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

Thanks for joining us for Curis' Third Quarter 2020 Earnings Call. To start, I'd ask that you visit the Investors area of our site, www.curis.com, where you can locate our third quarter 2020 earnings release along with the related financial tables. I also want to remind all of you that on this call, management will be providing forward-looking statements, which rest on our present expectations and beliefs; such statements carry certain risks and uncertainties, and actual results could differ materially. For more information, please consult our SEC filings. With me today are Jim Dentzer, President and Chief Executive Officer, and Bob Martell, Head of R&D; we'll also take questions during a question-and-answer period at the conclusion of the call. At this point, I'd like to hand the call over to Curis' CEO, Jim Dentzer. Jim?

Thanks, Bill. Hello everyone, and I appreciate you joining us this afternoon. Here at Curis, what drives us is developing the next wave of precision cancer medicines capable of delivering real improvements in how long patients live and how well they live. We moved significantly closer to that goal over the third quarter. Despite the difficulties created by the COVID-19 pandemic, we remain positioned to achieve all of the objectives and milestones we laid out for 2020, and we're preparing for the clinical data we expect to announce at ASH next month. Turning to CA-4948, our IRAK4 inhibitor — the first of its kind — we currently have two clinical trials running: the first of these involves individuals with non-Hodgkin's lymphoma whose disease has come back or stopped responding to treatment. Our other IRAK4 trial is in people who have relapsed or refractory acute myeloid leukemia, along with high-risk myelodysplastic syndromes. Next month, at the American Society of Hematology's Annual Meeting, we'll share updates from both trials through an oral presentation and poster sessions. In addition, we were delighted to announce earlier today that a Cooperative Research and Development Agreement, also known as a CRADA, has been signed with the National Cancer Institute, and under it they'll collaborate with us on CA-4948's development. This collaboration is something we're really enthusiastic about, because it significantly increases how many patients we can reach in a group facing serious unmet medical needs, and we're able to do that without any outside funding that would dilute shareholders or any major money outlay on Curis's part. Getting the joint effort underway with the folks at the NCI is something we're looking forward to, and we'll keep everyone posted with news whenever we've got it. On the CI-8993 front, the momentum has been quite thrilling too. Back earlier in the year, we told you about teaming up with ImmuNext as well as filing our IND for CI-8993, which is our VISTA inhibitor and a first-in-class asset. Then during Q2, we shared that the FDA had given us the green light on that IND. During the third quarter, we're pleased to share that we succeeded in activating our initial clinical locations and began administering doses in the Phase Ia/Ib trial involving individuals who have relapsed or refractory solid tumors. Overall, Curis experienced a highly productive quarter; we're eager to continue advancing this work as we prepare year-end data releases and sustain that energy going into 2021. Let's now examine specifics of our active clinical initiatives. To recap, our Phase I dose-escalation trial of CA-4948, which treats those with relapsed or refractory non-Hodgkin's lymphoma, enrolls people who have diffuse large B-cell lymphoma, Waldenstrom's macroglobulinemia, and oncogenic MYD88 mutations. Right now, we're looking at patients who are getting 300 milligrams of CA-4948 two times a day, and that's because we saw a clear dose response along with tumor reductions at earlier dose levels. On November 4, which was last week, we put out clinical data from this study in an abstract that got accepted for an oral presentation at the ASH Conference this December. In that abstract, we reported that CA-4948 has shown encouraging safety and pharmacokinetic properties, and at higher dose levels, clear single agent efficacy in a relapsed refractory NHL patient population that had already been through a median of 4 prior lines of therapy before they joined our study. For a bit more background, at ASH last year we shared a modest yet compelling dataset hinting that CA-4948 might be able to make IRAK4 inhibition a novel mechanism of action — a new approach to treating NHL patients — since it produced a strong safety and efficacy profile, especially at the higher doses when given as a monotherapy. The aim this year was to verify that result and to determine which of the active dose levels — 200, 300, or 400 milligrams BID — gave the optimal combination of safety and efficacy. Looking more closely at the abstract data, which use a July cutoff, we observe that 8 patients saw their tumor burden drop by 20% or more relative to baseline, among them 4 patients who received 300 milligrams BID; it is quite encouraging that efficacy got better as the dose levels rose. That pattern appeared both across the overall study group and in one individual patient, a Waldenstrom's patient who, as of the July cutoff, had spent 18 months on study across several dose levels and attained an objective response featuring a 66% reduction in tumor burden. The patient started on 50 milligrams taken twice daily, then moved up to 100 milligrams, followed by 200 milligrams, and finally 300 milligrams, with tumor burden shrinking at every dose level in a manner tied to how much drug was given. It's worth stressing again how severely ill this population is—before enrolling, they had a median of 4 prior treatment lines. Being able to see a therapeutic signal from a single agent, and having those responses persist over such an extended stretch, is very heartening, and we're looking forward to the ASH Conference, where our presentation will feature a larger, refreshed dataset based on a cutoff date later than the one used for the abstract. Because of the obvious single agent activity observed in the clinic and the obvious pre-clinical synergy observed when CA-4948 is paired with a BTK inhibitor like ibrutinib, our clinical investigators and we are keen to test the CA-4948 plus ibrutinib combination in the clinic. As we said on our August call, the direction of the data was already apparent to us, and we decided to launch the combination study as fast as we could. On this call, we're happy to share that through tight coordination with the sites running our trial, we were able to revise the existing study's protocol to add combination therapy. Doing it this way meant we didn't have to file a brand-new protocol or launch a separate clinical trial from scratch. As a result, we can leverage the sites and personnel who are already involved in our monotherapy work, which should save a significant amount of time and money as we speed up our route to the clinic. This combination study will have 2 parts, and the design will be laid out in a Trial in Progress poster that will be shown at the ASH Conference. The trial's initial phase involves escalating doses using a 3x3 design. CA-4948 starts at 200 milligrams given twice daily, then increases to 300 milligrams twice daily, combined with ibrutinib at amounts tailored to each particular NHL subtype. An expansion basket with 4 cohorts makes up the trial's second phase. Marginal zone lymphoma, or MZL, is covered in the first cohort; ABC DLBCL in the second; primary central nervous system lymphoma, or PCNSL, in the third; and the fourth addresses NHL that has developed adaptive resistance to ibrutinib. When it comes to primary endpoints, the study will incorporate established clinical endpoints like objective response rate and duration of response, yet beyond that we'll be exploring how responses correlate with biomarkers we've pinpointed, which could assist us in enriching the patient population and in figuring out the optimal registration path. So across the whole arc — starting with the scientific hypothesis, moving through pre-clinical data, and then into clinical data — each step along the way has been a consistent advance toward what we see as the long-term future for CA-4948 in NHL. The idea there is that IRAK4 sits at the center of a key pathway that works alongside and in a complementary way to the BTK pathway, and that if you block IRAK4, you could bring added benefit to the very large group of patients who receive a BTK inhibitor, and you might also help reduce resistance to BTK therapy. That captures our vision in NHL.

