Q2 2025 Corvus Pharmaceuticals Inc Earnings Call

Speaker #1: One.

Speaker #3: Good afternoon, everyone. Thank you for standing by, and welcome to the Corvus Pharmaceuticals' second quarter 2025 business update and financials results conference call. At this time, all participants are in a listen-only mode.

Speaker #3: Later, we will conduct a question-and-answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Zack Kubow of Real Chemistry.

Speaker #3: Please go ahead, sir.

Speaker #4: Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals' second quarter 2025 business update and financial results conference call.

Speaker #4: On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer, Leif Lea, Chief Financial Officer, Jeff Arcara, Chief Business Officer, and Ben Jones, Senior Vice President of Regulatory and Pharmaceutical Sciences.

Speaker #4: The executive team will open the call with some prepared remarks, followed by a question-and-answer period. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements.

Speaker #4: Forward-looking statements are based on estimates and assumptions as of today, and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements including the risks and uncertainties described in Corvus's quarterly report on Form 10Q for the quarter ended June 30, 2025, and other filings the company makes with the SEC from time to time.

Speaker #4: The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. With that, I'd like to turn the call over to Leif Lea.

Speaker #4: Leif?

Speaker #5: Thank you, Zack. I will begin with a brief overview of our second quarter 2025 financials and then turn the call over to Richard for a business update.

Speaker #5: Research and development expenses in the second quarter of 2025 totaled $7.9 million compared to $4.1 million for the same period in 2024. The $3.8 million increase was primarily due to higher clinical trial and manufacturing costs, associated with the development of Zoclitinib as well as an increase in personnel-related costs.

Speaker #5: The net loss for the second quarter of 2025 was $8 million, including a non-cash loss of $400,000 related to Angel Pharmaceuticals, our partner in China.

Speaker #5: In addition, we recorded a non-cash gain of $2 million from the change in fair value of Corvus's warrant liability during the second quarter of 2025.

Speaker #5: This compares to a net loss of $4.3 million for the same period in 2024 which included a $1.8 million non-cash gain related to the change in fair value of Corvus's warrant liability and a $600,000 non-cash loss related to Angel Pharmaceuticals.

Speaker #5: Total stock compensation expense for the second quarter 2025 was $1.3 million compared to $800,000 in the same period in 2024. As of June 30, 2025, Corvus had cash, cash equivalents, and marketable securities totaling $74.4 million as compared to $52 million at December 31, 2024.

Speaker #5: During the second quarter, all of the remaining common stock warrants were exercised resulting in cash proceeds of approximately $35.7 million which included $2 million from warrants exercised by our CEO, Dr. Miller.

Speaker #5: Based on our current plans, we expect our current cash-to-fund operations into the fourth quarter 2026. I now turn the call over to Richard who will discuss our clinical progress and elaborate on our strategy and plans.

Speaker #6: Thank ou, Leif, and good afternoon, everyone. Thank you for joining us today for our update call. Our main focus continues to be the development of Zoclitinib for atopic dermatitis where we believe we are uniquely positioned with an oral medication featuring a novel mechanism of action that so far has shown favorable safety and efficacy profile.

Speaker #6: We are making significant progress on multiple fronts. Including new data from our Phase 1 trial reported in June that increases our confidence in the long-term potential for Zoclitinib in this indication and beyond.

Speaker #6: On today's call, I will provide a high-level recap of this data review our go-forward clinical plans including our planned Phase 2 trial design and briefly discuss our progress with our other clinical programs.

Speaker #6: We view the data through cohort three of the Phase 1 trial as very encouraging. All of the treatment cohorts demonstrated a favorable safety and efficacy profile compared to placebo and cohort three data is especially exciting demonstrating earlier and deeper and more durable responses compared to cohorts one and two.

Speaker #6: Specifically, at just four weeks of treatment, cohort three showed a mean percent reduction of easy score of 64.8%, compared to 54.6% for the combined cohorts one and two and 34.4% for placebo.

Speaker #6: No placebo patients achieved the clinically meaningful endpoints of easy 75, easy 90, or IGA 0 or 1. We compare this to the results seen for the Zoclitinib patients where many achieved these endpoints, in cohort three 50% of patients achieved easy 75, 8% achieved 90 easy 90, and 25% achieved IGA 0 or 1.

