Corvus Pharmaceuticals, Inc. — Q2 2022 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2022. Corvus is a clinical-stage biopharmaceutical company with no product sales. Financial statements are unaudited.
Financial performance and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $4.9 million | $9.1 million | $10.0 million | $17.3 million |
| General and administrative expense | $2.1 million | $2.2 million | $4.4 million | $5.4 million |
| Net loss | $8.4 million | $11.8 million | $16.7 million | $23.3 million |
| Net loss per share | $0.18 | $0.28 | $0.36 | $0.61 |
| Cash used in operating activities | — | $12.5 million | $21.4 million |
At June 30, cash and cash equivalents were $28.5 million and marketable securities were $28.2 million, totaling $56.7 million, down from $69.5 million at year-end 2021. Current assets were $58.9 million and current liabilities $10.2 million. Total liabilities were $12.2 million, largely accounts payable, accruals and operating lease liabilities; the filing reports no funded borrowings. The company held a $30.2 million equity-method investment in Angel Pharmaceuticals and recorded a $2.6 million share of Angel’s loss in the first half.
There is no meaningful product gross margin because Corvus has no product revenue. Operating expenses fell year over year, principally because of lower mupadolimab trial spending and reduced personnel and overhead costs. Cash-flow investing activity was a $22.4 million outflow, mainly net purchases of marketable securities; financing cash flow was zero in the first half of 2022. Corvus issued no shares under its at-the-market programs during that period.
Material changes, outlook and commentary
- Management prioritized CPI-818, an investigational ITK inhibitor, after reviewing clinical and preclinical data. CPI-818 spending increased year over year, while mupadolimab spending declined substantially.
- As of July 22, 2022 (after quarter-end), Corvus reported 12 patients enrolled in the 200 mg CPI-818 cohort, eight evaluable for response, with reported complete and partial responses and stable disease. These are interim results from a small clinical cohort, not definitive efficacy findings; the company expected to present additional data later in 2022.
- Corvus said it would not initiate its planned randomized Phase 2 trial of mupadolimab with pembrolizumab and chemotherapy as first-line NSCLC treatment in 2022, citing capital conservation and focus on CPI-818 T-cell lymphoma and autoimmunity programs. Angel Pharmaceuticals planned to continue mupadolimab development in China; China’s drug regulator accepted its IND filing in July 2022.
- Corvus planned a Phase 2 ciforadenant trial with the Kidney Cancer Clinical Trials Consortium in first-line advanced renal cell cancer, expected to enroll about 60 patients. Timing and costs remain subject to development uncertainties.
- Management believes existing cash, cash equivalents and short-term securities will fund planned operations for at least 12 months from issuance of the statements. However, Corvus does not expect its resources to fund all ongoing and planned programs through commercialization and expects to need additional capital. Equity financing could dilute shareholders; debt or collaborations could impose restrictions or require relinquishing rights.
- Key risks include clinical-trial failure or delay, patient enrollment and COVID-19 disruption, dependence on contract manufacturers and research organizations, regulatory approval and data acceptance (including foreign trial data), intellectual-property exposure, and the availability and terms of future financing. Corvus had $6.2 million of non-cancellable 2022 drug-substance purchase commitments and contingent future license milestones and royalties not recorded as liabilities.
- No material legal proceedings were reported. Management concluded disclosure controls were effective as of June 30, 2022, and reported no material change in internal control over financial reporting.
Most important facts for investors to verify
- Whether CPI-818’s emerging clinical activity is confirmed in larger, longer follow-up cohorts and supports the selected 200 mg twice-daily regimen.
- Actual cash burn and the timing, amount and terms of financing needed beyond management’s stated 12-month operating horizon; assess potential dilution and remaining ATM capacity ($18.9 million under the 2020 agreement and $40.0 million under the 2021 agreement, as of June 30).
- Progress and funding priorities for the planned ciforadenant trial, the deferred U.S. mupadolimab program and Angel Pharmaceuticals’ China programs.
- Changes in clinical-trial costs, enrollment, manufacturing commitments and the company’s 49.7% Angel investment, including further losses or foreign-currency effects.