Corvus (CRVS) Q4 2025 Earnings Call Transcript

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DATE

Thursday, March 12, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Financial Officer — Leiv Lea
• President and Chief Executive Officer — Richard A. Miller

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TAKEAWAYS

• R&D Expenses -- $9.9 million in the quarter, up from $6 million the previous year, attributed to increased clinical and manufacturing costs for soquelitinib and higher personnel expenses.
• Full-Year R&D Spend -- $33.7 million for the year, up from $19.4 million, driven by ongoing clinical program investments.
• Net Loss -- $12.3 million for the quarter, compared to $12.1 million the prior year; noncash losses from the Angel Pharmaceuticals stake were $0.7 million, down from $2.2 million the previous year.
• Stock Compensation Expense -- $1.6 million in the quarter, compared to $0.8 million a year ago.
• Liquidity -- $56.8 million in cash and equivalents at period end, up from $52 million a year prior; pro forma cash after January’s public offering totaled approximately $246 million, extending the runway to 2Q 2028.
• Soquelitinib Clinical Data -- In the placebo-controlled Phase I atopic dermatitis trial (cohort 4), mean EASI reduction was 72% for soquelitinib versus 40% for placebo, with statistical significance (p=0.035).
• Cohort 4 Key Outcomes -- 75% of patients (9/12) achieved EASI 75, 25% achieved EASI 90, and 33% reached IGA 0/1; the only nonresponder was refractory to both Dupixent and Rinvoq.
• Comparison for Prior Systemic Therapy Patients -- 60% of soquelitinib patients who previously failed systemic therapies reached EASI 75, compared to 0% for placebo; placebo patients with prior therapy did worse than those untreated, while soquelitinib responders were similar regardless of history.
• Durability of Response -- Over 90% of patients in cohorts 3 and 4 showed maintained or improved responses 90 days after last dose, with no evidence of disease rebound, unlike other systemic therapies.
• Safety Profile -- No new safety signals identified after extending treatment to 8 weeks; adverse events were similar between active and placebo arms, with no notable lab or hepatic abnormalities, and no serious infections reported in over 150 patients across indications.
• Biomarker Findings -- Data indicated induction of T regulatory cells and decreased levels of IL-4, IL-5, IL-17, and TARC, as well as observed modulation in JAK/STAT pathway signaling.
• Phase II Atopic Dermatitis Trial Initiated -- 200-patient, randomized, international trial with 12 weeks of dosing and 90-day follow-up; endpoints include median EASI reduction and other efficacy measures, with data expected mid-2027.
• Phase III PTCL Trial Progress -- Ongoing enrollment; recent independent Data Safety Monitoring Board review found no safety signals, with a formal interim analysis planned later in the year.
• Pipeline Expansion -- Phase II trials in hidradenitis suppurativa (HS) and asthma planned for later in the year, with design and endpoints outlined for the HS study (60 patients, primary endpoints include HiSCR 50 and HiSCR 75).
• China Collaboration -- Angel Pharmaceuticals actively enrolling Phase Ib/II atopic dermatitis study with multiple soquelitinib dose arms, initial results expected late in the year, and total enrollment projected at up to 140 patients by mid-2027.

SUMMARY

The call emphasized broad clinical progress for soquelitinib, with multiple late-stage programs advancing and first international expansion in China underway. Upcoming data presentations at the Society for Investigative Dermatology will highlight new biomarker discoveries and durability results. Management confirmed sufficient cash to fund operations through key trial readouts and outlined further expansion plans for soquelitinib in immune and inflammatory diseases. Strategic focus included evaluating activity in treatment-resistant populations and exploring additional indications beyond atopic dermatitis and PTCL.

• CEO Miller stated, "our confidence continues to grow in the long-term potential for soquelitinib in atopic dermatitis, peripheral T-cell lymphoma and a broad range of additional inflammatory diseases."
• Management reported no observed cases of EBV reactivation or serious infections in the soquelitinib program, including patients highly immunocompromised at baseline.
• Phase II trial design incorporates both treatment-naive and prior systemic therapy patients to assess comparative efficacy across subgroups.
• Initial results from the Angel Pharmaceuticals China study will provide first data on soquelitinib’s 12-week regimen, preceding the global Phase II readout.
• Enrollment in the Phase III PTCL trial is proceeding as planned, with randomization versus investigator’s choice of belinostat or pralatrexate.
• Management plans to initiate separate Phase II studies targeting hidradenitis suppurativa and asthma, leveraging soquelitinib’s multi-cytokine mechanism and preclinical evidence.

