Curis, Inc. (CRIS) Earnings Call Transcript & Summary

Thanks, everyone, and welcome to the Curis call covering our first quarter of 2020. Before we get started, I'd ask all of you to visit the Investors area of our site, www.curis.com, where the earnings release for Q1 2020 and the accompanying financial tables are posted. I also want to remind those listening that on this call, management will be sharing forward-looking statements, and those rest on what we currently expect and believe. Such statements carry certain risks and uncertainties, and actual results could differ materially. For more information, please refer to our SEC filings. With me today are Jim Dentzer, our President and Chief Executive Officer, and Bob Martell, who leads R&D; the two of them will also stick around for Q&A once the call ends. At this point, I'll hand things over to Curis' CEO, Jim Dentzer. Jim?

Thank you, Bill. Good afternoon to all of you, and we appreciate you being with us today. Prior to walking through the quarter, I want to offer some broader remarks regarding COVID-19 and how it is affecting what we do, both inside the company and with regard to the clinical trials we have underway. Right now, as we, like everyone else around the globe, adjust to the new realities of living through this pandemic, our commitment to the mission of delivering innovative, targeted cancer therapeutics to patients who continue to have substantial unmet need remains unwavering. The challenges created by the pandemic have been met by our team with resilience and commitment, and the strength of this organization makes me extremely proud. We keep watching guidance from institutions, regions, and the country as a whole, which allows us to stay nimble and current on emerging developments; we consider ourselves lucky that we can move our business forward productively and efficiently while following public health directives and operating remotely. When it comes to clinical work, we are collaborating closely with our partners, CROs, manufacturers, and the investigators and staff at every one of our clinical sites in order to safeguard the health and safety of patients, and to make sure they have uninterrupted access to study drug in a way that maintains the integrity and rigor of our trials. With that said, I'd like to go over our clinical development program. Let's begin with the IRAK4 program and CA-4948. As a reminder, CA-4948, which is an IRAK4 kinase inhibitor, is being evaluated right now in an ongoing Phase I dose escalation study for treating patients who have relapsed or refractory non-Hodgkin's lymphoma, among them patients with diffuse large B-cell lymphoma, Waldenstrom's macroglobulinemia, and Oncogenic MYD88 mutation. Enrollment has slowed in pace because some sites have paused enrollment for the time being as a result of the pandemic, but a number of our Phase I study sites are still open and are enrolling new patients. Currently, we are evaluating patients receiving 300 milligrams twice daily, following the clear dose response and tumor reductions we observed at earlier dose levels; the results from the study thus far please us, and we remain on schedule to share updated safety and efficacy data and to declare the recommended Phase II dose later this year. I also want to discuss our second program for CA-4948, in patients with acute myeloid leukemia, or AML, and myelodysplastic syndrome, or MDS. The AML and MDS community was energized by the groundbreaking presentation that Dr. Amit Verma of Einstein gave at the ASH Conference in December, where he emphasized the role of specific spliceosome mutations as key drivers of IRAK4-L expression. In addition, he identified IRAK4-L, the oncogenic long isoform of IRAK4, as the first and, to date, only known driver of disease affecting more than half of the population of patients with AML and MDS. We've supplied CA-4948 to Dr. Verma so he could explore it in his lab. And in preclinical studies, he discovered that blocking this long isoform of IRAK4 through treatment with CA-4948 dramatically reduced the formation of leukemic block. This preclinical information showed, for the first time ever, an obvious inherited cause of illness that impacts most people in the AML and MDS patient groups. It's also especially thrilling for Curis, since our medication acts straight on this cancer-causing kinase, IRAK4-L. Right now we're collaborating with our trial locations and researchers to get a Phase I trial of CA-4948 going in AML and MDS patients. Even though the coronavirus outbreak has definitely turned everything into a bigger hurdle, we anticipate kicking off this trial sometime in the current quarter. Finally, I want to bring up our clinical program for CI-8993, a monoclonal antibody created to block the VISTA signaling pathway. Back in January 2020, we signed an option and license deal with ImmuNext covering development and commercialization of an anti-VISTA antibody, which includes its lead compound, CI-8993. VISTA is an important and promising target in oncology. And we're eager to apply what we've learned and experienced from earlier VISTA studies as we move CI-8993 forward. We anticipate starting our Phase I dose escalation trial as soon as the second half of this year. At this point I'll hand the call over to Bill for a rundown of our financial results for the quarter. Bill?

Thanks, Jim. For Q1 2020, Curis posted a net loss of $9.7 million, which works out to $0.28 per share, on a basic as well as diluted basis — that compares with a net loss of $9.9 million, or $0.30 per share, again on both a basic and diluted basis, during the equivalent stretch of 2019. Revenue came in at $2.7 million for the first quarter of 2020, versus $1.8 million for the matching period in 2019. In both periods, revenue was made up mainly of royalties booked on Genentech and Roche's net sales of Erivedge. Operating expenses reached $11.2 million in Q1 2020, compared with $7.3 million for the matching period in 2019. Positive royalty revenues came to $0.1 million in both the first quarter of 2020 and 2019. R&D expenses totaled $7.5 million in Q1 2020, versus $4.1 million for the same period in 2019. That rise came mainly from in-license expenses tied to our option and license agreement with ImmuNext, plus higher costs tied to clinical activities, such as consulting, outside lab expenses and CRO services. G&A expenses were $3.6 million in Q1 2020, compared with $3.1 million for the matching period in 2019. That increase was driven chiefly by greater legal services during the period. Net other expense was $1.2 million in Q1 2020, versus $4.3 million in the matching period of 2019. In 2020, net other expense was mostly imputed interest expense tied to future royalty payments. In 2019, by contrast, that expense stemmed mainly from a onetime loss on extinguishment of its total debt. As of March 31, 2020, cash, cash equivalents, marketable securities and investments at Curis came to $12.5 million, and roughly 36.6 million shares of common stock were outstanding. Curis anticipates that its current cash, cash equivalents and investments ought to let it sustain its planned operations into the second half of 2020; with that, I'd like to open the call for questions. Operator?

Thanks, Jamie. To wrap up this call, I want to express our gratitude to every patient and family still taking part in our clinical trials, plus the team here at Curis for their dedication and effort, and our collaborators at Aurigene and ImmuNext for standing with us. We appreciate your presence on today's call, and we're eager to bring you another update before long. Jamie?

Everyone, this brings today's conference call to a close, and we appreciate your participation in today's presentation. You're welcome to hang up your lines at this time.