Corvus Pharmaceuticals, Inc.

Good afternoon, everyone, and thank you for standing by. Welcome to the Corvus Pharmaceuticals Second Quarter 2024 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. Thanks for joining us for the Corvus Pharmaceuticals Second Quarter 2024 Business Update and Financial Results Conference Call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer, Leif Lee, Chief Financial Officer, Jeff Arcara, Chief Business Officer, Jim Rosenbaum, Senior Vice President of Research, and Ben Jones, Senior Vice President of Regulatory and Pharmaceutical Sciences. The executive team will open the call with some prepared remarks. followed by a question and answer period. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the risks and uncertainties described in Corvus's quarterly report on Form 10-Q for the quarter ended June 30, 2024 that was filed today 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 Laith Lee. Laith?

Thank you, Zach. I will begin with a quick overview of our second quarter 2024 financials and then turn the call over to Richard for a business update. Research and development expenses in the second quarter of 2024 totaled $4.1 million compared to $4.0 million in the same period in 2023. The net loss for the second quarter of 2024 was $4.3 million, including a non-cash loss of $0.6 million related to Angel Pharmaceuticals, our partner in China. In addition, we recorded a non-cash gain of $1.8 million from the change in fair value of Corvus' warrant liability during the second quarter 2024 associated with warrants that we sold as part of our financing completed in early May 2024. This compares to a net loss of $6.5 million for the same period in 2023, which included a $1.3 million non-cash loss related to Angel Pharmaceuticals. Total stock compensation expense for the second quarter 2024 was $0.8 million compared to $0.5 million in the same period in 2023. As of June 30, 2024, Corvus had cash, cash equivalents, and marketable securities totaling $47.3 million as compared to $27.1 million at December 31, 2023. This includes $30.3 million raised in our May financing. Based upon our current plans, We anticipate our cash provides runway into the fourth quarter of 2025. Of note, the warrants we sold in May have an exercise price of $3.50 per warrant and expire on June 30th, 2025. If all of the warrants are exercised, it will raise approximately $60 million in incremental capital. 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 is pioneering the development of selective ITK inhibition as a new therapeutic modality for a broad range of immune diseases and cancer. Soquelitinib, our next generation ITK inhibitors, have a unique mechanism of action which works upstream to modulate key T cell signaling pathways. This mechanism is particularly relevant for immune and inflammatory diseases because it results in the modulation of multiple cytokines that are the targets of current approved therapies. The emerging clinical evidence from our atopic dermatitis trial and our ongoing preclinical work support the potential for socolitinib and selective ITK inhibition in several large patient populations, including diseases such as atopic dermatitis, asthma, psoriasis, inflammatory bowel diseases, scleroderma, and other fibrotic diseases. We continue to gain confidence in our ITK inhibitor program, which we believe is now demonstrating activity in a broad range of diseases beyond lymphoma and solid tumors. Our main focus continues to be advancing our lead ITK inhibitor, socolitinib. The opportunity for ITK inhibition in immune diseases is particularly exciting given its profile as a well-tolerated oral medication, the emerging clinical evidence from our atopic dermatitis trial, and our ongoing preclinical work in a wide range of immune diseases. In cancer, we remain on track to begin enrollment in our planned, registrational, Phase III clinical trial of SOQL and NEB for patients with relapsed peripheral T-cell lymphoma in the third quarter. and our confidence in this trial continues to grow as another patient in our Phase I 1B trial experienced continued tumor regression and recently achieved a complete response after previously having a partial response at first follow-up. Now I will provide more detail on our progress, starting with soqualitinib Phase I clinical trial in patients with moderate to severe atopic dermatitis. The clinical trial is now open at several sites, and we will be adding additional sites based on our early encouraging experience. The trial is designed to enroll 64 patients with moderate to severe atopic dermatitis that have progressed on at least one prior therapy. The study is randomized, placebo-controlled, and blinded to patients and treating physicians. 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 socolitinib or placebo given for 28 days. The primary endpoint is safety and tolerability, and efficacy is measured using the clinically validated measurements of improvement in eczema area and severity index score, also known as EASI, and the investigator global assessment. The first cohort, which utilizes the lowest socolitinib dose of 100 milligrams BID, is currently enrolling, and we have a few patients that now have completed the 28-day treatment regimen and follow-up. While the patient and physician are blinded to the treatment assignment, the Corvus team is not blinded to the trial results, and I can report that, although very early, we see signs of clinical activity. So far, treated patients have shown substantial improvement in easy scores at 28 days and corresponding changes in serum cytokine levels that are consistent with soqualitinib's mechanism of action. This is encouraging given this is the lowest dose cohort. Also, we continue to find that the drug is well tolerated with no significant safety issues reported to date. There continues to be high interest in the trial and our novel drug. We anticipate sharing interim data from the initial cohorts in the fourth quarter. The early preliminary data from these initial patients demonstrate important findings in serum cytokine levels that support the potential use of ITK inhibition in other immune diseases. Many of these changes are consistent with those that we have seen in preclinical studies in other inflammatory diseases and suggest that soqualitinib could be effective in these diseases. We anticipate reporting on some of this work at the American College of Rheumatology meeting in November. We are gaining more evidence that soqualitinib and selective ITK inhibition may be an important new treatment approach for a range of immune and inflammatory diseases. This is further supported by recent work from the lab of Professor Avery August at Cornell University. Dr. August is a preeminent immunologist and one of the world's leading authorities on ITK. These investigators demonstrated that ITK controls the fate of inflammatory Th17 cells. When ITK is inhibited by socalitinib, the maturing Th17 cells convert or switch to Treg cells that suppress inflammation. Socalitinib treatment in an asthma model of mice with allergic airway inflammation significantly reduced the percentage of Th17 cells in the lung, resulting in an increase in the ratio of T regulatory cells to Th17 cells. These studies confirm and extend our understanding