INDUSTRY GLOSSARY

• EASI: Eczema Area and Severity Index, a tool for measuring the extent and severity of atopic dermatitis.
• IGA: Investigator Global Assessment, clinical rating of disease severity in dermatology trials.
• HiSCR: Hidradenitis Suppurativa Clinical Response, an efficacy endpoint in HS clinical studies reflecting reduction in abscesses and inflammatory nodules.
• PTCL: Peripheral T-cell lymphoma, a category of aggressive non-Hodgkin lymphomas arising from mature T cells.
• Treg: T regulatory cell, an immune cell subtype involved in controlling and modulating immune responses.
• JAK/STAT: Janus kinase/signal transducer and activator of transcription pathway, a signaling cascade critical in immune and inflammatory responses targeted by various therapeutics.
• ALPS: Autoimmune lymphoproliferative syndrome, a rare immune disorder characterized by immune dysregulation and proliferation of lymphocytes.
• BID/QD: Dosing schedule abbreviations—BID means twice-daily, QD means once-daily.
• Dupixent: Brand name for dupilumab, an approved biologic treatment for atopic conditions referenced in the clinical discussion.
• Rinvoq: Brand name for upadacitinib, a JAK inhibitor approved for inflammatory diseases and referenced as prior therapy for trial participants.

Full Conference Call Transcript

Leiv Lea: Thank you, Zack. I will begin with a brief overview of our fourth quarter and full year 2025 financials and then turn the call over to Richard for a business update. Research and development expenses in the fourth quarter of 2025 totaled $9.9 million compared to $6 million for the same period in 2024. R&D expenses for the full year 2025 totaled $33.7 million compared to $19.4 million for the full year 2024. For both the fourth quarter and full year 2025, the increases in R&D expenses were primarily due to higher clinical trial and manufacturing costs associated with the development of soquelitinib as well as an increase in personnel costs.

Net loss for the fourth quarter 2025 was $12.3 million compared to a net loss of $12.1 million for the same period in 2024. Included in the net loss for the fourth quarter of 2025 and 2024 were noncash losses of $0.7 million and $2.2 million, respectively, from Corvus' equity method investment in Angel Pharmaceuticals and a noncash loss of $2.3 million in the fourth quarter of 2024 associated with the change in fair value of the company's warrant liability. Total stock compensation expense for the 3 months ended December 31, 2025, was $1.6 million compared to $0.8 million for the same period in 2024.

As of December 31, 2025, Corvus had cash, cash equivalents and marketable securities totaling $56.8 million compared to $52 million at December 31, 2024. In January, we closed an upsized underwritten public offering that included a premier group of biotech investors and generated net proceeds of $189 million including the net proceeds from this financing, pro forma cash at December 31, '25, was approximately $246 million, extending our cash runway into the second quarter of 2028. I will now turn the call over to Richard, who will discuss our clinical progress and elaborate on our strategy and plans.

Richard Miller: Thank you, Leiv, and good afternoon, everyone. Thank you for joining us today for our update call. In 2025, we made significant progress advancing the development of soquelitinib, our first-in-class selective ITK inhibitor that is designed to rebalance or reset the immune system. This was highlighted by the presentation of final results from our Phase I/Ib trial in peripheral T-cell lymphoma in an oral session at the ASH Annual Meeting and the recent announcement of data from cohort 4 of our Phase I atopic dermatitis trial, which showed that soquelitinib could become a leading therapy for atopic dermatitis and potentially other inflammatory diseases.

Shortly after the data announcement, we completed a $200 million financing, reflecting high investor interest in the opportunity for soquelitinib and ITK inhibition given our strong data to date, its unique mechanism of action and its broad potential to help patients across multiple areas of medicine. As a result, we are entering 2026 in a position of strength with ongoing enrollment in our Phase III PTCL trial, our recently initiated Phase II atopic dermatitis trial and the opportunity to expand into mid-stage trials for other important inflammatory diseases such as hidradenitis suppurativa and asthma later this year. Based on our current plans and anticipated time lines, our cash runway extends beyond key data readouts for all of these programs.

On today's call, I will recap the highlights from our cohort 4 data announcement, share the latest on our plans to present additional data from the trial at an upcoming medical meeting and provide an update on our Phase II trial. I will also review our pipeline expansion plans and key upcoming milestones. The results from cohort 4 and the full Phase I trial show that soquelitinib's emerging clinical profile appears to provide substantial advantages in the treatment landscape for atopic dermatitis. One, it is an oral medication. Two, it has a novel mechanism of action that combines tissue selective and target-specific precision with ability to affect multiple inflammatory signaling pathways.

