Curis, Inc. (NASDAQ:CRIS) Q2 2023 Earnings Call Transcript

Curis, Inc. (NASDAQ:CRIS) Q2 2023 Earnings Call Transcript August 3, 2023

Curis, Inc. misses on earnings expectations. Reported EPS is $-0.12 EPS, expectations were $0.12.

Operator: Good afternoon and welcome to the Curis’ Second Quarter 2023 Business Update Call. All participants will be in a listen-only mode. [Operator Instructions] After the company’s prepared remarks, call participants will have the opportunity to ask a question. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Diantha Duvall, Curis’ Chief Financial Officer. Ms. Diantha, please go ahead.

Diantha Duvall: Thank you, and welcome to Curis’ second quarter 2023 business update call. Before we begin, I would like to encourage everyone to go to the Investors section of our website at www.curis.com to find our second quarter 2023 business update release and related financial tables. I would also like to remind everyone that during the call, we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and actual results may differ materially. For additional details, please see our SEC filings. Joining me on today’s call are Jim Dentzer, President and Chief Executive Officer; and Jonathan Zung, Chief Development Officer. We will also be available for a question-and-answer period at the end of our call. I’d now like to turn the call over to Jim.

Jim Dentzer: Thank you, Diantha. Good afternoon everyone, and welcome to Curis’ second quarter business update call. Big news this quarter is of course the removal of the partial clinical hold on our TakeAim Leukemia study and getting that done a full quarter faster than we expected. It’s a testament to the hard work of our team at Curis and the strong support of our clinical investigators. I’d like to take this moment to express my gratitude and appreciation to everyone involved. In our discussions with FDA, we were also able to confirm that 300 milligrams BID is the recommended Phase 2 dose for monotherapy in leukemia. With that confirmation, we’re excited to announce that we are expanding monotherapy enrollment in the TakeAim Leukemia study at 300 milligrams BID for relapsed/refractory patients with spliceosome or FLT3 mutation.

In addition, we’re working with our clinical investigators on a frontline study combining emavusertib with azacitidine and venetoclax to treat all patients with AML regardless of their mutation status. We expect to have data from both the monotherapy and combination studies in 2024. Now let’s transition to our TakeAim Lymphoma study where we’re focusing on patients with primary CNS lymphoma. There’s a high unmet need in this patient population and we believe combining emavusertib with ibrutinib could potentially address the problem of ibrutinib resistance and provide a meaningful new therapeutic option for these patients. We’re currently enrolling patients and expect to have data in 2024. On the financial front, we were able to further strengthen our balance sheet with a $15 million equity financing achieved with no discount and no warrant coverage.

I’m sure everyone on this call knows how rare this is in the current market. All-in-all, it was a terrific quarter for Curis and we’re excited to be back in the clinic at the recommended Phase 2 dose of 300 milligrams and closely collaborating with our clinical investigators to develop a novel therapeutic with the potential to be a cornerstone therapy in heme malignancies. With that, I’ll turn the call back over to Diantha to review our financial results for the quarter. Diantha?

Diantha Duvall: Thank you, Jim. Curis reported a net loss of $12 million or $0.12 per share as compared to a net loss of $15.9 million or $0.17 per share for the same period in 2022. Curis reported a net loss of $23.5 million or $0.24 per share for the six months ended June 30, 2023, as compared to a net loss of $32 million or $0.35 per share for the same period of 2022. Revenues for the second quarter of 2023 were $2.2 million as compared to $2.4 million for the same period in 2022. Revenues for the six months ended June 30, 2023 and 2022 were both $4.5 million. Research and development expenses were $10 million for the second quarter of 2023 as compared to $12.3 million for the same period in 2022. The decrease in research and development expenses for the quarter is primarily attributable to a decrease in personnel costs.

