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

Thanks for joining us, and welcome to the Curis business update call for the first quarter of 2023. Before we get started, I'd ask each of you to visit the Investors area of our site, @www.curis.com, where you can locate our fourth quarter 2023 business update release along with the related financial tables. I also want to remind all of you that forward-looking statements will be made on this call, and those are grounded in 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 on today's call are Jim Dentzer, our President and Chief Executive Officer; Bob Martell, Chief Scientific Officer; and Jonathan Zung, who has just been appointed as our Chief Development officer. A question-and-answer period will also be available at the end of the call. At this point, I'd like to hand the call over to Jim.

Thanks, Diantha. Hello, everyone, and good afternoon. It's great to have you join us for Curis' First Quarter Business Update Call. During the quarter that just ended, we achieved meaningful advancement with emavusertib, our lead clinical candidate. In our March update, we noted that we had finished enrolling the extra patients the FDA asked for, and we did so earlier than planned. We think this reflects both the obvious unmet need in leukemia and the enthusiasm within the clinical community for this novel agent. This quarter, we are gathering and reviewing data from those patients, and we expect to talk about these data with the FDA during the third quarter. Our hope is that the data will be enough for the FDA to permit us to move forward with a Recommended Phase 2 Dose and advance into the expansion portion of our take aim leukemia study. Additionally, we are enrolling patients who have Primary Central Nervous System Lymphoma, or PCNSL, and giving them Emavusertib together with the BTK inhibitor ibrutinib as part of our TakeAim Leukemia study. In our view, combining emavusertib with ibrutinib could become a significant new treatment for PCNSL, an orphan patient population facing substantial unmet need. I'm happy to share as well that Curis' executive team is growing with Dr. Jonathan Zung joining us as Chief Development Officer. Dr. Zung bolsters our leadership as an industry figure who is highly regarded and brings extensive drug development expertise from both biotech and large pharma. In summary, the CURES team keeps achieving considerable headway in building up our lead clinical candidate, Emavusertib, which demonstrates both evident single agent activity and wide-ranging potential, as well as combination therapy as a possible foundational treatment in hematological malignancies. We anticipate reporting the outcome of our talks with the FDA in the coming quarter. With that, I'll hand the call back to Diantha so she can go over our financial results for the quarter. Diantha?

Thanks, Jim. For Q1 2023, Curis posted a net loss of $11.6 million, equating to $0.12 per share, versus a net loss of $16.1 million, or $0.18 per share, during the comparable stretch of 2022. Revenue in the first quarter of 2023 came in at $2.3 million, compared with $2.1 million in the matching period of 2022. R&D expenses stood at $9.1 million during Q1 2023, versus $11.4 million in the equivalent quarter of 2022. That quarter-over-quarter drop in research and development spending stems mainly from the timing of manufacturing costs plus reduced employee-related costs tied to a smaller headcount. G&A expenses reached $4.8 million in Q1 2023, compared with $5.7 million during the same quarter of 2022. This decline in general and administrative costs came largely from lower employee-related expenses resulting from the headcount reduction. In Q1 2023, other income net was $0.1 million, versus other expense net of $1 million in the matching period of 2022. Other income expense net is composed chiefly of interest income, partly offset by costs associated with future royalty payments. As of March 30th, 2023, Curis' cash, cash equivalents, and investments came to $71.8 million, with roughly $96.6 million shares of common stock outstanding. We remain in a solid cash position and anticipate that our current cash, cash equivalents, and investments ought to let us sustain our planned operations into '25. Having said that, I'd like to hand the call over for questions, operator.

Hi there, good afternoon. I appreciate you taking our questions. Jim, I'm just wondering — regarding those nine more patients that were enrolled during Q1, can you tell whether the activity observed up to now is similar to what was seen at the higher 300 mcg dose? Also, do you intend to possibly reveal that data before the Q3 FDA meeting?

