Corvus Pharmaceuticals, Inc.

Good afternoon, everyone. Thank you for standing by, and welcome to the Corvus Pharmaceuticals Second Quarter 2025 Business Update and Financials 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 2025 Business Updates 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 Varkara, 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' quarterly report on Form 10-Q for the quarter ended June 30, 2025, 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 Lace Lee. Lace?

Thank you, Zach. I will begin with a brief overview of our second quarter 2025 financials, and then turn the call over to Richard for a business update. Research and development expenses in the second quarter of 2025 totaled $7.9 million compared to $4.1 million for the same period in 2024. The $3.8 million increase was primarily due to higher clinical trial and manufacturing costs associated with the development of socalitinib as well as an increase in personnel-related costs. The net loss for the second quarter of 2025 was $8 million, including a non-cash loss of $400,000 related to Angel Pharmaceuticals, our partner in China. In addition, we recorded a non-cash gain of $2 million from the change in fair value of Corvus' warrant liability during the second quarter of 2025. This compares to a net loss of $4.3 million for the same period in 2024, which included a $1.8 million non-cash gain related to the change in fair value of Corvus' warrant liability and a $600,000 non-cash loss related to Angel Pharmaceuticals. Total stock compensation expense for the second quarter 2025 was $1.3 million, compared to $800,000 in the same period in 2024. As of June 30, 2025, Corvus had cash, cash equivalents, and marketable securities totaling $74.4 million, as compared to $52 million at December 31, 2024. During the second quarter, all of the remaining common stock warrants were exercised, resulting in cash proceeds of approximately $35.7 million, which included $2 million from warrants exercised by our CEO, Dr. Miller. Based on our current plans, we expect our current cash to fund operations into the fourth quarter of 2026. 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 update call. Our main focus continues to be the development of socolitinib for atopic dermatitis, where we believe we are uniquely positioned with an oral medication featuring a novel mechanism of action that so far has shown favorable safety and efficacy profile. We are making significant progress on multiple fronts, including new data from our Phase 1 trial reported in June that increases our confidence in the long-term potential for soqualitinib in this indication and beyond. On today's call, I will provide a high-level recap of this data review our go-forward clinical plans, including our planned phase two trial design, and briefly discuss our progress with our other clinical programs. We view the data through cohort three of the phase one trial as very encouraging. all of the treatment cohorts demonstrated a favorable safety and efficacy profile compared to placebo, and cohort three data is especially exciting, demonstrating earlier and deeper and more durable responses compared to cohorts one and two. Specifically, at just four weeks of treatment, cohort three showed a mean percent reduction of EASY score of 64.8%, compared to 54.6% for the combined cohorts 1 and 2, and 34.4% for placebo. No placebo patients achieved the clinically meaningful endpoints of EZ75, EZ90, or IgA0 or 1. We compare this to the results seen for the soqualitinib patients where many achieved these endpoints. In cohort 3, 50% of patients achieved EZ75, 8% achieved 90, easy 90, and 25% achieved IgA 0 or 1. This compares to 29%, 4%, and 21% in the combined cohorts 1 and 2 that were treated respectively. In terms of the kinetics of response, cohort 3 showed earlier and deeper separation from placebo beginning at day 8 with the easy score improvement continuing through day 15 and 28 and far beyond. For cohorts one and two, the separation from placebo began at day 15 and showed continued separation at day 28. For all three cohorts, this separation was maintained during the 30-day post-treatment follow-up period. In addition, for all three cohorts, the downward slope of the curves at day 15 to day 28 suggests that longer treatment duration could potentially deepen responses further. We also have found a remarkable impact on PPNRS, a patient self-reported assessment of itch. A number of cohort three patients reported steep drops in the score beginning at day eight, which aligned with the reductions we see in serum cytokine levels of IL-31 and IL-33. Both of these cytokines are known to be involved in the itch response. In addition, other biomarker data from the trial continues to support the ITK inhibition mechanism of action, including the potential induction of anti-inflammatory T regulatory cells. Regarding safety, there were no safety issues observed with socolitinib, with no significant differences between treatment and placebo groups, and no clinically significant laboratory abnormalities were seen. The total current treatment experience with socolitinib now involves over 150 patients with T-cell lymphoma or atopic dermatitis, representing more than 9,000 patient treatment days. In our lymphoma trial, some patients have been on continuous daily therapy up to two years. Based on the results obtained to date, we are advancing