Three, it appears safe and effective in a broad range of patients, including those who have received prior systemic therapies; and four, it produces durable responses with no disease rebound. Based on our market research, this profile would be considered a significant advancement for patients with atopic dermatitis. So we are excited that soquelitinib data further elevates its profile and potential. It shows one of the strongest EASI 75 results at only 8 weeks of therapy and the durability of responses with no disease rebound may provide the opportunity for new approaches to therapy of immune diseases, including the potential for soquelitinib to be an intermittent therapy.

Overall, if the current profile continues to be supported by larger clinical trials, we believe soquelitinib will be very well positioned to be among the leading options for the treatment of patients with moderate-to-severe atopic dermatitis. I will now review key highlights from our recent data announcement. First highlight, efficacy. For cohort 4, which was designed as a randomized placebo-controlled trial with drug given over an 8-week treatment period, the mean percent reduction in EASI was 72% versus 40% for placebo that was statistically significant at 0.035. 75% of patients, 9 of 12 achieved EASI 75 and 1 additional patient was in EASI 74. 25% of patients achieved EASI 90 and 33% achieved IGA 0/1.

11 of 12 patients achieved EASI 50. The only nonresponder was a patient who was refractory to previous therapy with both Dupixent and Rinvoq. Two of the EASI 90 patients were resistant or nonresponsive to prior systemic therapies. 20% of placebo patients achieved EASI 75 or 17% if you include 2 patients that missed the day 56 evaluation and on later evaluation, never reached EASI 75. In addition, 2 placebos required rescue medication due to disease flares versus none in the active group. The 2 placebo patients who were EASI 75 were both patients who had not received prior systemic therapies.

None of 7 placebo patients who received prior systemic therapy achieved EASI 75, whereas 3 of 5 active patients who received prior systemic therapies achieved EASI 75. The cohort 4 results confirm our hypothesis from cohorts 1 through 3, which is that extending the treatment duration would deepen responses. The data also show that soquelitinib is superior to placebo in every efficacy endpoint evaluated. And when compared to other agents, we believe the results obtained so far for soquelitinib place it among the most active agents, oral or injectable approved or under development for atopic dermatitis. Second highlight, durability.

Starting with cohort 3, we took a more systematic approach to measuring the remission duration with a longer blinded post-treatment follow-up period of 90 days compared to 30 days tracked for cohorts 1 and 2. The cohort 3 data show that responses observed at day 28, the last day of treatment were maintained or slightly improved out to 118 days or 90 days without therapy. This compares to other systemic therapies for atopic dermatitis, which all show a rapid rebound in disease that starts as soon as 1-week after stopping therapy. We see no rebound phenomenon with soquelitinib, both in cohorts 3 and 4.

We believe that the induction of T regulatory cells by soquelitinib could be responsible for this durable suppression of inflammation and sustained disease remission. We have seen this in preclinical experiments and biomarker data shows an increase in circulating Tregs in Cohort 3 patients. The demonstration of circulating Tregs is quite remarkable as usually, these cells are very rarely found in the blood. It is likely that these cells are migrating to and concentrating in sites of disease as we have found in our animal models. Third highlight, broad applicability. 35% of all patients enrolled in the Phase I trial had received prior systemic therapies, including 50% of patients in cohort 4.

Dupilumab was the most commonly used prior therapy followed by JAK inhibitors and some patients received multiple prior therapies. This includes patients who were resistant to their last systemic therapy. In other words, they were nonresponsive to their prior treatment. Typically, patients that are treatment-resistant or who have gone through multiple prior therapies are more challenging, and this was confirmed when looking at the placebo patients in the trial. The response curve data showed that placebo patients who received prior systemic therapies do worse than those who did not receive prior therapies, indicating that prior systemic therapy is an unfavorable characteristic.

However, the response curves for patients receiving soquelitinib are very similar across these groups, indicating that soquelitinib is not affected by prior systemic therapy experience. Together with our baseline patient characteristics, this also indicates that the patient population treated on our protocol was more unfavorable than those reported in most atopic dermatitis clinical trials. As noted above, in patients who received prior systemic therapies, the EASI 75 was 0% for placebo 0 out of 7 versus 60%, 3 of 5 seen in patients who received soquelitinib.

So in terms of patient indications, our conclusions are that soquelitinib is active in patients who have received prior systemic therapies with outcomes no different than naive patients despite these patients having more unfavorable disease. Responses were observed in patients who are refractory to their prior systemic therapy. This supports our hypothesis regarding the novel mechanism of action for soquelitinib and the lack of resistance due to prior therapy experience. Fourth highlight, safety. No new safety signals were seen in cohort 4 with a longer 8-week treatment duration. In cohort 4 and the full Phase I trial, reported adverse events are similar in both placebo and active groups. No significant lab abnormalities were observed.