Let's turn our attention now to leukemia, which a lot of people consider perhaps even more promising than the NHL opportunity. Our second trial involving CA-4948 focuses on individuals suffering from relapsed or refractory AML along with high-risk MDS, and this includes patients who carry spliceosome mutations responsible for driving expression of the oncogenic long isoform of IRAK4. Back in early July, we shared news that the first patient had been dosed in our open-label Phase I dose escalation trial evaluating CA-4948 as a monotherapy across these populations. Enrollment has gone especially smoothly since that point. As you might remember, this trial originated from the pioneering research done by Dr. Amit Verma and Dr. Daniel Starczynowski, which was presented at the ASH Conference last year, where they pinpointed the particular spliceosome mutations that push disease forward in AML and MDS patients by triggering expression of the long isoform of IRAK4. Drawing on their published findings, we now understand that the long isoform of IRAK4 is oncogenic, and moreover that IRAK4-L is over-expressed in more than half of the AML and MDS patient population. Something that has the team here at Curis especially enthusiastic is that Doctors Verma and Starczynowski additionally showed that blocking IRAK4-L through treatment with CA-4948 meaningfully decreases leukemic blast formation in patient-derived xenografts. Today, we're happy to report that the first 2 cohorts in the Phase I dose-escalation trial have fully enrolled. Patients in the first cohort get 200 milligrams twice daily, while those in the second cohort get 300 milligrams twice daily. As we've mentioned before, our belief is that 200 milligrams is probably a therapeutic dose, and we'll keep escalating the dose until we arrive at the recommended Phase II dose as well as the maximum tolerated dose. Next month, we'll give you a further look at the study design and share initial interim data from these patients. We're aware that other single agent drugs tested in this late-line relapsed refractory population have had difficulty demonstrating sharp decreases in leukemic blast cells. Let me be clear: the data we'll present next month will be early data. Even so, we're hoping to observe results that line up with our pre-clinical findings. Our confidence remains strong that this novel strategy of targeting IRAK4 sets CA-4948 apart clearly in AML and MDS. Before I continue, I want to note that this AML and MDS trial, along with the data we're presenting next month, comes on top of the NCI CRADA we announced earlier today. Our partnership with the NCI is still in its early stages, and we're eager to bring you updates on it going forward; now let me shift to CI-8993; our view is that a therapeutic antibody like CI-8993 might deliver powerful VISTA blockade as a monotherapy for patients with certain solid tumors. VISTA has been a target we've been enthusiastic about for a long time, given the essential part it plays in dampening T-cell activity once the VISTA checkpoint gets activated. On the flip side, pre-clinical studies have demonstrated that blocking VISTA stops T-cell suppression and, in doing so, restores antitumor immune function. Beyond that, we see considerable opportunity in combinations, and down the road we might investigate going after VISTA alongside a PD-1, PD-L1, or perhaps even a CTLA-4 inhibitor, since pre-clinical work indicates that interfering with VISTA markedly boosts how well those checkpoint regulators perform. Up to now, efforts to hit VISTA have yielded scant real progress, owing to a range of on-target side effects tied to blocking the pathway, chief among them immune-mediated toxicity and cytokine release syndrome. Even so, advances made over the past 10 years in CAR-T development and the wider immunotherapy field have brought safe and effective VISTA modulation far closer to reality. With that in mind, we have begun dosing patients in a Phase Ia/Ib dose-escalation trial of CI-8993 in those with relapsed and refractory solid tumors, and enrollment continues right now. Our view is that CI-8993 could go further than our earlier PD-L1 VISTA program, a small molecule that showed activity yet failed to deliver the efficacy level required to rival monoclonal antibodies being developed at that time for the same target population. The probable reason is that large molecule monoclonal antibodies such as CI-8993 deliver full coverage of a receptor across several binding regions. In contrast, a small molecule blocks just 1 or 2 contact points on a target receptor. What's more, monoclonal antibodies generally cling tightly around a receptor, nearly the way Velcro behaves, whereas a small molecule keeps bouncing on and off its target; we believe CI-8993 is the most advanced anti-VISTA antibody now in clinical development. The clinical community has shown us a great deal of interest and enthusiasm for this program, and we believe CI-8993 could become a game-changing cancer therapy. We look forward to giving an overview of the study in a Trial in Progress poster at SITC this week, along with further updates in 2021. In closing, I want to stress how proud I am of everyone at Curis, who amid a global pandemic still raging have labored tirelessly to make sure we reached every ambitious goal we set for ourselves this year. It is remarkable to reflect that since we signed the deal bringing this new VISTA asset aboard in January, we have written a protocol, engaged the FDA, secured IND clearance, opened clinical sites, trained investigators and their staff, and started dosing patients, all in under 9 months. That speaks to the team's experience, their dedication, and their passion, and it is an honor to work alongside them. With that, I'll hand the call to Bill to go over our financial results for the quarter. Bill?

