Curis, Inc. (NASDAQ:CRIS) Q4 2022 Earnings Call Transcript

Curis, Inc. (NASDAQ:CRIS) Q4 2022 Earnings Call Transcript March 13, 2023

Operator: Good morning, and welcome to the Curis Fourth Quarter 2022 Business Update Call. Please note, this event is being recorded. I would now like to turn the conference over to Diantha Duvall, Curis’ Chief Financial Officer. Diantha, please go ahead.

Diantha Duvall : Thank you, and welcome to the Curis Fourth Quarter 2022 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 fourth quarter 2022 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 Bob Martell, Head of R&D. We will also be available for a question-and-answer period at the end of the call. I’d like now to turn the call over to Jim.

James Dentzer : Thank you, Diantha. Good morning, everyone, and welcome to Curis’ Fourth Quarter Business Update Call. This past quarter, we made important progress with our lead clinical candidate, emavusertib, which is currently being evaluated in two clinical studies: The TakeAim Leukemia study, a Phase 1/2 study with both monotherapy and combination arms for patients with relapsed or refractory acute myeloid leukemia or AML and high-risk myelodysplastic syndromes or MDS; and the TakeAim Lymphoma study, a Phase 1/2 combination study with ibrutinib for patients with relapsed or refractory NHL and other hematologic malignancies. We were especially pleased to present an update of clinical data from the TakeAim Leukemia study, in which AML patients with a FLT3 mutation had a CR rate of 29%.

AML patients with a spliceosome mutation had a CR/CRh rate of 22% and MDS patients with a spliceosome mutation had an overall response rate of 45%, with all five responses achieving a marrow Complete Remission. This update doubled the size of our earlier data set and reaffirmed emavusertib’s potential to be an important therapeutic alternative for patients with AML or MDS. We’ve also made important progress in our work to resolve the partial clinical hold on our leukemia study. In last quarter’s call, we announced that the FDA had approved the reopening of our clinical sites so that we could enroll nine additional patients at the 200-milligram dose level to facilitate discussions with FDA on the Recommended Phase 2 Dose or RP2D and the resolution of the partial clinical hold.

We’re pleased to announce today that we have completed the reopening of our sites, and have also completed the enrollment of the nine additional patients requested by FDA. This is ahead of schedule, and we believe reflects the excitement surrounding this novel therapeutic and the critical unmet need in this sorely underserved patient population. We expect to collect data for these patients in Q2 and meet with FDA in Q3 to review those data. We also continue to enroll in our TakeAim Lymphoma study in which we are focusing on primary CNS lymphoma and treating patients with the combination of emavusertib and ibrutinib. In short, we had a very productive end of 2022 and that momentum is carried forward into 2023. We look forward to working with the FDA in the months ahead to gain alignment on RP2D in our TakeAim Leukemia study and resolution of the partial clinical hold.

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. For the fourth quarter of 2022, Curis reported a net loss of $11.3 million or $0.12 per share as compared to a net loss of $13.6 million or $0.15 per share for the same period in 2021. Curis reported a net loss of $56.7 million or $0.61 per share for the 12 months ended December 31, 2022, as compared to a net loss of $45.4 million or $0.50 per share for the same period in 2021. Revenues for the fourth quarters of 2022 and 2021 were $2.9 million and $3.1 million, respectively. Revenues for the 12 months ended December 31, 2022, and December 31, 2021, were $10.2 million and $10.6 million, respectively. Operating expenses for the fourth quarter of 2022 were $13.1 million as compared to $15.7 million for the same period in 2021.

Operating expenses for the 12 months ended December 31, 2022, were $63.2 million as compared to $52.7 million for the same period in 2021. And consisted of the following: royalty revenues, which comprised amounts due to third-party university patent licensors in connection with the Genentech and Roche Erivedge net sales were $0.1 million for the fourth quarter of 2022 as compared to $0.2 million for the same period in 2021; cost of royalty revenues for the 12 months ended December 31, 2022, were $0.3 million as compared to $0.5 million for the same period in 2021; research and development expenses were $8.7 million for the fourth quarter of 2022 as compared to $10.8 million for the same period in 2021. The decrease in research and development expense for the quarter is primarily attributable to decreased personnel, manufacturing and clinical development costs.

Research and development expenses were $43.3 million for the 12 months ended December 31, 2022, as compared to $34.9 million for the same period in ’21. General and administrative expenses were $4.3 million for the fourth quarter ended December 31, 2022, as compared to $4.8 million for the same period in 2021. The decrease in general and administrative expenses was driven primarily by a decrease in personnel costs. General and administrative expenses were $19.6 million for the 12 months ended December 31, 2022 as compared to $17.3 million for the same period in ’21. For the fourth quarters of ’22 and ’21, total other expense was $1.1 million, respectively. Other expense was $3.7 million for the 12 months ended December 31, 2022, as compared to $3.4 million for the same period in 2021.

Other expense net for the year ended December 31, 2022, primarily consisted of expense related to future royalty payments, partially offset by interest income. Other expense net for the year ended December 31, 2021, primarily consisted of imputed interest expense related to future royalty payments, partially offset by a gain recognized upon the forgiveness of a PPP loan. As of December 31, 2022, Curis’ cash, cash equivalents and investments totaled $85.6 million, and there were approximately 96.6 million shares of common stock outstanding. We continue to have a strong cash position and expect our existing cash, cash equivalents and investments should enable us to maintain our planned operations into 2025. With that, I’d like to open up the call for questions.

Operator?

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Q&A Session

Operator: And our first question will come from Ed White of H.C. Wainwright.

Ed White: Jim, previously, you had said that TakeAim Lymphoma, you had expected data in 2023. Now that we’re in 2023, can you give us a little bit of guidance as to when we should expect to see that data in this year?

James Dentzer : Thanks, Ed. Thanks for calling in. Yes, I think our expectation remains the same, that we’re hoping to provide an update by year-end. If things change between now and then, of course, we’ll let you know. But we’re very pleased with where we stand on both studies.

Ed White : Great. And you didn’t mention the VISTA program at all. I know it’s been halted. I just wanted to get your thoughts on — is anything changing there? Is there any thoughts being given to restarting this program in 2023? Or is that perhaps more out there further?

James Dentzer : Well, yes, I think it’s premature for us to think about restarting it just yet. Remember, the reason we paused it had nothing to do with our excitement about the program. It’s a terrific target. It’s a terrific program. We were making really nice progress I thought. I think it was more about — given the financial climate, we needed to cut back our cash burn in order to ensure that cash went to 2025. And until we get to a point where we’re confident that the market is different or that we’ve got the ability to access cash that doesn’t put any compromising impact on to IRAK4, we need to go all in on IRAK4. So as I said, we’re really excited for where we are right now. I think we’re in a great position to add value to the IRAK4 program this year. And we’ll be keeping our eye on the financial markets more broadly as we go through the course of 2023.

Ed White : Okay. Since you brought up financials, maybe a question for Diantha, just regarding the — your thoughts on R&D expense throughout the year as the development of emavusertib gets back on track, how should we be thinking about the ramp or perhaps just not a ramp or flattening of the R&D expense?

Diantha Duvall : So Ed, if you recall, we announced our reprioritization in November. And I think Q4, as we said, the costs are coming down. So I think sort of where we sit in Q4 will likely sort of be the sort of ongoing run rate, although I will say it could come down a little bit further just by virtue of the fact we did not avail ourselves with a full quarter post reprioritization.

Operator: The next question comes from Soumit Roy of JonesTrading.

Soumit Roy : The nine patients, you mentioned, the additional new patients got enrolled. Are these all AML patients or they are AML and MDS, if you can give us some idea? And also, do you think if you can provide any color on if they are very late line patients as you have seen prior to the whole enrollment hold today, you are getting more late-line patients?

Robert Martell : Hey, Soumit. This is Bob Martell. Yes, we’re currently really trying to address the FDA’s question around the dosing in particular, at the lower dose of 200 milligrams. And so we’ve enrolled these nine patients as part of the regular Phase 1 protocol, which is open to both AML and MDS. We noticed that patients — many of the patients that we’ve enrolled on the study have had lots of prior lines of therapy. And that’s obviously a challenging population to treat. So while we’re not restricting per se, we always seek patients who’re perhaps a little bit earlier in their lines of therapy. But for these nine patients, we haven’t made specific guidelines.

Soumit Roy : Totally understandable. That’s really helpful. And one last question is, you previously had four patients on emavusertib and venetoclax combination with 50% response rate. Can you confirm if these patients are still being treated?

Robert Martell : Yes. We haven’t really given any updates on — since the ASH presentation, we’re not prepared on this call to provide any further detail other than the fact that the data that we saw was quite impressive where we had deep responses in the patient’s AML, MDS, Three out of the four patients who had responses — or assessments available had pretty dramatic reductions in their blast counts. And as you mentioned, two of them with getting their blast count back to normal. So as you know, just to talk a little bit to the mechanism, venetoclax hits BCL2. Well, the other major anti-apoptotic factor in these patients, that’s the cancer from undergoing apoptosis is MCL1. And in fact, hitting IRAK4 reduces MCL1. So we think this is a great potential combination from a mechanistic standpoint, and we’re really excited, ultimately to get more data on that combination.

Operator: The next question comes from Yale Jen of Laidlaw.