Earnings Labs

Curis, Inc. (CRIS)

Q3 2015 Earnings Call· Mon, Nov 9, 2015

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Transcript

Operator

Operator

Good day, ladies and gentlemen, and welcome to the Curis Inc. Third Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder, today's conference may be recorded. I would like to introduce your host for today’s conference, Ms. Mani Mohindru. Ma'am, please go ahead.

Mani Mohindru

Analyst

Thank you, Michelle. Good morning everyone, and thank you for joining us. During today's call, we'll provide you with an update on corporate developments and plans and also discuss our third quarter 2015 and year-to-date financial results. Before we begin, I'd like to advise you that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements relating to our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management; the potential therapeutic benefits and our drug development programs and our plans to advance the development of drug candidates within these programs, as well as our expectation about Genentech and Roche's continued development and commercialization of Erivedge. Actual results may differ materially from those indicated by forward-looking statements in this conference call as a result of various important factors, including those risk factors described in our quarterly report on Form 10-Q for the quarter ended June 30, 2015 and in other filings that make with the SEC, and we encourage you to review these risk factors carefully. We caution that forward-looking statements we make in this conference call speak only as of today and that we may not update any of these statements even if events and developments subsequent to the date of this call cause our estimates and expectations to change. I'd now like to introduce Ali Fattaey, our President and CEO, who will provide an update on the Company and our development programs. Following Ali's remarks, Mike Gray, our Chief Financial and Chief Business Officer, will review our financial results for the third quarter 2015, after which we will open the call for questions. Ali?

Ali Fattaey

Analyst

Thank you, Mani and thank you to the conference call and webcast participants for joining us this morning. We continue to focus our efforts on building Curis into an oncology company with strategic emphasis on our development capabilities as we expand our pipelines with the aim of eventual commercialization of innovative and effective drugs for the treatment of patients with cancer. In addition to the progress with our proprietary clinical drug candidate CUDC-907 we recently exercised two options under our collaboration with Aurigene. One of these involved the license to a pre-IND stage oral immunomodulatory small molecule that targets PD ligands and VISTA inhibitor checkpoint proteins and from now on this molecule is being referred to as CA-170. And the second was a license to a preclinical program of potent and selective inhibitors of the IRAK4 kinase. I will provide additional details regarding these three programs today. Let me begin with our most advanced molecule CUDC-907 which is an oral dual HDAC PI3 kinase inhibitor that we have been investigating in patients with relapse or refractory aggressive lymphomas and separately in patients with certain solid tumors. We are very pleased with the progress being made with CUDC-907, especially in the setting of relapsed refractory diffuse large B-cell lymphoma or DLBCL. Earlier this year we reported interim results from the Phase 1 trial of CUDC-907 in patients with relapsed refractory lymphoma and multiple myeloma at the ASCO Annual Meeting, the European Hematology Association Annual Meeting, as well as at the International Congress on Malignant Lymphoma at Lugano. In these meetings we reported that CUDC-907 monotherapy treatment was very safe and six out of the ten response evaluable, heavily pretreated patients with relapsed refractory DLBCL experienced objective responses, including two patients with complete responses and four patients with partial responses, while two…

Michael Gray

Analyst

Okay, thank you Ali. We reported a net loss of $5.5 million or $0.04 per share on both a basic and fully diluted basis for the third quarter of 2015 as compared to a net loss of $5.6 million or $0.06 per share on both a basic and fully diluted basis for the third quarter of 2014. We reported a net loss for $45.5 million or $0.30 per share again on both a basic and fully diluted basis for the nine months ended September 30 of 2015 as compared to a net loss of $13 million or $0.15 per share in the prior year period. The net loss for the first nine months of 2015 includes an in-process research and development charge of $24.3 million related to our collaboration agreement with Aurigene. Revenues for the third quarter of 2015 were $2 million dollars as compared to $1.8 million for the same period in 2014. The increase in revenues is primarily due to an increase in royalty revenues recorded on Genentech and Roche's net sales of Erivedge, which increased to $2.3 million during the third quarter of 2015 as compared to $1.8 million for the third quarter of 2014. Revenues for the nine months ended September 30, 2015 were $5.8 million as compared to $7.9 million for this same period in 2014. The decrease was primarily related to a $3 million milestone payment that we received in 2014 related to our Genentech collaboration offset in part by an increase in royalty revenues recorded on net sales of Erivedge. Operating expenses for the third quarter of 2015 were $6.9 million as compared to $6.5 million for the same period in 2014. Operating expenses for the nine months, ended September 30, 2015 where $49 million as compared to $18.9 million for the same…

Operator

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Brian Skorney with Robert Baird. Your line is open, please go ahead.

Brian Skorney

Analyst

Hey good morning guys. Thanks for taking my question. Just one question on CUDC 907, just thoughts on your Phase 2 plans in relapsed refractory NHL, I know in the ASH abstract it discusses the planning has an emphasis on MYC [ph] aberrations. So I just want to kind of get your higher-level thoughts on enrichment for this Phase 2 study, would it be purely based on a specific biomarker or you're just looking to enroll overall a greater proportion and how exactly do we think about the partnering of this? Immunohistochemistry for making BCL2 is that standard practice at this point?

Ali Fattaey

Analyst

Yes, hi Brian, thank you for the question. I think that some of things that were discussed at ASH and as indicated in the abstract as well, some of the patients that have had responses with CUDC-907 these are relapsed refractory DLBCL patients, we’ve seen that they have had high expressions of MYC and we've been evaluating all of the patients so far that we have tissues available from with regards to their MIC alterations, both genetically and by immunohistochemistry for protein levels, both of these are relatively standard assays that can be tested for patients in that regards. Our study will incorporate this information including MYC gene aberrations as well as MYC protein expression levels into selection of patients for treatments; I think our expectation right now is that we would restrict it to those patients for the enrollment, rather than just an enrichment or predominantly those patients.

Brian Skorney

Analyst

Great, thanks Ali.

Ali Fattaey

Analyst

Sure, thank you Brian.

Operator

Operator

Thank you. And our next question comes from the line of Boris Peaker here from Cowen. Your line is open. Please go ahead.

Boris Peaker

Analyst

Good morning. So I just want to focus on CA-170, just curious how do the kinetics of the oral drug compare to the IV formulation of PD-1 drugs? And kind of part to that question is how do you plan to differentiate throughout development from the approved PD-1 agents, this is just going to be the route of administration or there is going to be some clinical strategy for getting differentiated data?

Michael Gray

Analyst

Thank you, Boris. With regards to the pharmacokinetics of CA-170 it is a small molecule and it has so far at least in preclinical models that we’ve tested including rodents and dogs and in non-human primates, it appears to have a PK or half life similar to what we find for other small molecules relatively short, less than a day half life in that regards. Therefore all of the studies that we so far conducted in animal studies has been using once daily administration of the drug and our expectation is that the drug will be used similarly in the clinic, once daily administration at least to start with until we learn more regarding the pharmacokinetics in humans. Based on the profile and the target profile of CA-170 that it targets both PDL ligands as well as VISTA, our expectation is that the drug can be used in patients that express PDL and therefore are currently being treated with PD pathway directed drugs. But it can also potentially go beyond that based on VISTA inhibition and treat patients that have either relapsed or don’t really respond to PD based treatments. As we indicated in the call this morning, we’ve tested the drug in number of different syngeneic animal model testings, some of those that are responsive to PD based therapies and some that are not. And the compound seems to address both of those and provide an anti-tumor effect in both types of animal model studies. We believe that that can result in a similar clinical benefit for patients, although of course we'd have to go into the clinic and test that. So the differentiation can come not only from the oral dosing of the drug in this regard, but also potentially expand beyond just PDL expressing and those patients that are treated with PD directed drug candidates at this point.

Boris Peaker

Analyst

Got you and just a last quick question on Erivedge. In terms of the timeline if you think about myelofibrosis versus lung fibrosis, do you have a sense of which one is likely to be the lead indication?

Michael Gray

Analyst

We don’t, I think as we noted this morning, they definitely indicated their interest in testing the drug in combination for myelofibrosis, which is already a trial that shows up in clinicaltrials.gov, not recruiting yet. Secondly in IPF Roche based on their guidance that they’ve given they continue to be very interested in continuing to develop Erivedge in IPF. But with regards to priorities and their strategies in these different fibrotic disease indications, our assumption is that they’re interested in all of those.

Boris Peaker

Analyst

Great, thank you for taking my questions.

Michael Gray

Analyst

Sure, thanks Boris.

Operator

Operator

Thank you. [Operator Instructions] Our next question comes from Assaf Vestin with Roth Capital Markets. Your line is open. Please go ahead.

Assaf Vestin

Analyst · Roth Capital Markets. Your line is open. Please go ahead.

Good morning, thanks for taking the question. There was some very interesting data presented at CITI [ph] this past week and by Dr. [indiscernible] about anti-VISTA and how it synergizes with anti-PD-1, so that I just wanted to know two things, one is how the CA-170 effectively [ph] targets both [indiscernible] 650 and how what do you see in your hands with regards to that? And another thing, she presented data about early versus late intervention that was specifically in colon carcinoma, but still I would like to know what is your thoughts about going early versus late-stage because it appears that late intervention actually achieves better effect with the combination rather than early effect?

Michael Gray

Analyst · Roth Capital Markets. Your line is open. Please go ahead.

So, with regards to - thank you for the question. With regards to CA-170, we have indicated actually on the presentation that we made, our colleagues at Aurigene made on Friday that so far the EC50 [ph] for the ability of CA-170 to rescue T-cells from either PDL inhibition or VISTA inhibition appears to be relatively the same. These are low double-digits nanomolar inhibitory activity for those molecules. In models that we test, most of these models – animal models that have been tested by us are with established tumor models. So this is difficult to determine whether going early versus late based on preclinical studies can determine that. So I think at this point, our assessment, our expectation is that at least in the Phase 1 testing we will be looking at fairly established late-stage tumors for CA-170. Recall that in the Phase 1 we’ll have to determine both the safety and tolerability of the drug which so far in animal studies appears to be very safe and obviously we will be looking at not only patients' responses, but the profiling of the patients with regards to their immune system and immune profile as well. So I don’t think I can comment on early versus late at this point based on the information that we have.

Assaf Vestin

Analyst · Roth Capital Markets. Your line is open. Please go ahead.

Got it, thank you, very helpful. Thanks.

Michael Gray

Analyst · Roth Capital Markets. Your line is open. Please go ahead.

Sure.

Operator

Operator

Thank you. And I’m showing no further questions at this time and I'd like to turn the conference back over to management for any closing remarks.

Ali Fattaey

Analyst

So, thank you again for participating in our call and potentially later on the webcast as well, I want to take this opportunity to thank all of Curis' employees for all their efforts regarding our programs as well as our partners and collaborators Aurigene and Roche, but most importantly, I'd like to thank the patients and their families for participating in our clinical trials and allowing us to advance our drugs for the treatment of patients with cancer. Thanks everyone.