Curis, Inc. (CRIS) Q1 2022 Earnings Report, Transcript and Summary

00:07 Good afternoon everyone and welcome to Curis' First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please also note, today’s event is being recorded. At this time, I’d now like to turn the conference call over to Curis’ Vice President of Investor Relations and Corporate Communications, Craig West. 00:48 Sir, please go ahead.

00:51 Thank you and welcome to Curis' first quarter 2022 earnings call. Before we begin, I would encourage everyone to go to the Investors Section of our website at www.curis.com to find our first quarter 2022 earnings release and related financial tables. 01:13 I would also like to remind everyone that during the call, 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 actual results may differ materially. For additional details, please see our SEC filings. 01:35 Joining me on today's call are Jim Dentzer, President and Chief Executive Officer; Bill Steinkrauss, Chief Financial Officer and Chief Administrative Officer; and Bob Martell, Head of R&D. We will also be available for a question-and-answer period at the end of the call. 01:54 And I'd now like to turn the call over to Jim. Jim?

01:58 Thanks, Craig. Good afternoon everyone and welcome to Curis' first quarter 2022 earnings call. For those of you who haven't yet had the pleasure of meeting Craig, he recently joined the company as our Vice President of Investor Relations and Corporate Communications and we're delighted to have him on the team. 02:17 Every day at Curis, we strive to develop the next generation of first-in-class cancer therapies that meaningfully improve and extend patient’s lives. The first quarter of 2022 has been a reminder that the patent clinical development is not always a straight line. And that we need to collaborate with many different stakeholders along the way. 02:41 We are encouraged by the knowledge that we have a drug that works as a single agent in exactly the places we expect it to. Further, the company is well positioned to manage through the dynamics of drug development, and we remain confident in our pipeline, our strategy, and our team. 03:02 Let's start our update tonight with our lead asset, emavusertib, formerly known as CA-4948. Our first-in-class program specifically designed to target IRAK4 and FLT3. Emavusertib is currently being evaluated in three clinical studies. 03:21 First, the TakeAim Leukemia study, a Phase 1/2 study with monotherapy and combination arms for patients with relapsed or refractory acute myeloid leukemia or AML, and high risk myelodysplastic syndromes or MDS. 03:40 Second, the TakeAim Lymphoma study, a Phase 1/2 combination study with ibrutinib for patients with relapsed or refractory NHL and other hematologic malignancies. And third, the Phase 2 Lucas study, evaluating emavusertib in patients with lower risk MDS. 04:03 In January, we announced the positive updated clinical data from the TakeAim Leukemia study, showing early, but compelling response rates in patients with spliceosome or FLT3 mutation. These results demonstrated both a manageable safety profile and improved anti-cancer activity compared with the current standard of care. 04:25 Patients enrolling in this study are often in [rough shape] [ph]. They tend to be heavily pre-treated and have an expected median survival of less than six months. Given that baseline, we've been very encouraged by the study results to date. 04:43 We'll be presenting the data highlighted in January at the ASCO and EHA and Medical Conferences in June. Beyond that, we expect to report updated data from the monotherapy and combination portions of the study later this year. 04:59 In April, the FDA asked us to pause the enrollment of new patients, placing partial clinical holds on both the TakeAim Leukemia and TakeAim Lymphoma trials following Curis’ report to the FDA of the [death] [ph] of a relapsed refractory AML patient. Who after being on study drug for nine cycles, experienced among several other conditions rhabdomyolysis. 05:28 Patient safety is always our top priority. We're working with the FDA to provide additional data related to rhabdomyolysis and also our recommendation of 300 milligrams BID as the recommended Phase 2 dose. And we hope to resolve the partial hold, as quickly as possible. 05:47 We expect to provide updated guidance on the timing for discussions with FDA on a potential rapid registrational path for emavusertib after the partial clinical hold has been resolved and any potential impact on the study can be determined. 