provide an update on the progress of the Lucas IST in 2022. The current standard of care in low-risk MDS is supportive care, such as EPO-stimulating agents, which can be effective for patients with low serum EPO, or loose patercepts, which enhances production of red blood cells. Unfortunately, these interventions do not alter the underlying disease. Their effect is often transient and they do not prevent progression to AML or further disease complication. In contrast, CA4948 is disease modifying, targeting a key driver of the underlying disease. Given the direct non-myelosuppressive targeting of IRAC4, and its demonstrated safety profile, we believe CA-4948 could potentially offer a safe and transformative disease-modifying alternative for patients in this earlier stage of disease. In conclusion for AML and MDS, our success earlier this year led us to expand our clinical investment to include both monotherapy and combination therapy and to include patients across the spectrum of disease from low-risk MDS to high-risk MDS to AML. We look forward to providing data updates on all of these studies in 2022. Moving to our B-cell cancer program. We have made steady progress with our CA4948 clinical development in B-cell cancers. Data from our monotherapy phase 1-2 study highlighted clear reduction in tumor burden and a strong durability profile, which is particularly notable with a novel monotherapy agent in such extremely sick patients. Based on these findings, as well as our preclinical work, we believe CA4948 is the ideal candidate to combine with BTK inhibitors to maximize the downregulation of NF-kappa-B. Earlier this year, we initiated the combination study evaluating CA4948 with ibrutinib, which is expected to enroll approximately 18 patients in a 3 plus 3 design with CA4948 starting at 200 and escalating to 300 milligrams BID. Ibrutinib dosing will be determined based on the appropriate dose for the patient's type of cancer. We are pleased to share today that CA4948 administered at the 200 milligram twice daily dose has been well tolerated in combination with ibrutinib with no DLTs observed. We are currently evaluating the 300 milligram twice daily dose of CA4948 in combination with ibrutinib. The trial is progressing well, and we expect to report initial data from this study at a medical meeting in 2022. While we are obviously excited about our ongoing studies in AML, MDS, and B-cell cancers, we are equally excited by the breadth of its potential application in other cancers and are working with our collaborators at NCI and in the broader KOL community to evaluate additional opportunities for CA4948. In October, we announced at the triple meeting conference on molecular targets in cancer therapeutics new preclinical data highlighting the potential benefit of CA4948 in multiple new applications. These data demonstrated that CA4948 can cross the blood-brain barrier and enhance survival in patients with primary central nervous system lymphoma, an incredibly aggressive and rare form of lymphoma in which malignant cells form in the lymph tissue of the brain and spinal cord. Additional data at the meeting highlighted CA4948 as synergistic with small molecules targeting BCR signaling, including both idelalicid and ibrutinib. These data suggest it may help overcome secondary resistance to these therapies in marginal zone lymphoma. Last but not least, turning to CI8993, our first-in-class monoclonal antibody targeting VISTA for patients with relapsed or refractory solid tumors. Enrollment remains on track in this Phase I study, and we expect to report initial safety data in our January 2022 update. VISTA is highly differentiated from other existing checkpoint inhibitors because of its primary role in enforcing T-cell quiescence. When unblocked, VISTA is capable of sequestering a large proportion of T cells in a quiescent state, preventing them from being acted upon by anti-CTLA-4 or anti-PD-1 antibodies. VISTA is also a primary driver of MDSCs, which independently promote T cell exhaustion and suppress pro-inflammatory tumor-associated macrophages. This year, our primary objective is to evaluate safety and tolerability and confirm that using our revised protocol, the on-target side effects of CI8993 can be safely managed, enabling dose escalation up to and beyond all doses studied with this anti-VISTA therapy in prior clinical studies. Achieving of this critical milestone which we hope to report on in January, will enable us to begin the exploration for efficacy at higher dose levels in 2022. I would also note that earlier today, we announced that a preclinical data submission for CI8993 was accepted for a poster presentation at the annual meeting of the Society for Immunotherapy of Cancer, or CITSE, being held from November 12th to the 14th. We look forward to sharing additional data from this program at that time. In summary, this has been an incredibly exciting year for QRIS, and we have even more to look forward to. Specifically, we expect to report in January both initial safety data from our anti-VISTA program, the phase one monotherapy study of CI8993, and an update of safety and efficacy data from our Phase I-II monotherapy study of CA4948 in AML MDS patients with certain spliceosome or FLT3 mutations. This update will be followed by a more comprehensive update later in 2022. Also in 2022, we plan to report initial data at a medical meeting from the ongoing Phase 1-2 combination study of CA4948 plus ibrutinib in patients with B-cell cancers. Before turning the call over to Bill to discuss our financials, I always like to extend my gratitude and appreciation to the entire CURIS team for their dedication and hard work. We are eager to build upon our efforts 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? Thank you, Jim. For the third quarter of 2021, we reported a net loss of $11.1 million, or 12 cents per share, on both a basic and diluted basis, as compared to a net loss of $6 million or 11 cents per share on both a basic and diluted basis for the same period of 2020. For the nine months ended September 30th, 2021, we reported a net loss of $31.8 million or 35 cents per share as compared to a net loss $22.4 million or 52 cents per share for the same period 2020. Revenues for the third quarter of 2021 and 2020 were $3 million and $2.7 million, respectively. Revenues for the nine months ended September 30, 2021 were $7.5 million, as compared to $7.8 million for the same period in 2020. Revenues for both periods comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of AeroVeg. Operating expenses for the third quarter of 2021 were $13.1 million as compared to $7.5 million for the same period, 2020. Operating expenses for the nine months ended September 30, 2021 were $37 million as compared to $26.4 million for the same period in 2020, and were comprised of the following. Cost of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche's AeroVegNet sales, were $0.2 million for the third quarter of 2021, as compared to $0.1 million for the same period in 2020. Cost of royalty revenues were $0.4 million for both the nine months ended September 30, 2021 and 2020. Research and development expenses were $8.6 million for the third quarter of 2021 as compared to $4.7 million for the same period in 2020. The increase in direct research and development expenses for the quarter is primarily attributable increased clinical and manufacturing costs for our clinical programs. Additionally, employee-related R&D costs increased by $2.3 million, primarily attributable to increased stock-based compensation and personnel costs as a result of additional headcount. Research and development expenses were $24.1 million for the nine-month-ended September 30 2021 as compared to $17.5 million for the same period in 2020. General and administrative expenses were $4.3 million for the third quarter of 2021 as compared to $2.6 million for the same period 2020. The increase in general administrative expense was driven primarily by higher costs for stock-based compensation, personnel, professional, and consulting services. General and administrative expenses were $12.5 million for the nine months ended September 30, 2021, as compared to $8.6 million for the same period in 2020. For the third quarter of 2021 and 2020, Net other expense was $1 million and $1.3 million, respectively. Net other expense primarily consisted of imputed interest expense related to future royalty payments. Net other expense was $2.3 million for the nine months ended September 30, 2021, as compared to $3.8 million for the same period in 2020. As of September 30, 2021, QRIS's cash, cash equivalents, and investments totaled $149.8 million, and there were approximately 91.6 million shares of common stock outstanding. 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?