Speaker #6: This compares to 29%, 4%, and 21% in the combined cohorts one and two that were treated respectively. In terms of the kinetics of response, cohort three showed earlier and deeper separation from placebo beginning at day eight with the easy score improvement continuing through day 15 and 28 and far beyond.

Speaker #6: For cohorts one and two, the separation from placebo began at day 15 and showed continued separation at day 28. For all three cohorts, this separation was maintained during the 30-day post-treatment follow-up period.

Speaker #6: In addition, for all three cohorts, the downward slope of the curves at day 15 to day 28 suggests that longer treatment duration could potentially deepen responses further.

Speaker #6: We also have found a remarkable impact on PPNRS, a patient self-reported assessment of itch. A number of cohort three patients reported steep drops in the score beginning at day eight which aligned with the reductions we see in serum cytokine levels of IL31 and IL31.

Speaker #6: Both of these cytokines are known to be involved in the itch response. In addition, other biomarker data from the trial continues to support the ITK inhibition mechanism of action including the potential induction of anti-inflammatory T regulatory cells.

Speaker #6: Regarding safety, there were no safety issues observed with Zoclitinib with no significant differences between treatment and placebo groups and no clinically significant laboratory abnormalities were seen.

Speaker #6: The total current treatment experience with Zoclitinib now involves over 150 patients with T-cell lymphoma or atopic dermatitis representing more than 9,000 patient treatment days.

Speaker #6: In our lymphoma trial, some patients have been on continuous daily therapy up to two years. Based on the results obtained to date, we are advancing the clinical development of Zoclitinib in two ways.

Speaker #6: First, we amended the Phase 1 trial protocol to replace the previously planned cohort four with an extension cohort four that will evaluate an additional 24 patients at the cohort three dose of 200 milligrams twice per day given for eight weeks with an additional 30-day follow-up without therapy.

Speaker #6: The 24 patients will be randomized in a blinded fashion one-to-one with placebo 12 active and 12 placebo. The extension cohort four will give us data on a longer treatment duration of eight weeks versus four weeks seen with cohorts one and three.

Speaker #6: We have now enrolled more than half the patients and continue to anticipate that data from the extension cohort will be available in the fourth quarter.

Speaker #6: Second, we are finalizing the design of our planned Phase 2 clinical trial of Zoclitinib for atopic dermatitis and I am happy to share those plans with you now.

Speaker #6: The trial will be an international randomized placebo-controlled and double-blinded. The company will also be blinded. It will enroll approximately 200 patients with moderate to severe atopic dermatitis that have failed at least one prior topical or systemic therapy.

Speaker #6: Patients will be required to have a baseline EASI score that is greater than or equal to 16, IGA of 3 or 4, and body surface involvement that is greater than or equal to 10%.

Speaker #6: The patients will be randomized equally into four cohorts. 50 patients in each cohort receiving either 200 milligrams Zoclitinib once per day, 200 milligrams twice per day, 400 milligrams once per day, or placebo.

Speaker #6: Let me repeat those groups. 200 milligrams once per day, 200 milligrams twice per day, 400 milligrams once per day, or placebo. The treatment period will be 12 weeks, and patients will be followed for an additional 30 days without therapy.

Speaker #6: The primary endpoint will be the percent change in EASI score from baseline to week 12. Secondary endpoints will include the percent of patients achieving EASI 75 or IGA 0 or 1 at week 12. The impact on itch will be measured by the percent of patients achieving a greater than or equal to 4.0 decrease in the PPNRS scale.

Speaker #6: At week 12, and of course, safety as well. We anticipate including 30 to 40 clinical trial sites globally. We are currently finalizing the trial design with the investigators with strong interest from many leading centers and we are on track to initiate the trial before the end of the year.

Speaker #6: Outside of our clinical trials, our partner in China, Angel Pharmaceuticals, plans initiate a Phase 1B2 trial of Zoclitinib for atopic dermatitis in China. This study will enroll 48 patients and is anticipated to build on the data from our Phase 1 trial by studying a longer treatment period of 12 weeks and an additional dosing option of 400 milligrams once daily in line with the direction we are headed with our Phase 2 trial.

