Corvus Pharmaceuticals, Inc. — Q2 2020 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2020. Corvus is a clinical-stage biopharmaceutical company developing oncology therapies and a CPI-006 COVID-19 program. It has not generated product revenue and reported operating losses.
Financial performance and liquidity
| Metric | Q2 2020 | Q2 2019 | Six months 2020 | Six months 2019 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $7.9m | $10.6m | $18.0m | $20.1m |
| General and administrative expense | $2.9m | $3.0m | $6.0m | $5.8m |
| Total operating expenses | $10.8m | $13.6m | $24.0m | $25.9m |
| Net loss | $10.6m | $13.0m | $23.5m | $24.6m |
| Basic and diluted loss per share | $0.36 | $0.44 | $0.80 | $0.84 |
| Net cash used in operating activities | — | $18.8m | $18.2m |
For Q2, operating expenses fell 21% and net loss narrowed 18% year over year, principally reflecting lower R&D spending. For the six-month period, operating expenses fell 7% and net loss narrowed 4%. R&D reductions included lower ciforadenant and CPI-818 costs; CPI-006 six-month costs increased with clinical-trial activity. Interest income and other expense, net, declined to $0.5m for six months from $1.3m, reflecting lower investment balances and interest rates. With no revenue, operating margins are not meaningful.
At June 30, cash and cash equivalents were $20.7m and marketable securities were $38.6m, totaling $59.3m, versus $78.0m at December 31, 2019. Total assets were $64.2m; total liabilities were $13.3m, including $2.8m of operating lease liabilities. The filing reports no material financial borrowings. Stockholders’ equity was $50.8m and accumulated deficit was $240.7m. Management believes available cash and securities will fund planned operations for at least 12 months from issuance of the financial statements, but not all ongoing or planned programs through commercialization. A $50m at-the-market offering was available; no shares had been sold under it by June 30.
Business developments, outlook, and risks
- Ciforadenant: In June, Corvus reported interim RCC results: objective response rate was 17% among adenosine-gene-signature-positive patients (31 patients) versus 0% among signature-negative patients (20 patients). With a modified CD68 biomarker, reported response rates were 26.7% (4 of 15) for CD68-positive and 3% (1 of 38) for CD68-negative patients. The company expected to discuss a potential pivotal RCC study design with the FDA; these interim findings do not establish efficacy or approval prospects.
- CPI-006: The company continued its cancer study and initiated a Phase 1 study in hospitalized COVID-19 patients. The filing describes an individual cancer patient’s COVID-19 course and early antibody observations in the COVID-19 study. As of July 30, 2020, early results were preliminary, patient numbers were limited, and follow-up was short.
- CPI-818: Dose escalation in its Phase 1/1b T-cell lymphoma study was complete; the company selected a dose and continued enrollment in disease-focused cohorts. CPI-182 IND-enabling work and manufacturing scale-up were paused in mid-March because of the pandemic.
- COVID-19: Management said oncology enrollment goals for 2020 had largely been met in Q1, patients generally completed scheduled visits, and drug supply had not been disrupted. However, future enrollment, site activity, supply, regulatory interactions, operations, and access to capital remained uncertain.
- Funding and development risks: Corvus expects continued losses and substantial R&D spending, and may need additional capital sooner than planned. Financing may dilute shareholders, add debt obligations, or require partnering or relinquishing product rights; funding may not be available on acceptable terms. Clinical, regulatory, manufacturing, third-party, competition, and intellectual-property risks remain significant.
No material legal proceedings were reported. The company reported effective disclosure controls as of June 30 and no material change in internal control over financial reporting during the quarter.
Most important facts for investors to verify
- Cash runway assumptions and the timing, size, and terms of any future financing or ATM sales.
- Final and updated clinical data for ciforadenant, CPI-006, and CPI-818, including safety, patient counts, follow-up, and biomarker performance.
- FDA feedback and any concrete study design or timeline for a potential pivotal ciforadenant RCC trial.
- Whether COVID-19 affects trial enrollment, site operations, drug supply, costs, or the company’s ability to raise capital.
- Potential dilution from outstanding options and pre-funded warrants, and the terms and potential payments under product-license agreements.