Curis, Inc. (CRIS) Q1 2018 Earnings Report, Transcript and Summary

Good morning, and welcome to the Curis First Quarter 2018 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to the Chief Operating and Chief Financial Officer of the company, Mr. James Dentzer. Please go ahead, sir..

Thank you, operator, and welcome to Curis’s first quarter 2018 earnings call. Before we begin, I would like to encourage everyone to go to the Investor section of curis.com to find our earnings press release and related financial tables. I would also like to remind everyone that we 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 our actual results may differ materially. I encourage you to consult our SEC filings for additional detail. Now I will turn the call over to our President and CEO, Dr. Ali Fattaey.

Thank you, Jim. Good morning, everyone, and thank you for joining us today. As we move into the second quarter of the year, we are excited about the depth of our clinical pipeline. This is the first time for Curis to have three drug candidates in clinical development, which reflects the evolution and strategy of our organization. Our achievements in the first quarter included preparation of a pivotal study of CUDC-907 in patients with relapsed or refractory DLBCL, which tumors have MYC-alteration. This is a population with no durable treatment options. Secondly, testing of CA-170, our small molecule PDL1 and VISTA checkpoint inhibitor in patients at higher dose levels and using twice-daily dosing in our Phase 1 trial as well as our collaborator Aurigene enrolling patients at sites in India in the Phase 2 trial. Thirdly, initiation of enrollment and dosing in patients with lymphomas for our IRAK4 inhibitor CA-4948, the first such drug candidate to examine patients with cancer. And finally completing IND enabling studies of CA-327, our small molecule PDL1 and TIM3 antagonist in preparation for regulatory filing. These achievements show our progress towards our goal which is developing new oncology therapeutics that improve treatment options and bringing these therapeutics to patients with our own capabilities. Today I will provide a brief update on each of our pipeline programs. Our most advanced clinical candidate previously known as CUDC-907 and now designated from the fimepinostat, have shown significant clinical benefit in patients with relapsed refractory DLBCL with MYC-alteration. Thus far based on treating a total of 105 patients with relapsed refractory DLBCL who were not transplant eligible, treatment with fimepinostat have resulted in 19 objective responses, 9 of which were complete responses. The majority of these responses, 14 of them were among the 60 patients whose tumors were identified to have MYC-alterations. Furthermore, the median duration of response for the patients treated with fimepinostat was 14 months. We believe this level of monotherapy benefit in this patient population is significant and we are continuing our discussions with regulatory agencies and working to initiate a pivotal study based on the results of which we'd expect to secure registration of fimepinostat for this population of patients with DLBCL. In parallel, we continue to work with our commercial manufacturers and potential providers of an appropriate companion diagnostic. We expect to provide a more detailed update on the development path and plan for fimepinostat before the end of this quarter. Our second clinical candidate CA-170 is the first orally administered small molecule checkpoint antagonist to enter clinical development, which we are developing in collaboration with our partner Aurigene. CA-170 is a dual inhibitor targeting the PDL1 [indiscernible] as well as the VISTA inhibitory immune checkpoint. In our ongoing Phase 1 trial CA-170 have had a good safety profile, while evidence of potent immune modulation and patient tumor shrinkages have been observed at doses up to 800 milligram administered once-daily. The trial continues to investigate increasing dose levels and twice-daily oral administration to maximize patient drug exposure. Our partner Aurigene also continues with enrollment in a Phase 2 trial of CA-170 in patient -- patients with selected cancer types in multiple centers in India. This Phase 2 study is providing access to a significant population of patients who have not experienced prior immunotherapy or expensive prior anticancer treatment. Enrollment in these trials is progressing according to our expectations and we plan to provide additional updates from CA-170 studies by mid-year 2018. Our third clinical candidate CA-4948 is currently the only IRAK4 kinase inhibitor in clinical development for treatment of patients with cancer. We recently announced the initiation of a Phase 1 trial enrolling patients with non-Hodgkin's lymphoma clearing the dose escalation stage, and in particular those patients with cancers that have a prevalence of alterations in the MYD88 gene or the Toll-like receptor signaling pathway. The aim of this -- the aims of this study are to establish safety and tolerability of CA-4948, to determine the pharmacokinetic and pharmacodynamic profile for the drug candidate, to establish the recommended Phase 2 dose and to measure any anticancer activity in treated patients. We continue to enroll patients and expect to provide an update in the second-half of 2018 for this drug candidate. In summary, in the first quarter of 2018, we saw progress in each of our clinical programs we are excited by the potential of fimepinostat to address the evident needs for patients with MYC-altered DLBCL, and look forward to providing this treatment option to patients and treating physicians. Our clinical studies as well as the trial being conducted by our partner Aurigene continue to enroll patients and we look forward to providing further updates throughout the year. With that, I will turn the call over to Jim for a discussion of our financial results now.

Thank you, Ali. For the first quarter of 2018, we reported a net loss of $10.7 million or $0.07 per basic and diluted share as compared to a net loss of $15.7 million or $0.11 per basic and diluted share for the same prior year period. Revenues for the quarter ended March 31, 2018, were $2.5 million as compared to $2.1 million for the same period in 2017. Revenues for both periods comprised primarily royalty revenues recorded on Genentech and Roche's net sales of Erivedge. Operating expenses were $12.4 million for the first quarter of 2018 as compared to $17.2 million for the same period in 2017. Research and development expenses were $8.3 million for the first quarter of 2018 as compared to $13.5 million for the same period in 2017. The decrease in research and development expense was primarily due to a payment to Aurigene of $3.8 million for an exclusivity option in January 2017 as well as decreased costs related to clinical activities for fimepinostat and CA-170. General and administrative expenses were $4 million for the first quarter of 2018 as compared to $3.5 million for the same period in 2017. The increase in general and administrative expenses was driven primarily by higher legal, professional and consulting services for the period. Other expense was $0.8 million for the first quarter of 2018 as compared to $0.7 million for the same period in 2017. Other expense primarily consisted of interest expense related to the debt obligations of Curis Royalty, a wholly owned subsidiary of Curis. As of March 31, 2018, our cash, cash equivalents, marketable securities and investments totaled $48.5 million and there were approximately 165.6 million shares of common stock outstanding. With that, we'll open the call for questions. Operator?

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Adnan Butt with Guggenheim.

Hey, good morning. Thanks for taking the question. I will start with 907, please Ali. Previously you were expected and updated some of [indiscernible] in the quarter. Could I ask if that’s a timing and scheduling issue with the FDA, or is there something specific that you would like to show them or share with them? And secondly, where would you be able to discuss the pivotal trial design will [indiscernible] patients that will have and the effects that you might have to [indiscernible]?

Sure. Thank you, Adnan. So our discussions with the FDA and other regulatory agencies is continuing. I think a little bit of that is the timing for us and the extend of our discussions with them. So it's not really regarding a specific scheduling associated with that. Having said that, we do continue to expect to have readouts and feedback that we will share as they become available and once appropriate. With respect to the design or the population of patients for the pivotal study itself, we would do that at the same time as we have the feedback from the regulators. As I indicated in the call today, we do view the monotherapy activity of CUDC-907 to be significant. Much of our focus is in the design of a monotherapy study at this stage for the year and for the study itself. Although we have options for combination, but we view the monotherapy as being an important part of CUDC-907s overall development and we view that as the right study at this stage.

Ali, I hate the [indiscernible] but what gives you confidence that by the end of the second -- by the end of this quarter you will have design and FDA discussions as well [indiscernible]?

We do view. That -- that’s the appropriate timing. That’s correct, Adnan, in terms of both having the design for the study or more details associated with it and more feedback from the regulators as well. I also want to indicate that we now do refer to CUDC-907 as fimepinostat that is designated name for it. And we are quite excited about the continued development of this drug candidate at this stage.

Okay. Thanks for fimepinostat update. Let me just ask on 907, sorry 170 before I get into the queue. Could you, if I missed it, could you -- in case I missed it, could you tell us what -- where you’re in terms of dosing? So are you still dosing [indiscernible] with all the dosing cohorts now [indiscernible]?

Yes, Adnan, that’s a good point. I think we did update our corporate presentation last time [indiscernible]. We did update our corporate presentation last time and showed some of the data for the 600 milligram twice-daily dosing, which would be a 1,200 milligram total daily dosing for the drugs. Prior to that at the end of last year, we’ve presented all of the data that was available for once-daily dosing associated with it. Based on our view of twice-daily dosing and drug exposure for the patients, the advantage that we observed with twice-daily is that the trough levels of the drug concentration in patients plasma is significantly higher than with once-daily dosing. We therefore made the determination that twice-daily dosing is the appropriate way of administering this drug for occupation of the receptors as well as saturating that. So in ongoing dose escalation, everything at the moment is using twice-daily administration of the drug, and we have gone beyond the presented in the slide deck -- in the corporate slide deck the 600 milligram twice-daily have now also been escalated and that will continue for us at this stage.

Then Ali [indiscernible] are you still on track for 170 Phase 2 update sometime this year, because if I remember correctly, that began with once per day dosing, right?

That’s correct. Adnan, I want to be mindful that the study, its being conducted by our colleagues at Aurigene. I think our expectation is to provide an update on the overall clinical experience with CA-170 including our dose escalation and as much of the data as possible for the study that’s being conducted by our colleagues in India. Whether that study will have a similar dose and schedule or how much of that will be available for the update, I can't speak to it at this point. But we'd provide all the update that’s available from both of the studies at that time.

Okay. Thank you.

Thank you, Adnan.

[Operator Instructions] Our next question comes from Peter Lawson with SunTrust Robinson Humphrey.

Hey, Ali. Thanks for taking my questions. Just on CA-170, where would we see that update you mentioned kind of a midyear update, but that’s just the press release, [indiscernible] ASCO or is there another venue you think in three?

Any of those are possible. I think if the data is a little bit -- we'd -- well, first I should say that we'd always like to present our data at Scientific Conference and then speak to them. It's that opportunity. It does not lend itself to us doing that then we would press release data and/or provide a call to make those update. So I would leave it at that at this stage. There are opportunities at scientific conferences, but so -- once we come out with it, it will -- that will be in the form of a press release and then a call or in one of the conferences coming up.

Right. Would you press release a single PR [ph] when that happens?

At this stage, it's a little more detail than we’d like to do. Our preference always is to present the data that is available for us including clinical activity and other parameters of the drug whether a single response is meriting of a press release, I don’t think I can comment on that at this stage.

Right. And then, so as -- in terms like you’ve got -- you got a mix kind of the Phase 1, Phase 2, U.S., or yield data, origins data, you kind of combine the whole when you release that data as much as possibly it seems?

That’s our expectation. That’s correct, Peter.

Got you. Okay. And thanks for taking the questions.

Thank you, Peter.

At this time, there are no more questions in the queue. So, I will --I'd like to turn the conference back over to the company's President and Chief Executive Officer, Dr. Ali Fattaey.

Thank you, everyone, and thank you, operator. I would like to finish by thanking the Curis team for their hard work, advancing our drug candidates, and our partner Aurigene for the productive relationship that we have built with them. I would like to thank also Genentech and Roche for their work that they do with commercialization of our approved drug Erivedge, as well as our investigators for their support with the development of our drug candidates. Most importantly, I’d like to thank the patients and their families for participating in our trials, of our drug candidates and making them become a reality. Thank you, everyone.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.