Speaker #6: Briefly, on our other clinical programs, we have submitted an abstract to present the final results from our Phase 1 clinical trial of Zoclitinib for the treatment of relapsed refractory T-cell lymphomas at the American Society of Hematology meeting in December.

Speaker #6: We continue to enroll patients in our registrational Phase 3 trial of Zoclitinib in patients with relapsed PTCL driving towards interim data in late 2026.

Speaker #6: In addition, patient enrollment is ongoing in our Phase 2 trial of Zoclitinib in patients with ALPS, autoimmune lymphoproliferative syndrome. Depending on enrollment trends, it is possible we could see initial data from the Phase 2 ALPS study in late 2025 or early 2026.

Speaker #6: We have completed enrollment in our Phase 2 trial with cifradinib in renal cell cancer. These data will be presented in an oral presentation in October at the ESMO meeting, European Society for Medical Oncology.

Speaker #6: In closing, the Zoclitinib results in atopic dermatitis and T-cell lymphoma underscore the importance of ITK as a critical target for a range of diseases involving inflammation and cancer and the broad potential for Zoclitinib in many areas of medicine such as dermatology, oncology, rheumatology, pulmonary medicine, and other areas.

Speaker #6: We feel we may be entering a new era of immunotherapy for autoimmune inflammatory diseases that is based on drugs with novel mechanisms of action that modulate or rebalance immunity by keeping pro-inflammatory or aberrant T-cells in check.

Speaker #6: This potential has motivated us to complement the development Zoclitinib with the discovery and development of next-generation ITK inhibitors with unique properties. In near term, we look forward to continuing the clinical development of Zoclitinib in atopic dermatitis and PTCL and look forward to providing updates on our programs in the coming quarters.

Speaker #6: I will now turn the call over to the operator for a questions and answer period. Operator?

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star key followed by the number one on your touchstone phone.

Speaker #3: You will hear a prompt that our hand has been raised. Should you wish to decline from the polling process, please press the star key followed by the number two.

Speaker #3: If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Jeff Jones.

Speaker #3: Your line is now open.

Speaker #7: Good afternoon, guys, and thanks for taking question and congrats on a hugely productive quarter. I guess you've got a plethora of opportunities in front of you.

Speaker #7: As you think about CFO in autoimmune disease, in addition to accelerating, as you are in the Phase 2, how are you thinking about next indications and financial aid being able to support the many opportunities that CFO represents?

Speaker #6: Okay. For Jeff, let me first correct CFO, yeah, CFO is renal cell cancer and but Zoclitinib, obviously, we're pursuing aggressively atopic dermatitis, but we've already begun to think about follow-up indications.

Speaker #6: And the two indications that we're thinking about, we're thinking about two of them. One, of course, would we sort of want to maintain our presence in dermatology.

Speaker #6: We have experience there now. We have a lot of information on, we think, the behavior of the drug and these cutaneous diseases. So I think a likely target for us might be something like hidradenitis suppurativa.

Speaker #6: There is totally unmet need there, I would say. And then the other disease moving away from dermatology and the inflammation area would be pulmonary disease.

Speaker #6: Asthma is probably scientifically the most, the most justification for a disease is probably asthma. We have three or four different animal models where we see excellent activity of our drug in asthma, both acute and chronic.

Speaker #6: Also, the mechanism of action specifically, the inhibition of what are called innate lymphoid cells, really leads us to believe that we might have a very important novel approach to asthma and perhaps other pulmonary diseases.

Speaker #6: But you're quite right. It is difficult for us to pursue all these indications but we've shown that we're very adept at an agile in terms of efficiently maximizing the value of, I'd say, of our products.

Speaker #8: I appreciate that. And then the follow-up question is actually on CFO. In terms of the renal update coming at ESMO, how are you thinking about next steps for the program assuming within a world that there's going to be a positive update here on the program?

Speaker #6: Okay. So just to remind everyone cifradinib is an A2A antagonist oral medication. We did a Phase 2 study in first-line renal cell cancer patients who are receiving ipinivo.

