Good afternoon, everyone, and thank you for standing by. Welcome to the Corvus Pharmaceuticals Third Quarter 2026 Business Update and Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. It is now my pleasure to turn the call over to Zack Kubow, Vice President, Investor Relations and Corporate Communications. Please go ahead, sir.
Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals Third Quarter 2026 Business Update and Financial Results Conference Call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer, Leiv Lea, Chief Financial Officer, Jeff Arcara, Chief Business Officer, Ben Jones, Senior Vice President of Pharmaceutical Development, and Suresh Mahabhashyam, Vice President of Clinical Development. The executive team will open the call with some prepared remarks, followed by a question-and-answer period. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements.
Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the risks and uncertainties described in the Corvus quarterly report on Form 10-Q for the quarter ended September 30, 2026, and other filings the company makes with the SEC from time to time. The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. With that, I'd like to turn the call over to Leiv Lea. Leif?
Thank you, Zach. I will begin with a brief overview of our third quarter 2026 financials and then turn the call over to Richard for a business update. Research and development expenses in the third quarter of 2026 totaled $17.8 million compared to $8.5 million for the same period in 2025. The increase in R&D expenses was primarily due to higher clinical trial costs associated with the development of soquelitinib, as well as an increase in personnel costs. Net loss for the third quarter of 2026 was $20.3 million compared to a net loss of $10.2 million for the same period in 2025. Included in the net loss for the third quarter of 2026 and 2025 were non-cash losses of $0.9 million and $0.3 million, respectively, from Corvus' equity method investment in Angel Pharmaceuticals.
Total stock compensation expense for the three months ended September 30, 2026, was $2.8 million compared to $1.2 million for the same period in 2025. As of September 30, 2026, Corvus had cash equivalents, and marketable securities totaling $202.9 million as compared to $56.8 million at December 31, 2025. Cash as of September 30, 2026, included approximately $189.4 million in net proceeds received in a follow-on offering completed in Q1. Also, as announced on June 9, 2026, Corvus invested $5 million in a $13.5 million financing completed by Angel Pharmaceuticals in the second quarter of 2026. Based on our cash position at September 30, 2026, and our current plans, we expect our cash to fund operations into the second quarter of 2028.
I'll now turn the call over to Richard, who will discuss our clinical progress and elaborate on our strategy and plans.
Thank you, Leif, and good afternoon, everyone. Thank you for joining us today for our update call. We are highly focused on soquelitinib, our first-in-class selective ITK inhibitor, and maximizing its potential across a broad range of diseases. We now have soquelitinib in several clinical trials covering a number of areas of medicine. Our priority is advancing our two lead opportunities, the registrational phase III trial in relapsed refractory peripheral T-cell lymphoma and our SIERRA1 phase II trial in moderate to severe atopic dermatitis. Both programs are on track and represent significant opportunities to bring needed new treatment options to patients. Based on soquelitinib's immunologic properties, we are leveraging its novel mechanism of action and broad immunomodulatory profile by strategically expanding its development to include new indications that are currently not well addressed by existing agents.
This includes our recently initiated trial in hidradenitis suppurativa, our planned asthma trial across T2 and non-T2 patients, and the ongoing trial in ALPS. Combined with the clinical activities in China conducted by our partner, Angel Pharmaceuticals, we anticipate a number of key data readouts and milestones associated with our pipeline over the next year. We are positioned to generate significant value with our pipeline in 2027. I will start with a brief update on our phase III trial in relapsed refractory PTCL. Enrollment is on track with our expectations, with the next milestone being a futility analysis anticipated in the first quarter of 2027. As a reminder, the futility analysis will be conducted by an independent data monitoring committee after a predefined number of progression-free survival, or PFS events, have occurred. This is event-driven, not time-driven.
Based on the data at that point, the committee will determine whether the study should be continued or terminated for futility based on available safety and efficacy data. Corvus will not announce any safety or efficacy data in conjunction with the interim analysis, but will disclose the committee's decision to continue or discontinue the trial. We remain excited about the potential of soquelitinib to provide a new treatment option for patients with relapsed refractory PTCL, particularly given the challenges with current therapies, none of which are fully FDA approved for this indication. On a related note, there will be an abstract published in the American Society of Hematology, or ASH, Annual Meeting Abstract Supplement of research done by a team from Memorial Sloan Kettering Cancer Center that further supports soquelitinib's mechanism of action.
