Corvus Pharmaceuticals, Inc.
Q3 2019 Earnings Call Transcript

Published: 30 Oct 2019

[Operator:]

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Corvus Pharmaceuticals Third Quarter 2019 Update and Financial Results Webcast. Today's conference is being recorded. 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 Zack Kubow of Pure Communications. Please go ahead, sir.

[Zack Kubow:]

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals third quarter 2019 business update and financial results conference call.On the call to discuss the results and business highlights for the third quarter 2019 are Richard Miller, Chief Executive Officer; Leiv Lea, Chief Financial Officer; and Mehrdad Mobasher, Chief Medical Officer. Also joining the call are Corvus' Senior Scientist, Dr. Stephen Willingham and Dr. Drew Hotson. 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, 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?

[Leiv Lea:]

Thank you, Zack. I'll begin with a quick overview of our third quarter financials, and then turn the call over to Richard for a business update.At September 30, 2019, Corvus had cash, cash equivalents and marketable securities totaling $86.4 million, as compared to $114.6 million at December 31, 2018. Research and development expenses in the third quarter 2019 totaled $9 million compared to $8.4 million for the same period in 2018. The increase of $0.6 million was primarily due to an increase in CPI-006 and CPI-818 program costs and personnel costs, partially offset by reduced ciforadenant costs. I would like to note that we continue to carefully manage our expenses and currently expect full year 2019 net cash used in operating activities to be between $38 million and $40 million with the 2019 year-end cash balance between $75 million and $77 million. The net loss for the third quarter of 2019 was $11.0 million compared to a net loss of $10.5 million for the same period in 2018. Total stock compensation expense for the third quarter of 2019 and 2018 was $1.8 million.I will now turn the call over to Richard.

[Richard Miller:]

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our third quarter 2019 business update.During the quarter, we continued advancing all three of our clinical programs. Our Adenosine A2A receptor antagonist, ciforadenant, our anti-CD73 CPI-006, and our ITK inhibitor CPI-818. Enrollment in all three clinical studies continues to go very well, and we look forward to providing updated CPI-006 clinical data in an oral presentation and updated clinical data with ciforadenant and posters at the SITC meeting in November. We are also planning to present data related to ciforadenant and CPI-818 programs at other medical meetings over the next four months. On today's call, I will provide a brief preview of our SITC presentations, followed by an update on our other programs, ciforadenant and CPI-818. In short, we believe that our precision medicines, biomarker-driven studies and efficient clinical designs will allow us to advance multiple products deeper into clinical developments. As a reminder, CPI-006 is a novel, first of its kind anti-CD73 antibody.We created and are developing it because it possesses unique immunobiology properties. Dr. Jason Luke from the University of Pittsburgh, presented the first human clinical evidence of these properties in an oral presentation at ASCO earlier this year. His presentation demonstrated that CPI-006 has two important mechanisms of action, combining immune stimulation and adenosine blockade, which are expected to be synergistic. Briefly, the key highlights from ASCO included CPI-006 binds to a site on the CD73 protein that blocks its enzymatic activity, blocking the production of immunosuppressive adenosine. CD73 is also a co-stimulatory molecule on immune cells. CPI-006 interacts with the site on the molecule that leads to activation of immune cells. This process is independent of adenosine. Clinically, the early results presented at ASCO demonstrated dose-dependent disease control in patients with advanced refractory disease, when administered as a monotherapy and in combination with ciforadenant. CPI-006 achieved tumor control and regression in patients with very advanced cancers, who are resistant to current treatment approaches. In particular, we saw early signs of activity in prostate and renal cell cancer.We also reported a positive safety profile as CPI-006 was well tolerated at all dose levels with no dose limiting toxicities observed so far. We continue to enroll patients with advanced cancer in the Phase 1/1b study with a focus on the first two arms of the study, single agent and in combination with ciforadenant. Since ASCO, we have selected our optimal dose at 18 milligrams per kilogram every three weeks for CPI-006 monotherapy, one of the main goals of the study. Based on the experience to date, we believe this dose provides sustained pharmacokinetics and full occupancy of the CD73 sites in blood and in tumors. This dose provides the basis for the expansion cohorts in the current trial and future trials focused on assessments of efficacy. On Friday, November 8, at 3

[Operator:]

Thank you. [Operator Instructions] First question will come from Biren Amin with Jefferies.