Speaker #6: So we added the A2A antagonist and the idea there, of course, is to look at response rate but also very importantly to look at, since they stay on the A2A antagonist every day for a long time, they get the ipinivo for a short time.

Speaker #6: I think one of the things that we'll be looking for in addition to, of course, objective responses is the durability of responses. And their PFS, in other words.

Speaker #6: So let's see what that data is. This is a study that was conducted by the Kidney Cancer Consortium several centers: MD Anderson, Vanderbilt, and several others.

Speaker #6: They ran that study. We of course provided the drug and some financial support. So let's see what's presented in an oral presentation at ESMO.

Speaker #6: And then 'll go from there. Based the data that comes out of that, we'll make our decisions about how to follow up on that.

Speaker #6: Okay, but it is quite a unique study. I mean, it's first-line disease. It's renal cell cancer. We know that's immunoresponsive. I'm emphasizing this because I know today some other company came out with some A2A stuff and I think it was metastatic colon cancer and they had chemotherapy and you ow a number of various treatments there.

Speaker #6: And one of the things that we've ways done well is to carefully study our agents initially as a monotherapy and then move into combinations.

Speaker #6: Where we have a good understanding of the efficacy and safety and you ow mechanism. So that's helped us a lot. Did that answer your estion?

Speaker #8: It does. Thank you, Richard. I'll hop back into the queue.

Speaker #3: Our next question comes from Craig Sivanavez. Please go head.

Speaker #9: Hi, this is Sam on for Craig. Thanks for taking question and congrats on the progress. Maybe just a quick one on Zoclitinib and PTCL.

Speaker #9: Just curious how this enrollment is going and if the previous guidance for data in late 2026 is still there. Thank you.

Speaker #6: Our guidance is still intact. We're enrolling according to plan. We have probably about 20 centers open now. These are the best of the best centers in United States and Canada.

Speaker #6: So everything there is going according to plan. And you know we're hoping that our presentation on the Phase 1 will really start to focus attention on this drug.

Speaker #9: Got it. Thanks for the update.

Speaker #3: Your next call comes from Aiden Hussainov. Please go head.

Speaker #10: Hi, everyone. Thank ou for taking questions and congrats with the quarter. A couple of questions from us. So could you walk us through the decision process thinking process regarding the Phase 2 trial design for atopic dermatitis?

Speaker #10: So I reciate you know giving us the color about you know four different cohorts 200 QD, 200 BID, 400 QD, and placebo. Just you know so far we've seen atopic dermatitis, the most productive cohort is cohort three.

Speaker #10: So I was curious to better understand was it more just like an FDA suggestion to give a little weaker dose, a little bit harder, a little bit stronger dose?

Speaker #10: Just walk us through the process if you could.

Speaker #6: Okay. Thank you for that question. So first of all, there's a lot of precedence now for Phase 2 trials in atopic dermatitis. We're not the first company to do that.

Speaker #6: And you know a 200-patient trial with roughly 50 per arm is, I would say, pretty standard. And you're correct, Aiden. Usually, there is you know the FDA wants to see some dosing different doses studied so that you can determine what's the lowest dose that's possibly effective and you know what's a dose that becomes maybe not more effective than another dose.

Speaker #6: So we selected these doses because the 200 once a day, we think, is active. We don't ink it's going to be. And we've ready tested it.

Speaker #6: You've seen that data in cohort two. I think that will be an active dose. It's a single it's a daily dose. Some people, of course, preferred a single dose once-a-day ing for atopic dermatitis.

Speaker #6: But the 200 BID, we saw better a better response. It's a doubling of the dose. In our cohort three. And that's what we're ying in our extension now.

Speaker #6: So that's the second cohort, 200 once a day, 200 twice a day. And then, of course, we want to do 400 once a day.

Speaker #6: Same total dose. As the 200 BID, but given once a day, I think we can do once-a-day dosing so this will give us an opportunity to confirm that.

Speaker #6: And then, of course, placebo. I can't emphasize enough how important it is to have placebos in Phase 1 and Phase 2 trials. I am seeing companies now do these studies with no placebos, and it's actually astounding to me.

Speaker #6: But in any event, so 50 patients in each arm, 200 total, placebo-controlled, totally blinded. Companies blinded. The endpoints are pretty standard. The mean percent change in easy is the usual primary endpoint for a Phase 2 study.