The MSK team studied pre- and post-treatment biopsy material from three patients from our phase I trial with cutaneous T-cell lymphomas, a Th2-derived malignancy involving the skin. Using very sophisticated spatial transcriptomics, they showed that response to soquelitinib was associated with blocking GATA3 signaling, the master regulator of Th2 cells, leading to reduced Th2 cells in the skin. I mention this work because it is relevant to the treatment of both PTCL and atopic dermatitis, and adds to the growing body of knowledge supporting the fascinating immunologic properties of soquelitinib. Now for an update on soquelitinib for atopic dermatitis. We remain very excited about the data to date, and we are working to advance development and enrollment in the phase II SIERRA1 trial as quickly as possible.
The trial was planned to enroll approximately 200 patients, including patients who received prior systemic therapies across three soquelitinib doses and a placebo group. The treatment period is 12 weeks, with a 90-day drug-free follow-up period. Enrollment is on track with our plans, with top-line data anticipated in the third quarter of 2027. Assuming a successful result from SIERRA1, our strategy is to advance soquelitinib into a phase III program, similar to the other approved systemic therapies for atopic dermatitis. This includes a primary endpoint based on EASI score and IGA score at 12 or 16 weeks of therapy compared to a placebo. If our current timelines for SIERRA1 hold, we could be in a position to start a phase III trial in 2028.
Our goal is to make soquelitinib available as soon as possible for patients, and then expand the clinical evidence and label with post-marketing studies exploring some of its more unique attributes, such as post-treatment response duration. In addition to our efforts, our partner in China, Angel Pharmaceuticals, is conducting a phase I-B/II clinical trial that may provide further evidence in support of soquelitinib's safety and efficacy in atopic dermatitis, while also advancing its development in China. The Angel trial has a similar design to our phase II trial and is open at several leading dermatology centers in China who have been involved in many global registration trials. It is a double-blind, placebo-controlled trial. Angel has completed enrollment in cohort one, which includes 24 patients randomized evenly to soquelitinib doses of 100 milligrams twice per day, 200 milligrams once per day, or placebo.
This is the same as the lower dose level studied in our phase I trial, but the treatment period is longer at 12 weeks compared to four weeks. Recall, we found evidence of efficacy at these lower doses in our phase I trial with four weeks of therapy. We have been working closely with the Angel team on the trial, including the review of photographic images of disease from every single patient. Based on current timeline, we anticipate Angel and Corvus will announce preliminary data in March 2027. This timing accounts for all patients to complete 12 weeks of therapy and at least a 30-day post-treatment follow-up period, allowing Angel and us to remain blinded up until this point. The physicians and patients will continue to be blinded for the complete 90 days post-treatment, which will allow us to evaluate the durability of response.
We are pleased with the progress of the Angel trial, and we are monitoring blinded baseline patient characteristics. I can report that the Angel patients have similar baseline clinical characteristics to those patients enrolled in our phase I atopic dermatitis trial. Of particular interest, and we are pretty excited about this, is that Asian American patients who were enrolled in Corvus' phase I trial have very similar characteristics to the patients enrolled in the Angel trial conducted in Chinese patients. In our phase I trial, Asian Americans accounted for 11%, or eight of the total of 72 patients. Our testing shows that our Asian American patients had significantly elevated levels of serum IL-17 at baseline compared to the rest of our non-Asian population and a group of healthy volunteers.
This aligns with the literature, which shows that Asian patients and certain other populations with atopic dermatitis have a greater component of Th17 disease, making them more difficult to treat with existing therapies that only target Th2 pathways. A recent report indicates that some patients have the coexistence of atopic dermatitis and psoriasis, either concurrently or as a result of treatment-induced phenotype switching between the two. We anticipate Angel will begin enrolling patients in cohort two this month, November, with data from cohort two potentially available in the second half of 2027. Cohort two will include 24 patients randomized evenly to soquelitinib doses of 200 milligrams BID, 400 milligrams SID, or placebo. Depending on the results from these 48 patients in cohorts one and two, an additional 60 to 90 patients are anticipated to be enrolled in the phase II portion of the study.
Turning back to Corvus, in September, we initiated a phase I trial of soquelitinib in patients with moderate to severe hidradenitis suppurativa. While there are approved biologic therapies for HS, many patients are in need of new treatment options due to lack of efficacy or results that wane over time. The approved therapies mainly target IL-17, a key downstream cytokine of Th17 cells, which are the primary drivers of this disease. We believe soquelitinib is well-positioned in HS because, number one, we have shown it reduces both Th17 and Th2 in our atopic dermatitis trial and other work. Two, we have shown in preclinical studies that it reduces fibrosis, another hallmark of HS. And three, it is an oral therapy in a category where the majority of approved products and development candidates are injectable biologics. The phase I-B HS trial is designed to enroll up to 25 patients.
