Greetings. Welcome to Corvus Pharmaceuticals Fourth Quarter 2021 Earnings Conference Call. Please note, this conference is being recorded. I will now turn the conference over to Zack Kubow of Real Chemistry. Thank you. You may begin..

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals fourth quarter 2021 business update and financial results conference call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer; and Leiv Lea, Chief Financial Officer.

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.

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’ Annual Report on Form 10-K, which was filed today with the SEC and other filings the company makes with the SEC from time to time.

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 Leiv Lea.

Leiv?.

Thank you, Zack. I will begin with a quick overview of our fourth quarter and full year 2021 financials and then turn the call over to Richard for a business update. At December 31, 2021, Corvus had cash, cash equivalents and marketable securities totaling $69.5 million as compared to $44.3 million at December 31, 2020.

Research and development expenses in the fourth quarter of 2021 totaled $4.8 million compared to $7.2 million for the same period in 2020. The decrease of $2.4 million was primarily due to a decrease in clinical trial and personnel costs. R&D expenses for the full year 2021 totaled 21 -- $29.1 million, compared to $31.8 million for the full year 2020.

The net loss for the fourth quarter 2021 was $9.2 million, compared to net income of $27.3 million for the same period in 2020. Net income in the fourth quarter 2020 included a non-cash net benefit of $37.2 million from the establishment of Angel Pharmaceuticals, which we co-founded in October 2020.

Excluding this item, net loss would have been $9.9 million. The net loss for the full year 2021 was $43.2 million, compared to a net loss of $6 million for the full year 2020 also included the non-cash benefit from the establishment of Angel Pharmaceuticals.

Total stock compensation expense for the fourth quarter and full year 2021 was $0.7 million and $4.2 million, respectively, compared to $1.2 million and $5.7 million for the same periods of 2020. Looking forward, we expect full year 2022 net cash used in operating activities to be between $34 million and $36 million.

I will now turn the call over to Richard..

Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our fourth quarter and full year 2021 business update.

In 2021, we advanced our programs and the laboratory and clinical data we generated has enabled us to identify opportunities for our product candidates that we believe could represent important new therapeutic approaches to several types of cancers.

We enter 2022 with three clinical programs focused on targets of high interest that we plan to advance into patients in earlier lines of therapy and into mid to later stage clinical trials. I will now elaborate further on each of our pipeline opportunities and plans.

As you know, there is now heightened interest in antibodies targeting CD73, following the recent data from AstraZeneca in Stage 3 lung cancer that demonstrated a benefit of adding their anti-CD73 oleclumab to durvalumab, an anti-PDL-1 antibody.

More recently, in February, AZ announced data from the Neo Coast trial, a randomized Phase 2 neoadjuvant trial in lung cancer that confirmed the benefit of adding oleclumab to durvalumab. There are now several companies pursuing development of an anti-CD3 agents for cancer and other diseases.

We believe we have a very differentiated antibody demonstrated by the substantial laboratory and clinical data behind it. We also have discovered key biologic properties of the CD73 target that are helping us develop and expand clinical opportunities, not only in cancer, but other diseases as well.

Briefly, the key differentiators for mupadolimab include, number one, it binds to CD73 with picomolar affinity and completely blocks adenosine production. Two, its binding to CD73 is concentration dependent and plateaus without a hook effect. Three, its binding does not cause antigen internalization, there's no loss of antigen.

Four, it binds to a unique epitope on the CD73 protein and this has now been confirmed by Cryo electron microscopy studies, which enabled us to determine the molecular structure at atomic resolution. Five.

Most importantly, it's binding to B cells, results in their activation and differentiating into antibody producing plasma cells and into memory B cells. This property is not dependent on adenosine, and I want to repeat that this property is not dependent on adenosine.

Our results demonstrating B cell activation and differentiation have been presented at meetings and published. Several recently published papers by others are confirming the importance of B cells in the tumor microenvironment.

Briefly, the presence of B cells and plasma cells confers a favorable prognosis and is predictive of response to immuno oncology agents. Six, last in clinical trials involving over 100 patients, we have determined safety, dosing, PK PD and immunologic effects. We have reported early signs of anti-tumor activity in lung cancer and other tumors.

The data have led us to a therapeutic approach of combining mupadolimab, which serves to step on the gas or drive immune responses, combined with checkpoint blockade to release the brakes on the immune system. Together, we believe these complementary therapies may improve the immunotherapy of cancer.

This is now being tested in ongoing Phase 1b/2 trials in advanced refractory lung and head and neck cancers. We anticipate presenting data from these cohorts in the second half of 2022. To build on this, we plan to initiate a randomized blinded Phase 2 study in the frontline treatment of patients with Stage 4 non-small cell lung cancer.

Approximately 150 patients will be randomized to therapy with mupadolimab, in combination with pembrolizumab and chemotherapy, or to therapy with pembro and chemo alone, which are approved standard of care therapies for this indication.

The primary endpoint will be progression free survival, and secondary endpoints include response rates, and overall survival. Chemo and tempo are approved for stage four lung cancer, regardless of PDL1 one expression on the tumor. So, a very high proportion of patients with Stage 4 lung cancer are eligible for this trial.

We anticipate that we can start this trial in the third quarter of 2022. Let me now discuss CPI-818 are ITK inhibitor. ITK is a homologue of BTK and is involved in T cell activation and T cell proliferation. As you may know, BTK inhibitors are now widely used in the treatment of B cell lymphomas.

And several members of the Corvus team played crucial roles in the discovery and development of ibrutinib, the first BTK inhibitor.

The idea here is that CPI-818, which is a small molecule orally administered drug will block malignant T cell proliferation and be useful in T cell lymphomas, and perhaps in autoimmunity and allergy by blocking the proliferation or activation of T cells that are involved in these diseases.

At the ASH meeting, American Society of Hematology meeting in December 2020, we presented data and patients with peripheral T cell lymphoma, or PTCL, treated with 818. We saw one complete response and one partial response out of seven patients with very advanced refractory PTCL. I might add that CR last 19 months.

Additional laboratory studies demonstrated that CPI-818 is having rather remarkable effects on lymphocyte populations and functions. Our partner in China Angel Pharmaceuticals has licensed CPI-818 for the greater China territory, and we are working with them to conduct expanded clinical trials in China and in the U.S and other countries.

A key motivation here is that T cell lymphomas are more common in Asia than in North America and Europe. Angel is now enrolling patients Phase 1/1b trial of CPI-818. I am happy to report that the initial antitumor activity we reported on at ASH has been confirmed in the Angel clinical trial.

I will also add that Angel has enlisted the top academic clinical centers in China, led by the Beijing Cancer Center at Peking University. Looking forward, both Corvus and Angel will continue to enroll patients in these Phase 1/11b trials, and we are aiming to present data from these studies in the second half of this year.

We are advancing our third clinical program, ciforadenant, in frontline renal cell cancer in a triplet combination with an anti-PD-1 and anti-CTLA-4 therapies. We believe there is very strong rationale for this novel combination, which is based in our -- on our publication in cancer immunology research in 2018.

Briefly, in those studies, we showed in several animal tumor models that ciforadenant combined with anti-CTLA-4 and anti-PD-1 were highly active, resulting in a high proportion of cured animals, even in the setting of treatment of established tumors.

In addition to the preclinical studies noted here, we’ve published and presented clinical data in very advanced refractory patients with renal cell cancer, demonstrating antitumor activity with cifo as monotherapy and together with anti-PD-L1 therapy.

As you may recall, we also identified a biomarker, the Adenosine Gene Signature, that predicts response to adenosine blockade. These findings have now been confirmed by other academic groups.

Based on our preclinical and clinical results and recent emerging clinical data showing that the combination of ipilulumab and nivolumab produce long-term plateaus on progression-free survival and overall survival curves, the Kidney Cancer Clinical Trial consortium and Corvus plan to conduct a Phase 2 trial in frontline renal cell cancer, focused on the triplet combination of ciforadenant plus ipi and nivo.

The trial will enroll about 60 patients and the primary endpoints will be deep responses and progression-free survival. Deep responses are complete responses and partial responses with greater than 50% tumor reduction. The rationale behind this trial is to raise the plateau on progression-free survival and survival by adding ciforadenant.

The Kidney Cancer consortium was led by MD Anderson and includes several leading centers such as Vanderbilt, Beth Israel in Boston, Cleveland Clinic, UT Southwestern and others. This study is on track to begin in late April of this year. Since this is an open-label trial, I anticipate that we will get a good feel for efficacy early in the trial.

To summarize our near-term opportunities, mupadolimab is a differentiated anti-CD73 antibody that we're developing for lung cancer initially. It is being utilized in a novel immunotherapy approach based on B-cell activation. And long term, we believe it has broad applications in other cancers and in infectious diseases.

We also are exploring partnering opportunities to expand mupadolimab's development scope. CPI-818 is being studied for T-cell lymphomas and these studies are elucidating dramatic effects on T cell function, which we believe bode very well for other diseases like autoimmunity and allergy.

Together with Angel, we continue to treat patients in our trial here in the United States, Canada, Australia, South Korea and in China, with a goal of initiating a global Phase 2 study.

And ciforadenant is now positioned to begin clinical evaluation in first-line renal cell cancer using a novel approach aimed at increasing complete remissions and deep responses. One final point to highlight. Working with Angel and the Kidney Cancer Consortium allows us to conduct multiple comprehensive clinical trials very cost efficiently.

Combined with a solid balance sheet, we have the resources to execute on our 3 clinical programs through several key milestones over the next couple of years. I will now turn the call over to the operator for Q&A.

Operator?.

Our first question is from Li Watsek with Cantor Fitzgerald..

Hey guys, thanks for taking my questions. I guess first one, I will move. I guess for the long trial, it seems like you plan to do a Phase 2 instead of to do a Phase 2/3. So maybe just talk a little bit about what's behind the plan here. And then you mentioned that you initiated a Phase 2 trial in, I guess, third quarter of this year.

So just wondering what are the gating steps here? Thanks..

Okay, Li. We decided to go with a randomized blinded Phase 2 trial, because that gives us more abilities to look at the data. It's not a registration trial. It's not viewed as a registration trial by the FDA. So, we're able to look at the data and evaluate efficacy along the way. Now we're not going to be looking at the data on a continuous basis.

We have built into the Phase 2 trial interim points, where we will take controlled looks at what's going on from an efficacy standpoint. We have a Phase III trial teed up and ready to go. The minute we are convinced that there is a good signal from an efficacy standpoint, we fire up the Phase III trial, which would be a larger study.

Basically, this is a way to efficiently manage Phase 2 moving into Phase 3, conserving capital and being able to look at the data. Now once we start the Phase 3, of course, we can't look at the data until the trial is done. Now you're -- sorry, the second question was on the ....

Yes ....

What are the gating items for starting? The gating items are just getting our sites lined up, getting IRB approvals, vendors, et cetera. I mean there's no -- more logistical items than anything else..

Okay. Thank you..

Our next question is from Mara Goldstein with Mizuho. Please proceed..

Thanks so much for taking the question. I just wanted to ask just on the expansion cohorts for the mupadolimab that was in process. Where you are now in terms of enrolling up to those 15 patient cohorts in -- on those specific indications? I think it was non-small cell lung cancer and the head and neck cancer indication, if you don't mind me asking.

And then, do you have a sense of when there might be data from CPI-818 that will be available to share?.

Okay. The expansion cohorts with mupa are enrolling. Head and neck is enrolling very nicely. Hope to report some data on those later this year. Now keep in mind, those are very different patients than our randomized Phase 2. I mentioned the randomized Phase 2 in lung is frontline.

The lung, and head and neck that we're enrolling now is second, third, fourth, fifth line therapy. So very, very different patients. And I don't consider that information to be gating on our Phase 2 at all and other people are seeing that, too. These late-line patients are very, very different.

Now your question on 818, let me just say 818 is exciting product and we're enrolling patients and we're going to present data later this year, maybe ASH or something like that. I think that the biology that's coming out of this is extraordinary. I think that this is a really pretty cool target..

Okay.

If I could just ask, the clinical program there, is the sort of global design, is that a function of maybe what occurred at the sintilimab FDA ADCOM or was that always anticipated to enroll patients outside of Asia?.

Well, sintilimab has got nothing to do with it. Our plan was always to enroll patients in North America and Australia and we did the deal -- we formed Angel to accelerate our global development. We don't intend to just enroll a trial with Chinese patients.

I mean this is -- the majority of patients in what we're doing now are going to be from North America..

Okay. Thanks so much..

Our next question is from Roger Song with Jefferies. Please proceed..

Great. Thank you. It's for taking our questions, so maybe for the first one, for the mupa Phase 2 first line non-small cell lung cancer. Rich, can you just tell a little bit about the powering assumption for these 150 patients? Also, you mentioned you potentially will have multiple kind of internal lot.

Just to confirm from those internal lots, if you see the efficacy signal there, you can start a Phase 3?.

Okay. So first of all, it's a 150-patient trial. It's not a registration trial, the Phase 2 part of this. So, I'm not sure what the -- where you're going with power or P values. But we would be -- I would like to -- we'd be able to look at this data after 75 events, let's say, 75 to 100 events, events being progression.

In a Phase 2 trial with 150 patients, the power calculations and P values are a little bit different. I would -- I think if we had a hazard ratio between the treatment and control groups of 0.7, that would be very, very good. But of course, we will look at response rate and other things.

Now keep in mind that chemo plus pembro for all comers with lung cancer, wild type, not excluding ALK and eGFR mutations, has a PFS median of about 8 months.

