Corvus Pharmaceuticals, Inc. (CRVS) Q1 2019 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Corvus Pharmaceuticals First Quarter 2019 Business Update and Financial Results Conference Call. Today's conference is being recorded. [Operator Instructions] It is now my pleasure to turn the call over to Zack Kubow of Pure Communications. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceutical's First Quarter 2019 Business Update and Financial Results Conference Call. On the call to discuss the results and business highlights for the first quarter 2019 are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; and Mehrdad Mobasher, Chief Medical Officer, who is traveling and phoning in remotely. 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 filed with the SEC 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 Leiv Lea. Leiv?

Thank you, Zach. I'll start with a quick overview of our first quarter financials and then turn the call over to Richard for a business update. At March 31, 2019, Corvus had cash, cash equivalents and marketable securities totaling $105.8 million as compared to $114.6 million at December 31, 2018. Research and development expenses in the first quarter of 2019 totaled $9.4 million compared to $12.1 million for the same period in 2018. The decrease of $2.7 million was primarily due to a decrease in ciforadenant program cost. The net loss for the first quarter of 2019 was $11.6 million compared to a net loss of $14.3 million for the same period in 2018. Total stock compensation expense for the first quarter 2019 was $2 million compared to $1.8 million of total stock compensation expense for the same period in 2018. I will now turn the call over to Richard.