All patients will receive a soquelitinib dose of 200 milligrams twice per day for 12 weeks, followed by a 90-day follow-up period with no treatment. The primary endpoint of this trial is safety and tolerability. The key efficacy endpoint is the proportion of patients achieving hidradenitis suppurativa clinical response, or HiSCR50 or 75, at week 12. We plan to intensively evaluate skin and blood biomarkers, looking for Th17, Th2, Tregs, and related effects. There has been very strong interest in our HS trial. While we have only been open about one month, we are ahead of our enrollment plan, positioning us to potentially report data in the first half of 2027. We are also making progress on the asthma front. This includes our plan to enroll both the allergic or eosinophilic and non-allergic type of asthma, also referred to as T2 and non-T2.
Most asthma drugs and most clinical trials address only the allergic T2 patients. We intend to enroll both types based on our mechanism of action, which we believe will address both T2 and non-T2 disease. A substantial proportion of asthma patients, up to 40%, have the non-T2 type and are in need of new and better therapies. The trial design will include an interim analysis, which will allow us to discontinue a disease type, such as T2 or non-T2, if there is futility. We are on track to initiate the asthma trial in the first quarter of 2027. I would like to report on our work in ALPS, or autoimmune lymphoproliferative disease, a study led by NIAID. Initial data covering three patients enrolled in the trial and treated for one year was selected for a poster presentation at the ASH meeting in December, and the related abstract was published yesterday.
The data is consistent with the safety profile we have seen across our lymphoma and atopic dermatitis trials, and all three patients had a positive response to therapy. Key highlights include, first, safety. All three patients completed one year of treatment at the 200 milligram twice per day dose. The treatment was well tolerated with no interruptions in therapy and no grade three or four adverse events reported. Next, clinical activity was observed in the three ALPS patients as follows. All three patients were able to discontinue their background medications, including corticosteroids and immunosuppressive drugs. Two of three patients had a drop in circulating proliferating double-negative T cells in the blood. These are the pathologic cells in ALPS. One of the patients had very low circulating numbers to start with, making quantitation difficult. Splenomegaly was reduced in two of the three patients. Other disease-related markers were also improved.
Based on these results, we plan to transfer the IND for soquelitinib treatment of ALPS to Corvus. Our plan is to meet with FDA to expand the number of treatment centers and to reduce the age eligibility to include pediatric patients. Overall, we believe we are executing on a strategy to confirm the broad potential of soquelitinib and ITK inhibition across a range of Th2 and Th17-driven diseases. In 2027, we have significant milestones across our pipeline, with clinical trials covering four significant market opportunities: PTCL, atopic dermatitis, hidradenitis suppurativa, and asthma. This will be complemented by Angel, which is expected to have trials in atopic dermatitis and asthma, and the NIAID study in ALPS that is transitioning to Corvus.
To briefly review our upcoming in 2027 anticipated milestones, initial ALPS data at ASH in December, interim futility analysis from the phase III PTCL trial in the first quarter, Angel Pharmaceuticals atopic dermatitis cohort one data in March, hidradenitis suppurativa phase I-B results in the first half of 2027, Corvus SIERRA1 phase II data in the third quarter, Angel Pharma cohort two data in the second half of the year, and the phase III PTCL top-line data before the end of the year 2027. In addition, both Corvus and Angel plan to launch asthma trials in 2027. The key through line across our development pipeline is the unique mechanism of action of ITK inhibition, resetting the immune system by modulating several key cellular functions with an oral tablet that so far has shown a very favorable safety profile.
We look forward to updating you on our progress in future calls. I will now turn the call over to the operator for questions and answer period. Operator?
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, press star two. One moment, please, for your first question. Your first question comes from Li Watsek from Cantor. Please go ahead.
Hey, thanks, guys, for taking my questions. Just, in terms of the Angel data, looks like it has been pushed out by a quarter. Maybe help us understand the reason for the timeline shift. You noted that the baseline characteristics in the trial is very similar to the U.S. trial. Just wondering which cohort that you are referring to, given there are some variabilities between cohorts.
Li, thanks for the question. I assume you are referring to the atopic dermatitis trial by Angel. In the Angel patients enrolled so far, that is their first cohort, their baseline characteristics, blinded baseline characteristics, we can look at things like age, gender, et cetera, other mean EASI scores, et cetera. When we look at that and compare that to the patients that we enrolled in our entire phase I trial, 72 patients, we find that the characteristics are very, very similar regarding age, EASI scores, IGA scores, et cetera. This motivated us. Obviously, we are tracking Angel very carefully. This motivated us to go back and look at cytokines in Asian patients enrolled in the Corvus phase I study. Obviously, there are Asians that are sometimes enrolled in American studies, and when we look at those patients, the baseline characteristics are very, very similar to the Chinese patients.