There were no hepatic abnormalities, no changes in liver function tests. Infections were similar in treated and placebos and were minor. I'd like to make some additional comments on infection. We have received questions from investors regarding the potential for EBV viral reactivation. These questions are based on very rare reports in the literature of EBV infection in babies born with germline mutations in ITK. In a neonate, the immune system is primitive as T and B cells have not yet formed. Immune system maturation occurs during development and exposure to antigens.

A germline mutation in ITK in the primitive developing immune system is completely different than transiently blocking the kinase domain of ITK with a small molecule drug in an individual with a mature immune system. We have seen no serious infections of any kind in more than 150 patients treated with soquelitinib across our lymphoma, atopic dermatitis and ALPS trials to date. This involves over 14,000 patient days of treatment with some patients on therapy for more than 2 years. In PTCL, most patients harbor EBV and other viruses such as CMV.

In our Phase I lymphoma study, we identified over 30 patients with EBV virus detectable at baseline, that is before therapy in their blood measured using a PCR technique that is they are viremic. None of these patients or any other patient had any evidence of EBV reactivation or related illness during the treatment, which, in some cases, lasted over 2 years. And recall, these patients are extremely immunocompromised. One other thing to note, ITK inhibition spares Th1 cells, also known as Th1 skewing. Th1 cells are the cells responsible for eliminating viruses. Now beyond clinical results, biomarkers have been identified that support the novel mechanism of action with ITK inhibition that leads to immune rebalancing.

Some of these biomarkers represent new discoveries. Briefly, the data show a decrease in IL-4, IL-5 and IL-17 cytokines, a small reduction in TARC, a reduction in Th2 cells and an increase in Tregs. In ongoing work, we are also finding very significant and interesting changes in the JAK/STAT signaling pathways that will be reported on later. With the additional information that is emerging both from the clinic and our biomarker analysis such as induction of Tregs, we believe that soquelitinib's novel mechanism of action and safety will allow for its utility in diverse indications in immune inflammatory diseases and in cancers.

Our soquelitinib abstract was accepted for oral presentation at the Society for Investigative Dermatology, or SID Annual Meeting, which takes place in mid-May. We plan to present the Phase I clinical data, expanding our safety and durability data. We will also focus on our biomarker results in this presentation, which we believe will provide novel ideas regarding control of immune diseases. Our late-breaker abstract was not selected for presentation at AAD, which typically favors later-stage trials. Angel Pharmaceuticals, our partner in China, is enrolling their Phase Ib/II trial in atopic dermatitis.

This is a blinded placebo-controlled trial that is evaluating a 12-week treatment regimen in 48 patients with soquelitinib doses of 100 milligrams BID, 200 milligrams QD, 200 milligrams BID and 400 milligrams QD. The patient eligibility and endpoints are the same as was used by Corvus. Depending on the results from the Phase I portion, an additional 60 to 90 patients will be enrolled in the Phase II portion of the study. This trial is open at leading centers in China that are very experienced in performing these types of trials. The study is conducted in close collaboration with the Corvus team. Results from the initial cohorts are expected late this year.

Now I would like to discuss our Phase II randomized placebo-controlled trial in atopic dermatitis. We announced today that the trial has been initiated. This trial is planned to enroll 200 patients with moderate to severe disease randomized into 1 of 4 cohorts with 50 patients in each cohort. We will allow patients who have received prior systemic therapies. Doses of 200 milligrams QD, 200 milligrams BID and 400 milligrams QD will be examined along with placebo. The treatment duration is 12 weeks with an off-treatment follow-up period of 90 days. The primary end point is median percent reduction in EASI at 12 weeks, a typical endpoint for Phase II studies in atopic dermatitis.

Other endpoints include EASI 75, EASI 90, IGA, PP-NRS and others. This will be an international study. We anticipate the data from this trial will be available in mid-2027. Outside of atopic dermatitis, we continue to enroll patients in our Phase III registration PTCL trial with an interim analysis expected later this year. We recently conducted a planned meeting of our outside independent Data Safety Monitoring Board. No safety signals were observed, and the study continues as planned. In December, at the American Society of Hematology or ASH Annual Meeting, we presented the final data from our Phase I/Ib clinical trial evaluating soquelitinib in patients with T-cell lymphoma.

The data are supportive of the ongoing Phase III program showing that patients in the 200-milligram BID cohort, the same dose being studied in Phase III had a median progression-free survival of 6.2 months and a median overall survival of 28 months comparing favorably -- very favorably to results with other therapies. For example, median survivals with chemotherapy are less than 1 year and PFSs are less than 3.5 months. The data presented at ASH also shows soquelitinib's immunobiological effects and its mechanism of action of affecting T cell differentiation via ITK inhibition. These data support its potential in atopic dermatitis and a much broader range of immune and inflammatory diseases.