of the role of specific ITK inhibition in inflammation and are relevant to many immune diseases. We also continue to advance our second and third generation ITK inhibitors, which we are further optimizing for use in treating immune and inflammatory diseases. We are focusing our preclinical development on asthma, psoriasis, scleroderma, inflammatory bowel diseases, and fibrotic diseases, with a host of additional indications identified for future work. Now for an update on SOCL for peripheral T-cell lymphoma, or PTCL. While we are no longer enrolling new patients in our phase one trial, The data continues to evolve as patients on therapy complete their scheduled follow-up assessments. In the most recent data cutoff from July 15, we had one additional patient who demonstrated continued tumor regression, achieving a complete response after having a partial response at the first follow-up visit. With this update, the objective response rate, or ORR, for the Phase III eligible patients remains 9 out of 23, or 39%, but the number of complete responses has increased to 6, or 26%, complete response rate. Although not studied head-to-head, the complete response rate for soqualitinib at 26% is more than double that seen with belinostat or pralatrexate, the standard chemotherapies for PTCO that will be the comparators in our Phase III trial. Similarly, The ORR, disease control rate, progression-free survival, and overall survival for this group compares favorably to the results seen with belinostat or pralotrexate. The median PFS for our patients, which is the primary endpoint for our Phase III trial, is 6.2 months. This is substantially better than reported results for the standard agents, which is 1.6 and 3.5 months for belinostat and pralotrexate, respectively. The durability of our responses is impressive, with some of the earlier enrolled patients now maintaining their responses for more than 24 months. We plan to begin patient enrollment in our so-called registrational phase three clinical trial in relapsed PTCL in September of 2024. There are currently no FDA fully approved agents for the treatment of relapsed PTCL, and the FDA has granted orphan drug designation and fast-track designation for socolitinib for the treatment of relapsed T-cell lymphoma. Recently, we received a pediatric waiver from FDA, which means that we will not be required to conduct clinical trials in a pediatric population for this indication. We are working with or in advanced discussions with a number of leading centers in the United States, Australia, Canada, and South Korea. The study is designed to enroll 150 patients, randomized to socalitinib or standard of care, which will be either Pralatrexate or Belinostat. We anticipate about 40 centers will participate in the trial. The vast majority will be in the United States. Some of the study centers include MD Anderson, Memorial Sloan Kettering, City of Hope, Washington University, and other high-profile institutions. We are delighted to have the participation of leading academic centers with extensive experience and expertise in conducting clinical trials in T-cell lymphomas. Outside of our atopic dermatitis and PTCL trials, we're also planning a so-called solid tumor trial as a single agent in relapsed renal cell cancer, representing a new approach to immunotherapy of this disease. We also continue to advance our other clinical stage development programs. We have been one of the leaders in the development of adenosine A2A receptor antagonism for the treatment of cancer with cifrodenins. This includes our Phase 1b2 clinical trial that is being conducted in collaboration with the Kidney Cancer Research Consortium. The trial is evaluating CIFO as a potential first-line therapy for metastatic renal cell cancer in combination with ipilimumab and nivolumab. The study is enrolling at MD Anderson, Vanderbilt, Duke, and the University of Pennsylvania. The results from the trial and supported published preclinical research demonstrate the potential of the combination of an anti-CTLA-4 antibody with sifiridenate to produce striking anti-tumor efficacy that is better than what has been observed when combining SIFO with anti-PD1s. In July, a new patent covering our work with sifiridenate was issued in the United States, and foreign counterparts are pending. As of the most recent data analysis on May 31st, 32 patients were enrolled, and the trial continues to meet our pre-specified statistical hurdle for continuation, which is the achievement of at least a 50% improvement in the deep response rate of 32%, which is associated with ipilimumab and nivolumab combination alone. Deep response rate is the CR rate plus the PR rate, only counting PRs, that achieve greater than 50% tumor volume reduction. Note the usual criteria for PRs is 30% tumor reduction. The trial continues to enroll patients, and we are targeting a potential presentation of the latest data from the trial at a meeting in the fourth quarter. Outside of RCC, we also expect new preclinical data highlighting the potential of SIFO to treat prostate cancer. The preclinical and early clinical data will be presented at CITSE in November. This presentation from investigators at UCSF will highlight mechanism and potential biomarkers that are important for prostate cancer. For our anti-CD73 antibody, mupidolamab, our partner, Angel Pharmaceuticals, is continuing to enroll patients in a Phase I 1B clinical trial in China with mupidolamab alone and together with pembrolizumab in patients with non-small cell lung cancer. Based on observed partial responses with monotherapy, an expansion cohort study examining monotherapy in relapsed non-small cell lung cancer is underway in China. Summarizing the outlook for the remainder of 2024, we have important clinical milestones for soqualitinib that we expect will increase awareness of the unique mechanism of action with ITK inhibition and its potential to address a wide range of indications. Upcoming milestones include for soqualitinib, number one, starting our registrational phase three clinical trial of soqualitinib in PTCL in September. Number two, reporting interim results from our soqualitinib phase one atopic dermatitis trial in the fourth quarter, followed by final data in early 2025. Number three, present preclinical data in other immune disease indications at the ACR meeting in November. Number four, initiate a Phase II clinical trial with soclitinib in solid tumors in the fourth quarter with initial data anticipated in the second half of 2025. For cifredenant, reporting additional data from the CIFO Phase Ib2 trial in frontline renal cell cancer in the fourth quarter and reporting data in prostate cancer at the CITSE meeting in November. Our current cash runway, Our current cash gives us runway into late 2025, allowing us to execute on these important milestones and further demonstrate the value of our programs, and in particular, the significant opportunity for ITK inhibition in immunology and in cancer. 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 Q&A period.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. And should you wish to cancel your request, please press star followed by the two. And if you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Lee Watzak from Kantor. Please go ahead. Hey, great.