Most interesting to us is many papers show that Asian patients with atopic dermatitis have a very strong IL-17, Th17 component. We confirm that in our U.S. Asian patients. The Angel trial is going as planned. We have been very careful about patient selection, documentation of disease by photographic images, working at the very best centers in China, and so we are just enrolling that according to plan. In addition, before we disclose any data, we wanted to have the full 12 weeks of therapy with a 30 days of follow-up, and we remain blinded during that period of time, the company, the patients, the doctor, everybody. That is the reason why we have extended that out a little bit. Does that answer your question?
Yes. Thank you very much.
Your next question comes from Graig Suvannavejh from Mizuho. Please go ahead.
Good afternoon. Richard, thanks for taking my question. Congrats on the progress and all the updates. I had two questions, please. One, on your futility analysis that you will be announcing first quarter of next year, I think you said on your prepared comments that you are just going to announce pretty much like a yes or no answer and not disclose any safety or efficacy. Is that true in either case? In other words, if there was a futility that went negative, you still wouldn't want to share the safety tolerability data? Just wanted to clarify that and perhaps reasoning. Then, just second, as it relates to your hidradenitis suppurativa readout, I think the HiSCR50 or 75 are the main efficacy endpoints.
I was just curious if you were going to also share, or is there any lesion-based clinical endpoints that you have incorporated into the study, and will you be sharing any of that? Thanks.
Okay. Thanks, Graig. Regarding the futility analysis, if the study continues, we would just let people know that. I mean, it would be inappropriate to disclose data publicly at that time, because one could argue it could bias the remainder of the study. So that's fairly typical. Now, if the study is negative and you stop it, yes, of course, you can disclose data at some point. Now, the second question on the HS, there are other parameters that we're measuring in HS. We're very interested in not just the nodules, but we're also scoring abscesses, tunnels, draining tunnels, all that sort of stuff. So we're excited about HS because we're pretty convinced now we're having an effect on Th17. Th17 major player in asthma and in HS. A lot of neutrophils in these lesions. Neutrophils come from Th17 effects. So all of these things are sort of coming together.
There's a reason behind the diseases that we chose based on the mechanism of action of soquelitinib. So the HS endpoints will look at everything you mentioned, nodule count, which is just a HiSCR, but we are very interested in the other aspects, abscesses and tunnels, because we've previously reported, and this is a Th2-mediated effect, that soquelitinib has an effect on fibrosis. That was published last year and presented at the ACR meeting. It was in a mouse model of systemic sclerosis.
Just a quick follow-up.
I hope that answers your question.
It does. Thanks. Just a quick follow-up on your ALPS program. It's interesting that you're going to have the IND transferred over to Corvus, and I'm wondering if you can confirm, those are the same doses that you previously have tested, and given just the patient population, which tends to be, I believe, a more rare orphan type of a situation versus something more broad, like asthma or atopic dermatitis. How are you thinking about dosing or pricing, I guess, ultimately, if you were to have success in all of these indications?
Okay. First of all, so far, the ALPS patients have been adults. They've been 30 to 40 years old. The dose has been 200 milligrams BID, same thing we're doing in lymphoma and in AD. ALPS is mostly a disease in children, and we're going to meet with FDA and move into a pediatric population, expand the number of sites. We want to have more control over this study. That's why we're taking over the IND. Obviously, when we go to pediatric population, the doses may change based on just the size of the individuals involved. I think that the value of ALPS is what it is teaching us about our drug, about ITK, and about the immune system. Right now, we work in T-cell lymphoma and autoimmune diseases. ALPS sits at the adjacency, between these two areas. We have learned so much from the ALPS patients.
Not only did it confirm the safety that we've been seeing in a pretty sick population, but really, it's been giving us a lot of information on other diseases that we may want to go after in the future. Now, regarding pricing and commercialization, I think it's a little early to talk about that.
Okay. Thank you very much.
Your next question comes from Roger Song from Jefferies. Please go ahead.
Hey, guys. This is Cha-Cha on for Roger. Just two questions from me. I just want to confirm, your phase II AD patients, you said they failed at least one systemic or topical therapy, but does that mean that they've not necessarily failed DUPIXENT or JAK? Is that correct? My second question is about your HS study. Can you just give us some expectations for the data benchmarks in order for soquelitinib to be competitive in this space?
