Corvus Pharmaceuticals, Inc.

Good afternoon, everyone. Thank you for standing by, and welcome to the Corvus Pharmaceuticals fourth quarter and full year 2023 business update and financial results conference call. 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 Zach Kubo of Real Chemistry. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us for the Corvus Pharmaceuticals' fourth quarter and full year 2023 Business Update and Financial Results Conference Call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer, Lace Lee, Chief Financial Officer, Jeff Arcarra, Chief Business Officer, 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' annual report on Form 10-K, 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.

With that, I'd like to turn the call over to Lacey. Lacey?

Thank you, Zach. I will begin with a quick overview of our fourth quarter and full year 2023 financials and then turn the call over to Richard for a business update. Research and development expenses in the fourth quarter 2023 totaled $4 million compared to $4.1 million for the same period in 2022. R&D expenses for the full year 2023 totaled $16.5 million compared to $24.5 million for the full year 2022. The net loss for the fourth quarter 2023 was $6.7 million, including a $1.4 million non-cash loss related to Angel Pharmaceuticals, our partner in China. This compares to a net loss of $9.8 million for the same period in 2022, which included a $4.6 million non-cash loss related to Angel Pharmaceuticals. The net loss for the full year 2023 was $27 million, including a $5.3 million non-cash loss related to Angel, compared to a net loss of $41.3 million, including a $10 million non-cash loss related to Angel for the full year 2022. Total stock compensation expense for the fourth quarter and full year 2023 was $0.6 million and $2.1 million, respectively, compared to $0.6 million and $2.7 million in same periods in 2022. As of December 31st, 2023, Corvus had cash, cash equivalents, and marketable securities totaling $27.1 million as compared to $42.3 million at December 31st, 2022. I will now turn the call over to Richard, who will discuss our clinical progress and elaborate on our strategy and plans.

