Corvus Pharmaceuticals, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Unaudited results; amounts below are in U.S. dollars. Corvus is a clinical-stage biopharmaceutical company developing oncology and immune-modulating therapies and reported no product revenue.
Financial performance and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $4.0m | $10.4m | $12.5m | $20.4m |
| General and administrative expense | $1.6m | $2.1m | $5.2m | $6.5m |
| Total operating expenses | $5.6m | $12.5m | $17.8m | $26.9m |
| Net loss | $6.0m | $14.8m | $20.4m | $31.5m |
| Net loss per share | $0.12 | $0.32 | $0.43 | $0.68 |
| Cash used in operating activities | Not provided for quarter | Not provided for quarter | $18.8m | $19.5m |
Because Corvus had no revenue, gross profit and operating margins are not meaningful. Interest income and other expense, net, was income of $0.4m in Q3 and $1.2m for the nine months. Equity-method losses from Angel Pharmaceuticals were $0.9m and $3.9m, respectively.
At September 30, 2023, cash and cash equivalents were $20.1m and marketable securities were $12.1m, totaling $32.2m, versus $42.3m at December 31, 2022. Current assets were $33.1m and current liabilities $7.3m. Total liabilities were $7.7m, primarily including operating lease liabilities; the filing reports no conventional borrowings. Accumulated deficit was $328.1m. Nine-month cash flows included $17.9m provided by investing activities, largely from net marketable-security maturities, and $7.9m from financing, primarily ATM stock sales.
Changes versus prior comparable periods
- Net loss narrowed by $8.8m in Q3 and $11.1m for the nine-month period. Lower operating expenses were the main driver.
- R&D expense declined by $6.4m in Q3 and $7.9m year to date. Mupadolimab spending fell substantially after Corvus paused its development to prioritize other candidates; nine-month mupadolimab R&D fell from $9.9m to $0.6m.
- Soquelitinib R&D increased to $1.2m in Q3 and $3.8m year to date, from $0.9m and $2.0m, respectively, reflecting higher clinical, manufacturing and other external costs.
- Cash, cash equivalents and marketable securities decreased $10.1m from year-end 2022. The company raised $7.8m net through its ATM program during the nine months and sold 2.46m shares; 49.04m shares were outstanding at September 30, versus 46.55m at December 31, 2022.
Programs, outlook and risks
- Soquelitinib: Corvus reported an August 2023 FDA end-of-phase/pre-Phase 3 meeting and anticipated starting a potentially registrational Phase 3 trial in relapsed peripheral T-cell lymphoma in early 2024. The proposed study would enroll 150 patients, randomize them against physician-choice standard chemotherapy, and use progression-free survival as its primary endpoint. The company also planned a solid-tumor Phase 1 trial in the first half of 2024. Previously disclosed interim findings were preliminary and are not equivalent to confirmatory trial evidence.
- Ciforadenant: The Phase 1b safety portion of a combination study in first-line metastatic renal cell cancer was fully enrolled; Phase 2 enrollment was ongoing. Interim data were anticipated in early 2024.
- Mupadolimab: Corvus paused its own development to prioritize soquelitinib and ciforadenant. Angel Pharmaceuticals continued a China Phase 1 trial in advanced lung and head-and-neck cancers.
- Funding: Management believed available cash and short-term investments would fund planned operations for at least 12 months from issuance of the financial statements. However, Corvus stated existing resources would not fund all ongoing and planned programs through commercialization and anticipated needing additional capital. The $90m ATM agreement had $81.9m of capacity remaining at September 30; further equity financing could dilute shareholders.
- Key risks and contingencies: Corvus has never generated product sales and expects continuing losses. Clinical success, regulatory approval, patient enrollment, manufacturing and third-party performance are uncertain. The company relies on external manufacturers and trial providers, and its U.S. cash does not include Angel’s separately held financing. Future milestone and royalty payments under licensing agreements are contingent and not recorded as balance-sheet liabilities. Corvus reported no material legal proceedings.
Investor verification priorities
- Check whether the planned soquelitinib Phase 3 trial began on schedule, its final protocol and enrollment pace, and whether the preliminary response findings hold with longer follow-up.
- Verify timing and results of ciforadenant Phase 2 interim data and any updates to the planned soquelitinib solid-tumor study.
- Monitor quarterly operating cash use, remaining runway, ATM share sales and resulting dilution, and any financing or partnership terms.
- Review the extent of paused mupadolimab spending and progress by Angel, including the financial and development implications of the related-party relationship.