Research and development expenses were $19.2 million for the six months ended June 30, 2023 as compared to $23.8 million for the same period in 2022. General and administrative expenses were $4.2 million for the second quarter of 2023 as compared to $5.1 million – excuse me, as compared to $5.1 million for the same period in 2022. The decrease in general and administrative expenses was driven primarily by a decrease in personnel costs. General and administrative expenses were $9 million for the six months ended June 30, 2023 as compared to $10.8 million for the same period in 2022. For the second quarter of 2023 other income net was $0.2 million as compared to other expense net of $0.9 million for the same period in 2022. The other income net was $0.2 million for the six month end of June 30, 2023 as compared to other expense net of $1.9 million for the same period in 2022.

Other income and expense net primarily consists of interest income partially offset by expense related to future royalty payments. Including the proceeds from the July financing, Curis’ cash, cash equivalents and investments totaled $77.4 million and there were approximately 117.7 million shares of common stock outstanding. We continue to be in a strong cash position and expect that our existing cash, cash equivalents and investments should enable us to maintain our planned operations into 2025. With that, I’d like to turn the call over for questions. Operator?

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Q&A Session

Operator: Thank you. [Operator Instructions] And the first question will come from Soumit Roy with Jones Trading. Please go ahead.

Soumit Roy: Hi. Good afternoon everyone, and congratulations on all the progress, really a solid quarter.

Jim Dentzer: Thank you. Soumit.

Soumit Roy: Would love to get a little bit of color on how the conversation with the FDA went and where they got back the confidence in putting 300 milligram BID to the go forward dose?

Jim Dentzer: Sure, happy to. So it really went exactly the way we were hoping it would go. It just went faster. What we said when we were originally put on hold, as you know, the first questions they had were about the patient death 15 months ago. They very quickly came to the same conclusion we did that that was due to underlying disease, not to drug. And then we immediately flipped into a project optimist discussion, and that’s why it’s been over a year of work. Their view was that they liked the decision process that we had made of testing the three doses, 200 milligrams, 300 milligrams and 400 milligrams, they agreed all three doses were safe and all three doses led to a response, sort of a high class headache. And while they liked 300 milligrams better than 400 milligrams for just the reason we said it looked like we were getting the same responses in both levels.

At 200 milligrams, their view was we didn’t have enough patients tested. So all they really asked was put more patients on drug, and as you know, they asked for nine more, so put more patients on drug, run the data, rerun the analysis and let us know if you come out in the same place. And the answer was really quite straightforward. We did exactly what they asked. We put nine more patients on drug, we compiled the data, produced the report, sent it off to FDA and it was really a very straightforward discussion. 200 milligrams is a good dose, it’s an active dose, but 300 milligrams looks to be a little bit better. So I’m pleased it came out where we expected it would come out. And obviously I’m very pleased that the FDA moved more quickly than we anticipated.

Soumit Roy: Great. This is a really good news.

Jim Dentzer: Yes.

Soumit Roy: So when is the next data update at least from the 200 milligram, a longer-term, or should we think that it’s all going to be mid to later half of 2024 with 300 milligram and the combination trial?

Jim Dentzer: Yes. We’re a little hesitant to commit to exactly which date we’re going to have. As you know, in the update we gave in the press release, we said 2024. And the fact of the matter is we go to every major medical conference. So we’re always out there talking to our investigators and to analysts, of course, and we want to get data out as fast as you want to see it. So the issue for us on our end is now that we know our dose is 300 milligrams, we’ve got to get the sites up running and enrolling as fast as we possibly can. So it seems like in this early stage, it was too early to commit to we are definitely going to have data by year end. That’s why we said 2024, but which conference in 2024 remains to be seen. We’ll hopefully give an update on that later this quarter as we have a better eye towards enrollment.

Soumit Roy: Got it. No, that’s totally understandable. And on the combination trial venetoclax in the frontline setting, I’m assuming you would continue to genotype the patients and hold the record if patients have the IRAK4 mutations, FLT3 and the other mutations and show the data in the following subgroups if need be.