Thank you, Leif, and good afternoon, everyone. Thank you for joining us today for our business update call. Corvus has become a pioneer in the research and development of ITK inhibition as a new therapeutic modality to benefit patients with a diverse range of diseases. We have demonstrated that selective inhibition of this target leads to significant biologic effects that could lead to new treatments for cancer and immune diseases. In 2024, we are focused on two key value drivers to further confirm and advance this opportunity. First, begin patient enrollment in a registrational phase three trial of Socolitinib for patients with relapsed PTCL or peripheral T-cell lymphomas, an indication with no fully FDA-approved therapies and significant unmet need. And second, begin patient enrollment in a placebo-controlled phase 1 trial of socolitinib for patients with moderate to severe atopic dermatitis, which is expected to generate the first clinical data for ITK inhibition for an immune disease before the end of the year. We believe Corvus is positioned to build value in the near term with significant upcoming clinical milestones for socolitinib in oncology and immune diseases, further strengthening our ongoing business development, which is concentrated on partnering opportunities for ITK inhibition. Recently, published data demonstrated the potential role of ITK in a broad range of indications, and we have expanded our capabilities and approach to business development with the appointment of Jeff Arcara as Chief Business Officer. Jeff will be presenting his views and strategy in a moment. I will now provide further details on our two priorities for the year and our other programs, starting with socolitinib for PTCL. We plan to begin patient enrollment in our socolitinib registrational phase three clinical trial in relapsed PTCL in the third quarter of 2024. The data from our phase one trial continues to evolve with longer follow-up of treated patients. In the most recent data cutoff from January 2024, we found that a patient with previously reported partial response of approximately 80% target lesion reduction after nine weeks of therapy subsequently converted to a complete response at 18 weeks due to continued tumor response. This patient, who remains on therapy, had relapsed extranodal NK T-cell lymphoma involving the nasopharynx and represents the fourth complete response out of 21 Phase III eligible patients in the trial. The objective response rate, or ORR, for the Phase III eligible patients in the Phase I trial remains at seven out of 21 patients with four CRs and three PRs, or 33%. Although not studied head-to-head, The ORR, complete response rate, disease control rate, progression-free survival, and overall survival for this group compares favorably to the results seen with belinostat or pralatrexate, which are the standard chemotherapies for PTCL and that we will be comparing against in a Phase III trial. These agents received accelerated approval in the United States, but no definitive trial has been conducted for either. The median PFS, progression-free survival, for our patients and the primary endpoint for our Phase III trial remains at 6.2 months, which is substantially better than reported for the standard agents. Regarding our interactions with FDA, we reached alignment on the final study protocol, and in February, they granted socolitinib, the orphan drug designation, for the treatment of T-cell lymphomas. This is an important milestone that reinforces the unmet need for new therapies for these patients given existing drugs provide limited efficacy and are associated with significant toxicity. In fact, current NCCN guidelines for relapsed refractory PTCL recommend that patients enter an experimental clinical trial as the preferred treatment for second-line therapy. We are already working with or are in advanced discussions with a number of leading centers in the United States and Canada. We anticipate about 40 centers will participate in the trial. The vast majority will be in the U.S. Our second priority is soqualitinib for atopic dermatitis, the first immune disease indication we are exploring. Our plans to move into a clinical trial are supported by our preclinical work including using socolitinib to successfully treat spontaneous canine atopic dermatitis. We are on track to initiate a phase one trial in April. We plan to enroll 64 patients with moderate to severe atopic dermatitis that has progressed on at least one prior therapy. The study will be randomized, placebo controlled, and blinded to patients and the treating physician. There will be four sequentially enrolled cohorts of 16 patients with patients in each cohort being randomized three to one to different dosing regimens of soqualitinib or placebo administered for 28 days. The primary endpoint is safety and tolerability and efficacy will be measured using investigator global assessment and the clinically validated measurement of improvement in eczema area and severity index also known as EASI. It should be noted that while the atopic dermatitis trial is double blind, patient and doctor are blinded, but the company is not blinded. We plan to evaluate the data in an ongoing manner as successive cohorts of patients complete enrollment. Based on the anticipated enrollment and follow-up timelines, we believe data from the initial cohorts will be available before the end of 2024 with study completion in early 2025. We are planning to conduct a solid tumor trial in relapsed renal cell cancer, but are prioritizing initiation of the PTCL and atopic dermatitis trials. Our plans to move into a clinical trial are supported by our preclinical work and independent academic confirmation led by a team from Erasmus University in Rotterdam. The trial is planned to be conducted in partnership with investigators at the Kidney Cancer Research Consortium. The clinical and preclinical results we have seen with soqualitinib have motivated us to search for additional analogs of ITK inhibitors. In February, we presented data at the Keystone Symposia on Systemic Autoimmune and Autoinflammatory Diseases that included the first description of our next generation ITK inhibitors which are designed to deliver precise T-cell modulation that is optimized for specific immunology indications. Given the broad potential of ITK inhibition in inflammatory and immune-mediated diseases, we seek to partner with biotech or pharma companies that have established development and commercialization capabilities that match with the various opportunities. In order to accelerate our business development activities, in February, we appointed Jeff Arcara as Chief Business Officer. He joins Corvus with more than 30 years of commercial experience in the biopharmaceutical industry, including broad functional experience across commercial development, corporate development, product licensing and partnering, and corporate strategy. I will now pass the call to Jeff to comment briefly on our business development initiatives. Jeff?

Thank you, Richard, and good afternoon, everyone. I am very excited to join the Corvus team and to advance the development of a very promising pipeline. In cancer, Corvus is focusing in areas of high unmet need with a novel target and with significant commercial potential. The opportunity to join Corvus at this time was very appealing with a number of potential milestones and key inflection points for the company over the next six to 12 months, including the start of our Phase III trial of sovalitinib for relapsed PTCL, which is addressing an indication with significant unmet need and provides the opportunity to bring an important new treatment option to patients and to create value for Corvus. From the commercial perspective, if approved, it will be the only fully FDA-approved treatment for relapsed PTCL. To give a sense for the magnitude of the opportunity, consider these factors. PTCL has a very high unmet need, with a very low survival rate of under 20% at five years, so there is a desperate need for new and effective therapies. It is estimated that there are 70,000 cases of PTCL globally, with current pricing for treatments in the U.S. ranging from 200,000 up to 600,000 per year. Soqualitinib represents a near-term commercial opportunity, with our planned Phase III trial protocol intended to enroll 150 patients. The market for drugs to treat hematologic malignancies is large, at approximately 55 billion, and is projected to grow to 90 billion by 2028. For purposes of benchmarking, global sales of etcetras, an anti-CD30 drug conjugate, were 1.6 billion in 2023, with estimated sales of approximately 558 million in patients with non-Hodgkin's lymphomas, primarily in patients with anaplastic T-cell lymphoma, a subset of PTCL, accounting for about 15 to 20% of cases. Together, these factors make the PTCL opportunity substantial for a novel effective treatment as is seen with other disease-modifying therapies in the hematology space. More broadly, we view PTCL as an entry point with numerous potential ways to expand the opportunity and to help more patients with solid tumors and immune diseases. Given all this, we believe socalitinib and our next-generation ITK inhibitors can be an attractive opportunity for partners, given the unique mechanism of action, human safety data with socalitinib from our Phase I lymphoma trial, the large and diverse market opportunities in oncology and immunology, and our strong intellectual property position with issued composition of matter patents for socal adenib extending out to November 2037, not including likely extensions. With that, our preferred partnering strategy is to find partners with development and commercialization expertise in immune disease, as well as to seek regional partnerships in oncology. We have seen increasing momentum in partnering interest since the announcement of our Phase III registration trial in the third quarter of 2023, and recent publications on the activity of socalitinib in preclinical models of cancer and immune diseases. I will now turn the call back to Richard.

