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

Thanks for joining us for Curis' Q1 2022 earnings call. To start, I'd ask that you visit the Investors area of our site, www.curis.com, where the Q1 2022 earnings release and accompanying financial tables are posted. I also want to note that on this call we'll be sharing forward-looking statements, which reflect what we currently expect and believe. Such statements carry certain risks and uncertainties, and actual outcomes could differ materially; please refer to our SEC filings for more information. With me today are Jim Dentzer, our President and Chief Executive Officer; Bill Steinkrauss, our Chief Financial Officer and Chief Administrative Officer; and Bob Martell, who leads R&D. We'll also take questions in a Q&A session once the call concludes. At this point I'd like to hand things over to Jim. Jim?

Thank you, Craig. Good afternoon, everybody, and welcome to the earnings call for Curis' first quarter of 2022. For anyone who hasn't yet had the chance to get acquainted with Craig, he came aboard the company not long ago in the role of Vice President of Investor Relations and Corporate Communications, and having him with us makes us very happy. At Curis, each day we work hard to create the coming generation of first-in-class cancer treatments that deliver meaningful improvements and extensions to patients' lives. The opening quarter of 2022 served as a reminder that clinical development of patents doesn't always follow a straight path. And that along the way, we must work together with a wide range of stakeholders. We take encouragement from knowing that we possess a drug that functions as a single agent in precisely the areas where we anticipate it should. Moreover, the company finds itself in a strong position to navigate the dynamics that come with drug development, and our confidence in our pipeline, our strategy, and our team remains firm. Let's begin tonight's update with our lead asset, emavusertib, which was previously called CA-4948. This is our first-in-class program built specifically to go after IRAK4 and FLT3. Right now, emavusertib is under evaluation in 3 clinical studies. The first is the TakeAim Leukemia study, a Phase 1/2 trial that includes monotherapy and combination arms for patients suffering from relapsed or refractory acute myeloid leukemia, or AML, along with high risk myelodysplastic syndromes, or MDS. The second is the TakeAim Lymphoma study, which is a Phase 1/2 combination trial pairing the drug with ibrutinib in patients who have relapsed or refractory NHL as well as other hematologic malignancies. And the third is the Phase 2 Lucas study, which assesses emavusertib in individuals with lower risk MDS. Back in January, we shared positive updated clinical data coming out of the TakeAim Leukemia study, which revealed early yet compelling response rates among patients carrying a spliceosome or FLT3 mutation. Those findings showed both a safety profile that can be managed and better anti-cancer activity when set against the current standard of care. People who join this study are frequently in poor condition < >. They are typically heavily pre-treated and face an expected median survival of under six months. With that as the starting point, the results we've seen so far have been quite encouraging; we will present the data that we highlighted in January at the ASCO and EHA and Medical Conferences taking place in June. Past that, we anticipate reporting updated data from both the monotherapy and combination portions of the study before the year is out. In April, the FDA requested that we halt enrollment of new patients, issuing partial clinical holds on the TakeAim Leukemia and TakeAim Lymphoma trials after Curis told the FDA about the death < > of a relapsed refractory AML patient. That patient, following nine cycles on the study drug, experienced rhabdomyolysis, among several other conditions. Patient safety always comes first for us. We are collaborating with the FDA to supply further data regarding rhabdomyolysis as well as our recommendation of 300 milligrams BID as the recommended Phase 2 dose. We're aiming to get that partial hold lifted as fast as we can. Once it's resolved and we know what effect, if any, the study will see, we plan to come back with revised guidance about when we'll talk with the FDA regarding a possible accelerated registrational route for emavusertib. Turning now to the TakeAim Lymphoma study, our research on emavusertib in B-cell cancers: at ASCO and EHA in June, we anticipate sharing initial results, with the same data presented at both conferences so we reach American and European audiences alike. That update will feature fresh findings on roughly a dozen patients treated with emavusertib plus ibrutinib across multiple NHL subtypes. A quick reminder: Part A1, already finished, looked at monotherapy dose escalation. Part A2, currently underway, is evaluating the emavusertib-ibrutinib combination; enrollment for this portion should reach about 18 patients under a three plus three design, with emavusertib beginning at 200 and going up to 300 milligrams BID, while ibrutinib is given at whatever dose suits each patient's particular NHL subtype. From this first dataset, we want to confirm that emavusertib and ibrutinib can be safely co-administered without toxicities overlapping. Naturally, we're also hoping for evidence of anti-cancer activity. Particularly in patients who have relapsed or are refractory to BTK inhibitors, such activity would offer early, encouraging proof of concept supporting the scientific literature, which indicates that hitting both the BCR and TLR pathways could be more effective than hitting just one. I'd like to say a few words as well about our collaboration examining emavusertib in low risk MDS patients. Dr. Uwe Platzbecker, Co-Chairman of the European Hematology Association's scientific working group on MDS, is leading this study; we anticipate reporting its data later in 2022. Showing safety and efficacy in this population might amount to a potential breakthrough for the MDS field. Back in March, a new possible opportunity for IRAK4 inhibition emerged when preclinical data appeared in the peer-reviewed journal gastroenterology, generated by our collaborators at the Washington University School of Medicine in St. Louis. That paper looks at IRAK4's role and the preclinical efficacy of emavusertib combined with checkpoint immunotherapy in pancreatic ductal adenocarcinoma — a disease with a very poor prognosis that badly needs new therapeutic options. Looking forward, we hope to extend these results by working with the NCI and our other collaborators to find further cancer targets where emavusertib might serve areas of high unmet need. Shifting to our second asset, CI-8993: this first-in-class monoclonal anti-VISTA antibody is being developed alongside ImmuNext to treat patients with relapsed or refractory solid tumors. CI-8993 is built to antagonize the VISTA signaling pathway, thereby boosting T-cell mediated immune function. Our view is that CI-8993 stands as the leading anti-VISTA antibody in clinical testing right now, and it could become a therapy that transforms cancer treatment, influencing many immune mechanisms tied to cancer, a number of which aren't touched by going after PD1, CTLA4, or other immune checkpoints. Back in January, we shared updated clinical findings, pointing to a favorable safety picture and early hints that CI-8993 may activate several anti-cancer immune mechanisms. We also felt good about the PK profile, which shows saturation kinetics, pointing to a possible way past the sink effect we anticipated. Dose escalation has moved up to the 0.6 milligrams per kilogram level and will keep going until the recommended Phase 2 dose is set. We're eager to report broader safety and tolerability data, plus initial PK, PD, and anti-cancer data from the trial, during the second half of 2022. To sum up, we're happy with the clinical results seen to death to date, and we expect to deliver multiple updates later this year, among them new clinical data from both the IRAK4 and VISTA programs. Meanwhile, we'll collaborate with the FDA to clear partial clinical holds as fast as we can. As we've told many of you on calls during the last few weeks, clinical development is never a straight road. We're lucky to be working with a molecule that has the unique and compelling profile of emavusertib. With that, I'll hand the call to Bill so he can go over our financial results for the quarter. Bill?