06:03 Now, let's turn to our study of emavusertib in B-cell cancers, the TakeAim Lymphoma study. We expect to report initial data from this study at both ASCO and EHA in June, the same data at both meetings to address both the American and European audiences. This update will include new data on approximately a dozen patients who have received emavusertib in combination with ibrutinib in several types of NHL. 06:34 As a reminder, Part A1 of the study, which is completed, examined dose escalation in monotherapy. Part A2, in process now, is exploring the combination of emavusertib and ibrutinib. This combination study is expected to enroll approximately 18 patients in a three plus three design with emavusertib doses starting at 200 and escalating to 300 milligrams BID and ibrutinib dosing will be whatever is appropriate for the patient's respective NHL subtype. 07:14 In this initial dataset, we'll be looking to confirm that the combination of emavusertib and ibrutinib can be dosed safely without overlapping toxicities. And of course, we also hope to see signs of anti-cancer activity. 07:30 Especially for patients relapsed or refractory to BTK inhibitors, signs of anti-cancer activity would be an early and encouraging proof of concept for the scientific literature, which suggests the targeting both the BCR and TLR pathways may prove more effective than targeting either pathway alone. 07:54 I'd also like to comment briefly on our collaboration studying emavusertib in patients with low risk MDS. This study is being led by Dr. Uwe Platzbecker, the Co-Chairman of the European Hematology Association’s scientific working group, on MDS. We hope to report data on this study later in 2022. Being able to demonstrate safety and efficacy in these patients could represent a potential breakthrough in the MDS field. 08:26 In March, a new potential opportunity for IRAK4 inhibition was identified with the publication of preclinical data in the peer-reviewed journal gastroenterology, altered by our collaborators at the Washington University School of Medicine in St. Louis. This manuscript examines the role of IRAK4 and the preclinical efficacy of emavusertib in combination with checkpoint immunotherapy in pancreatic ductal adenocarcinoma. A disease type with a very poor prognosis and in need of new therapeutic options. 09:05 As we look ahead, we hope to build upon these results working with the NCI and our other collaborators to identify additional new cancer targets where emavusertib could address areas of high unmet need. 09:22 Moving to our second asset, CI-8993. This is the first-in-class monoclonal anti-VISTA antibody, which we are developing in collaboration with ImmuNext for the treatment of patients with relapsed or refractory solid tumors. 09:40 CI-8993 is designed to antagonize the VISTA signaling pathway. Thereby increasing T-cell mediated immune function. We believe CI-8993 is the most advanced anti-VISTA antibody currently in clinical development and has the potential to be a game changing cancer therapy, affecting numerous cancer related immune mechanisms, many of which are not addressed by targeting PD1, CTLA4, or other immune checkpoints. 10:15 In January, we presented updated clinical data, highlighting an encouraging safety profile and early signs a CI-8993’s potential to activate multiple anti-cancer immune mechanisms. We were additionally pleased with the PK profile, which exhibits saturation kinetics, suggesting the potential to overcome the anticipated sink effect. 10:42 Dose escalation has proceeded to the 0.6 milligrams per kilogram dose level, and will continue until the recommended Phase 2 dose has been determined. We look forward to reporting expanded safety and tolerability data along with initial PK, PD, and anti-cancer data from the trial in the second half of 2022. 11:07 In summary, we're pleased with the clinical results observed to death to date, and we expect to provide several updates later this year, including new clinical data in both IRAK4 and VISTA programs. In the meantime, we'll work with the FDA to resolve partial clinical holds, as quickly as possible. 11:30 As we have said to many of you in calls over the last few weeks, clinical development is never a straight road. We're fortunate to be working with a molecule with the unique and compelling profile of emavusertib. 11:43 With that, I'll turn the call over to Bill to review our financial results for the quarter. Bill?