Congrats on the progress. Maybe just one on the phase one data from a topic dermatitis in Q4, which I wonder if we can maybe frame the expectations for us in terms of what we expect to see and what would be the bar in terms of EZ score And also understanding you are testing maybe multiple doses, so how should we think about the dose response in autoimmune?

Thank you, Lee, for those questions. I would expect by the fourth quarter we would be able to report safety and efficacy data on the first two cohorts of our clinical trial. The first two cohorts are enrolling patients treated at 100 milligrams BID and then 200 milligrams once a day. Of course, we're trying to move to a once-a-day dosing. In terms of setting the bar for what we would consider success, I would say having a majority of the patients' EASY scores above 50% improvement. Remember, this is a 28-day treatment, so that's a pretty good score in a short period of time. I would expect that data to be comparable to that that was seen with early clinical trials with Dupixent and other competitive products. So we're looking to be competitive. We think we have certain advantage in the long term with an oral drug, very good safety profile, and a novel mechanism that's going to be applicable to a range of immune and inflammatory diseases.

Okay, great. So another question, or if you talk about you are going to other immune diseases, so in terms of You know, the dose that you're going to be using, do you expect that to be the same or slightly different based on the conditions?

I would expect them to be the same. I don't expect that we're going to see gross differences in dosing. Remember, we have a very precise way to measure the pharmacodynamic effects of our drug. We can actually measure how much of the active site of the target is occupied by our drug And we're also beginning to get a handle on other biological functional assays, such as the production of different cytokines. So I don't expect to have variability from disease to disease.

Okay, great.

Thank you. Thank you. And your next question comes from the line of Roger Song from Jefferies. Please go ahead.

Great. Thanks for the update and then taking all the questions. Maybe the first one is the phase one, atopic dermatitis study enrollment. What kind of a patient baseline we should expect given you allow them to have for at least one prior therapy? Should we expect most patients will be having prior biologics or they are having multiple prior lines? And then given you give us some expectation for easy 50 for majority of the patients, so how should we think about the comparability compared to other trials for the 80? Thank you.