Appreciate that, Jim. At Curis, we keep carrying out our strategy while sitting in a solid financial position. During the first quarter of 2022, the company posted a net loss of $16 million, equal to $0.18 per share on a basic and diluted basis, which compares with a net loss of $9.9 million, or $0.11 per share on a basic and diluted basis, for the same quarter in 2021. Revenue for the first quarters of 2022 and 2021 came in at $2.1 million and $2.2 million, respectively. In both periods, that revenue was royalty revenue, booked against Genentech and Roche's net sales of Erivedge. Operating expenses for the first quarter of 2022 reached $17.2 million, versus $11 million during the matching period in 2021. Those operating expenses broke down as follows: cost of royalty revenues, meaning amounts owed to third-party university patent licensors tied to royalties received on Erivedge net sales, came to $0.1 million in the first quarter of both 2022 and 2021. Research and development expenses hit $11.4 million in the first quarter of 2022, compared with $6.8 million during the same period in 2021. That rise stems mainly from greater manufacturing costs for our programs along with higher personnel-related costs from added headcount. General and administrative expenses were $5.7 million for the quarter ended March 31, 2022, against $4.1 million in the matching period of 2021. The growth in general and administrative expense came largely from elevated personnel costs, stock-based compensation, professional consulting services and insurance costs relative to the earlier year. Net other expense for the first quarter of 2022 and 2021 was $1 million and $1.1 million, respectively. That net other expense was mostly imputed interest expense tied to royalty payments. As of March 31, 2022, cash, cash equivalents and investments at Curis came to $120.7 million, with roughly 91.6 million shares of common stock outstanding. Cash burn in the first quarter matched prior years in running above other quarters, driven by the timing of working capital changes. Our cash position remains strong. We still anticipate that our current cash and investments will let us sustain planned operations into 2024. With that, I'd like to open things up for questions. Operator?