11:50 Thank you, Jim. Curis continues to execute on its strategy from a position of financial strength. For the first quarter of 2022, Curis reported a net loss $16 million or $0.18 per share on both a basic and diluted basis, as compared to a net loss of $9.9 million or $0.11 per share on both a basic and diluted basis for the same period in 2021. 12:23 Revenues for the first quarters of 2022 and 2021 were $2.1 million and $2.2 million respectively. Revenues for both periods represent royalty revenues, recorded on Genentech and Roche's net sales of Erivedge. 12:44 Operating expenses for the first quarter of 2022 were $17.2 million, as compared to $11 million for the same period in 2021. Operating expenses comprised the following: Cost of royalty revenues, which comprised amounts due to third-party university patent licensors in connection with royalties received on net sales of Erivedge, were $0.1 million for the first quarter of 2022 and 2021. 13:21 Research and development expenses were $11.4 million for the first quarter of 2022 as compared to $6.8 million for the same period in 2021. The increase is primarily attributable to increased manufacturing costs for our programs and higher personnel related costs as a result of additional headcount. 13:45 General and administrative expenses were $5.7 million for the first quarter ended March 31, 2022, as compared to $4.1 million for the same period in 2021. The increase in general and administrative expense was driven primarily by higher costs for personnel, stock-based compensation, professional consulting services and insurance costs as compared to the prior year. 14:15 Net other expense for the first quarter of 2022 and 2021 was $1 million and $1.1 million, respectively. Net other expense primarily consisted of imputed interest expense related to royalty payments. 14:34 As of March 31, 2022, Curis' cash, cash equivalents and investments totaled $120.7 million, and there were approximately 91.6 million shares of common stock outstanding. First quarter cash burn was consisted with prior years of being higher than other quarters driven by the timing of working capital changes. We are in a strong cash position. We continue to expect that our existing cash and investments should enable us to maintain our planned operations into 2024. 15:12 With that, I'd like to open the call for questions. Operator?

15:19 [Operator Instructions] Our first question today comes from [indiscernible] from Cantor Fitzgerald. Please go ahead with your question.

15:51 Hey, thanks for your updated [indiscernible]. Thanks for taking my questions. I guess, first one, you mentioned that additional data requested by the FDA, I just wonder if you can talk a little bit more if you need, I guess additional preclinical data or clinical data and do you need together, I guess perhaps more clinical data for [indiscernible] lower doses to fully resolve this issue?

16:20 Yeah. Let me address this. This is Bob Martell. We are obviously working closely with the FDA to answer their questions. As you know, as Jim mentioned, they had requested a variety of components from us, one of which was a little bit more information to help us and them untangle the complex patient who unfortunately passed away during treatment after seven or eight months actually of treatment with this drug. 16:55 Another is somewhat related to that and that is our work to identify the appropriate dose going forward. So, we've mentioned in the past based on our pharmacodynamic work, our pharmacokinetics, safety and efficacy that we believe the 300 milligram twice daily dose is our recommended dose. We'll present those data to the FDA and have a discussion with them regarding that. 17:25 Beyond that, the specifics of the data we’ll discuss that with FDA and divulge more of that as we come to an agreement with them.

17:36 Okay. Can I ask a follow-up question I guess? On the determination of the Phase 2 dose, I guess, can you just talk about, I guess what additional data points of FDA might need to see to justify, I guess the dose selection. And I guess what gives you confidence that you can resolve this hold quickly?

18:00 Yeah. So, like I said, we've done a pretty thorough analysis and in fact, as you know, we've evaluated a number of patients at 400 milligrams twice daily, 300 milligrams twice daily, as well as numerous other patients at lower dose levels. So, part of the approach to identifying a recommended dose is understanding the exposure of each individual patient. And so, and this is typical for any drug and any development and more of what they're looking for these days is a good understanding of pharmacokinetic exposure bands. 18:41 So, we'll present those data to the agency to discuss that and justify our choice of 300 twice daily. In addition, we've carefully monitored the safety across all of these doses. We believe that the safety of the 300 milligram twice daily is a safe dose, and we'll present our data regarding that. 19:08 As I mentioned earlier, we'll provide data to better untangle the complicated issues with this one particular patient who unfortunately passed away on the study. So, those are some of the main things that we'll be looking at and presenting to them in a full report.

19:27 Okay. Thank you very much.

19:32 Our next question comes from Soumit Roy from Jones Research. Please go ahead with your question.

19:38 Hi everyone. Thank you for taking the question. I wanted to just clarify one thing is, have you already submitted all the necessary data set to FDA regarding this partial hold or do we have a timeline on that?