the clinical development of socolitinib in two ways. First, we amended the phase one trial protocol to replace the previously planned cohort four with an extension cohort four that will evaluate an additional 24 patients at the cohort three dose of 200 milligrams twice per day given for eight weeks with an additional 30-day follow-up without therapy. The 24 patients will be randomized in a blinded fashion, one-to-one with placebo, 12 active and 12 placebo. The extension cohort four will give us data on a longer treatment duration of eight weeks versus four weeks seen with cohorts one and three. We have now enrolled more than half the patients and continue to anticipate that data from the extension cohort will be available in the fourth quarter. Second, we are finalizing the design of our planned phase two clinical trial of Socolidinib for atopic dermatitis and I am happy to share those plans with you now. The trial will be an international, randomized, placebo-controlled, and double-blinded. The company will also be blinded. It will enroll approximately 200 patients with moderate to severe atopic dermatitis that have failed at least one prior topical or systemic therapy. Patients will be required to have a baseline EASY score that is greater than or equal to 16 IgA of three or four, and body surface involvement that is greater than or equal to 10%. The patients will be randomized equally into four cohorts, 50 patients in each cohort receiving either 200 milligrams soqualitinib once per day, 200 milligrams twice per day, 400 milligrams once per day, or placebo. Let me repeat those groups. 200 milligrams once per day, 200 milligrams twice per day, 400 milligrams once per day, or placebo. The treatment period will be 12 weeks, and patients will be followed for an additional 30 days without therapy. The primary endpoint will be the percent change in EASY score from baseline to week 12. Secondary endpoints will include the percent of patients achieving EZ75 or IgA01 at week 12. The impact on itch will be measured by percent of patients achieving greater than or equal to four-point decrease in the PPNRS scale at week 12, and of course, safety as well. We anticipate including 30 to 40 clinical trial sites globally. We are currently finalizing the trial design with the investigators, with strong interest from many leading centers, and we are on track to initiate the trial before the end of the year. Outside of our clinical trials, our partner in China, Angel Pharmaceuticals, plans to initiate a Phase 1B2 trial of Soquelitinib for atopic dermatitis in China. This study will enroll 48 patients and is anticipated to build on the data from our Phase 1 trial by studying a longer treatment period of 12 weeks and an additional dosing option of 400 milligrams once daily, in line with the direction we are headed with our Phase II trial. Briefly, on our other clinical programs, we have submitted an abstract to present the final results from our Phase I clinical trial of soqualitinib for the treatment of relapsed refractory T-cell lymphomas at the American Society of Hematology meeting in December. We continue to enroll patients in our registrational phase 3 trial of soqualitinib in patients with relapsed PTCL, driving towards interim data in late 2026. In addition, patient enrollment is ongoing in our phase 2 trial of soqualitinib in patients with ALPS, autoimmune lymphoproliferative syndrome. Depending on enrollment trends, it is possible we could see initial data from the phase 2 ALPS study in late 2025 or early 2026. We have completed enrollment in our phase two trial with cifaradenin in renal cell cancer. These data will be presented in an oral presentation in October at the ESMO meeting, European Society for Medical Oncology. In closing, the soqualitinib results in atopic dermatitis and T cell lymphoma underscore the importance of ITK as a critical target for a range of diseases involving inflammation and cancer and the broad potential for socalitinib in many areas of medicine, such as dermatology, oncology, rheumatology, pulmonary medicine, and other areas. We feel we may be entering a new era of immunotherapy for autoimmune inflammatory diseases that is based on drugs with novel mechanisms of action that modulate or rebalance immunity by keeping pro-inflammatory or aberrant T cells in check. This potential has motivated us to complement the development of soqualitinib with the discovery and development of next-generation ITK inhibitors with unique properties. In the near term, we look forward to continuing the clinical development of soqualitinib in atopic dermatitis and PTCL and look forward to providing updates on our programs in the coming quarters. I will now turn the call over to the operator for a questions and answer period. Operator?

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star key followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star key followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Jeff Jones. Your line is now open.

Good afternoon, guys, and thanks for taking the question, and congrats on a hugely productive quarter. I guess you've got a plethora of opportunities in front of you as you think about SIFO in autoimmune disease. in addition to accelerating as you are in the phase two, how are you thinking about next indications and, you know, financially being able to support the many opportunities that SIFO represents?

Okay. So, Jeff, let me first correct. SIFO is renal cell cancer, but socolitinib, Obviously, we're pursuing aggressively atopic dermatitis, but we've already begun to think about follow-up indications. And the two indications that we're thinking about, we're thinking about two of them. One, of course, we sort of want to maintain our presence in dermatology. We have experience there now. We have a lot of information on, we think, the behavior of the drug in these cutaneous diseases. So I think a likely target for us might be something like hidradenitis suppurativa. There's totally unmet need there, I would say. And then the other disease moving away from dermatology in the inflammation area would be pulmonary disease. Asthma is probably scientifically the most justification for a disease is probably asthma. We have three or four different animal models where we see excellent activity of our drug in asthma, both acute and chronic. Also, the mechanism of action, specifically the inhibition of what are called innate lymphoid cells, really leads us to believe that we might have a very important novel approach to asthma and perhaps other pulmonary diseases. But you're quite right. It is difficult for us to pursue all these indications, but we've shown that we're very adept and agile in terms of efficiently maximizing the value of, I'd say, each of our products.

I appreciate that. And then the follow-up question is actually on SIFO. In terms of the renal update coming at ESMO, how are you thinking about next steps for the program, assuming within a world that there's going to be a positive update here on the program?

Okay, so just to remind everyone, cifredenant is an A2A antagonist, an oral medication. We did a phase two study in first line renal cell cancer, patients who are receiving ipinevo. So we added the A2A antagonist. And the idea there, of course, is to look at response rate, but also very importantly to look at, since they stay on the A2A antagonist every day for a long time, they get the ipinevo for a short time, I think one of the things that we'll be looking for in addition to, of course, objective responses is the durability of responses and their PFS, in other words. So let's see what that data is. This is a study that was conducted by the Kidney Cancer Consortium, several centers, MD Anderson, Vanderbilt, and several others. They ran that study. We, of course, provided the drug and some financial support. So let's see what's presented in an oral presentation at ESMO, and then we'll go from there. Based on the data that comes out of that, we'll make our decisions about how to follow up on that. Okay, but it is quite a unique study. I mean, it's first-line disease. It's renal cell cancer. We know that's immunoresponsive. I'm emphasizing this because I know today some other company came out with some A2A stuff and I think it was metastatic colon cancer and they had chemotherapy and a number of various treatments there. And one of the things that we've always done well is to carefully study our agents initially as a monotherapy and then move into combinations where we have a good understanding of the efficacy and safety and mechanism. So that's helped us a lot. Does that answer your question?

It does. Thank you, Richard. I'll hop back into the queue.

Our next question comes from Craig Suvanovich. Please go ahead.

Hi, this is Sam, also Greg. Thanks for taking the question and congrats on the progress. Maybe just a quick one on Zolkalibnib and PTCL. Just curious how the enrollment is going and if the previous guidance for data in late 2026 is still there. Thank you.

Our guidance is still intact. We're enrolling according to plan. We have probably about 20 centers open now. These are the best of the best centers in the United States and Canada. So everything there is going according to plan. And, you know, we're hoping that our presentation on the phase one will really start to focus attention on this drug.

Got it. Thanks for the update.

Your next call comes from Aiden Hussainaz. Please go ahead.

Hi, everyone. Thank you for taking questions and congrats with the quarter. A couple of questions from us. Could you walk us through the decision process, thinking process regarding the phase two trial design for atopic dermatitis? I appreciate giving us color, but four different cohorts, 200 QD, 200 BID, 400 QD, and placebo. So far we see in atopic dermatitis the most productive cohort is cohort three. So, I was curious to better understand, was it more like an FDA suggestion to give a little bit weaker dose, a little bit harder, a little bit stronger dose? Just walk us through the process, if you could.