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our first quarter 2019 business update. Since this is the first quarterly call that we have hosted since becoming a public company, I want to take a few moments to highlight the significant progress we have made since our IPO and the value we are building with our product pipeline. I will then provide an update on our development programs and anticipated key milestones for the remainder of 2019. At Corvus, we like to say that we are bringing ingenuity to cancer drug development, identifying product candidates with precise mechanisms of action and advancing them through extensive preclinical testing and rigorously conducted clinical trials. Our highly experienced team is deeply committed to this mission. And as a result, we have built a leadership position in the adenosine cancer pathway with our two lead programs that have generated meaningful clinical data. And we have just entered the clinic with our third program that is distinct from the adenosine pathway focused on ITK inhibition with a novel drug that affects T-cell biology. In total, we now have three unique agents with novel mechanisms of action in clinical trials for a wide range of solid and hematologic cancers along with a pipeline of preclinical programs that we expect to move into IND-enabling studies over time. And if you have been following Corvus, you know that we are committed to providing regular data updates from our studies, which have been consistently presented at major medical meetings such as AACR, ESMO, SITC and ASCO. We plan to continue to have a steady cadence of new data at major medical meetings over the remainder of the year. I will now provide a more detailed update on our three clinical programs, starting with our lead program ciforadenant, which was previously known as CPI-444. Ciforadenant is an oral, small molecule drug that is an antagonist of the adenosine A2A receptor. There are several differentiating factors that we believe make ciforadenant the leading adenosine pathway product candidate in development today. Let me discuss a few of these. First, efficacy data. Ciforadenant has demonstrated antitumor activity as monotherapy and in combination with atezolizumab in patients that have failed a median of three prior therapies, mainly over 70% failed anti-PD-1 therapies with some patients experiencing durable responses and disease control out to over 28 months. We have several patients who have now been on ciforadenant for more than two years. We've seen efficacy signals in our comprehensive Phase 1/1b study in non-small cell lung cancer and in renal cell cancer. Of note, in our 68 patients with renal cell cancer, there is an overall survival exceeding 88% at 28 months and the median progression-free survival of 5.8 months. These results are solid compared to numerous other trials with other agents in advanced refractory renal cell cancer. Multiple recurrent renal cell cancer is an unmet need as long-term disease control has been very difficult to achieve. Although we see better results with combination therapy, our monotherapy data is also strong. Monotherapy activity is crucial to understanding and developing cancer drugs, and this is why we have focused on that. At the recent AACR meeting, AstraZeneca presented Phase I data for their oral adenosine A2A receptor inhibitor showing signs of efficacy in prostate cancer patients including a monotherapy partial response. We were very pleased that their data confirms the activity of A2A receptor blockade. Of note, we also have seen activity in prostate cancer patients. As it relates to efficacy, unlike some other adenosine receptor antagonists in development, an attractive feature of ciforadenant is that it is able to cross the blood-brain barrier, which we believe has important implications for treatment of cancer patients. Many cancer patients present with or develop brain metastasis during the course of their illness, and it is important that a cancer drug controls disease in that vital organ since lack of tumor control in the brain results in devastating neurologic consequences. For example, the anti-PD-1s and targeted drugs like alectinib are successful partly because they control disease very well in the brain. Second, safety pharmacokinetic and pharmacodynamic data. Today, over 250 patients have been treated with ciforadenant with a strong safety profile without dose-limiting adverse events. No patients have discontinued therapy due to toxicity. Our PK/PD studies have shown excellent oral bioavailability and complete A2A receptor blockade. Third, through diligent collection of biopsies and genetic analysis, we have developed ciforadenant as a precision medicine, based on the identification of a predictive genetic biomarker, the Adenosine Signature, that was discovered by our team. The Adenosine Signature may provide clinicians with the ability to select patients most likely to benefit from therapy. From a biologic perspective, activation of the Adenosine Signature genes appears to be related to resistance to anti-PD-1 therapies. This provides a compelling rationale to use ciforadenant in combination with anti-PD-1s, as we are now doing. Taken together, we believe that ciforadenant is positioned as the leading A2A receptor inhibitor. We are currently evaluating ciforadenant in combination with atezolizumab in a Phase Ib/II clinical trial in patients with renal cell cancer. The patients in the trial have failed treatments with anti- PD 1 antibodies and tyrosine kinase inhibitors. Our recent data presentation last fall at SITC reported durable objective tumor responses and prolong survival in a large group of biomarker-unselected patients, which is very encouraging given such advanced disease. The current ongoing trial is in earlier patients who have failed less than or equal to three prior therapies. We also have a Phase Ib/II study evaluating ciforadenant in combination with atezolizumab in patients with non-small cell lung cancer who have failed no more than two prior regimens. The lung cancer study is going on -- is ongoing and is being conducted by Genentech as part of its MORPHEUS platform, which was established to develop immunotherapy combination therapies more rapidly and efficiently. Our second development program is CPI-006, which is a potent humanized monoclonal antibody directed against CD73. CPI-006 is a unique anti-CD73 antibody, as has been presented at recent meetings. We selected this antibody because it possessed dual mechanisms of action. It inhibits the catalytic function of CD73, blocking production of adenosine, and it induces the activation and trafficking of immune cells to peripheral lymphoid tissues. Largely overlooked by others, the CD73 protein is named to function in immune cell activation and migration. These properties are synergistic. Removing adenosine eliminates its immunosuppressive effects and activating lymphocytes could enhance antitumor immunity. You will hear much more about this at ASCO. We are developing CPI-006 to treat advanced cancers and are currently evaluating it in a multicenter Phase 1/1b dose escalation study as a single agent and in combination with ciforadenant and in combination with the anti-PD-1 antibody pembrolizumab. The trial is designed to select the dose and evaluate the safety, pharmacokinetics, immune biomarkers and efficacy in patients with renal cell cancer, lung cancer and several other solid tumors who have failed standard therapies. We also believe that our Adenosine Signature will play an important role in the development of this agent. The Phase 1/1b study will enroll up to 350 patients and is currently enrolling in the dose escalation portion of the study for CPI-006 administered as a monotherapy and in combination with ciforadenant. Initial data from the Phase 1/1b study will be delivered in an oral presentation at ASCO on June 2 by Dr. Jason Luke, Director of Cancer Immunotherapeutics and Associate Professor of Medicine at the University of Pittsburgh Medical Center. This will build upon data presented in February that demonstrated early signs of immunologic activity across multiple pathways that may be important in cancer therapy. In addition to the myriad of immunologic effects, we will also present early clinical data with monotherapy and in combination with ciforadenant. In addition to the oral presentation at ASCO, we will also be hosting an investor and analyst reception on Sunday, June 2 at 6 P.M. Central Time, during which Dr. Luke will provide an overview of his oral presentation on CPI-006. In addition, Dr. Mobasher Mehrdad and I will provide an update on our programs, and all three of us will be available for Q&A. If you would like to receive information on attending this event, please reach out to Leiv. Our third development program is CPI-818, which is an oral, small molecule drug that has been shown to selectively inhibit ITK. ITK is an enzyme that is expressed in T-cells and plays a role in T-cell and natural killer cell lymphomas and leukemias as well as in normal immune function. We believe CPI-818 has the potential to be directly cytotoxic to T-cell lymphomas and also may lead to enhancement of the immune system by increasing the Th1 immune response, which could provide a therapeutic benefit for lymphomas and for solid tumors. Some of our research also indicates that this drug may be an attractive drug candidate to examine in autoimmune diseases. We are particularly excited about this program because the development of CPI-818 was based on a similar targeted strategy to that of BTK inhibitors. And members of the scientific team at Corvus, including myself, led the development of the first BTK inhibitor, ibrutinib, which is approved for the treatment of several types of B-cell lymphomas. ITK has many biochemical and functional similarities with BTK, and we believe that inhibiting ITK with CPI-818 for T-cell lymphomas could have an analogous effects to inhibition of BTK with ibrutinib in B-cell lymphomas. CPI-818 has extraordinary specificity, a feature that has been lacking in previously described ITK inhibitors. We have previously reported evidence of efficacy in drugs with spontaneous naturally occurring T-cell lymphomas treated with CPI-818. This gives us optimism for its potential in human T-cell lymphomas. As we announced in today's press release, we have initiated patient enrollment in a global Phase 1/1b study of CPI-818 in patients with T-cell lymphomas, a patient group that often has limited treatment options and a very poor clinical outcome. Looking forward, we're planning to present data from all three of our programs at medical meetings over the course of the year. I have already highlighted our CPI-006 oral presentation at ASCO. We expect to provide updated data for ciforadenant and CPI-006 at SITC and the first CPI-818 data at The American Society of Hematology Meeting. For ciforadenant, we plan to initiate a late-stage study in patients with renal cell cancer late this year. This study will utilize our Adenosine Signature to select patients. We believe the use of this biomarker will further improve the efficacy results in patients with renal cell cancer treated with ciforadenant. These are important catalysts for the company, and we look forward to providing updates on our progress at these medical meetings and in future business update calls. I will now turn the call over to the operator for the question-and-answer session. Operator?

[Operator Instructions] And we'll go first to Biren Amin with Jefferies.

Maybe I can start with 444. When can we expect next data from the RCC and non-small cell lung cohort? And I guess, when can you -- when do you expect to reach a time point where you can make a decision on how to proceed forward into a more advanced study?

We expect that we'll have next update on renal cell cancer data with CPI-444, now known as ciforadenant, at the SITC meeting, which is in November. In terms of the lung cancer study with ciforadenant and atezolizumab, that study is part of the MORPHEUS program being conducted by Genentech enrolling very nicely, actually. That's our control study that has a concomitant group of patients treated with chemotherapy, Taxotere. I'm not sure exactly when we'll be in a position to report on that data, since it's been run by Genentech, but I know we're getting a cut of the data in just a couple of months. Now your next question on the subsequent studies with ciforadenant in renal. We are working right now. In fact, we have KOL meetings set up at ASCO for a very interesting trial in renal cell cancer that would start later this year. Dr. Mobasher is working on that very hard, which will use our Adenosine Signature to select patients for enrollment in that study. That'll be a Phase II study with the opportunity to convert that into even a randomized or a Phase III study. That study design, very briefly, is going to be patients who failed PD-1s and TKIs. Again, because we think our Adenosine Signature identifies patients, as we presented at recent meetings, we think it identifies patients who are likely to respond to our drug, ciforadenant, and moreover, it seems to identify patients who failed to respond to PD-1s. So it's in a sense the perfect biomarker because it's selecting those patients who don't respond to PD-1s, presumably because they have adenosine production as a resistance mechanism, and therefore, combining the PD-1 and ciforadenant makes very good sense. So that's sort of -- I hope that answers your question. That's sort of our plans on that.

So maybe just a follow-up on the renal cell study that you're planning in patients that failed PD-1 and TKI. Our recent conversations with some KOLs in the area suggest that first-line seems to be PD-1 IPI [ph]. Would you potentially also evaluate in that cohort of patients as well?

Possibility. I mean those discussions are going on now, but I mean as you are aware, two recent papers looked at anti-PD-1 or anti-PD-L1 combinations with axitinib, and those results were very good. They were published in New England Journal of Medicine and presented at the GU meetings in San Francisco. So we believe that PD-1 axitinib is probably going to move to frontline very soon. I know many physicians are still using [indiscernible], but there are going to be a lot of patients getting pembro and axitinib. Those results are very, very good. And while we're on the subject of those results, although their response rates are very good, 50%, 60%, mostly partial response, if you look at the progression-free survival curves in those studies, everybody is relapsing. The PFS curves have a continuous downward trajectory. As we predicted two years ago, the field is moving in our direction. We predicted that PD-1s would move to frontline along with TKIs and that the perfect world for our therapies would be in those relapsed patients. And so, we think that's playing out nicely. So there will be plenty of patients with pembro-axitinib or avelumab-axitinib, the Pfizer drug. There will be plenty of those patients who relapse and are in need of subsequent lines for therapy.

And then given the recent AstraZeneca data with their A2AR in prostate cancer where they saw several responses and given also your data set as well in that tumor type, are there any plans to move forward in metastatic CRPC patients that may have failed on AR therapy?

There's a lot of plans for that. Again, first of all, congratulations to AstraZeneca for doing a good study where they look at monotherapy. So you can really understand what's going on. We know those folks well so -- they do very good clinical research. I think three or four of their prostate cancer patients were combination with, of course, their anti-PD-L1 and one was on immunotherapy. I think they had another patient who had a drop in PSA with monotherapy. So prostate seems to be -- seems to at least based on early results, a good target for this kind of therapy. Come to our ASCO presentation, you'll hear more about prostate cancer there. And yes, we definitely have plans to look at prostate with ciforadenant and with adenosine blockade, in general. So we're -- I think with AstraZeneca's work -- our work and AstraZeneca work now really validates A2A receptor as a really good target.

[Operator Instructions] We'll take our next question from Michael Morabito with Crédit Suisse.

I was just looking to see if you could give us a little bit of a reminder on CPI-818 of roughly how many patients you plan to enroll per arm, if you can update how many patients have been enrolled so far, how enrollment is ongoing? And if you plan to enroll the same number of patients for each lymphoma type or just as they come in?

Very good question, there is a lot here. So first of all, this is a first-in-human clinical trial. So T-cell lymphoma, as you know, is a heterogeneous group of diseases, but there's about four or five main kinds of T-cell lymphoma. The initial part of the study is CPI-818 is delivered in a 3-by-3 dose escalation design, and we're taking all patients with T-cell lymphomas, and the purpose of that is to define the dose, the safety and, of course, look at efficacy as well. We have an extensive biomarker program where we're looking at occupancy of the target, effects on the immune system, things like that. And then once the dose is determined, then the trial in an adaptive design breaks into separate parts where we look at the various principal kinds of T-cell lymphomas. So for example, those are peripheral T-cell lymphomas, which is one of the more common T-cell lymphomas, what's called angioblastic T-cell lymphoma, cutaneous T-cell lymphoma, then we have a category of other. So dose escalation initially in all-comers then we enroll patients in the different disease-specific cohorts. And based on response in those disease-specific cohorts, we can expand those in a disease-specific manner, as appropriate. So if you -- hard to put the final number, but it could be hundreds of patients if you -- depending on how many of those cohorts got expended. The -- I guess the number of centers, we have -- obviously because of the track record of our group here with ibrutinib, we're very, very well connected in hematologic malignancies. We have worked with all the thought leaders. My group here at Corvus has worked with all the thought leaders throughout the world. We have the very best people involved in conducting this trial. It will be an international study, United States, Canada, Australia, South Korea, there are sites there. The study just started, total number of centers that will be up will probably be -- I think our plans is for more than 30 centers, if I'm thinking -- if I'm recalling correctly. We're not there yet. But I think that the pace of enrollment in this study is going to be very, very good because this is a really unique mechanism of action in a novel agent. Now the nice thing about ITK as a target, which by the way stands for interleukin-2-inducible T-cell kinase. The reason that people are excited about this is because of the success with ibrutinib and BTK. I mean BTK was a sleepy little target that nobody felt much about and, of course, our group made it one of the most important targets in oncology in the last 10 or 20 years. And we're hopefully replanting that now with ITK. Now ITK is involved in T-cell biology. And that gets you into a whole lot of other stuff. Like can you manipulate cytotoxic killer cells so that they might attack a solid tumor, not necessarily a T-cell but a solid tumor better? And can you effect autoimmune diseases? So the opportunities with an ITK inhibitor, we think, are really significant. Cancers are -- T-cell lymphoma is the sort of lowest-hanging fruit. It gives us the opportunity to learn a lot about the intrinsic biology and pharmaceutical properties of the compound, but there's a lot more we intend to do with it. As I mentioned in my opening remarks, the key point about this compound is its extraordinary selectivity. This really only hits ITK. It is really difficult to do that. Because the similarity of the kinases, ITK, BTK and the 11 other kinases in that family, there are very, very few amino acid differences and it's difficult to get that kind of selectivity. And the selectivity is crucial for the immunologic effects. And I think it's attributed to the experience and the talent of our group here, who obviously have already succeeded with their development of ibrutinib. Sorry for that long answer but you get -- you tuned on when you talk about that.