19:55 So, again, we're working closely with the FDA. We haven't given specifics on the timing of that or whether or not we have done that yet, but as soon as we gain further information and on our discussion with the agency then we'll release that information.

20:15 Okay. The June data on the AML front, that will be no new data, it will be probably [finer details] [ph] you would provide, would you also include in mid-year at ASCO? Would you also include details on this patient who died during the ASCO presentation?

20:38 Yes. Thanks, Soumit. So, I'll do the first one first. So, the June data update and there's going to be two updates right. There's going to be leukemia and lymphoma. The leukemia is not an update, that's the January 6 data, which was, as you may remember, it was put out in the press release. This is now going to be at a peer-reviewed form. So, it's our opportunity to get that in front of the global physician network at both ASCO and EHA American and European forums. 21:07 Lymphoma and the other hand is new data. That's going to be roughly a dozen patients of emavusertib in combination with ibrutinib. And so I would point you to that. And then lastly, you asked, whether we’d take the opportunity at one of those two conferences to discuss more about the patient debt? I'd say, no, our focus right now is having that dialogue with FDA and as Bob mentioned, the patient was on for a long period of time. And we do have a lot of data related to that patient and I think the question is a fair one, but it's, of course a complicated one as well. 21:40 And as we get resolution with the FDA on where they come out and where we can both get comfortable moving forward. At that point, of course, we're happy to share all of the details, but because this is, sort of an ongoing discussion and a very complicated discussion, we want to wait until we've got that resolved with FDA before we go public with the information.

22:00 Got it. Totally understandable. And one last one. On the lymphoma front, the Part A2, would you present any data with 300 million BID or do you know – or can you disclose any patient being treated with 300 milligram BID or pretty much all 200 milligram?

22:18 Yeah. As I said, I think we're going to wait for the disclosure of those data at that conference, but it is going to be new data, and I would encourage you to keep an eye out for it. We look forward to talking about it.

22:28 Thank you so much for taking the questions.

22:30 Thank you.

22:33 Our next question comes from Yale Jen from Laidlaw and Company. Please go ahead with your question.

22:40 Good afternoon and thanks taking the questions. I’ve got two here. The first one is that, with a partial clinical hold for the other study combined, how many patient are to eligible at this point to undergo studies on both lymphoma and leukemia?

23:08 Well, I want to make sure I understand your question. So, we – the partial clinical hold had us pause enrollment of new patients. All the patients who were existing on study, who we felt were benefiting from the study are allowed to continue on. So, it did not prevent those patients who are ongoing from continuing. We haven't mentioned the specific number who are ongoing, but any patient who is continuing on would be able to remain on.

23:40 Yeah, the hold is simply keeping us from adding new patients to the study. So, it really gets to the amount of patient data that we might have by year end. But the existing patients on study that are benefiting from the drug, of course, they can stay on, and we're still following them.

23:57 Okay, great. And maybe just two quick ones. Number one is that the – for the pancreatic cancer study that – is that allowed at this point or are you still being under the partial clinical hold until that being result to start enrollment?

24:15 Yes. So it’s the [indiscernible] study. That's not part of these clinical studies, but as I would say, our approach, you may remember when the leukemia study was originally put on hold since it's the molecule, we were advising our partners across the studies whoever is using the drug that the spirit of the FDA clinical hold was don't enroll new patients. So, of course, we would give [indiscernible] the same advice. 24:42 We'd say, look let's wait till we get resolution with the FDA before we start enrolling new patients whether it's in one of our existing clinical studies or whether it's in an IST. That's the same guidance we would give to anybody using emavusertib.

24:57 Okay. Maybe a last one here is, little bit housekeeping that, given that you might slow down the clinical development activity for sure while, should we anticipate the R&D expenses at least for the maybe next one or two quarters, a lower – trending is slightly lower before taking up?