Thank you, Jeff. Turning to our partner-led programs, the Kidney Cancer Research Consortium is currently enrolling patients and a Phase II portion of a Phase Ib-II clinical trial evaluating cifradinins, our adenosine A2A 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 there are currently about 25 patients enrolled. Based on current timelines, we anticipate initial interim data in the first half of 2024. Encouragingly, As we enroll more patients, we continue to see that the deep response rate exceeds our 32% benchmark based on 14 evaluable patients that have received at least one follow-up assessment, up from eight evaluable patients at our Q3 call. Recall, deep response rate is complete response plus partial responses that exceed 50% tumor volume reduction. This endpoint has been shown by others to predict prolonged progression-free survival, and it is 32% with ipilimumab and nivolumab. For our anti-CD73 antibody, mupidolumab, our partner, Angel Pharmaceuticals, is continuing to enroll patients in a Phase I 1B clinical trial in China with mupidolumab alone and together with pembrolizumab in patients with non-small cell lung cancer and head and neck squamous cell cancers. Summarizing the outlook for 2024, our current cash allows us to achieve near-term milestones, including starting our registrational Phase III clinical trial of socalitinib in PTCL, generating interim data from early cohorts of the socalitinib Phase I atopic dermatitis clinical trial, and reporting interim data with ciforadmin and renal cell cancer in the first half of 2024. Our intent is to leverage these near-term milestones and achievements as we seek additional funding and partnerships for our ITK inhibitors in immunology and oncology, as well as our other novel programs, including the A2A receptor antagonist, Ciforidenib. We look forward to providing updates on our programs in the coming quarters. I will now turn the call over to the operator for a question and answer period.

Thank you.

Operator?

Thank you. We'll now conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press the star key followed by the number 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. And our first question comes from Greg Sivanovich with Mizuho Securities. Please state your question.

Hi. This is Jerry Alford, Greg. Just taking our questions. Maybe two from us. To start off with, on the phase three, the trial initiation, can you kind of speak to what's kind of gating the start of that trial, and have there been any adjustments to the protocol since? I do have a follow-up.

There's been no changes or adjustments to the protocol. We've been in complete agreement with FDA on the design, statistics, and other parameters of the trial. Nothing's changed in that regard. Our phase one data continues to improve as we have longer follow-up. We're in the process now of finalizing contracts with the various centers. And there's really no gating items other than the usual administrative things.

Gotcha. That's super helpful. And then a question for you, Jeff. So you did speak to a range of pricing in PTCO. Can you kind of speak a little more on to, I guess, how Corvus is thinking about where you fall in that range or that range of a scale pricing?

Yeah, thanks. I guess in terms of pricing, you know, obviously we look at analogs and what the current market is charging in terms of these areas. I think, you know, you take into account the size of the patient population that you're going after. You know, but more importantly, you know, the pricing is really going to be dictated on the size of the unmet medical need, which we know is very large in PTCL, as well as, you know, the product profile that we present, so the safety and efficacy data that we have. So I think, you know, obviously we're looking at analogs at this point in time, but ultimately the final price will be set once we get the final data and, you know, do some testing with payers on the value proposition.

Got it.

Thanks for taking our questions, and congrats on the quarter.

Thank you.

Our next question comes from Jeff Jones with Oppenheimer. Please state your question.

Hi, guys, and thanks for taking the question.

I guess two from me. Can you speak to the confirmed versus unconfirmed reported outcomes in the PTCL study with the additional CR now and just to clarify how many of those are confirmed versus unconfirmed and then one follow-up?

They're all confirmed.