Well, so far, we've seen some patients who've had biologics and some who have not. So I'm not sure I'm able to predict what we'll ultimately get. But the treatment of this disease is changing over the years because there's other therapies that are effective. And So I'm not sure, Roger, I can predict exactly what the mix is that we'll get in this phase one trial. I would expect that we'll get a little bit of everything.

All right. Yeah, that makes sense. We're going to take a closer look at the reported data. And then, so in terms of the solid tumor, can you give us some rationale why it goes into the RCC as the first sort of tumor and any preclinical rationale to support that?

Okay. Okay, good question. So, first of all, remember, soclitinib or specific ITK inhibition results in what's called TH1 skewing. This, of course, was predicted based on genetic knockout studies done 20 years ago. And with the motivation for us making a highly selective drug, that blocks Th2, Th17, and induces what are called Th1 helper T cells. Those lead to the production of an increase in CD8 killer cells. We have shown in animal models, and this has been shown by other investigators, that we induce a host anti-tumor response, not just against T cell lymphomas, but in mice, we've seen activity against renal cell cancer, against GI tumors, against lung tumors, melanoma, and B-cell lymphoma. Other investigators have seen other solid tumors. Now the reason we picked renal cell cancer in the clinical trial is number one, renal cell cancer is a so-called immune responsive disease. We wanted to go after a disease where we knew that the immune system was important in controlling the tumor. We also had mouse data that showed us that Socolitinib worked really well in tumors that were resistant to anti-PD-1 therapy. So renal cell cancer provided a great opportunity for us to treat patients who would have already had failed an anti-PD-1 or a checkpoint inhibitor and had immunoresponsive tumors. And then finally, we have a very good relationship with the Kidney Cancer Research Consortium So we've really loved working with these folks. These are the world's experts in renal cell cancer. This provided a very special opportunity for us to move quickly into renal cell cancer. And finally, I might add that at the last ASCO meeting, even though no question IPI and NEVO are inducing more PRs and CRs and PFSs improved, et cetera, When you really look at some of the original data now that was comparing treatment, checkpoint inhibitor therapy to SUTENT, the standard care, it's not clear that survival has improved. So there's clearly a need for therapies in renal cell that have a different mechanism of action and potentially can improve that PFS even longer and result in an improvement in survival. So renal's a good disease, but it's a good question. You could also say study melanoma, study lung cancer. You know, there are gastric cancer. There are plenty of other immune-responsive tumors. But we were in a good position to do renal, and we had very strong rationale for that.

Yeah, that makes sense, you know, multi-factory factors to decide the indication selection. Maybe just last one, quick one, given you're moving – you know, expanding the application for the so-called Latin Dev. So how should we think about the strategic decision in terms of you moving everything by itself or you maybe at some point you were looking to partner with some other company to be able to more efficiently expand the program? Thank you.

Okay, well, we're really excited about the results, both in lymphoma and in early results in immune disease, not to mention strong preclinical data. We're going to push soqualitinib forward in immune diseases and cancer as fast as we can. Of course, we have a lot of partnering discussions ongoing, and Mr. Arcaro, our chief business officer, is busily working away on those. But we're pushing both fronts forward as quickly and as fast as we can. We'll talk to partners. And we'll determine as we get into these discussions based on the economics, the data, et cetera, which, you know, how to expand these appropriately.

Excellent. Thank you.

Thank you. And your next question comes from the line of Aiden Husainov from Lovenberg. Please go ahead.

Hi, Richard and team. Congratulations with the progress this quarter, and congratulations with converting one PR into a CR. So you've got six CRs and three PRs now, and usually we get, vice versa, usually we get majority of the patients getting PR in some other trials. So how would you describe these CR patients? Why do you think they are responding so well, the ones that have CRs, complete responses?

Um, so how would I describe the patient? Let me take that first. Well, if you look at our last CR, this was a patient who grew through CHOP. CHOP chemotherapy is an aggressive chemotherapy. Uh, he grew through that. He did not respond to that. Um, then he went on a protocol called, uh, chemo regimen called ICE. Uh, ifosfamizes platinum etoposide, very aggressive chemotherapy. The patient had a very, um, had a very short partial response and relapsed and then goes on our drug and has a CR. So that's how I would describe that. Now, why does that happen? I'm not sure I can answer that question other than that this is a completely different mechanism. Our drug has a completely different mechanism of action. And even though this patient had chemorefractory disease, The immune approach was very effective in him. So we do not yet have, I would say, a specific biomarker to predict responsiveness, although in our phase three trial, where we'll have more patients, we do have biopsies. We do also have a research program that is going to be looking, using all kinds of very sophisticated techniques, looking at sequencing of the tumor, sequencing of the host infiltrate in these tumors, and, of course, they're circulating normal blood cells to try to figure out what is predictive. I might also add that almost all of the patients on our trial are so-called GATA3 positive. GATA3 is a transcription factor that's called the master regulator of helper T cells or Th2 cells. GATA-3 positive tumors are known, it's in the literature, to be a very poor prognostic sign, very poor. In fact, my colleague Ryan Wilcox at the University of Michigan published a paper a few years ago in PTCL where GATA-3 positive patients who went in a hospice did just as well as those that got chemotherapy. So this is a really bad disease, and I I think that we're having a very significant effect on basically an unmanageable patient population.