We also continue to collect very exciting data from our ALPS or autoimmune lymphoproliferative syndrome clinical trial with 3 patients now on therapy for close to a year. We continue to collaborate with the team at NIAID and our current plan is to submit data for a potential presentation on the study at the ASH meeting in December. In terms of upcoming clinical trials, we plan to initiate a Phase II trial of soquelitinib for hidradenitis suppurativa and asthma later this year. There is strong scientific rationale for evaluating soquelitinib in HS, which is it is an IL-17-driven disease. In both in vitro and in vivo animal models, soquelitinib is a potent inhibitor of Th17 cells and reduces IL-17 production.

Our trial design for HS is further along. At a high level, we are planning to enroll about 60 total patients with moderate to severe HS into 3 arms: 200-milligram BID, 400-milligram QD and placebo. The treatment period will be 12 weeks and the primary endpoints are safety and efficacy measured by HiSCR 50, HiSCR 75. The asthma study design is emerging and will likely involve about 150 patients treated for 3 months. In closing, our confidence continues to grow in the long-term potential for soquelitinib in atopic dermatitis, peripheral T-cell lymphoma and a broad range of additional inflammatory diseases.

We are only beginning to unlock the full potential of ITK inhibition and immunomodulation, which could lead to new and better therapies for inflammatory, autoimmune and fibrotic diseases and cancers. We are building strong momentum with soquelitinib and our ITK platform, and we look forward to updating you on our progress throughout the year. I will now turn the call over to the operator for questions-and-answer period. Operator?

Operator: [Operator Instructions] And your first question comes from Roger Song from Jefferies.

Jiale Song: Congrats for all the progress you have made. Richard, maybe just one question related to the read-through from the data readout you will have before the Phase II, the global atopic dermatitis data mid next year. So you will have a PTCL potentially data and then also the China 12-week study data. So how should we think about the read-through from those data readouts to the Phase II AD maybe from the efficacy and then the safety perspective, particularly on the high-dose 400-milligram QD?

Richard Miller: Okay. So we are anticipating that Angel Pharmaceuticals, who is conducting a placebo randomized trial and looking at different doses, will have some data from their initial couple of cohorts later this year. That would be the first data readout. That's going to be looking at 100 milligrams BID and 200 milligrams QD. But recall, they're going for 12 weeks. They're treating for 12 weeks. We've only gone up to 8 weeks. So that will be very important information for us. Then that data is unblinded. They look at that. We can report that. And then the next part of the study will look at 200 milligrams BID and 400 QD. That will be probably middle of 2027. Okay?

So we'll get some data on more patients and things. Now in total, after that, the Angel goes on and does 40 -- what, 50, 60 or 60 to 90 patients in a Phase II study rolls right into that. In total, you're looking at around 140 patients or so. And that -- yes, 130, 140 patients, and that's totally completed by mid-2027 or early '27. So we'll have some data from them late this year, more data in first half of 2027. The PTCL trial will have an interim formal review in later this year. That has a futility analysis as part of it, so -- and safety analysis.

And -- but the complete trial results are expected in late '27. Okay. Now what I talked about on the call was we do have also periodic safety -- outside independent safety reviews on the Phase III PTCL trial. We had one of those very recently and everything looked good, as I mentioned.

Operator: And your next question comes from Li Watsek from Cantor.

Li Wang Watsek: Two from us. Maybe just first on the data that you're going to present at the SID meeting in May. Rich, you talked about biomarker and durability data before. Can you just maybe set expectations for us?

Richard Miller: Yes. Well, I can set expectations. The durability continues to look great. And in terms of biomarkers, the things I've mentioned previously, but we have discovered some new biomarkers, which is going to be probably the main part of the SID presentation, fascinating work around the T regulatory cells and some of the JAK-STAT signaling. And the key message there is that you're affecting different multiple cytokine pathways. Even though you're targeting a very specific enzyme restricted to T cells that can affect several different cytokines, all of which are important in inflammatory diseases like IL-5 and 4 and 17, et cetera. So plus we'll update the clinical data with the durability and a few other things.

Li Wang Watsek: And then sorry, my second question is on the Phase II trial in HS. Just wondering what the benchmark that you're looking at, especially relative to the approved agents like IL-17 in the space, do you think in terms of efficacy, you have to match the biologics?

Richard Miller: Well, first of all, we have to find the optimum dose, which we're going to look at a couple of different doses. But of course, the AD study informs us as well as the T-cell lymphoma study informs us on the HS trial. I would expect efficacy as good or better than what's out there, which is what the corrected HiSCR scores are, what, 25% or so.

Operator: And your next question comes from Graig Suvannavejh from Mizuho.

Graig Suvannavejh: Richard, congrats on the great progress we're seeing with soquelitinib across multiple indications. I just wanted to maybe touch upon a couple of things. First, just on your next data presentations, you did mention that maybe you did apply for late-breaker abstract to AAD. I think you gave us a reason why perhaps your abstract was not accepted, although I do think that Kymera does have a late breaker. I don't know their data set very well as I don't cover it, and so it's not at the top of -- or the tip of my tongue.

But any thoughts on whether it is perhaps they had a bigger database because I do think that the just curious to get any thoughts there.

Richard Miller: Well, Graig, what gets accepted abstracts that get accepted or even publications that get accepted. This is a capricious process, and there are a lot of factors. I don't know why they accept some and not others. I personally am shocked that Kymera with no placebo and an interesting study for sure. But I don't have an explanation for it.

Graig Suvannavejh: There may not be a good one. I just thought I'd speculate...

Richard Miller: I wouldn't get too worried about that. I mean I've had some really, really good papers get accepted at journals and be rejected at others. At the end of the day, it's -- 1 or 2 guys read some abstracts. I used to do it myself. You get a few hundred to review and you decide what looks good, whatever. So I don't know if I focus too much on any reasons on that. We're not very active in AAD. We've never done anything there. We don't have booths. We don't subscribe to their journals. I think that's another factor -- could be another factor, not sure. Anyway, SID is a good meeting.

If anything, scientifically more rigorous, it is the meeting for early stage and translational biology and research. So we ended up, I think, in a very good place.

Graig Suvannavejh: Okay. Great. If I could ask just on the Phase II trial in AD that you did start and congratulations there. I think you mentioned that data would be available in middle of 2027 and just trying to get a sense of in between now and mid-2027, will there be an opportunity for the company to provide some kind of update? Just trying to get a sense of news flow from that trial from now until mid-2027?

Richard Miller: So that Phase II trial is placebo-controlled, randomized and blinded. No, we will not see that data until it's completed. And as I mentioned, the Angel trial is underway. That's also blinded and placebo controlled, but they can look at the data after each cohort, similar to what we did in our Phase I. So there will be a news flow from that in terms of the AD stuff.

Graig Suvannavejh: Okay. And last question, if I could, just on hidradenitis suppurativa, just given coverage of some other companies that I have, I'm under the view that there are not very good preclinical models of HS and just wondering then how do you handicap success in HS when perhaps there are not very well established or good predictive models in HS?

Richard Miller: You are correct, there are not good animal models for HS, but it's pretty clear in human studies that IL-17 is very important. Th17 and IL-17 are very important. And in fact, IL-17s are approved to treat it. So I think there's proof of principle already that if you can block IL-17, it should work. And we block IL-17 among the many other cytokines that we block. Hidradenitis suppurativa has a lot of different inflammatory cells, T cells, neutrophils, B cells, for example. And again, I think the advantage of soquelitinib is that since you're blocking multiple cytokine pathways, you actually affect many different lineages.

And I think that's going to be important because when you look at the sites of disease, even in atopic dermatitis, you just don't see Th2 cells, you see a lot of different cells. So I think that, that's one -- I mean, I would say the best explanation for that is, hey, anti-IL-17 works in that disease. And we block it even better.

Operator: And your next question comes from Jeff Jones from Oppenheimer.

Jeffrey Jones: Since I think we've beaten HS to death, maybe talk about AD and how you guys are -- this is a different disease and indication than the dermatological ones. How are you thinking about dosing and your strategy there?

Richard Miller: I think you mean asthma probably.

Jeffrey Jones: Asthma, I'm sorry.

Richard Miller: Yes, you mentioned AD. So well, as you know, atopic dermatitis and asthma frequently go together and drugs that work in one often work in the other. They seem to be part of the atopic syndromes. We have several -- now that's one where we do have several animal models and our drug works really well in those asthma models, 4 or 5 different models work. Soquelitinib works beautifully. In terms of dosing, I think it's the same dosing that we've talked about. The AD and PTCL studies inform the asthma. The asthma study is pretty much the same dosing regimens. There'll be no reason to change that.

Jeffrey Jones: Okay. And then one...

Richard Miller: Sorry, just to elaborate, remember, we have the best biomarker in the world, which is that -- and we've been doing this for years. You can give the drug, you take out the T cells from the patient, either in the blood or the sites of disease and you can measure quite accurately the drug sitting in the target. It is a clean quantitative assay. It blocks the function of that enzyme. That's a biomarker. And we know that when you give a 200-milligram dose, you pretty much completely block that. Sorry, Jeff.

