Corvus Pharmaceuticals, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022; filed November 3, 2022. Corvus is a clinical-stage biopharmaceutical company with no product revenue. Management says it is prioritizing CPI-818 development and conserving capital.
Financial results
Amounts in millions, except per-share data. The company reported no revenue; operating margins are therefore not meaningful.
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $10.4 | $7.0 | $20.4 | $24.3 |
| General and administrative | $2.1 | $2.1 | $6.5 | $7.5 |
| Total operating expenses | $12.5 | $9.0 | $26.9 | $31.8 |
| Net loss | $14.8 | $10.7 | $31.5 | $34.0 |
| Basic and diluted loss per share | $0.32 | $0.24 | $0.68 | $0.84 |
| Cash used in operating activities | Not provided for quarter | Not provided for quarter | $19.5 | $29.9 |
- Q3 R&D increased $3.4 million year over year, largely due to mupadolimab manufacturing costs, including antibody purchased under a non-cancelable commitment despite the program being paused. Nine-month R&D declined $3.9 million, mainly reflecting lower mupadolimab clinical costs and lower unallocated personnel and overhead costs.
- Q3 net loss widened by $4.2 million, including a $1.0 million increase in the equity-method loss from Angel Pharmaceuticals. Nine-month net loss improved by $2.5 million despite a $3.1 million increase in the Angel investment loss.
- At September 30, cash and cash equivalents were $24.6 million and marketable securities were $25.0 million, totaling $49.6 million. Current assets were $51.3 million and current liabilities $14.0 million, or approximately $37.3 million of working capital.
- Total liabilities were $15.7 million, principally accounts payable, accruals and operating lease liabilities. The filing reports no material borrowing balance; lease obligations include $2.9 million in present-value liabilities.
- Accumulated deficit was $297.9 million. The company held a 49.7% interest in Angel and recorded a $5.4 million share of its losses for the first nine months.
Cash, liquidity and capital resources
Cash, cash equivalents and marketable securities declined from $69.5 million at December 31, 2021 to $49.6 million at September 30, 2022. For the first nine months, operating activities used $19.5 million; investing activities used $19.4 million, mainly reflecting net purchases of marketable securities; and financing activities provided no cash. The comparable 2021 period included $62.1 million of financing proceeds.
Management believes available resources will fund planned operations for at least 12 months from issuance of the financial statements. It does not expect existing resources to fund all ongoing and planned programs through commercialization and expects to need additional capital. Remaining ATM capacity was reported as $18.9 million under the 2020 agreement and $40.0 million under the 2021 agreement; no shares were sold through the ATM in the first nine months of 2022.
Programs, outlook and material developments
- CPI-818: Corvus is emphasizing this ITK inhibitor following review of early clinical and preclinical findings. The company reported a 200 mg twice-daily regimen as its identified optimum dose and continued enrollment in the T-cell lymphoma trial. The filing describes response and biomarker observations through July 22, 2022; these are interim results, not final evidence of efficacy. Management expected to present further data at the December 2022 ASH meeting and was preparing potential autoimmune-disease trials.
- Ciforadenant: The company described an open-label Phase 1b/2 study with the Kidney Cancer Research Consortium in first-line metastatic renal cell cancer, in combination with ipilimumab and nivolumab. The older Genentech collaboration study had completed enrollment, with no further patients being enrolled in the specified trial.
- Mupadolimab: The company said its cancer Phase 1/1b enrollment was complete, but delayed a planned randomized Phase 2 study with pembrolizumab and chemotherapy to prioritize CPI-818 and conserve capital. Angel planned development in China.
- Angel Pharmaceuticals: Corvus’s approximately 49.7%-owned investee develops licensed programs in Greater China. Its cash is not available to fund Corvus’s operations, and Corvus recognized a $5.4 million equity-method loss year to date.
- Clinical and business risks: Substantial future losses and financing needs; uncertain clinical outcomes and regulatory approvals; reliance on third-party manufacturers, CROs and collaborators; possible trial delays, supply constraints and COVID-19 impacts; and competition, intellectual-property and foreign-market risks. Corvus has no in-house manufacturing capabilities.
Other notable items
- On October 25, 2022, Corvus disclosed receiving a Nasdaq notice for failure to maintain the $1.00 minimum bid price for 30 consecutive business days. It had until April 24, 2023 to regain compliance, with a possible transfer to Nasdaq Capital Market or delisting if requirements were not met.
- The company reported no material legal proceedings, no unregistered equity sales or repurchases, and no material change in internal control over financial reporting. Management concluded disclosure controls were effective at September 30, 2022.
- The filing identifies interest-rate exposure but says a hypothetical immediate 10% rate increase would not materially affect the portfolio’s fair value, given its short duration and low-risk investments.
Investor verification points
- Check subsequent CPI-818 clinical data, trial enrollment, safety findings and whether the reported interim responses are confirmed in later analyses.
- Confirm the cash runway against actual spending, trial plans, manufacturing commitments and financing raised after September 30, 2022.
- Monitor the status and terms of any ATM issuance or other financing, including potential shareholder dilution.
- Verify progress toward Nasdaq minimum-bid compliance and any listing or reverse-split actions.
- Track the paused mupadolimab program, its non-cancelable manufacturing commitments, and Angel’s development and funding position.