Thank you. Really helpful. And another question I have is on second-generation ITK inhibitors. So could you remind us what is going to be different with socolitinib, and when do you think they will enter the clinics?

So the second and third generation ITK inhibitors, some have similar chemical structures with just slight changes. Some are very different chemical structures. Some are covalent. Some are non-covalent or reversible. We've been examining each of those agents in various biologic assays that we have, and we see some differences in their impact on, for example, Th2 versus Th17 inhibitors. versus TH1. So I would say we're still in the process now of identifying the next generation for IND-enabling studies. I think we're 12 to 15 months away from studies in immune or inflammatory diseases. In the meantime, we blast forward with socalinib in immunology, immune diseases, and cancer.

all right thank you thanks so much and congrats for the progress you scored thank you once again should you have a question please press star then the number one on your telephone keypad your next question comes from the line of jeff jones from oppenheimer please go ahead good afternoon guys and congrats on all the progress it's great to see it um i guess

Quick question on the AD data. Any thoughts on how you'll be presenting this? Will this be at a conference or is this something you might do more informally by press release or investor call?

Jeff, probably by some sort of investor call or R and D update or something like that. I'm not sure there's any meeting around the end of the year. That's appropriate. We do have this. We do have meetings, but they're not really geared towards immune diseases. We'll, we'll be at 60. we'll be at a GU oncology meeting in November, but probably be in the form of a press release or investor conference call something like that.

Okay, great. And with respect to the pivotal study, it sounds like you're a, you're right on the cusp of kicking things off, but any gating items that we should be thinking about that need to get knocked down ahead of moving forward? Or, you know, is this ready to go? I think you said in September.

No gating items. We've got complete clearance from FDA. We've had close communication with them. Our sites are ready to go. I think we have contracts even in place with some of them and all the approvals there. Right now, we're just pressure testing some of our computer systems to make sure there are no glitches. Really, there's nothing in our way now that I can see.

And then I guess the last question, just a little further clarity on the next generation of ITK inhibitors that you spoke to earlier. Sounds like they're a little over a year away, if I understood correctly, from the clinic. But maybe some clarity there. And are these things you would think of moving ahead into the clinic yourself? Or would that await, you know, a partner on some of these INI indications, as you've spoken to before?

Both of those things are being considered. Okay. With our backup, the second and third generation compounds, first of all, we have to do, you know, more testing in animals. We think certain ones would be better for particular diseases. And so, you know, we just need to get more information on that. But right now, we love sulcolitinib for immune diseases.

All right. Great. Thank you very much, guys.

Thank you. And your next question comes from the line of Greg Souvenage from Missoula. Please go ahead.

Good afternoon. Thanks for taking my questions. It's nice to see the progress. First question, if I could, is just around the current budget or operating plan vis-a-vis the cash runway. Can you just remind us what the current budget actually allows for in terms of the programs that are funded, and to what stage are those programs funded, again, given the current cash situation?

Sure. Sure. The programs that we've described in terms of the beginning of the Phase III trial, the completion of our Phase I 1, 1B trial, the solid tumor trial, and the SIFO trial are all in the budget with our cash forecast into the end of 2025.

Okay, thanks so much for that clarification. And then just on the pivotal phase three study that you're planning to start by September, I might have missed this previously, but can you provide just kind of a sketch of kind of the timelines of when you might expect to get to a data readout for that study?

So first of all, the phase three registration trial, I said it will start in September, not by September. And so that trial enrolls 150 patients. There's an interim analysis at 65 events, PFS events. That's probably a year away after we start the trial, 18 months to complete enrollment, two years to get the data, less than two years to get the data, top line data.

Okay. Thank you very much.

Thank you. There are no further questions at this time.

Okay. Operator, thank you. Thank you everyone for participating in our call. We look forward to updating you at future conference calls. Thank you very much.

Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect.