Covir at H.C. Wainwright: Strategic Shift to Immuno-Oncology

On Tuesday, 20 May 2025, Covir (NASDAQ:CHRS) presented at the H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025, discussing its strategic transition to an innovative immuno-oncology company. While the company highlighted promising clinical data and a focused pipeline, it also acknowledged past operational challenges and outlined plans for future growth.

Key Takeaways

• Covir is transitioning to focus on innovative immuno-oncology, divesting its biosimilar business.
• Promising clinical data for CHS one one four and toripalumab in head and neck cancer was presented.
• The company is pursuing unique combination strategies to differentiate from competitors like Keytruda.
• Operational challenges in Q1 with the Lactorsi launch are being addressed, with improvements noted in Q2.
• Future outlook includes key clinical data releases and strategic partnerships.

Operational Updates

• Lactorsi Launch: Covir faced challenges in Q1 due to the divestiture of Udentica and supply interruptions, leading to a sales force reorganization. Improvements are underway, with Q2 showing more consistent progress.
• Medina Care Divestiture: The divestiture allows Covir to concentrate on innovative oncology, where a smaller, targeted team can create significant value.
• Partnership Strategy: Covir has shifted its partnership approach, waiting for more mature clinical data before announcements to focus on impactful clinical results.

Future Outlook

• CHS one one four (CCRA Antibody): The second-line study in PD-1 patients is expected to enroll and provide results by early next year.
• Castoza (IL-27 Antibody): A randomized study with toripalumab and bevacizumab is set to complete enrollment this year, with results anticipated next year.
• Toripalumab (PD-1 Inhibitor): Clinical data from collaborations in liver, head and neck, and lung cancer are expected next year.
• Keytruda’s Loss of Exclusivity: Covir plans to leverage its novel combination strategy to mitigate the impact of Keytruda’s loss of exclusivity in 2028.

Q&A Highlights

• CHS one one four Potential: The company is excited about combining CHS one one four with T cell engagers, leveraging increased CD8 T cell infiltration after Treg depletion.
• PD-1 Differentiation: Toripalumab’s unique binding epitope and higher affinity are believed to enhance its activity across various cancers.
• Combination Strategy: Covir aims to get two drugs approved for the cost of one by combining CHS one one four or castosakitug with toripalumab.
• Partnership Structuring: Covir is providing expertise to biotech companies to expedite data generation.

Covir’s strategic shift to focus on immuno-oncology marks a significant transition, with promising clinical data and a streamlined operational focus. For more details, refer to the full transcript below.

Full transcript - H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025:

Doug: Represented by the company’s CEO, Danny Lanfear, and the chief scientific officer

Danny Lanfear, CEO, Covir: Scientific and development

Doug: officer. Scientific and development officer to Theresa Lavelle. So, Denny, I don’t know if you know this, but I think we’re now have known each other for a decade, which makes me feel kind of old. But the company certainly evolved and changed dramatically from when we first got to know each other as a as a biosimilars company. And, you’re now sort of a innovative IO company.

So why don’t we start with, you know, you recently presented data for your CCRA antibody in recurrent metastatic head and neck squamous cell carcinoma, and you had one partial response in a patient with very advanced refractory disease. What was so encouraging about this? And, you know, I think some investors are like, it’s just one patient and, you know, maybe missing some of the context around, the severity of the of the disease and and and what the patient was facing.

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. So I think there’s a couple things for, those unfamiliar with the CCR eight target. It’s just that our compound, CHS one one four, is a targeted therapy. People have tried for decades to target and kill T regulatory cells because they’re known to dampen anticancer therapies broadly, but also well characterized to be important cells to drive p d one resistance. So having a target that’s selectively overexpressed in the tumor and not broadly on Treg cells so that these are cells that are very important for immune homeostasis.

So if you broadly knock out T regulatory cells, you end up with autoimmunity, which doesn’t help. So we’ve been able to show safety that this does preferentially target Treg cells in the tumors that also was on the poster showing marked depletion greater than 50% depletion of Treg cells in the tumor in response to CHS one one four monotherapy. So for targeted therapies, the important thing is where is the target present, and when it’s present, is it driving the disease? So the highest prevalence of the target, CCRA, is present in gastric cancer, cervical cancer, and head and neck cancer. So when we combined CHS one one four with toripalumab in the safety cohort so we did three patients at one dose, four patients at the higher dose, and saw a response in a fourth line head and neck squamous cell carcinoma patient.

This patient had had every available therapy, including PD one treatment and progressed. And so this fourth line patient having a dramatic response with CHS one one four and torocalimab was highly encouraging that this targeted therapy really is doing what it’s set out to do. And now we have the second line study, which is, you know, still a very sick patient population. But going in the fourth and fifth line for any cancer therapy, but particularly an immune based mechanism, is a pretty high bar. So the second line patients looking immediately progression on p d one to see if the Tregs are the true target for the p d one resistance.

And that study will read out, will enroll and read out enroll this year and read out early next year. So I think it’s encouraging for the class and just really looking at the development path to go quickly with this program.

Danny Lanfear, CEO, Covir: I would I would also add that we believe this is the first US data on a on a CCR rate, on a Treg, and many view this as an emerging superclass of therapeutics. We’ve the we’ve of we’ve of the past. Excited about

the

we’ve made seen some of our biomarker data. Maybe you wanna go through that for just a moment or so.

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. So the the aspect that we looked at that I said that we saw, so it’s a binding kill mechanism. It’s an aphucosylated antibody. So the killing is done by the immune system, ADCC or ADCP mechanism. There’s several antibodies approved with that approach across different targets.

The thing that we did not expect to see is that just the depletion of the Treg cells would lead to this large infiltration of c d eight cells. And that really has us excited about the potential not just to combine with p d one, because, obviously, you need T cells there to reinvigorate antigen experience exhausted T cells as a mechanism for p d one, but also T cell engagers. I mean, the biggest issue with getting T cell engagers successful in solid tumor treatments is the lack of T cells for the c d three to bind onto. We also think it could go across many different classes of agents to combine with. So this translational data so as I said, the data shows safety, which was really important for the class, the antitumor activity in a patient population where the target is broadly expressed, and then to see the biomarker data where it’s doing exactly what it said it would do but more than we expected has us very excited.

Doug: And just as when you say doing more than what you expected, what are you specifically referring to there?

Theresa Lavelle, Chief Scientific Officer, Covir: The the immune infiltrate, the c d a t cell infiltration into the tumor just in response to Treg depletion.

Doug: And and, you know, this has been an area of some interest broadly by the industry. What makes your molecule unique?

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. So I think that there’s a couple things to know about the class. So CCR eight is a protein called a g protein coupled receptor. About a third of FDA approved drugs are against GPCRs, so it’s a well known target. But there’s hardly any antibody drugs against GPCRs.

I think there’s about five, last I counted, of the total drugs on the market against GPCRs, and that’s because they’re very challenging targets because of the way that they weave in and out of the membrane. There’s not a lot of protein on the outside of the cell to have the antibody latch onto for selectivity and specificity. So in all of the screens, in our screens and screens of other molecules, there is one and only one antibody we found that exclusively binds CCR eight. And this is important because if you have off target binding, you have characteristics that you may not understand for your drug. So, like, one of the proteins that we one of the CCR eight antibodies we characterize binds J chain as an off target binding, which is broadly that protein is broadly expressed in the gut.

So you could worry about GI toxicity. So that selectivity is really important to understand on target, biology both for efficacy and tolerability.

Doug: And when we think about your broader portfolio, sort of your first approved asset is Laptorizy, which is a p d one inhibitor. What does the potential LOE for for Keytruda, right, which is still a couple years away, but, you know, sort of looming over the horizon. What impact does that potentially have on the market and and and, you know, sort of how you advance Lactorsi both in MPC, but more broadly in other indications?

Danny Lanfear, CEO, Covir: Well, you know, certainly, we are very cognizant of the LOE date in ’28 for KEYTRUDA when we set upon our development path with Lactorsi a couple grow excited about excited

the the to excited for another when you develop a therapy such as a CCR8 or a casdozo, for example, with toropalumab. Theresa can comment a little further, but it’s also important to keep in mind that these PD ones are differentiated, you know, on the basis of their epitopes and their activity and so forth and give very different results. So over you know, the overarching, you know, thing, I think, is that while you’ll see the biosimilarization of KEYTRUDA probably in 2829, it really won’t have any substantial impact commercially or therapeutically as we’re proceeding, Theresa.

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. And I think I mean, it’s important to note that our strategy is with our pipeline is to get look at both the novel agent, CHS one one four, or castosakitug in combination with toripalumab. So we get two drugs approved for the development price of one, but that then Keytruda won’t have the the IL 27 p d one combination data. So whatever biosimilar comes up, it won’t have the label to replace Tori there. So we we feel that the strategy is further strengthened by improving patient care and standard of care by adding combinations that are outside of the other p d ones labels.

