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

Thanks for joining us for Curis' business update covering the third quarter of 2023. To start, please visit the Investors area of our site, www.curis.com, where you can access the press release for that quarter's update along with the accompanying financial tables. Also, a reminder: throughout this call, forward-looking statements will be made that reflect where we currently stand in terms of expectations and beliefs; such statements carry specific risks and uncertainties, and outcomes could end up differing materially. For more information, please review the filings we make with the SEC. With me today are Jim Dentzer, our President and Chief Executive Officer, and Jonathan Zung, our Chief Development Officer; a question-and-answer period will take place at the conclusion of the call. At this point, I'll hand things over to Jim.

Thanks, Diantha. Good morning, all, and welcome to Curis' Third Quarter Business Update Call. For both the company and for patients, this quarter represented a crucial turning point, since the partial clinical hold being lifted allowed us to refocus on clinical enrollment in our TakeAim Leukemia and TakeAim Lymphoma studies. Abstracts for the 65th ASH Annual Meeting are going to be revealed later this morning, and we're happy that several abstracts are under consideration. At ASH, we anticipate sharing an update from our TakeAim Lymphoma study, which will include our initial look at proof-of-concept data for patients who have primary CNS lymphoma, a rare form of extranodal non-Hodgkin lymphoma with few available treatment options. Within the TakeAim Leukemia study, our clinical sites have reopened, and we're collaborating with them to find and enroll new patients. As a reminder, the TakeAim Leukemia study is a monotherapy study aimed at patients with relapsed or refractory AML who have either a FLT3 or spliceosome mutation. New patient enrollment is underway, and we anticipate our first look at data from these patients in the first half of 2024. Finally, we're partnering with clinical sites and regulatory authorities to move forward a new triplet study of emavusertib combined with azacitidine and venetoclax in AML. The purpose of this study is to assess safety along with emavusertib's capacity to boost the effectiveness of azacitidine and venetoclax by examining AML patients who are responding to azacitidine and venetoclax treatment but continue to have minimal residual disease, or MRD. We hope that adding emavusertib to their treatment regimen can help these patients convert from MRD-positive status to MRD-negative. We anticipate launching this study in the fourth quarter and seeing initial data in the second half of next year. In short, we're making excellent progress in advancing emavusertib's potential as a monotherapy, as a doublet therapy, combining with ibrutinib, and as a triplet therapy in combination with azacitidine and venetoclax, all of which should have data over the coming 4 quarters. We look forward to providing those updates; with that, I'll hand the call back to Diantha to review our financial results for the quarter. Diantha?

Thanks, Jim. For Q3 of 2023, Curis posted a net loss amounting to $12.2 million, which works out to $2.13 per share, versus a net loss of $13.3 million, or $2.83 per share, during the equivalent quarter in 2022. Over the 9 months that concluded on September 30, 2023, Curis recorded a net loss of $35.7 million, equal to $6.96 per share, compared with a net loss of $45.3 million, or $9.82 per share, across the same stretch in 2022. Revenue during the third quarters of both 2023 and 2022 came in at $2.8 million. In each of those periods, the revenue was made up of royalties earned on Genentech and Roche's Erivedge sales. For the 9 months ending September 30, 2023 and 2022, revenue was $7.3 million in both cases. R&D expenses totaled $10.4 million in the third quarter of 2023, against $10.8 million a year earlier. That quarterly decline in R&D spending stems mainly from reduced employee-related costs following a smaller headcount, though higher clinical costs partly offset it. R&D expenses reached $29.5 million across the 9 months ending September 30, 2023, versus $34.6 million during the comparable period of 2022. G&A expenses amounted to $4.8 million in Q3 of 2023, compared with $4.6 million a year before. That rise came largely from greater costs for professional, legal and consulting services. G&A expenses came to $13.8 million over the 9 months ending September 30, 2023, versus $15.3 million in the same period of 2022. Other income, net, was $0.2 million in the third quarter of 2023, compared with other expense, net, of $0.7 million a year earlier. Other income and expense, net, is mostly interest income, partly offset by noncash expense tied to the sale of future royalties. Other income, net, came to $0.4 million for the 9 months ending September 30, 2023, versus other expense, net, of $2.5 million in the same period of 2022. At September 30, 2023, Curis' cash, cash equivalents and investments came to $68.5 million, with roughly 5.9 million shares of common stock outstanding. Our cash position remains strong, and we expect our existing cash, cash equivalents and investments to fund our planned operations into 2025. With that, let's open the call for questions. Operator?

Nice work on the progress, and congratulations. I have two things to ask. First, regarding the ASH abstract you're planning for that 2%, can you share a bit more detail? You said there's more than one, so what's the broader picture there? I'll have a follow-up after that.

Sure, and thanks, Yale, I appreciate it. Most of what we'd say about the ASH abstract we're going to hold back until the abstracts are published. That said, here's what I can tell you: we have both leukemia and lymphoma programs underway. Enrollment of new patients is what really got the leukemia study going, or going again, in July. Because of that, those results are genuinely a 2024 story rather than something for ASH. When it comes to ASH, lymphoma is where the fresh data will be presented; and as we've discussed previously, our past work has covered both monotherapy and combination therapy. Our dose has been established, and we've chosen primary CNS lymphoma as the indication that makes the most sense for us to pursue. You'll remember the reasoning behind picking primary CNS: number one, it's an orphan indication within lymphoma, which means a comparatively modest patient count would be required along the regulatory pathway. Number two, the unmet need there is extremely clear. There's a well-established benchmark for ibrutinib given as monotherapy in primary CNS lymphoma — ibrutinib reached a 19% CR rate. And number three, this is genuinely going to create what I'm hoping will be a strong chance for us to show, first, whether an additive benefit is possible, meaning can we lift the CR rate by combining our drug with ibrutinib, and second, whether we can achieve CRs in patients whose disease has progressed on BTK treatment. Is resensitization possible for them? That's been the hypothesis all along for emavusertib and IRAK-4 inhibition. This marks the first occasion where data can show us whether that's achievable. So that's what I'd expect when we review the data at ASH. Leukemia is a 2024 story, while the ASH story will be lymphoma.

All right, that's useful. Now for my second question: earlier you noted that the decision to move ahead in high-risk MDS would hinge on whatever gets established as the standard of care, so you'd put the framework in place to enable that. What are your present views on that point?

Yes, precisely. When I say standard of care, the AML standard, as you're aware, is the azacitidine-venetoclax doublet. At this moment, azacitidine monotherapy is the MDS standard, while the azacitidine venetoclax trial — the VERONA study — hasn't read out yet. Its findings should arrive very soon. So naturally we're eager to learn whether that trial reads out positively or negatively. Should it be positive and the doublet becomes the MDS standard as well, our aim would be to move forward with a triplet. Conversely, if it reads out negative and azacitidine monotherapy stays the standard, we'd then intend to move forward with the doublet. Does that answer your question?

Absolutely. That's really, really useful; and perhaps any timeline you could kind of return to at this stage?

That study isn't something we conduct. So sadly, no, I mean, I think what everyone more broadly is anticipating is that it happens at some point during the coming months, whether that's ASH or at some point in early 2024. Naturally, we're no more informed than you are, but we're eagerly waiting for the results of that data.

All right. That's really useful. And once more, congratulations on how far things have come, and I'm looking forward to presenting at ASH.

Jim, could you possibly just set out for us what you expect from the data update coming in the first half of next year, especially in AML, and let us know what the bar is going to be?