25:20 Yes. Let me start that and then I'm going to hand over to Bill on that Yale. So, first, I'd say, obviously, the irony here is, we’re all here on parts of clinical hold, you're spending less, of course, than you otherwise would. And it really gets to the long-term impact is how long are we going to be on clinical hold? And that's an unknown question to be fair. 25:44 I mean we can look to the prior studies, as you know, in AML, there have been five other studies, five other companies who have had their AML programs put on hold in the last three years. Four of those five were in the last year. 26:01 All of those came off in roughly a one or two quarter timeframe. We don't know since of course every drug is different and every FDA conversation is different. We don't know that that definitely means that we're in that timeframe, but if you use that as a proxy, you'd say, it's a bump in the road between now and NDA and it's not something that I would consider a material question from a cash burn perspective, it's more a question of executing against the goals, especially when we think about how many patients data we're going to be able to accumulate being this calendar year. And of course in the rolling quarter view. 26:40 Bill, would you like to comment a little more on potential impact?

26:44 Yeah. I wouldn't want to necessarily give guidance, but I think in terms of our approaches, as we certainly want to spend money wisely and while we are on hold, we'll be considered of that, but there's still a lot of work that as you know, takes a long lead time, so that if this is just a quarter or two delay that we'll be wanting to make sure that continues on. So, I would expect us to be spending money wisely over these next few quarters and maybe there are some savings there, but I don't think there will be a big impact to the trend, unless the hold is to go longer than we expect.

27:20 Okay, great. Thanks for the details, and best of luck for you guys.

27:25 Yeah, thank you Yale.

27:28 [Operator Instructions] Our next question comes from Dane Leone from Raymond James. Please go ahead with your question.

27:43 Hi guys. This is [Sean] [ph] on for Dane. Thanks for taking the questions. Just one from us, trying to get an idea of what the scale and scope of the second half readouts for emavusertib could be? Obviously, you haven't said how many patients you've enrolled in the studies, particularly in the [indiscernible] combos. But just trying to get an idea of, maybe broadly, how many are you confident in the number of patients that are currently on study such that you could have at significant readout later in the year, irrespective of how long the clinical hold lasts? And then additionally, do you expect to readout any more data, say on hem recoveries or efficacy in patients who are not FLT3 [indiscernible]?

28:39 Yes, there was a lot of questions. I’m going to try and hit them all and if I miss one, Sean, please let me know, and I'm happy to go back to it. So, the scale on the scope of what we're expecting for the year, obviously, is very dependent on where we end up with the FDA in this discussion, but I would say in general, our milestones are very much the same as they were with the exception of course of the timing of meeting with the FDA to talk about the pivotal study. And that one's just unclear. 29:13 So, let's go through those milestones again. First half of 2022, we're going to report initial data for emavusertib in combination with ibrutinib in NHL. That was already of course, we started enrolling that awhile back, so we’ve already had those patients, we'll have about a dozen patients of data to report out. And that'll be at ASCO and in EHA as we announced today. 29:35 Second, we will have updated data for emavusertib in AML and MDS monotherapy later this year. Again, the number of patients is going to vary depending upon when we can restart the clinical trial and then how much time the patients have in the study and whether those data are mature enough for disclosure later this year. And then in the back half of the year, we've got two separate updates, initial efficacy data for CI-8993 the VISTA program, and of course, in the back half of the year, the combination data of emavusertib with [indiscernible] in AML and MDS. 30:15 You may remember we started dosing patients in the back end of Q4 this past year. So, we do have a handful of patients who are on drug before the clinical hold was put in place. And then hopefully, of course, if we can get the clinical hold lifted and we can start to enroll more patients in that study in that regimen as well, we would love to give an update on those data. So, a lot of data coming over the next six to nine months across both emavusertib and CI-8993.

30:51 Okay. Thank you.

30:54 Thank you.

30:58 And ladies and gentlemen I’m showing no additional questions. I'd like to turn the floor back over to the management team for any closing remarks.

31:05 Thank you, Jamie, and thank you everyone for joining today's call and as always, thank you to the patients and families participating in our clinical trials. To our team at Curis for their hard work and commitment and to our partners at Aurigene, ImmuNext, and the NCI for their ongoing help and support. We look forward to updating you again soon. Operator?

31:29 Ladies and gentlemen, the conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines.