CORVUS PHARMACEUTICALS, INC. You should read the following discussion and analysis of our financial condition
and results of operations together with our unaudited condensed consolidated
financial statements and related notes thereto included in Part I, Item 1 of
this Quarterly Report on Form 10-Q and with our audited consolidated financial
statements and notes for the year ended
This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled "Risk Factors." Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements.
Overview
We are a clinical stage biopharmaceutical company. Our strategy is to focus our efforts on the development of immune modulator product candidates with the potential to treat solid cancers, T cell lymphomas, autoimmune, allergic and infectious diseases. We have three product candidates which are in clinical development for treatment of various solid tumors.
Our lead product candidate is CPI-818, is an investigational selective, orally bioavailable, covalent inhibitor of ITK. ITK, an enzyme that functions in T cell signaling and differentiation, is expressed predominantly in T cells, which are lymphocytes that play a vital role in immune responses. T cell lymphomas are malignancies of T cells that proliferate and spread throughout the body. These lymphomas often have tonic signaling through the T cell receptor pathway, which involves ITK. Inhibition of ITK could result in blockade of this signaling pathway and control the growth of the malignancy. In addition, one of the key survival mechanisms of both lymphomas and solid tumors is believed to be the reprogramming of normal T cells to create an inflammatory environment that inhibits anti-tumor immune response and favors tumor growth. We believe highly selective inhibitors of this enzyme will facilitate induction of normal T cell anti-tumor immunity and may be useful in the treatment of solid tumors as well as lymphomas. We believe that CPI-818 can lead to reprograming of normal immune responses that could be beneficial for the treatment of certain autoimmune and allergic diseases. Selective inhibition of ITK can induce the differentiation of naïve T cells into Th1 cells, a process known as Th1 skewing. Th1 cells lead to the generation of killer T cells that can eliminate tumor cells or viral infected cells. Selective ITK inhibition also results in the blockade of Th2 cells. Overactive Th2 cells play a role in autoimmune and allergic diseases.
CPI-818 is currently being studied in a Phase 1/1b clinical trial that was
designed to select the recommended Phase 2 dose of CPI-818 and evaluate its
safety, pharmacokinetics ("PK"), target occupancy, immunologic effects,
biomarkers and efficacy. The study employs an adaptive, expansion cohort design,
with an initial phase that evaluated escalating doses (100, 200, 400, 600 mg
taken twice a day) in successive cohorts of patients, followed by a second phase
that is designed to evaluate safety and tumor response to the recommended dose
of CPI-818 in disease-specific patient cohorts. By protocol design, treatment is
discontinued after one year or upon disease progression. The study has enrolled
patients from
In
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T Cell Lymphoma Interim Data Highlights
13 patients were enrolled in the 200 mg cohort and 11 were evaluable for
response. Overall objective responses were seen in 4 of 11 patients. Enrolled
patients were heavily pretreated receiving a median of 3 prior therapies. In
this group, there was one complete response ("CR") lasting 25 months in a
? patient with peripheral T cell lymphoma ("PTCL"); one nodal CR lasting 19
months in a patient with cutaneous T cell lymphoma; and two partial responses
("PR") ongoing at six and eight months follow up, respectively, in patients
with PTCL and anaplastic large cell lymphoma. An additional patient in the 600
mg cohort also had a PR.
? No dose limiting toxicities were observed, and a maximum tolerated dose was not
reached at doses as high as 600 mg twice per day.
Immunologic Interim Data Highlights
? The 200 mg dose induced Th1 skewing and both Th2 and Th17 blockade based on
peripheral blood samples from several patients:
In one patient that had a substantial reduction of a large tumor on the
abdominal wall, a blood sample analysis demonstrated an increase in blood Th1,
a decrease in blood Th17, and a reduction of eosinophil count and IL-5
o consistent with Th1 skewing and Th2 blockade. Tumor samples in this patient
were also analyzed and showed an increase in terminally differentiated T
effector memory cells ("TEMRA" cells), which are T cells that have responded to
an antigen and are able to mediate effector functions, such as the destruction
of tumor cells.
In four patients (two with PRs, one with stable disease ("SD") and one with
progressive disease ("PD"), the change in Th1 and CD8+ TEMRA cells was serially
o measured over time. The PR and SD patients showed an increase in both Th1 and
CD8+ TEMRA cells. Of note, SD and PD patients were lymphopenic at baseline with
absolute lymphocyte counts less than 1,000, suggesting the need for a minimal
level of immune competence.
In vitro data demonstrated that CPI-818 induced Th1 skewing and Th2 blockade in
a dose-dependent manner that supported the selection of the 200 mg dose. This
? includes an analysis of peripheral blood samples from 12 healthy volunteers
that were stimulated in the presence of various concentrations of CPI-818 and
other studies that showed that CPI-818 inhibited Th2 cytokine production from
normal CD4+ and malignant Sezary cells.
? Other in vitro studies showed that CPI-818 inhibited the production of
interleukin 4, 5 and 13 cytokines produced by Th2 cells.
In vivo preclinical studies in mice with transplanted T cell lymphoma showed
? that CPI-818 led to an increase in infiltration of normal CD8+ T cells in the
tumor and inhibition of tumor growth.
The findings of the human and preclinical studies suggest that CPI-818 has the
? potential to enhance anti-tumor immunity representing a potentially novel
approach to immunotherapy.
As of
Treating patients in the 200 mg cohort has identified a biomarker associated with response to CPI-818. CPI-818 induces a host anti-tumor cell mediated immune response that requires normal functioning T cells. Data from the 200 mg cohort in the Phase 1/1b clinical trial indicates that a minimum absolute lymphocyte count (ALC) above 900 cells per cubic milliliter of blood is required for tumor response and disease control. Four of eight patients with ALC above 900
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have objective responses (those four patients are described above), all eight
have disease control (stable disease, PR, CR) and the median progression free
survival (PFS) is 28.1 months. No objective responses were seen in five patients
(0 of 5) with ALC below 900 and the PFS is 2.1 months. The ALC biomarker is
routinely measured, is consistent with CPI-818's presumed mechanism of action
and is present in about 70% of patients based on the Company's experience
to-date. In addition, as presented at the 10th Whistler Global Summit on
Hematologic Malignancies, which took place
As of
Based on the current enrollment rate of our Phase 1/1b clinical trial, we
believe that the number of patients treated in the clinical trial would provide
adequate safety and preliminary efficacy data to inform the design of a
registration clinical trial. We expect such a trial to enroll patients with
relapsed T cell lymphomas whose prognosis is poor with currently available
therapies. Although there are single agents approved for this disease, the
current National Cooperative Cancer Network guidelines recommend that patients
be enrolled in experimental therapies indicating a serious unmet need for
improved therapies to treat T cell lymphomas. We recently received a
communication from the
Our second product candidate, ciforadenant, is an oral, small molecule
antagonist of the A2A receptor for adenosine designed to disable a tumor's
ability to subvert attack by the immune system by blocking the binding of
immunosuppressive adenosine in the tumor microenvironment to the A2A receptor.
We are collaborating with the
Our third product candidate is mupadolimab, a humanized monoclonal antibody that
is designed to react with a specific site on CD73. In both preclinical and in
vivo studies, mupadolimab has demonstrated binding to various immune cells and
the enhancement of immune responses by activating B cells. While we believe
mupadolimab has the potential to be an important new therapeutic agent with a
novel mechanism of action for the treatment of a broad range of cancers and
infectious diseases, we are waiting to initiate a potential Phase 2 randomized
clinical trial in order to prioritize the development of our other two lead
product candidates.
Our molecularly targeted product candidates are designed to exhibit a high degree of specificity, which we believe have the potential to provide greater safety compared to other cancer therapies and may facilitate their development either as monotherapies or in combination with other cancer therapies such as immune checkpoint inhibitors or chemotherapy.
We believe the breadth and status of our pipeline demonstrates our management
team's expertise in understanding and developing immunology focused assets as
well as in identifying product candidates that can be in-licensed and further
developed internally to treat many types of cancer. We hold worldwide rights to
all of our product candidates (other than in greater
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Our diverse and versatile product candidates have also enabled us to address
markets in foreign markets. In
To date, the majority of our efforts have been focused on the research,
development and advancement of CPI-818, ciforadenant, and mupadolimab, and we
have not generated any revenue from product sales and, as a result, we have
incurred significant losses. We expect to continue to incur significant research
and development and general and administrative expenses related to our
operations. We expect to continue to incur significant research and development
and general and administrative expenses related to our operations. Our net loss
for the three months ended
Since our inception and through
In
On
During the three months ended
As of
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registration statement, including any sales under our ATM with
As of
We currently have no manufacturing capabilities and do not intend to establish any such capabilities. We have no commercial manufacturing facilities for our product candidates. As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices.
Impact of COVID-19
COVID-19 has placed strains on the providers of healthcare services, including the healthcare institutions where we conduct our clinical trials. These strains have resulted in institutions prohibiting the initiation of new clinical trials, enrollment in existing clinical trials and restricting the on-site monitoring of clinical trials. We also follow FDA guidance on clinical trial conduct during the COVID-19 pandemic, including the remote monitoring of clinical data.
In alignment with public health guidance designed to slow the spread of
COVID-19, as of
Significant Accounting Policies
Our significant accounting policies are described in Note 2 to our consolidated
financial statements for the year ended
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Components of Results of Operations
Revenue
To date, we have not generated any revenues. We do not expect to receive any revenues from any product candidates that we develop unless and until we obtain regulatory approval and commercialize our products or enter into revenue-generating collaboration agreements with third parties.
Research and Development Expenses
Our research and development expenses consist primarily of costs incurred to conduct research and development of our product candidates. We record research and development expenses as incurred. Research and development expenses include:
? employee-related expenses, including salaries, benefits, travel and non-cash
stock-based compensation expense;
external research and development expenses incurred under arrangements with
? third parties, such as contract research organizations, preclinical testing
organizations, contract manufacturing organizations, academic and non-profit
institutions and consultants;
? costs to acquire technologies to be used in research and development that have
not reached technological feasibility and have no alternative future use;
? license fees; and
? other expenses, which include direct and allocated expenses for laboratory,
facilities and other costs.
We plan to increase our research and development expenses substantially as we continue the development and potential commercialization of our product candidates. Our current planned research and development activities include the following:
? enrollment and completion of our ongoing Phase 1/1b clinical trial of CPI-818;
? a potential registration clinical trial for CPI-818;
? enrollment and completion of our Phase 1b/2 clinical trial with ciforadenant in
collaboration with the
? process development and manufacturing of drug supply of CPI-818 and
ciforadenant; and
? preclinical studies under our other programs in order to select development
product candidates.
In addition to our product candidates that are in clinical development, we believe it is important to continue substantial investment in potential new product candidates to build the value of our product candidate pipeline and our business.
Our expenditures on current and future preclinical and clinical development programs are subject to numerous uncertainties related to timing and cost to completion. The duration, costs and timing of clinical trials and development of product candidates will depend on a variety of factors, including many of which are beyond our control. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming, and the successful development of our product candidates is uncertain. The risks and uncertainties associated with our research and development projects are discussed more fully in "Part II, Item 1A-Risk Factors." As a result of these risks and
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uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.
General and Administrative Expenses
General and administrative expenses include personnel costs, expenses for outside professional services and allocated expenses. Personnel costs consist of salaries, benefits and stock-based compensation. Outside professional services consist of legal, accounting and audit services and other consulting fees. Allocated expenses consist of rent expense related to our office and research and development facility.
We expect that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of one or more of our product candidates.
Results of Operations
Comparison of the periods below as indicated (in thousands):
Three Months Ended
March 31,
2023 2022 Change
Operating expenses:
Research and development $ 4,594 $ 5,100 $ (506)
General and administrative 1,980 2,313 (333)
Total operating expenses 6,574 7,413 (839)
Loss from operations (6,574) (7,413) 839
Interest income and other expense, net 376 11 365
Sublease income - related party 56 146 (90)
Loss from equity method investment (1,731) (1,041) (690)
Net loss $ (7,873) $ (8,297) $ 424 Research and Development Expenses
Research and development expenses for the three months endedMarch 31, 2023 and 2022 consisted of the following costs by program as well as unallocated employee costs and overhead costs (specific program costs consist solely of external costs) (in thousands): Three Months Ended March 31, 2023 2022 Change CPI-818$ 1,647 $ 384 $ 1,263 Ciforadenant 218 529 (311) Mupadolimab 119 1,749 (1,630)
Unallocated employee and overhead costs 2,610 2,438 172
$ 4,594 $ 5,100 $ (506)
For the three months ended
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For the three months ended
For the three months ended
For the three months ended
General and Administrative Expense
For the three months ended
Interest Income and Other Expense, net
For the three months ended
Sublease Income -
For the three months ended
Loss from equity method investment
For the three months ended
Liquidity and Capital Resources
As of
Since our inception and through
In
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On
During the three months ended
As of
We believe our current cash, cash equivalents and marketable securities will be
sufficient to fund our planned expenditures and meet our obligations through at
least the next twelve months from the issuance of our financial statements as of
and for the three months ended
? the progress, timing, costs and results of clinical trials for CPI-818,
ciforadenant and mupadolimab;
? the timing, progress, costs and results of preclinical and clinical development
activities for our other product candidates;
? the number and scope of preclinical and clinical programs we decide to pursue;
? the costs involved in prosecuting, maintaining and enforcing patent and other
intellectual property rights;
? the cost and timing of regulatory approvals;
our efforts to enhance operational systems and hire additional personnel,
? including personnel to support development of our product candidates and
satisfy our obligations as a public company;
? the extent to which the COVID-19 pandemic may impact our business, including
our clinical trials and financial condition; and
? other factors described in the section of this report entitled "Risk Factors."
We expect to increase our spending in connection with the development and commercialization of our product candidates. Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financings. We may also enter into additional collaboration arrangements or selectively partner for clinical development and commercialization. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the governing documents would likely include operating and financing covenants that would restrict our operations. In addition, sufficient additional funding may not be available on acceptable terms, or at all. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs. Any of these actions could have a material effect on our business, financial condition and results of operations.
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