Hi, appreciate the update you provided. Thanks for fielding my questions. So, to start, you brought up the extra data the FDA asked for — I'm curious whether you could elaborate on whether that involves further preclinical or clinical information, and do you also need, perhaps, additional clinical data at lower doses in order to completely settle this matter?

Yes. I'll take that one. Bob Martell here. Clearly, we're collaborating tightly with the FDA to respond to what they've asked. As you're aware, and as Jim pointed out, they asked for several items from us, and one of those was a bit more information to assist both us and them in making sense of the complicated patient who sadly died while on treatment, after seven or eight months, in fact, of receiving this drug. Another item ties in somewhat with that, namely our efforts to determine the right dose moving forward. So, we've said previously, drawing on our pharmacodynamic work, our pharmacokinetics, safety and efficacy, that our recommended dose, in our view, is 300 milligram twice daily; we'll share those data with the FDA and hold a conversation with them about it. Beyond that, regarding the specifics of the data, we'll talk that over with FDA and disclose more of it once we reach an agreement with them.

All right. Could I perhaps pose one more question? Regarding how the Phase 2 dose gets determined, could you explain which extra data points the FDA may require in order to support the dose choice? And what makes you confident this hold can be cleared fast?

Yes; as I mentioned, our analysis has been quite comprehensive, and actually, as you're aware, we've looked at quite a few patients on 400 milligrams twice daily, 300 milligrams twice daily, plus many others on lower dose levels. Thus, one element of figuring out a recommended dose involves grasping each patient's exposure. And this is standard for every drug and every program, and increasingly what regulators want is a solid grasp of pharmacokinetic exposure bands. So we'll bring those data before the agency, talk it through, and make the case for picking 300 twice daily. Beyond that, we've tracked safety closely at all of these doses; our view is that 300 milligrams twice daily is a safe dose, and we'll share our data on that. As I said before, we'll supply data to help clarify the tangled matters surrounding this single patient who sadly died during the study; so those are among the key items we'll examine and put before them in a complete report.

All right, thanks a lot.

Hello, everybody. I appreciate you taking my question. I just want to make one thing clear: have all the required data sets already been handed over to the FDA concerning this partial hold, or is there a timeline for that?

So, once more, we are collaborating closely with the FDA. We have not provided details about when that will happen or if it has happened as of yet, but once we obtain additional information and once we have further discussions with the agency, we will make that information public.

Alright. Regarding the AML side, with the June data, there won't be any fresh information — it'll likely just be more granular specifics that you'd supply. Would that also be part of the mid-year at ASCO? And would you additionally cover specifics about the patient who passed away during the ASCO presentation?

Yeah. Thank you, Soumit; let me tackle the first question first. So, the June data update — there are actually going to be 2 updates, correct. There's leukemia and there's lymphoma. The leukemia one isn't an update; that's the January 6 data, which, as you might recall, came out via press release. Now it's going to appear in a peer-reviewed format. So this is our chance to present that to the worldwide physician community at both ASCO and EHA — the American and European meetings. Lymphoma, on the other hand, is fresh data; that involves approximately a dozen patients receiving emavusertib together with ibrutinib. So I'd direct your attention there. And then finally, you asked whether we'd use the occasion at one of those 2 conferences to talk more about the patient death? My answer would be no — our priority at the moment is having that conversation with FDA and, as Bob said, the patient was on treatment for an extended period. We actually have quite a bit of data concerning that patient, and I believe the question is a legitimate one, though it's obviously a complex one too. Once we reach a resolution with the FDA about where they land and where both sides can feel comfortable proceeding, at that point, naturally, we'd be glad to share all the particulars, but since this is a sort of continuing dialogue and a highly intricate one, we prefer to hold off until it's settled with FDA before making the information public.

Understood. That makes complete sense. And just one more. Regarding the lymphoma side, the Part A2, would you be showing any data at 300 million BID, or do you know — or are you able to reveal any patient who's getting 300 milligram BID, or is it pretty much all 200 milligram?

Yeah. Like I mentioned, I believe we're going to hold off on revealing those data until that conference, but it will be new data, and I'd urge you to stay watching for it. We're eager to discuss it.

I appreciate you taking the time to ask these questions.

Thanks.