Thanks, Jim. Curis posted a net loss of $6 million, or $0.11 per share, for Q3 2020, on both a basic and diluted basis, versus a net loss of $6.4 million, or $0.19 per share, on both a basic and diluted basis during the same quarter in 2019. Revenue in Q3 2020 came to $2.7 million, compared with $2.9 million in the equivalent 2019 period. In both periods, revenue mainly consisted of royalties recorded on Genentech and Roche's net sales of Erivedge. Operating expenses for Q3 2020 reached $7.5 million, against $8.2 million a year earlier. Cost of royalty revenues stood at $0.1 million in Q3 2020 and also $0.1 million in Q3 2019. R&D expenses totaled $4.7 million in Q3 2020, versus $5.1 million in the same 2019 period. That decline came mostly from lower clinical trial costs tied to CA-170 and fimepinostat. G&A expenses were $2.6 million in Q3 2020, compared with $2.9 million a year earlier. This drop was driven mainly by reduced personnel and stock-based compensation costs, partly offset by greater legal, professional, and consulting services costs. Net other expense was $1.3 million in Q3 2020, against $1.1 million in the comparable 2019 period. Net other expense for Q3 2020 was mostly made up of imputed interest expense tied to future royalty payments. At September 30, 2020, Curis' cash and cash equivalents came to $23.6 million, with roughly 56.7 million shares of common stock outstanding. Starting June 30, 2020, we lengthened our cash runway via our at-the-market sales agreement with JonesTrading and our stock purchase agreement with Aspire Capital, which together have generated about $10 million in proceeds so far. Thanks to those proceeds, we anticipate that our current cash and cash equivalents ought to allow us to keep up our planned operations past our end-of-year data catalysts and into the second quarter of 2021. That projection excludes any further possible proceeds from our stock purchase agreement with Aspire Capital or our at-the-market sales agreement with JonesTrading; with that, I'd like to open things up for questions. Operator?

This is Li calling in for Alethia. Regarding the ASH presentation you have coming up, what number of patients ought we to anticipate at that meeting, and in what way should we frame our expectations concerning the response rate along with safety, and is it premature to evaluate how long responses last? Then, regarding the VISTA program, could you offer some insight into how your trial is designed and what our approach should be toward managing CRS?

Certainly. Bob, do you want to discuss the ASH Conference?

Right, so at the ASH Conference, we'll be giving several presentations — 2 Trial in Progress sessions plus an oral one. For the oral presentation, we're expecting to share an update on the non-Hodgkin's lymphoma trial data. In the past, as you're aware, we've observed notable tumor reductions, and like Jim said, as we've moved up to higher dose levels and gotten closer to our recommended dose, we keep seeing activity along these lines, so we'll give an update on that trial at ASH during the oral presentation that Dr. Starczynowski is giving. Among the 2 Trial in Progress presentations, one will cover the combination in non-Hodgkin's lymphoma with the BTK inhibitor ibrutinib. There we'll lay out the trial design in somewhat more detail than Jim has today. And in the second Trial in Progress, we'll also discuss CA-4948 in AML and MDS. As Jim noted, we've already enrolled the first 2 cohorts in the AML/MDS study; this trial was first submitted to ASH before any patients were enrolled, so it went in as a Trial in Progress. We'll attempt to bring the community some efficacy data in some form as we move forward in that same timeframe. Does that address your question about the upcoming ASH data on 4948?

Yeah, that helps a lot. Regarding the VISTA study, could you walk us through the design of your trial and how you handle CRS?

Sure. It's set up as a Phase I trial involving dose escalation. Thanks to an earlier study Janssen had conducted, we have knowledge about certain initial dose levels and possible adverse effects from that work. Our study has been built so that we think we can lessen — and ideally avoid — side effects. Specifically, Jim brought up cytokine release syndrome as one toxicity that could occur because it's on target when hitting VISTA; we're aware that over recent years, this has grown far easier to handle thanks to improved knowledge of how it arises and, in the end, how to deal with it, plus newer medications that can assist with that. Beyond that, together with our collaborators at ImmuNext, we've carried out thorough research assessing clinical measures that we think will further lower the odds of this side effect becoming an issue for patients. Making sure this dose escalation is done safely for the patient is our number one goal, and it also needs to reach dose levels that are meaningfully high and that we believe will matter clinically; we're aware that the escalation approach and the doses where we begin aren't too distant from where we anticipate seeing meaningful clinical activity.