All confirmed? Okay.

Yeah.

Thank you.

Yeah, and Jeff, I might also add that usually in relapsed disease, most clinicians don't really talk about confirmed and unconfirmed. That's more appropriate in frontline therapy. In relapsed disease, especially in this disease, people live such a short time that in half your cases, it's difficult to even get people beyond a few months. But all of our responses are confirmed, partially and completely.

The swimmer plot you're showing, it looks like there's some patients who are still quite early in treatment. And so it almost looks like you're still enrolling patients in that study. So I guess, are you still enrolling patients in that phase one study? And would you be able to perhaps roll those patients over to the phase three?

We are not enrolling new patients in the phase one study. The patients that are shown on the swimmers and waterfalls, and some of them are continuing on therapy, will be followed, of course, and continued on therapy until they progress. But there's no new patients being enrolled in the phase one. We're focusing our centers now, many of the centers who participated in the phase one are participating in the phase three. So, we've got those guys now focused on the Phase III trial.

Okay. Thanks. I'll jump back into the queue.

Our next question comes from Roger Song with Jefferies. Please state your question.

Hi. This is Leon Chan for Roger. So, thank you for taking our questions. I think two questions from us. I think the first one on so-called litinib, you know, the updated Phase I data, so for you know, the five patients with tumor reductions that did not meet the criteria of PR. So how long were they on the treatment? And then for the two that continue, how long have they been on the treatment? Then I have a follow-up. Thank you.

For the... All right. For those that didn't... that are, the first question had to do with for those who have not reached the criteria for PR, how many are still, how long are they still on treatment? So if you look at the swimmer, that would be, one is, which by the way, you can do yourself, is five months. One is about six months. Another one is seven or eight months. Okay, and the other ones have been PRs. So that's my quick look at the swimmer. And the second part of your question was what? So for the tube, that it continues on the treatment.

So yeah, I guess, you know.

They continue on the treatment. Patients continue on treatment until they progress. Or they have some sort of a safety issue, but that's not happened.

Sure.

Okay.

So maybe moving on. Yeah. Yeah. I think, you know, my second question is about the phase one study in atopic dermatitis. So the patients are required to fail at least one prior. So any specific requirements on that?

Didn't quite hear the end of your. Patients are required to have failed one prior topical or systemic therapy. They're required to have moderate to severe atopic dermatitis. They're requiring to be, to have failing their prior therapy. Does that answer your question?

Yes, yes.

Okay, thank you. That's all for now. Thank you for the question.

Our next question comes from Lee Wacek with Kantor Fitzgerald. Please state your question.

Hi there. This is Rosemary on for Lee. Thanks so much for taking your question. Maybe firstly, could you reiterate the benchmarks for the relapsed refractory PPCL, what you're hoping to see? There was some interference on the call earlier, so I didn't catch that. And then I do have a follow-up question.

So pralatrexate and belinostat are currently the standard agents for relapsed peripheral T-cell lymphoma. Those agents received accelerated approval approximately 15 years ago, and the companies never did the confirmatory trials. So there is no currently fully FDA-approved drug for relapsed PTCL. Pralitrexate and Belinostat are basically chemotherapy drugs. Belinostat is an HDAC inhibitor. Pralitrexate is a folate antagonist. Both of those drugs suffer from the usual chemotherapy toxicities which are neutropenia, thrombocytopenia, and pneumonia. Pralotrexate suffers from an additional toxicity, mucositis. The response, those patients, the approval of those drugs was based on single arm phase two studies that enrolled, oh, somewhere between 100 and 120 patients. The response rate was about 25%. the PFS, progression-free survival, was, in the case of Belinistat, I believe it was 1.6 months, and in the case of Pralotrexate, it was around three months, if my memory is correct. We have a slide about this up on the slide presentation on our website. So we see a 33% response, 33.3% response rate, with more than half being CRs. CR rate in ours is about double of the 25% or so response rate with Pralutricin and Belinistat, about 10% with CRs. In our responders, most of the responders are CRs, albeit a small number. So CRs are very important in hematology and especially in the lymphoma world. Progression-free survival in our hands is 6.2 months, which is substantially better than the 1.6 and 3.0 months I mentioned earlier. So our study, just to go on because I think I know where you're headed, our study design, the statistical design, is to enroll 150 patients, 75 in each arm, standard of care versus soqualitinib, 75 in each arm, as I mentioned. The power, we have about an 89, 90% power to see an improvement from about three and a half months to five and a half months, which is our target.