Doug: And you’ve been obviously prosecuting an aggressive sort of development strategy with Tori in combination with with with your internal assets, with CCR eight or Castozo. You’ve also talked about in the past about sort of wanting PD one or Lachtore’s e to be sort of the PD one of choice in partnering. You’ve signed a a couple partnerships, but I think there was some hope or that that Tory would sort of proliferate across the IO landscape, and that hasn’t necessarily happened.

Theresa Lavelle, Chief Scientific Officer, Covir: Yet.

Doug: So I guess, you know, is it a question of yet, or has it been sort of a change in your your prioritization and and maybe some perspectives there?

Theresa Lavelle, Chief Scientific Officer, Covir: No. We have many conversations ongoing. What we changed is when we announce them. Because, you know, by the time we get together, what’s really important with these partnerships is seeing clinical data with the novel combinations. And so we’re looking to news flow and when we can anticipate readouts.

So we’ve changed our strategy for the collaborations to wait till closer to first patient in. So a few of the collaborations that we’ve been in discussions with companies will be forthcoming but have not been announced today because we’re waiting for that. Because the important thing is not that we’re we have a collaboration. The important thing is that we’ll have interesting clinical data next year with novel mechanisms. And one of the things we well, we have a couple of pillars that we look for in the collaborations is a novel mechanism of action, safety, because we’re very cognizant of not having that impede any other programs by spillover effect, but also some activity in tumor types that were really prioritized for our development.

So I think you can look forward to collaborations where we’re looking at clinical data sets in liver cancer, head and neck, lung cancer, tumor types. We’re developing Torian with our assets as well just to really broaden the dataset. So stay tuned, Doug.

Doug: And and maybe it’s just a follow-up, Teresa. When you think about the structures that you’re perhaps pursuing, and as you wait to sort of go until a first patient dose, does that imply that’s maybe sort of different structuring of partnerships than what you early initially contemplated? No. And maybe how versus rel are your parts partnerships structured differently than how the industry broadly interprets or thinks about partnerships?

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. So the way that we’ve looked at the Torapalumab drug supply collaborations is just that. Is drug supply an opportunity to look at Tory plus a novel mechanism in a very capital efficient manner. So by providing drug and expertise to biotech companies with their compounds, we can move quickly and get datasets, but not invest large amounts in the development We’re very excited about our assets and have really prioritized our spend on the development of CHS one one four and casdosakitug.

But we do see there’s huge opportunity for continuing to improve on p d ones through combinations and through these partnered drug supply collaborations. So the nice part is we’re small. And because it’s drug supply, I mean, we’ve been able to get these collaborations in place in as short as six weeks,

Doug: so we can work fast. And, you know, you’ve spoken, and I think you alluded to it, I think, Danny, in your comments earlier about Lactorsi having a differentiated mechanism, sort of binding epitope than other p d ones. We’ve certainly seen that in MPC in terms of the efficacy, especially in PD L1 low patients. But broadly speaking, right, you know, sort of different binding epitopes or that hypothesis has not necessarily played out in IO. I don’t I guess I’m just curious is, you know, do you and I think that’s a conventional wisdom.

Perhaps do you disagree with that? Do you think it hasn’t necessarily been tested properly?

Theresa Lavelle, Chief Scientific Officer, Covir: I do disagree with that. And I think that I mean, the field just knows that epitope matters. Right? I mean, look at HER two with pertuzumab versus trastuzumab. Very different activity with two different epitopes.

The question is, Torapalumab has two features, the FG loop, which we think is the important epitope. Others have published that it’s the preferred epitope for designing inhibitors, so a small molecule against the p d one domain. But it also has the potency difference. It’s tenfold higher binding affinity. So the two characteristics and the differences in the pharmacology have translated clinically to seeing activity not just in MPC, but in esophageal squamous cell carcinoma and non small cell lung cancer.

The esophageal squamous cell carcinoma showing activity irrespective of p d l one status is noteworthy because no other p d one that’s approved has that profile. FDA had an ODAC for Merck, BMS, and Beijing saying, not so much, and we shouldn’t give you the label for p d l one low in esophageal squamous cell carcinoma or gastric cancer because you’ve shown no patient benefit, and in one case, actually, detriment. Europe approved toripalumab irrespective of PD L1. The other PD ones not didn’t get that. So it’s not just the literature.

It’s actually health authorities seeing this difference. And why this is important for us and and our partners for the drug supply collaborations is any future standard of care is gonna go against an approved p d one. The dominant one is Keytruda. We’ve heard lots of chatter with some of the phase two, particularly the TIGIT studies. Oh, well, did it not work?

Because their p d one is inferior. So if you think about when you go head to head with p d one, if your p d one is not as good, you start here. So your combination to get a hazard ratio and a p value to get approved has a bigger climb. Whereas if you start equal footing or perhaps higher, then you have a higher probability of success. And I think we’ve just seen the ImmunoTEP data in head and neck cancer showing activity in p d l one low with Keytruda, which makes a complete different regulatory scenario for contribution of component as well.

Right? So I think Tori is well set up for a higher probability of success with this combination strategy.

Doug: And so is it through the combination strategy, do you go through those instances where perhaps as a reference, regulators have acknowledged difference, right, between efficacy or or or not granted approval in PDL 1 patients, does that make it a natural sort of area that you

Theresa Lavelle, Chief Scientific Officer, Covir: target? Absolutely.

Doug: And turning to Lactorsi from a commercial standpoint, right, because we’re now into the launch, You know, there was in the first quarter some disruption just given your divestiture of Udentica Salesforce standpoint. I guess, Denny, is that now in the rear view mirror? And, you know, how do we think about the launch and personalization through the rest of the year?

Danny Lanfear, CEO, Covir: That’s a fair question. Q four saw the announcement of the divestiture as well as the initiation resolution of the supply interruption, which carried on through q one when we actually then bifurcated the Salesforce and, you know, separated folks into which where they’re gonna go with the core, where they’re gonna stay with Covir. So while the NCCN guidelines came out, I think, in late November of last year with the repositioning of Loktorzi as the only preferred therapies across these lines, You know, I think it wasn’t really until we’ve gotten here now into q two, we’re able to make a practice out of that. I I can say that though that the team is hitting their stride here in q two, and things are things are moving a little bit, I think, more consistently upward. But it it is true that if you separate your organization and you go ahead and get over your supply interruption, it it it there was a little bump in the road, some turbulence, but I think that’s been the rearview mirror at this point.

Doug: And and maybe sort of saving the best for last or close to last, we are running out of time. I wanted to to touch on Castoza, your IL 27. You know, maybe before I start sort of getting into the data that you’ve generated so far, just talk about the importance of that mechanism and, you know, what really stands out.

Theresa Lavelle, Chief Scientific Officer, Covir: Yeah. So I think this is an antibody against a cytokine. So IL 27 antagonistic antibodies on against cytokines are well understood in inflammatory diseases. Right? IL 12 family, IL 23, which is part of the IL 27 family, well validated for rebalancing the immune system in autoimmune diseases and inflammatory diseases, hasn’t been seen in oncology till castos a ketog.

So the safety profile has been really well tolerated. We’ve shown by complete inhibition of the cytokine, we have activation of T cells and NK cells and monotherapy responses in tumor types that the preclinical models said should work. So I think the important things with this program is cytokines are immune regulatory. So depending upon the context, they have different biology. Everything from the mouse to where the expression is to the human studies has said liver and lung are particularly sensitive to IL 27 being immunosuppressive in tumors.

To see those monotherapy responses in lung cancer and activity in liver cancer is very exciting and I think different. That’s been one of the problems with immuno oncology is which trial do you do for that efficacy. Right? So we have strong what we call line of sight, knowing the patients to do, the trials to do, and get the answer about go, no go for registration. And seen in the phase two study in first line liver cancer in combination with p d l one and VEGF, a seventeen percent CR rate.

So I don’t think many people appreciate that IO has well below ten percent CR rate. In lung cancer, p d ones give a four percent. In liver cancer, the highest reported across all of the approved phase three studies is eight percent. We saw seventeen percent CR rate. That depth of response is highly unusual and differentiated.

So that has us excited. We’re doing the randomized study with ToriBev now. That should fully enroll this year and read out next year. And seeing that type of efficacy would set us up well for a pivotal study.

Doug: And we have maybe a minute left. Eddie, you know, you touched on it earlier. Did divest Medina Care, which was your personal product, and one that was enjoying a lot of success in the marketplace and certainly improved your sort of commercial capabilities. What was the strategic importance of that transaction?

Danny Lanfear, CEO, Covir: You know, we’re very proud of our accomplishments in the biosimilar space, and we we did as well as or better than anybody there. But I think it’s important to keep in mind that for the maximization of value of a biosimilar, you require a large product portfolio, you have to deal with the payers and you really have to leverage your overhead across a number of products. And that we did not have. On the other hand, innovative oncology is a place with small targeted team. There’s a long history of people creating disproportionate value and making disproportionate impact with patients.

And that’s really where our heart lies.

Doug: With that, I think we’re out of time, so we’ll have to to wrap up. Thank you so much, Doug.

Danny Lanfear, CEO, Covir: Thank you, Doug.

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