Thank you so much for asking. Our plan is to hold the discussion with FDA first, and afterward we'll talk about the data more openly. Naturally, that's how the FDA would rather handle it. I believe that's the best response we can give right now. What I can share is something we've mentioned previously: we addressed every question from the FDA last year except one, which concerned the fact that we have two doses — 200 milligrams BID and 300 milligrams BID — and both appear safe, and both have produced responses. The unresolved matter with the FDA is which of those two doses is superior. From our perspective, the data available last year at this point appeared to suggest that both were good, both could produce responses, and both were safe. There appeared to be a modest preference for 300. Since then we've enrolled additional patients at 200 so we can perform a more thorough analysis comparing the two. My expectation is that once we bring these data to the FDA, they will review the dataset and reach the same conclusion we have — namely, that both doses are safe and both doses are effective. Should there be a preference for 300, that would mean the data aligned entirely with what we'd observed up to now. Should there be a preference for 200, that would mean the data at 200 look even stronger than they did previously. Either result is favorable, and I'm eager to walk you through how these data look once we've had that conversation with FDA.

All right. Perhaps one more thing…

That was quite a lengthy response to what you asked. I hope it proves useful.

Yeah, absolutely. Perhaps a quick follow-up: when do you expect you'll be in a position to update us on the three, regarding the clinical hold, following the Q3 meeting — and for that same meeting, could you also talk about the registrational pathway with the FDA?

Yeah, I think what we're planning at this point is that we're hoping that conversation with the FDA happens at the end of Q3; so naturally, once we have those answers, we'd share them as soon as we do, assuming we're proceeding. As far as what comes next, I believe we've been quite clear that in AML, the design — the precedent for that design — is pretty straightforward. We look at IDH1, IDH2, flip three, every one of those trials, those pivotal trials, were conducted using a single arm design, with CR — CRH as the primary endpoint, duration of response and survival as secondary endpoints. And our assumption would be that moving forward, the FDA will stay consistent with how they've acted previously and use a comparable design in MDS. That's a lengthier conversation; that cuts both ways. The reason it takes longer is that no precedent exists for treating relapsed refractory MDS, and that's exactly because no drugs have been approved. So the positive aspect, obviously, is that it's a wide open space. The less certain aspect is, obviously, that since it's a wide open space and since nothing has been approved, some dialogue with the FDA will be required. Just like getting off clinical hold, I'm looking forward to those discussions with the FDA. And obviously, the moment we're able, we'll be very eager to talk with you.

Good afternoon, and I appreciate you taking my question. Thanks. The first thing I'd like to ask is this: regarding the patient you've already dosed at night, could you share anything about what those patients generally look like?

Yeah, so until we've completed our conversation with the FDA, we plan to hold back on discussing baseline characteristics or any other observations. We won't attempt to get ahead of those FDA discussions. That said, here's what we can tell you: as you're already aware for this population, whether the case involves relapsed refractory AML or relapsed refractory MDS, every one of these patients faces an extremely poor outlook. According to the literature, median survival ranges somewhere between 2.3 and six months. It's simply a very grim prognosis. So it's reasonable to state that all the patients who have entered the study thus far, along with any we're likely to see from now until NDA submission, will be individuals who are unfortunately in quite difficult circumstances.

Got it. I appreciate that, and I respect it too. Also, my follow-up here — you brought up the CCN test; could you give us some background? How would you get this started, what was the reasoning behind it, where does it stand right now, and what should we expect in 609 months? Thanks.

Yeah. So the reasoning for moving into primary CNS lymphoma — I can kick things off, and then I'll have Bob join in. Broadly speaking, with lymphoma, you recall that we treat it in combination with ibrutinib. The rationale there is that B-cell lymphoma these days is managed really by down-regulating NF-κB activity. NF-κB, in turn, gets driven by two biologic pathways: the BCR pathway, which is where Btk lives, and the toll-like receptor pathway, which is where IRAK4 lives. What we found in our early scientific work, later corroborated in the lab and then, of course, in the clinic, is that if your goal is to down-regulate NF-κB activity in these patients, the best approach isn't to shut down one pathway or the other — it's to shut down both. That's the reasoning behind pursuing lymphoma broadly and primary CNS lymphoma specifically; this is a cancer type that's especially sensitive to the toll-like receptor side rather than the BCR side, and it's an orphan drug indication. So that ought to mean we can reach an answer fairly quickly that hopefully goes our way. Bob, I don't know whether you'd like to add any further color there.