Speaker #6: Secondary endpoints being easy 75. And IGA 0 and 1s. So that's all really pretty standard. Yeah. And we're ing to 12 weeks of therapy.

Speaker #6: We'll have experience with eight eks of therapy which we already have right . And we think that you know that should give a pretty good result.

Speaker #6: In terms of the statistics, if we have even a 20% improvement in any of the groups, we can just look at any one group versus the placebo.

Speaker #6: If we're 20, 22 percent better, we want to we expect to be better than that, but even if that's the lower end of our of our of our information, we have an 80% power to see that you know a p-value of 0.05 on that.

Speaker #6: And in the Phase 2 trial, that'll be fine. So the size is statistically makes sense. The dosing makes sense based on what we know and what we also know about occupancy and the receptor.

Speaker #6: And we think this very manageable trial for us. There's a lot of experience in doing these international Phase 2s. 200 patients would be very manageable for a company like Corvus.

Speaker #6: I hope that answered your question.

Speaker #8: Appreciate it.

Speaker #10: Yeah, absolutely. Yeah, it does. Just wanted to ask a couple of follow-up questions on this trial. So I know this could be a little bit early, but would you be able to provide the timeline?

Speaker #10: When do you think we can see the results? I an, I understand this is randomized blinded trial, but if you could give us some some hints in terms of when when it could be ready, yeah.

Speaker #6: Okay. No, happy to give that. We've, of e, been thinking about that. I think you're looking enrollment 12 to 15 months. Maybe you have results in 18 months.

Speaker #6: And we'll start the trial in December. And we have a couple of ings I think going for us. viously, it's oral. You know that that should help enrollment.

Speaker #6: You know I think the the the second thing novel mechanism of action I think that will also facilitate enrollment. We're requiring biopsies, although we're we're going to have some centers where we're going to try to motivate people to do some biopsies.

Speaker #6: But of course, that should also improve enrollment. But the biggest ing that's going to facilitate enrollment is that we are allowing patients who have failed systemic therapies.

Speaker #6: So that really opens up the potential patient population. So many of these studies you ow they won't take you if you've already failed a systemic therapy, a JAK inhibitor, let's say, or a DUPY or something like that.

Speaker #6: Or an anti-IL13. But we're owing those patients. And the reason we're owing those patients is because our mechanism of action is completely distinct from those.

Speaker #6: Number one, and number two, 've had patients like that on our studies so far and it hasn't mattered. They've done just as well.

Speaker #8: So my assumption is that you'll ably be stratifying. You know based on which exactly therapy they failed, topical or systemic. But yes?

Speaker #6: Oh, absolutely. I mean, there are a few things you might stratify on. Obviously, easy school I mean, if your baseline easy score, that will be a stratification factor.

Speaker #6: And whether or not you failed systemic therapy. Yes. We haven't gotten into that degree of detail yet, but they'll probably be two or three different stratification factors.

Speaker #6: You can't get too many in a study with you ow only 200 patients.

Speaker #8: Right. Right. Yeah. And another question I have was about the next generation ITK inhibitor. And as we as we move forward with that, could you give us some thoughts on how it will be different from Zoclitinib and which indications you'd be planning to target if it's not too early?

Speaker #6: Okay. So first of all, for certain intellectual property reasons, I'd rather not go into the details of how they're different. Because there are a lot of people who are now working on ITK inhibitors and I'd rather not go into the details.

Speaker #6: But suffice it to say, let me answer your question this way. ITK plays many roles in a cell. T-cell receptor signaling, everything from T-cell receptor signaling to control of TH2 cytokine production to apoptosis.

Speaker #6: And we think we have compounds that might work better for some of those indications than others, or some of those mechanisms. So let me answer it that way.

Speaker #8: Okay. All right. Thank you. Thanks so much Richard and congrats for the arter again.

Speaker #3: There are no further questions at this time. I now turn the call over to Richard Miller. Please continue.

Speaker #6: Thank you, operator. First of all, let me thank everyone for participating in today's call. I look forward to next quarter and updating you on the progress with all our clinical trials.

Speaker #6: Thank you very much.

Speaker #3: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now