By the way, that's not very good, which is why we're interested in this trial, because we think adding mupa -- I mean, there's a good chance we think adding a third agent to that could improve upon that. So now in the Phase III trial, Roger, that would be a trial with --- I don't know, 700 patients and an interim look, maybe 1/3 of the way through.

There, you might be looking at a hazard ratio of 0.8, but that would be 90% power to get yourself P0.025.

Does that make sense?.

No, that's great. That's a very good kind of color around those ratio threshold. Okay. So that's very good. And then just to clarify for the 818 data, you said second half this year, maybe around ASH.

Will that include your own Phase 1b data as well as the Angel kind of China data or that's just from 1 or the other?.

I think it would include both. But there's a lot of parts to this. There's the clinical data, and there's a lot of very interesting biologic data. You have to realize that this has never been done before, right? ITK inhibition just like when my group did BTK, that was a completely pioneering work, and that's what we're seeing here.

And all I can say is that this is a really interesting target..

Yes. Got it. Yes. So potentially beyond ....

And we're going to be very cautious in how we talk about this, because there's a lot of interesting science, there's a lot of new targets that come about as you investigate this, new strategies, new diseases. So, this is something that I think you'll be hearing more about in the future..

Got it. Okay, great. Maybe just one last one, if I may.

For the Adenosine Gene Signature biomarker, how will that be incorporated into this Kidney Clinical Trial Consortium Phase 2 or you have some other kind of way to kind of enhance the ?.

Okay. Great question, Roger. So first of all, let me say that the Adenosine Gene Signature has been confirmed by one major academic group, and it's a publication that's in press now by this other academic group. So that signature appears to be very important in renal cell cancer.

Now we are going to measure it in our frontline renal cancer study with the Kidney Cancer Consortium, but we're not going to gate on it. We're not going to exclude people based on it. As you recall, in patients with metastatic recurrent disease, it's about half of the patients that are positive for this gene signature.

Now in the frontline setting, there's a lot to be learned. I don't know how common it will be in the frontline and its predictive value could be different, which is why we don't want to gate on it. We need to collect that information. And so, we will have outcomes on patients, who are Adenosine Gene Signature positive and negative. And we will see..

Our next question is from Arthur He with H.C. Wainwright..

Hey, good afternoon, Richard and Leiv. So, I just want to follow-up on the trial for the first-line lung cancer. I believe for AstraZeneca the COAST study, it was the Stage 3 lung cancer patients. And if I recall correctly, you mentioned the Stage 4.

So, could you walk us through your thought processing how to -- why you chose the Stage 4 versus Stage 3 for this trial?.

Sure. So, the reason -- one of the reasons AstraZeneca did Stage 3 lung cancer is, because durvalumab, their anti-PD-L1 was approved for Stage 3 front line. So, it was more a business reason than anything else. And they -- while being a dominant anti-PD-1 for Stage 3, it is not a dominant antibody for Stage 4. Stage 4 is far more common, by the way.

Stage 4 diseases is metastatic disease. And that's way more common. Stage 3 is patients who have locally advanced disease, they get chemotherapy and radiotherapy and then they went on adjuvant durvalumab or durvalumab oleclumab. So, it's a very different clinical setting.

It's a little earlier, but there would be no reason to think that the biology -- that the immunobiology of the lung cancer cells in Stage 3 versus Stage 4 is different. We selected Stage 4, because it's far more common.

We have some responses we've seen in metastatic disease with mupa alone and in patients who have failed PD-1s, and we're going to put -- partner our mupa with pembrolizumab, which is -- as you know, is approved -- is an approved agent for Stage 4 lung cancer. So those are the reasons. It's not really AZ's focus on Stage 3.

It has to do with the fact that, that's where they found their position, back a couple of years ago with their PACIFIC trial, okay?.

Okay. Got you. Thanks for that clarification. And I'm just curious for the potential registration trial for mupa for the first-line lung cancer.

Are you guys open to the design to including even possible for the triplet including the cifro?.

I'm sorry, the triplet, including what?.

Ciforadenant..

Oh, adding the A2A blocker to it. I mean, we would be open to considering it, but I mean, right now, we have -- this is a pretty straightforward design, both for our Phase 2 and potential Phase 3. It's pembro and chemo, which is approved for all Stage 4 lung cancer, except for the eGFR and ALK mutations and adding mupa on top of that.

Now if you want to have two experimental agents on top of it, that gets a little bit more complicated..

Okay. Thanks. Thanks for the additional color..

All right. First, thank you all for participating in the call. We look forward to updating you on our future progress. Thank you very much..

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation..