Curis, Inc.
Q1 2021 Earnings Call Transcript

Published: 12 May 2021

[Operator:]

Good afternoon and welcome to the Curis' First Quarter 2021 Earnings Call. All participants will be in a listen-only mode. After the Company's prepared remarks, call participants will have an opportunity to ask questions. Please also note this event is being recorded. I would like to turn the conference call over to the Company's Chief Financial Officer, Bill Steinkrauss. Please go ahead.

[Bill Steinkrauss:]

Thank you and welcome to Curis' first quarter 2021 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 2021 earnings release and related financial tables.

[Jim Dentzer:]

Thank you, Bill. Good afternoon everyone and thank you for joining us today. Every day is Curis, we push to develop the next generation of transformative, targeted cancer therapies that will meaningfully improve and extend the patient's lives. In the first quarter of 2021, we took important steps towards that goal, building upon the exciting progress we made last year and expanding into additional areas where we believe we can make a difference. Our novel small molecule IRAK4 inhibitor, CA-4948 is currently being evaluated in three clinical studies; first, the Phase 1/2 monotherapy study in AML and MDS I just mentioned; second, the Phase 1/2 study in combination with ibrutinib for patients with relapsed or refractory NHL or other hematologic malignancies; and third, the Phase 2 LUCAS study, evaluating CA-4948 in patients with lower risk MDS being led by Dr. Uwe Platzbecker of the University of Leipzig. We are especially pleased with the progress of CA-4948 and the exciting data update published in the European Hematology Association abstract this morning from our Phase 1/2 monotherapy study in relapsed or refractory acute myeloid leukemia or AML and high risk myelodysplastic syndromes or MDS. As many of you have been following the long isoform of IRAK4 or IRAK4-L has been recently identified as the key driver of disease in the majority of patients with AML and MDS. We have Curis at the first and only drug that directly targets IRAK4 to enter clinical testing for these patients. Today, I am also pleased to announce that we have amended our AML and MDS study to add both a combination dose escalation and our monotherapy dose expansion. Preclinical data supporting the combination study was published by EHA earlier today and will be presented in a poster presentation at the EHA conference next month. We expect to begin enrollment in this portion of the study in Q3. While there has certainly been a lot of attention on our IRAK4 study, it is important to note that we have also been pleased with patient's enrollment in the Phase 1 dose escalation study of our first in class monoclonal anti-VISTA antibody CI-8993. We look forward to recording initial clinical data for this study later this year.

[Bill Steinkrauss:]

Thank you, Jim. For the first quarter of 2021, we reported a net loss of $9.9 million or $0.11 per share on both the basic and diluted basis as compared to a net loss of $9.7 million for $0.28 per share on both the basic and diluted basis for the same period in 2020. Revenues for the first of 2021 were $2.2 million, as compared to $2.7 million for the first quarter of 2020. In both cases, revenues comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of Erivedge. Operating expenses for the first quarter of 2021 were $11 million as compared to $11.2 million for the same period in 2020. Cost of royalty revenues of $0.1 million for both the first quarter of 2021 and 2020. Research and Development expenses were $6.8 million for the first quarter of 2021 as compared to $7.5 million for the same period in 2020. The decrease for the quarter is primarily attributable to the upfront license fee expense from our option and license agreement with Immunex related to CI-8993 that occurred during the first quarter of 2020. These costs were partially offset by $0.3 million increase in employee related costs. General and administrative expenses were $4.1 million for the first quarter of 2021 as compared to $3.6 million for the same period 2020. The increase in general and administrative expense was primarily driven by higher costs for stock-based compensation, professional and consulting services, partially offset by lower legal costs during three months ended March 31 2021. For the first quarter of 2021 and 2020, net other expense was $1.1 million and $1.2 million respectively. Net other expense primarily consisted of imputed interest expense related to future royalty payments. As of March 31 2021, there were approximately 91.5 million shares of common stock outstanding. As of March 31 2021, Curis' cash, cash equivalents and investments totaled $168.4 million. We expect that our existing cash and investments should enable us to maintain our planned operations into 2024. With that, I'd like to open the call for questions. Operator?

[Operator:]

Our first question comes from Ed White with H.C. Wainwright. Please go ahead.

[EdWhite:]

Just the first question, Jim, I should be thinking of the path forward to approval for monotherapy and combination therapy. Maybe perhaps you can discuss potential timelines to approval in AML and MDS? And what strategy either monotherapy or combo can get 4948 to the market sooner?