Congratulations on the advancement. I have just 2 additional questions. The initial one is, might you provide us with somewhat more specifics about CRADA, at least concerning the intended agenda and particularly regarding the clinical aspect? Then I have one more thing to ask.

Alright. And what is the second question, I-Eh? Also, thanks for phoning, incidentally.

All right, that's fine. My follow-up concerns the combination trial involving 4948 in NHL — what had been the expected, or the intended, early patient enrollment figure for that study, and what might the study size actually be?

All right, thanks so much, I appreciate the question. Regarding the CRADA, my sense is we'll refrain from providing anything new until we have a clearer picture, though we'd gladly bring you up to date whenever we're able. I believe you've already seen whatever we're in a position to share right now, through the press release about it. I think it's simply — I just want to emphasize that we're clearly thrilled to have that partnership finalized, and we believe it will be a highly valuable addition for us as we broaden our investigation of these patients, with assistance from the NCI and, honestly, in a way that's quite efficient. As for the combo trial using 4948 in NHL, my recollection is that what we'd projected earlier — as we went over last year at ASH — was that this was truly a modest data set; the point was to move past those first dose levels, refining safety and tolerability along with PK and PD, until we could reach that efficacious range, which we'd anticipated would be 200 and, as it happened, that's exactly how it played out, correct. 200, 300, and 400 all appear to be efficacious doses, which was excellent, and last year in December we had 6 patients, and at that point we were seeing tumor shrinkage in 5 of those 6 patients. So what we really aim to do this year at ASH — we've stated publicly that we hoped to add 3 patients to the 6 patients. That represented our target for the year, but our intention was to enroll additional patients at those doses and track them over longer stretches of time, really for 2 purposes. The first is the clear one: we want to verify that finding — that we have a drug for which 200, 300, and 400 are all efficacious doses — but also that we know the drug engages its target and that it shrinks tumors even within this extraordinarily hard-to-treat population: 4 prior lines of therapy, a relapsed refractory setting, monotherapy, all of that. We wanted to demonstrate that we could reproduce that result — that the drug is efficacious, period. Beyond that, naturally, we now want to attempt to select a recommended Phase II dose, so we want to build on what we've learned at 200, 300, and 400 and determine whether efficacy improves as we move to higher doses, and whether any additional safety signals are emerging. We recognize this is a drug that will be administered over long periods of time. There are individuals who have received the drug for more than 12 months within the trial, and beyond 18 months for the Waldenstrom's patient as of the July cutoff. That tells us a therapy is needed that doesn't merely work well but also allows for extended administration. So among those dose levels, which one stands out as optimal, and what evidence backs up that determination? These are the topics we intend to address at ASH.

All right, that helps a lot. Maybe I can fit in one final question here—regarding the leukemia trial, at this stage of dose finding, has every patient undergone genetic or genomic screening to confirm they carry the right mutation before receiving treatment?

No, they haven't. Actually, this is an all-comer study. One of the great discoveries from the paper by Dr. Verma and Dr. Starczynowski is that more than half of AML and MDS patients have over-expression of IRAK4-L. So we'd anticipate roughly a better than 50% chance that those enrolled in the trial possess this over-expression. In reality, IRAK4 expression exists on a spectrum—it isn't binary, not a matter of having it or not having it. It's a ratio, with certain patients expressing higher amounts and others expressing lower amounts. What we aim to accomplish is to bring all-comers into that space and honestly observe how they fare. Hopefully, it will be a small data set; we were delighted to enroll faster than anticipated. As I mentioned, the first 2 cohorts are already full, but we want to try exploring patients throughout that spectrum and actually see how they respond to the drug. The ultimate objective, clearly, would be that these are all efficacious dose levels—at least we'd expect them to be, based on the pre-clinical study. At 200 and 300 milligrams, are we beginning to observe in any of these patients the types of signals we saw in the pre-clinical data that was so encouraging? That's our hope; so I expect you'll hear from us discussing that data set in just a few weeks at the ASH Conference, or at least near that time.