Jeffrey Jones: I appreciate that, Richard. And then on the ALPS trial, which you're doing with the NIH, can you maybe comment on how that -- the outcome of that might impact how you think about other indications or inform what you guys are doing?

Richard Miller: So ALPS is a disease where you have such an overreactive autoimmune response to so many different things. They have antibodies to red cells and white cells and platelets and other things. And [indiscernible] and lymphocyte proliferation, abnormal lymphocytes. And we have seen really interesting results in our patients. So I think the -- that what we're learning there is similar to what we learned in lymphoma is that the drug is very active, it's safe and it's interfering with the signaling pathways that we would predict. Now I'm not sure I can say, okay, if it works in ALPS, it's going to work in lupus, even though the ALPS mouse equivalent is a model for SLE.

But I don't think we're thinking of it that way. We're thinking of it as an indicator that we're affecting aberrant auto-inflammatory responses in a disease where there's no good treatments really. So it's kind of a model, if you will, but it's a human model. It is an orphan disease. There's no good therapies. Could you get approval for ALPS? Yes, you could. It's more of a childhood disease. We've been treating adults. We do intend to increase the number of sites, and we do intend to move down in age into children over the next year or so. We've been talking about that with NIH. So it's another indication, and it happens to be in autoimmune disease.

Operator: And your next question comes from Aydin Huseynov from Ladenburg.

Aydin Huseynov: Richard, congratulations for the tremendous progress so far this quarter in your pipeline in the drug soquelitinib. I got a couple of questions. So first, I wanted to ask about the near-term focus near-term Phase III readout interim analysis from the trial in PTCL. I was curious to hear any comments you may provide regarding the enrollment process so far? What types of PTCL you're actually enrolling? Is it NIS? Is it ALCL, follicular cutaneous? And what the physicians are using a standard of care prefer belinostat and pralatrexate? Just curious to hear overall dynamic of the trial.

Richard Miller: Okay. So let's take that question first. So the trial is enrolling and it's going perfectly according to plan. The patients get randomized into either soquelitinib monotherapy 200 milligrams BID versus the investigator's choice of either belinostat or pralatrexate. Now recall, belinostat and pralatrexate are received conditional approval, accelerated approval maybe 15 years ago or so based on response rate in patients with relapsed PTCL. So in our discussions with FDA, that was the logical control arm. So soquelitinib versus those agents. Now it's not a blinded trial because you can't -- well, first of all, we don't usually do that in cancer, but you can't blind -- soquelitinib is oral, right, as we know.

Belinostat and pralatrexate are given intravenously and have associated usual toxicities of chemotherapy, mucositis, blood count problems, things like that. So, so far, the trial is enrolling. We had our first safety monitoring board, and there were no new safety or different safety signals with regard to soquelitinib. Obviously, it's much safer than chemotherapy. So we win on every count on that. Now later -- now the types of patients that are enrolled are as stated in the protocol, are PTCL NOS, that's the most common one. We do allow anaplastic lymphomas that are ALK positive. The other big category would be what's called T follicular helper, which used to be what's called angioimmunoblastic lymphoma. So not CTCL.

CTCL really is a little bit more of a chronic disease and is treated differently. So that's the reason not to include that in this trial. But it's pretty typical. These are the most common peripheral T-cell lymphomas. Now peripheral T-cell lymphoma, again, just to remind people, there is no fully approved treatment for relapsed disease. It has a median PFS and belinostat median PFS is 1.7 months. Pralatrexate is 3 months. And OSs are under a year. So those are really bad -- these are really bad disease. These are sick patients. I can tell you that we are very, very happy with the way the trial is going.

And I think it could represent a very important breakthrough in hematology if we finish the trial and get the results that we're expecting. Does that answer your question?

Aydin Huseynov: Appreciate that. I got another one for asthma, if you don't mind.

Richard Miller: Sure.

Aydin Huseynov: So yes, so regarding the upcoming trial design in asthma, do you plan to have a cohort with patients who may have both asthma and atopic dermatitis? And in your opinion, is there any accelerated path with small pivotal trial with patients with 2 diseases simultaneously. So essentially, that would allow soquelitinib to cure 2 diseases at the same time. And as we know, Dupixent is the only drug that treats both diseases, but maybe you can have it in one shot.

Richard Miller: Well, that would be great. But I don't know -- so first of all, trying to get 2 indications on -- that's really very difficult. And you can get anecdotal information. I know some people report that. And we've had some anecdotal information about that. But the problem is you don't know how many patients are going to have both diseases concomitantly, how severe it is, what measurements you're going to use and how you power the study statistically for each disease. So it's really hard to do that. Anecdotally, it's something you would look at. You have to do a separate trial. And even Dupixent was separate trials for asthma and eosinophilic esophagitis and COPD and all those things.