Okay. Thanks for that question. Let's be clear. On our phase II study, you must have failed either a topical corticosteroid or a systemic therapy, but you can have failed more than that. We accept patients who have failed DUPIXENT, a JAK inhibitor, or other therapies, or systemic corticosteroids. That's in distinction to, I think, most other trials. You can have failed DUPIXENT. In fact, in our phase I, if you go back and look at the data that we presented at SID, there were several patients who had failed JAK inhibitors or DUPIXENT. Okay? The reason we're excited about that is because our mechanism of action does not overlap with those mechanisms. We would not expect, nor did we ever see, any evidence of cross-resistance. Now, the second question on HS, what do we expect to see?
What we expect, I think that's what you were asking. That's a trial that we're doing where we have now very good biomarkers to look at. We know what to look for. IL-17, Th17s, and the correlated transcription factors. Myeloid cells are going to be really interesting in that setting as well. As well, and this is surprising, as there are a lot of B cells in the HS lesions. Let me also point out, there are a lot of B cells in ALPS patients, even though it's a T-cell disease. There are a lot of B cells in their lesions. If you look at our poster at ASH, you'll see some work on that in that area. T cells drive B cells.
Anyway, we'll be looking at all of that, and I think we'll be able to get a good feel for whether or not we're seeing efficacy. As soon as we see that, we don't have to wait for all 25 patients to be treated, we can start planning on a more definitive, randomized placebo-controlled phase II. We don't have to wait till the end. Does that answer your question?
Great. Helpful. Yeah, thanks.
Your next question comes from Jeff Jones from Oppenheimer. Please go ahead.
Good afternoon, guys, and thanks for taking the question. Maybe just to build on the HS question. As you look at the other studies in the field, any feel for benchmarks or hurdles that you would want to see the degree of efficacy or signal that you want to see to support moving ahead? Then one follow-up.
Yeah. So I think that there are benchmarks for HiSCR 70 and 50. You'd want for HiSCR 50, you want to see 50%, 60% of the patients achieve that. For the HiSCR 75, maybe around 30%. So I think if we hit that or better, we would be happy with that result with an oral agent with a good safety profile. Of course, I didn't talk much about it on this call, but as you know, we're very interested in durability of response.
Yep. Great. Appreciate that.
Yeah, go ahead.
In follow-up, I guess, on the AD side, obviously really interesting, as you were just talking about, in some of the patient recruitment and allowing some of these patients who have failed more advanced therapy. Given what you've seen to date, how are you thinking about where soquelitinib could fit in the treatment milieu, given the various biologics and approvals out there and some of the bispecifics advancing? Are there particular patient subsets where you think soquelitinib would fit particularly well?
Based on what we've seen so far from our phase I study, based on our safety, and based on our mechanism, we think soquelitinib can be an upfront treatment for patients with moderate to severe AD, or can be used in the relapse setting for patients who have already had other therapies. Now, keep in mind, other therapies, there are many other therapies out there now, and the pool of patients that are prior systemic therapy experienced is increasing, which we actually predicted a couple years ago when we started working in this area. So Jeff, I think the answer is, we have every reason to think that you could use this as a first-line systemic therapy or later line.
Greatly appreciate it. Thanks, guys.
Thank you, Jeff.
Your next question comes from Sean Lee from H.C. Wainwright. Please go ahead.
Hey, good afternoon, guys, and thanks for taking our question. I just had one on the asthma study. We noticed that the start is slightly delayed to early next year. What caused the delay, and have you finalized on what kind of patients you are going to recruit for this study, in terms of thresholds for T2 or non-T2 groups?
First of all, we had been talking about late December to start asthma. Given that it is Christmas and New Year's, we figured it would be safer to talk about January. There is no material change in that timeline. As a matter of fact, our IND is already through FDA, and everything is fine. What was the second question on the second part of the question?
The patient types and predefined groups for T2 and non-T2 patients.
What are the what? I'm sorry, I don't understand.
No, I mean, what are Do you have any predefined thresholds for-
Oh, yeah. Yeah.
Yeah.
Okay, I understand your question. Sorry, I did not understand the question. Eosinophil is 150. If you are above 150, you are T2, and if you are below 150, you are not T2. Then we are also looking at the fractional exhaled nitric oxide, which is above 25 for the T2. These are very typical. 150 is our cutoff.
Okay. Got it. Thank you for that.
Any other questions?
Nope.
Okay. Well, thank you. I think, operator, there are no other questions. I want to thank everyone for participating in our conference call. We look forward to updating you in the future. Thank you, everyone.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.