[Biren Amin:]

Hi, guys. Thanks for taking my questions. Richard, maybe if I could just start in terms of thresholds for the prostate cancer program. How should we think about it as we get data the next year at ASCO GU in terms of -- what is good data with ciforadenant plus Atezo, in order to move the program forward into the next stage of studies?

[Richard Miller:]

Okay. Thanks, Biren. That's a good question. We've thought a lot about that and we have discussed it with our experts who are involved in our clinical trials. So we think that a response rate in hormone refractory patients with metastatic castration-resistant prostrate cancer, in excess of 20%, 25% objective response would be a very good result. Obviously, durability and safety are also key components of that, duration of response of six months or so, alternatively drops in PSA of around 50% or so would be seen in 20%, 25% would also be good results. So I think the threshold here is 20%, 25%. Keep in mind that you have a completely novel mechanism of action here. Also keep in mind that PD-1s, whether it be anti-PD-1 or anti-PD-L1 have had very low response rates in similar patient populations on the order of around 5% or even less. So our targets here is 20%, 25% ORR.

[Biren Amin:]

So when you look at 20%, 25% ORR, are you talking about that being measured by a recess in patients with measurable disease?

[Richard Miller:]

Yes.

[Biren Amin:]

Okay.

[Richard Miller:]

That would be in this criteria.

[Biren Amin:]

Okay. That's helpful. And then I guess as it relates to the RCC program, last year at SITC, you presented on I think top of Atezo, and we saw PFS in the combination arm of about 5.5 months across 31 patients. Are you going to update us on, you know with that cohort, in terms of PFS or is that basically -- is that, sorry, basically finished now?

[Richard Miller:]

No. The study is continuing. We are enrolling, Biren, part of your question, I think came in and out, so I'm not sure I captured it all. But I'll try my best to answer your question. I think, I knew where you were going. So in our ongoing renal cell cancer patient study with Atezo and cifo, keep in mind again, these are patients who've third-line therapy and fourth-line therapy. Most of them, if not all of them have failed PD-1s, their PD-L1 negative is bad group of patients. Now, we're using the adenosine signature looking at patients who are adenosine signature positive or negative. At the SITC meeting, we'll update you on the ORR in the positive versus negative, and I can tell you that adenosine signature continues to hold up and predict responsiveness in renal cell cancer patients. The target, if you're looking for a target for RCC in that kind of population, our target for wanting to proceed beyond this study perhaps in a pivotal trial would be 20% or more ORR by resist in a patient population that is similar to this, or perhaps slightly earlier, because we've got a lot of really end stage patients in our current study. And we probably would exclude those in a future trial. So I think we're looking for a 20% response rate or higher by resist in the Adenosine Signature Positive population, which would be about 50% or 60% of renal cell cancer patients.

[Biren Amin:]

And what about correlation of the Gene Signature to duration of response in those patients that are -- to achieve a response, do you expect…

[Richard Miller:]

Okay. That's a great question and it's also discussed in our paper and press. It turns out that the -- and I forget the number exactly, but the frequency of patients who are the long-term remitters, those who are the tail on the PFS curve, those are all Adenosine Signature Positive. I mean, I think just about every one of them. The Adenosine Gene Signature predicts durability and response, very well in renal cell cancer. The question that we are now beginning to look at is, does that Signature apply to prostate and other cancers, and it's just really too early to say that.

[Biren Amin:]

Got it, great. Thanks for taking my questions.

[Operator:]

[Operator Instructions] Next we will hear from Tony Butler with ROTH Capital Partners.