Okay. Thank you for that question. So, first of all, there's a lot of precedence now for phase two trials in atopic dermatitis. We're not the first company to do that. And, you know, a 200-patient trial with roughly 50 per arm is, I would say, pretty standard. And you're correct, Aiden. Usually there is, you know, the FDA wants to see some dosing, different doses studied so that you can determine what's the lowest dose that's possibly effective and, you know, what's a higher dose that becomes maybe not more effective than another dose. So we selected these doses because the 200 once a day we think is active. We don't think it's going to be, and we've already tested it. You've seen that data in cohort two. I think that will be an active dose. It's a daily dose. Some people, of course, prefer a single dose, once a day dosing for atopic dermatitis. But the 200BID, we saw a better response. That's a doubling of the dose in our cohort three. And that's what we're studying in our extension now. So that's the second cohort, 200 once a day, 200 twice a day. And then, of course, we want to do 400 once a day, same total dose. as the 200BID, but given once a day. I think we can do once a day dosing. So this will give us an opportunity to confirm that. And then, of course, placebo. I can't emphasize enough how important it is to have placebos in phase one and phase two trials. I am seeing companies now do these studies with no placebos, and it's actually astounding to me. But in any event, so 50 patients in each arm, 200 total. Placebo control, totally blinded, companies blinded. The endpoints are pretty standard. The mean percent change in EASY is the usual primary endpoint for a Phase II study, secondary endpoints being EASY75s and IgA01s. So that's all really pretty standard. Yeah, and we're moving to 12 weeks of therapy. We'll have experience with eight weeks of therapy, which we already have right now. And we think that, you know, that should give us a pretty good result. In terms of the statistics, if we have even a 20% improvement in any of the groups, we can just look at any one group versus the placebo group. If we're 20%, 22% better, we expect to be better than that, but even if that's the lower end of our information, we have an 80% power to see that, you know, a p-value of 0.05 on that. And in a Phase II trial, that'll be fine. So the sizes statistically make sense. The dosing makes sense based on what we know, what we also know about patients. occupancy and the receptor. And we think this is a very manageable trial for us. There's a lot of experience in doing these international phase twos. 200 patients would be very manageable for a company like Corvus. I hope that answered your question.

Appreciate it. Yeah, absolutely. It does. Just wanted to couple of follow-up questions on this trial. So I know this could be a little bit early, but would you be able to provide the timeline? When do you think we can see the results? I mean, I understand this is a randomized blind trial, but if you could give us some hints in terms of when it could be ready.

Okay, no, happy to give that. We've, of course, been thinking about that. I think you're looking at enrollment 12 to 15 months. Maybe you have results in 18 months. And we'll start the trial in December. And we have a couple of things, I think, going for us. Obviously, it's oral. you know, that should help enrollment. You know, I think the second thing, novel mechanism of action, I think that will also facilitate enrollment. We're not requiring biopsies, although we're going to have some centers where we're going to try to motivate people to do some biopsies, but of course that should also improve enrollment. But the biggest thing that's going to facilitate enrollment is that we are allowing patients who have failed systemic therapies. So that really opens up the potential patient population. So many of these studies, they won't take you if you've already failed a systemic therapy, a JAK inhibitor, let's say, or a DUPI or something like that, or an anti-IL-13. But we're allowing those patients. And the reason we're allowing those patients is because our mechanism of action is completely distinct from those. number one, and number two. We've had patients like that on our studies so far, and it hasn't mattered. They've done just as well.

So, my assumption is that you'll probably be stratifying, you know, based on which exactly therapy they failed, the topical or systemic, but yes? Oh, absolutely.

I mean, there are a few things you might stratify on. Obviously, easy score, I mean, if you're baseline easy score, that will be a stratification factor. and whether or not you failed the systemic therapy. Yes. We haven't gotten into that degree of detail yet, but there'll probably be two or three different stratification factors. You can't get too many in a study with, you know, only 200 patients.

Right, right. Yeah, and my question was about the next generation ITK inhibitor. As we move forward with that, could you give us some thoughts on how it will be different from soculitinib and which indications you'd be planning to target if it's not early?

Okay, so first of all, for certain intellectual property reasons, I'd rather not go into the details of how they're different, because there are a lot of people who are now working on ITK inhibitors, and I'd rather not go into the details. But suffice it to say, let me answer your question this way. ITK plays many roles in itself. T-cell receptor signaling, everything from T-cell receptor signaling to control of Th2 cytokine production to apoptosis. And we think we have compounds that might work better for some of those indications than others or some of those mechanisms. So let me answer it that way.

Okay. Thank you. Thanks so much, Richard, and congrats for the quarter again.

There are no further questions at this time.

I will now turn the call over to Richard Miller. Please continue.

Thank you, operator. First of all, let me thank everyone for participating in today's call. Look forward to updating you again in the next quarter and, you know, updating you on the progress with all our clinical trials. Thank you very much.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.