Okay? Thank you so much. Yes, thanks for the really thorough answer. And then I just have a quick question on atopic dermatitis. So for the data that we may get later this year, You have any anticipation around, like, the nature of that data, like, how many patients, how many doses, or is it just too early to tell? Thanks.

No, no, we have very good estimation of that. Okay, so first of all, we know a lot about the dosing of this drug already since we've been evaluating it in patients with lymphoma. We know a lot about the pharmacokinetics, the occupancy of the target, the safety, etc., So we're going to be studying four cohorts of patients that are enrolled sequentially. So we start with, let's say, the low-dose cohort, which in our case is 100 milligrams BID. 200 milligrams BID is our dose in the lymphoma studies and in the proposed phase three. So 100 milligrams BID will enroll 16 patients in a three-to-one randomization where 12 will get and the other four get placebo. Then we go to the next dose regimen, which is 200 milligrams once a day, because we think that once-a-day dosing will be effective, and we think it's more convenient, of course. So same thing, 16 patients go in there. Again, three-to-one randomization. Twelve get the socolitinib, four get the And then we go to the third cohort, which is 200 milligrams twice a day, the same regimen that we're using in lymphoma. Same idea, 12 patients get the drug, four get the placebo, again, randomized. And then the final cohort would be 400 milligrams once a day. Now, the reason that we're studying those cohorts is that we know that at 200 milligrams, you get complete occupancy of the receptor. 100 gives you pretty good occupancy, but it's not complete, but probably good enough to cause some biologic effect. So I would not be surprised if we see some effect even at the lowest dose regimen. So as I mentioned earlier, the doctor and the patient are blinded. The company is not. So we can look at the data, and we have a data monitoring board that can look at the data after each cohort's enrolled. and we're able to report that data or or not I mean I don't anticipate we're going to be reporting it every week but at our discretion we can be reporting that data now there's also a very rich amount of biomarker data that's going to be accumulating during the study we're measuring a number of different cytokines and lymphocyte subsets, et cetera, et cetera. And we know already from our lymphoma studies and our other animal studies that we've done and published, we know what biomarkers, what cytokines are affected, like IL-4 and IL-5 and others. So what we would be looking for at each cohort, of course, is safety. We would be looking at changes in biomarkers in our treatment group relative to baseline. We would expect to see changes in IL-4 and 5 and all these things as comparing each patient to his or her baseline. And, of course, doctors will be assessing the efficacy based on the grading criteria as I mentioned earlier, the EASY score and the investigator global assessment. So we're going to learn a lot from each of these. Now, in terms of the dosing, we, as I mentioned, we know a lot about the dosing already, so we're able to start at 100 milligrams BID. I would expect to see something very early in this study, and I think we'll get an idea very early not only about the efficacy, but also about the biologic activity, because remember The reason that we're picking atopic dermatitis first is that it is very much what's called a TH2, T helper cell 2 disease, a disease mediated by IL-4 and 5 and 13. And we know that our drug blocks the TH2 function very well. We learned this from our lymphoma studies and from our other studies, preclinical studies. So we're going to be able to determine very early in the study about safety. We already know that from our lymphoma studies. We'll be able to determine whether or not we're having the immunologic effects that we expect. And of course, we'll be monitoring the clinical efficacy. Now, the immunologic effects are important because this becomes the entry point, the stepping stone to other immune diseases. What are the other immune diseases? Asthma is one that would be very much TH2. Psoriasis, scleroderma, several other diseases, and we have a whole list of them on our website presentation. So this is a very important study in that we get data quickly, and it's very informative, not only for the purpose of atopic dermatitis, but it opens up the whole field. Basically, this study puts ITK inhibition on the map as an important therapeutic modality for a host of immune diseases. It's very reminiscent of an antibody that I worked on called rituxim, and where what we learned in lymphoma taught us about what happens to B cells, et cetera, and that opened the door for a lot of other dermatologic and immunologic diseases. So that was a long way to answer your question, but I wanted to make sure that we really had proper perspective. I appreciate the question. Did I forget anything?

Great.

Thank you so much.

Thank you. And there are no further questions at this time. I'll turn the floor back to Richard Miller for closing remarks.

Thank you, operator. Well, I want to thank everyone for participating in the call today. We look forward to giving additional updates each quarter and advancing socolitinib and other products in the coming months. Thank you very much.

Thank you. This concludes today's call. All parties may disconnect. Have a good day.