I guess as a follow-up, is there any chance that we will see early data from this at rather SITC or ASH later this year? And if so, will it just be pure dose-escalation data, safety data? Or is there a chance that we might actually see dose-expansion data.

I don't know about dose-expansion data because obviously 3-by-3 design, you have to wait to get through your GLP periods. But the good thing about our trial is that because of the extensive preclinical work we did, which showed that the drug was actually quite safe, at least in animal systems, we're able to start at a reasonable dose in our Phase I study. So we don't have to waste a lot of time going up through a lot of low doses. I mean I think that we -- I mean my hope is that we have some data to present at the ASH meeting in December. I think we're going to have a whole lot of immunology that's never been described before. And hopefully, we'll have -- certainly, we'll have some safety data and hopefully, have some early efficacy data. Michael, we only -- you know we only present efficacy. You know that. Unlike others... we are here for efficacy.

We'll go next to Robert Driscoll with Wedbush.

Again just related to 818. Do you have a sense of how ITK activation or kind of overexpression varies within each T-cell lymphoma type or kind of between types, depending on each type as an ITK signaling? And also just to add on, any -- talk a little bit about the biomarker work you're during in the study, what you are going to trying to find out there?

Okay. So ITK is expressed differently in different T-cell lymphomas. You're correct about that. And there's not a lot of information about that. We're collecting the seminal information in the field. But there is literature that says ITK is expressed a lot in peripheral T-cell lymphomas, which I mentioned is the -- like over 90% of them. Similarly for AITL, so AITL, or angioimmunoblastic T-cell lymphoma and put all T-cell lymphomas together and the most common for sure. ITK expression is very common in those. And in the other tumors it's not that well known. But we do know that T-cell receptor is expressed in all of the T-cell lymphomas. So Robert, I'm going to turn it around, I know you have a PhD, I'm going to turn it around on you. So if I ask you which T-cell tumor is overexpressed BTK, the answer is none that I'm aware of. But all of them have T-cell receptor, and the bet there was that T-cell receptor signaling would be involved in B-cell lymphomas, and it is in many, many signals. So I think it's, of course, present in all T-cells and all T-cell tumors, just a question of what it's doing and whether or not it's overexpressed and whether that's a critical driver in the malignant process. So there's a lot that is to be learned about this. But there's no question that PTCL and AITL have a lot of ITK. But T-cell receptor in that pathway appears to be functioning in many, many T-cell lymphomas. In fact, I don't know that T-cell lymphoma, I'm sure somebody will find me some paper her after this call, but I don't know if the T-cell lymphoma that does not express the T-cell receptor. So you have to ask yourself the question, why is that receptor so critical to the malignant process? Why is it that every T-cell cancer has that receptor? Is it by accident or does it play a role?

Very helpful. And then just quickly on the Adenosine Signature, I probably looked this up from the SITC presentation. Can you remind us what proportion of renal cell cancer patients might screen positive here? And any early thoughts on how that test might potentially be commercialized?

Yes, we've -- okay. Great question. Thank you for asking that. I can speak for hours on this but the answer to your question is, in our studies, we're finding that 60% of renal cell cancer patients express our Adenosine Signature. In a related study done by -- published by Genentech and coworkers in late 2018 in over 400 patients with renal cell cancer, 49% of their patients expressed what they called a myeloid signature. There's significant overlap between the myeloid signature and our Adenosine Signature. Most of our genes are myeloid cell derived. So it's a good number of patients. The -- in terms of commercialization of the -- we've done the test two ways. We do with NanoString and we've also done it with RNA-Seq, and there's concordance in those two methods. We believe it might be possible, it might, even to develop histochemical test from some of these markers. By the way, this analysis is done on the tumor biopsies, it's not the blood, it's tumor biopsy. So we are now talking with at least three companies about developing a clinical diagnostic and ultimately approved for the detection of our Adenosine Signature. So I don't think that, that development of the test for either Phase III trials or commercial sale will be an impediment at all.

That concludes today's question-and-answer session. I'd like to turn it back over to today's management for any additional or closing remarks.

Thank you, operator. First, let me thank everyone for participating in this call, very interesting. We look forward to speaking with you more on future calls and future updates. And hopefully, we'll see you all at ASCO. Thank you.

That concludes today's conference. Thank you for your participation. You may now disconnect.