[Tony Butler:]

Richard, once upon a time there was the notion and perhaps it still exists. So I'd like to refresh the molecular understanding of the need to put an A2A in addition to an anti-CD73 on board perhaps plus or minus PD-1, PD-L1. In that perhaps there is some adenosine leak if you were using one or the other. And I'm just curious if you could speak to the notion of and let's just call it adenosine leak such that you get maximum abrogation of adenosine by using the combination. Thanks again.

[Richard Miller:]

So, there are many sources of adenosine production, not just through CD39, CD73. So we've always thought that blocking the final receptor, the A2A receptor was the best strategy and that's why we initiated our work in that area first. Blocking CD73 will also improve upon that potentially, because it will reduce the levels of adenosine. But as I mentioned, there are other pathways. Now, Dr. Willingham's posters specifically will address this question because when you block CD73, and I don't want to give his poster away because he is going to give me dirty looks there. If it blocks CD73, you get a build-up of AMP. And AMP has other consequences that are interesting and it turns out that using anti-CD73 and an A2A together make a lot of sense for a lot of reasons. Main reason being there are multiple pathways of adenosine production but a buildup of AMP also has other consequences that you'll hear about in his poster.Now, keep in mind that our strategy combining CPI-006 and the A2A receptor antagonist together has yet another strategy, which I think is even more important. If you can block the A2A receptor adequately that's probably a very good thing to do, but we think that the more important thing we're doing with CPI-006 is we're stimulating immune cells and eliciting primary immune response. That together with removing the immunosuppression of adenosine could be an awesome combination and that's sort of our strategy, which is a little bit different than others.So, I guess the summary to your question is using both in combination, we feel using both in combination even if you're just focused on adenosine is a good idea but I think where Corvus has an advantage here is this other immunostimulatory ability on top of that. Now if you want to throw PD-1, anti-PD-1 in there as well that's a reasonable thing to do, because that's yet another pathway to block or another pathway to think about in terms of immune stimulation. But I think Stephen Willingham's poster -- Stephen Willingham's poster will address and presents really new findings about the consequences of blocking CD73 that I don't want to divulge right here.

[Tony Butler:]

And my second question. Thank you for that by the way, Richard. My second question is around other immune cells in that microenvironment, for example, does blocking -- if you were to block this anti-CD73, for example, forget about A2A for the moment inhibition, but do you actually have an increase or decrease in macrophages at the site when in fact you do get rid of adenosine and is it different even in-vitro, if you use both agents versus one or the other? Thank you.

[Richard Miller:]

Yes, I'm not sure we have -- and jump in here guys if you have question -- some knowledge on this. I'm not sure we have data -- convincing data showing from biopsies, you're asking a tough question that requires biopsies, you know with our adenosine blockade or with A2A receptor antagonist or CD73 whether we have a demonstration of any change in myeloid or monocytic cell infiltrate, certainly in some cases and it's in our paper and press, we see in many patients an increase in T-cells, but that's really hard to study, very hard to be sure about. But if you recall and I'm going to let Stephen comment on this. He is just falling out of his seat here and answer this question. The Adenosine Gene Signature also known as the myeloid gene signature is set of genes that are myeloid-cell derived. So you're putting your finger on really critical cell type, the myeloid cell is probably very important in all of this -- Stephen, you want to add something to that?

[Dr. Stephen Willingham:]

Only that. Yes, we see very big differences in-vitro when we use an anti-CD73 alone versus anti-CD73 plus our A2A antagonist and that's in part what I'll be presenting at the SITC Conference.

[Tony Butler:]

Stephen and Richard, thanks very much. I appreciate it.

[Richard Miller:]

Okay.

[Operator:]

And with no further questions in the queue, I'd like to turn the call back over to Richard Miller, for any additional or closing remarks.

[Richard Miller:]

Okay. Well, first of all thank you to everyone for participating in the call. We look forward to our presentations at the Society of Immunotherapy of Cancer or SITC meeting in November 8 and hope that for those who can't attend, you can come to our reception that evening, Friday evening or listening to our webcast. Thank you very much and good afternoon.

[Operator:]

Once again, that does conclude our call for today. Thank you for your participation. You may now disconnect.