[JimDentzer:]

Thanks Ed, appreciate the thoughts on the question. It's a little preliminary for us to talk about timelines to approval, but I think our overall approach is really the same approach we outlined in December. We're just -- of course, we're confident now that the data continues to reinforce it. And that is, from initially expecting this was a combo therapy only drugs that we were going to have in a selected population of 50% of the population and the December data and of course now the ASH abstract data seems to support that this is more appropriate for all comers. So I think that's the primary end use. The other opportunity that was seen to that in December, and now we can see more clearly is there may also be a monotherapy path in selected population. And I think now we can say it looks like the spliceosome mutations population would be a good candidate for that. All three of the patients that have a spliceosome mutation in the study so far I've seen marrow CR betters. So obviously that given the genomic association, which it makes it for a very compelling monitor of the opportunity, and the idea that in a post HMA setting, there is no other drug approved. We like the chance of that one as well. Which one will go faster? I don't really know. I think the answer at this point is both seem to be very compelling opportunities, a combination therapy, where this gets added to standard of care and then of course monotherapy in a separate population driven by the genomic signature.

[Ed White:]

Thanks, Jim. And maybe you could just give us your thoughts on the size of these dose escalation studies the cohorts in both combination and monotherapy?

[Jim Dentzer:]

Yes, Bob, would you mind taking that one?

[BobMartell:]

Yes, so these studies will initially be dose escalation trials using a three plus three type of design. Fortunately, we were able to start at a very relevant dose that's already been shown to be therapeutically active of 200 milligrams twice daily. And we also have starting to define the upper limits as well as Jim mentioned, we would likely tick within the range of somewhere in the 200 to 400 range for dosing. So the overall dose escalation for these trials, not likely to take too long.

[Operator:]

The next question is from Justin Walsh with B. Riley Securities. Please go ahead.

[JustinWalsh:]

First, could you guys elaborate on the steps needed to establish the recommended Phase 2 dose at lower than 500 milligrams BID in AML and MDS?

[Jim Dentzer:]

Sure, again, that's probably the best question for Bob. Bob?

[BobMartell:]

Yes, I can do that. So far, we've seen really exciting data in a small number of patients. So part of our efforts now will be to look at a variety of different variables, obviously, including pharmacodynamics. We do know for example that the pharmacokinetics are very well behaved between, say 200, 300 and 400 milligram dose levels. We'll also want to expand somewhat and further understand the efficacy, perhaps looking at perhaps a dosing, interval break, things like that. So, all of this will take place in the coming months, and hopefully, we'll be able to define a recommended Phase 2 dose going forward in the near term.

[JimDentzer:]

Yes. I think, I would add something to that, Justin. I'd say that, the good news from a timing perspective is we expected to hit MTD. We just didn't know when. The only signal that we had from the NHL study was that it was likely to be CPK elevation of rhabdo and sure enough we did see it at 500 in the leukemia study. So, I think now that we've got the MTD in hand, we're at this high class headache where 200, 300 and 400 all look therapeutic. I mean, I know that sounds kind of funny treated that your headache, but really it is. So, we need to do a little bit of dose exploration at this point to try and figure out, which of these really is the best one to take in the Phase 2.

[Justin Walsh:]

Got it. And one more question for me. I saw in the abstract that that most of the patients were transfusion dependent, which isn't that strange for higher risk MDS. I'm just wondering, are you guys tracking this and have you noticed any improvements in transfusion dependence in the MDS patients?

[Jim Dentzer:]

Yes. So hold that thought for the more detailed discussion at EHA, but absolutely in MDS transfusion dependence is really important. In fact, a clinical end point for a study could be reduction of transfusion dependence. So we continue to monitor that that's something that's going to be important, not just for our studies, but also of course, for the low risk MDS study that LUCAS IST that's being run in Europe. So hold that thought.

[Operator:]

Our next question is from that Soumit Roy with JonesTrading. Please go ahead.

[SoumitRoy:]

Hi, everyone. Congratulations again a very robust data. Just a couple of things and not sure how much color you can share with us. Any mutational status on this responders, if we should think they're mostly spliceosome mutants or it looks like both could be fit through you or mutant? And the split between AML or MDS, how many from the AML cohort responders, how many from the MDS?

[JimDentzer:]

So, we're going to want to hold off on some of the genomics discussion for the actual EHA presentation. We're going to not go beyond what we said in the abstract. That said of course that's a matter of great interest for us. So you can look forward to having a lot more detailed discussion around that when we get to it.

[SoumitRoy:]

Absolutely, understandable. Just one last question. Any one sitting up 4948 plus aza in the naive sitting. Should we think of as frontline patients being included whoever is not amenable to seven plus three treatment? And how would the physicians kind of think whether to put the patient on 4948 aza versus venetoclax plus aza in the elderly patients?

[JimDentzer:]

Yes, why don't we ask Bob, our oncologist, to walk through that? Bob?

[BobMartell:]

Yes, so absolutely, azacitidine maybe a viable treatment for first-line for patients. So this combination in first line is something that certainly can be considered. One of the advantages that this drug has over venetoclax for example is the lack of significant myelosuppression. So, this might be a driving factorespecially for frail elderly patients for a clinician to choose this combination over venetoclax. As we mentioned earlier, we were also exploring a combination with venetoclax itself and may even consider triplet combination at some point in the future as well.

[Operator:]

The next question is from Alethia Young with Cantor Fitzgerald. Please go ahead.

[AlethiaYoung:]

Thanks for taking my question and congrats on the progress with the abstract. First, I am going to ask them one by one because I think they're all equally important. So, when you look at the six people you had to ASH like when we trace back now to how the CRs have deepened were those the people that had met CR that deepened or how should we think about who had the hematologic recovery? That's the first question.

[Jim Dentzer:]

Yes, we haven't gotten into the patient by patient detail. I'd say hold that discussion on a deeper level of the data for the EHA conference. I would say that the high level observation is really the most important one is that we were very pleased that we're getting blast count reductions. Remember that this drug is that's an anti-cancer drug, it's not a marrow stimulant. So, we weren't really expecting to see heme recovery in this really late line population that we started to see it was fantastic. We would expect that if you can eliminate the tumor burden and heme recovery is possible, depending upon the health of the marrow, it is the sort of thing that you would expect might come over time. The fact that we've already seen it is, of course, fantastic. So, we'll be following those patients and of course the additional ones we put on the study in the market to come, but we're very encouraged by what we're seeing so far.

[AlethiaYoung:]

So to follow that up, so EHA we will get the information patient by patient, but just at a high level, is it fair to assume that your hypothesis responses deepened over time or can you say that?

[Jim Dentzer:]

I think the hypothesis is that this drug directly targets the driver of disease IRAK4 or IRAK4-L and that should lead to the reduction of leukemic blasts full stop. That's what this drug does. It's an anti-cancer drug. So by hitting the target of disease or the driver of disease, you should see a reduction in cancer burden. And if the patient's marrow is healthy enough, obviously frontline patient's marrow is going to be much healthier than in late line. The marrow gets damaged over time, not just by the cancer, but frankly by the cytotoxic agents whether its chemo or aza or ven, all of these agents will cause damage to the marrow. If the patient's marrow is healthy enough to be recovered, we would hope to see it, knowing that might take some time. But that's going to be frankly a patient by patient basis, and it's going to depend of course, how many prior lines of therapy and how deep the cancer has gone in each patient.

[AlethiaYoung:]

Okay. And so, I don't know if you can say this, but can you tell us at what dose those CRs were achieved?

[Jim Dentzer:]

We will be showing that at the EHA conference.

[AlethiaYoung:]

Okay. I guess maybe this is more just on the toxin at the higher dose. Can you confirm that whether there're any new responses reported at the 500 milligram cohort? Any more toxicity I guess in way like -- you know what I am saying.

[Jim Dentzer:]

Yes, I know what you are saying. Obviously, I'm trying to balance the EHA role. So, we don't want to be bridging the gap between what's in the abstract and what's in the presentation to come. I think what we would say is that, we always expected to see talks. And hard surprise, we were pleasantly surprised that we started to get responses even at the 200 and 300 dose levels. What I can say broadly is that 200, 300 and 400 all look like therapeutic doses. I would say that we were pleased that we've now established MTD, and we're now going to try and figure out which of the dose is there a dose response, is 200, 300 better than 200, 400 better than 300 remains to be seen. And as Bob said, we may also want to take advantage now that we're in Phase 1 before we go to Phase 2 of exploring different regimens as well, now is the time to learn that. But for now, I would say, we're frankly, in this very high class headache division of seen three therapeutic doses and trying to evaluate, which of the three is the best one to take into Phase 2.

[AlethiaYoung:]

So when you think about the dose response curve here like the 300, 400, now the 500. There was a ramp the 300 in this population, mind you. But do you think that there, you have a predictable kind of dose response recur between the 200, 300 and 400 now? And that, you know, basically 500 starts to creep up or do you think there is more work to be done there?

[Jim Dentzer:]

I would say, we still have a pretty small number of patients I need to be fair. I think we're encouraged that across the board, all of the doses look to be effective, all the doses meaning 200, 300 and 400. Such a small number of patients in each one, it's hard to say today that there's clearly dose response and that one dose is clearly preferable to the other two. That's exactly why we've got to continue to dose exploration in the months to come and try to assess that out.

[AlethiaYoung:]

Okay. So when these two things with rabdo with the Grade 3, 1, was there any clinical symptom? I know with the other one, there was a syncope? But can you -- is the syncope related -- is it drug related? And like, if so, like, can you kind of explain what you think the mechanism of action is?

[Jim Dentzer:]

Sure. Bob, you're probably the best one to talk to that.

[BobMartell:]

So generally, patients who experienced this will have some muscle soreness, maybe they'll notice a little bit of darkening of urine. In all the cases, patients have not had any organ dysfunction like renal failure or anything like that and they've all recovered fairly rapidly from this. We think in several other patients, there have been other factors that may have also contributed to that, for example, heavy exercise or a pattern for example that may have been as a warning for rhabdomyolysis. So, those potentials that this drug pushed those patients to the point where they experienced and from that extent, we do feel that it is drug related but other potential factors.

[Jim Dentzer:]

The primary factor for us to Alethia in declaring 400 is our maximum tolerated dose and backing away from 500 was not the syncope, it was the rabdo because we were looking for it frankly after the NHL experience. We did expect to see it. We were pleased with that. As Bob said, we believe based on the NHL study, that if you are on a statin this may exacerbate that. So if you already have one factor that would push the CPK elevation that if you stay on the statin and add our drug, it might push it that much farther in the direction. Same thing with heavy exercise, if you have a lot of heavy exercise maybe this exacerbates that. So, we were looking for that effect and that we did see, it didn't surprise us. But even though it's only one of the two DLTs, that's really the one that in our mind says, okay, we saw what we expected to see. Let's back off to 400, and then of course, take a look at the other dresses as well to see which dose is the best.

[AlethiaYoung:]

Okay. So, with the Grade 3 rabdo that you saw, did anyone have like kind of pattern exercise baseline things that would have done though?

[Jim Dentzer:]

Yes, bob.

[BobMartell:]

Yes. So, the two of the patients on the lymphoma trials, we've mentioned previously, one of whom had the Grade 3 rhabdomyolysis was also on a statin and the other patients in that case actually felt quite a bit better after being on the study drug for a certain time, and went out and exercise heavily and then developed muscle soreness and symptoms after that. So, we think, so what we've advised going forward for the clinical trials for patients and investigators to discuss with their patients, if they are on a statin or they're necessary to continue that statin. And if they can come off that statin, they would suggest to do that and similarly to avoid extremely vigorous exercise while on the treatment. And we think that part of the reason why we didn't see this side effect until higher doses on the leukemia study.

[AlethiaYoung:]

Got it. And then may my last one, do you think there's a differential kind of monitor if the response between MDS and AML patients?

[Jim Dentzer:]

Yes, bob.

[BobMartell:]

Yes. So, we'll actually give the much more detailed description of the specific patients, but obviously we've treated those patients so far and we've seen achievement in marrow CRs in both groups of patients. But we'll have to see that the MDS population is the population where the spliceosome mutations are much more common and that we've announced as part of this presentation that the three patients who have spliceosome mutations all achieved a marrow CR are better.

[Operator:]

This concludes our question-and-answer session. I would like to turn the conference back over to James Dentzer for any closing remarks.

[End of Q&A:]

[Jim Dentzer:]

Thank you, operator. I'd just like to thank everybody for joining us on the call today. We greatly appreciate the patients and families participating in our clinical trials. And of course, as I said earlier, I'd like to thank the team at Curis for their hard work and commitment, also our partners at Aurigene, Immunex and the NCI for their ongoing help and support. We look forward to updating all you again very soon at the EHA conference. Operator?

[Operator:]

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