So it requires a separate trial. Now one thing we are considering is we're really very interested in, I would say, 2 things. One is this durability of response is quite interesting. And we think we have explanation for it. I think we have a very good immunologic explanation for it. It's very elegant and compatible with what's known about the immune responses and so forth. We also are very struck by the activity we see in patients who failed previous therapies. And I talked about that in my discussion here. So we are allowing and I don't know if I mentioned it, we are allowing patients who have failed prior therapies in our Phase II atopic dermatitis study.

Now some people, many investors have been asking me, why don't you do a separate study in the resistant patients with atopic dermatitis. And that is something we are thinking about. That could be a smaller trial because the efficacy and the placebo do so -- the efficacy and placebo -- sorry, placebos do so poorly, you would presumably show a bigger difference with a fewer number of patients. But we are including both naive and experienced patients in our Phase II. I would do that in Phase III as well, which would enable you to get the total population of patients.

But there's no doubt that with more and more therapies coming out in atopic dermatitis, the proportion of patients that are not treatment naive, that is that have failed the prior therapies, that pool of patients is increasing. And the pool of patients that is naive is going to decrease proportionately. Okay? So that the resistant patient becomes, I think, very attractive. So I would say the 2 exciting -- I mean, we have a lot of things that we're excited about with soquelitinib. It's oral and it's safe and all that other stuff. But the durability is, I think, a game changer, changes how you approach the disease.

And I think the fact that you can think about frontline therapy or relapsed disease or multiple therapies, intermittent therapy. That's our -- it's the way we think about it.

Aydin Huseynov: Congrats for the results.

Operator: And your last question comes from Sean Lee from H.C. Wainwright.

Xun Lee: To touch upon the durability a bit more. I think in the previous Phase I study, you guys followed the patients for up to 3 months. How long are you following these patients in Phase II? And is the study powering any way to really make a differentiation on the durability of this response?

Richard Miller: So the Phase II trial has built in continued blinding of the trial out to 90 days beyond the therapy. So it's 12 weeks of therapy plus the 90 follow-up. That's baked into the protocol. However, the endpoint is the EASI score compared to placebo at 12 weeks, and that's the typical endpoint. To do something different would be sort of atypical. Now I think that in the future, this issue of how durable the responses are is something that you might study separately. But I think it stands to reason. I mean, we'll talk more about this, but we have over 90% of our patients don't relapse and follow-up now out to 3 months beyond the last dose.

Over 90% of patients, disease just doesn't come back. Now you look at other agents, dupi, STAT6, whatever the IL-13s, IL-2s, whatever, these diseases come back pretty quickly. In my view, that's not a very good therapy. Best therapy is a shorter treatment duration. Disease goes away, you don't need to take your drug again for a long time, if at all, hopefully, but that's asking a lot. So the durability is important because it's important to understand why it's happening, does it pertain to other inflammatory diseases? In other words, how broad is that going to be? Is that unique to atopic dermatitis? Or is that something that you could think about for other autoimmune diseases?

And that's why we're excited about that. But anyway, the answer to your question is in the Phase II, it is part of the formal follow-up is blinded, but it's not part of the statistical endpoint. The statistical endpoint is the typical one, which is EASI score at 12 weeks.

Xun Lee: Okay. Got it. For the -- touching on the asthma study for our second question. As the upcoming study, will you be focusing on eosinophilic asthma with the Th2 high? Or are you targeting the more difficult to treat Th17 driven population as well?

Richard Miller: We're probably going to -- so those are some of the things we're discussing now. We're leaning to taking everybody.

Xun Lee: I see.

Richard Miller: I'm actually -- Sean, I'm glad you brought that up because there's something -- some people say, well, we only treat Th2 disease. I don't know where that comes from. Some people said, "Oh, you're only selecting patients with atopic dermatitis that are Th2. First of all, I don't even know how to do that. But we're not doing that. Our atopic dermatitis patients are run-of-the-mill patients from U.S. centers. They have to have the necessary eligibility criteria, but we didn't enrich for any patient population. Most of our -- by the way, AD patients do not have eosinophilia. Their eosinophil counts are normal or little. So I don't think we're going to restrict it to the high EO asthma.

Although I have to say the asthma study protocol has not yet been finalized, and that's still under discussion. Alright. Okay. Well, first of all, thank you, everyone, for participating in our call. We look forward to updating you throughout the rest of the year and beyond. Appreciate everybody's interest. Thank you.

Operator: Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day.

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