Earnings call transcript: Corvus Pharmaceuticals’ Q2 2025 results show EPS beat

Corvus Pharmaceuticals reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of -$0.10, outperforming the forecasted -$0.13. This unexpected EPS beat, amounting to a surprise of 23.08%, comes as the company continues its strategic focus on innovative treatments for autoimmune and inflammatory diseases. Despite the positive earnings surprise, Corvus’ stock price saw a slight decline of 0.96% in after-hours trading, closing at $4.13. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 4.9, though analysts anticipate continued losses this year.

Key Takeaways

• Corvus Pharmaceuticals reported a narrower-than-expected EPS loss for Q2 2025.
• The company’s R&D expenses increased significantly, reflecting its investment in new trials.
• Cash reserves improved to $74.4 million, ensuring operational funding into 2026.
• Promising results from the Phase One trial of socolitinib for atopic dermatitis.

Company Performance

Corvus Pharmaceuticals continues to advance its research and development efforts, particularly in the field of autoimmune and inflammatory diseases. The company has made significant strides with its lead product, socolitinib, showing promising results in early trials. The increase in R&D expenses from $4.1 million in 2024 to $7.9 million in Q2 2025 underscores its commitment to innovation. Despite a net loss of $8 million for the quarter, Corvus’ financial position remains robust, bolstered by $35.7 million in cash proceeds from warrant exercises.

Financial Highlights

• Research and Development Expenses: $7.9 million, up from $4.1 million in Q2 2024
• Net Loss: $8 million for Q2 2025
• Cash, Cash Equivalents, and Marketable Securities: $74.4 million, up from $52 million at the end of 2024

Earnings vs. Forecast

Corvus Pharmaceuticals reported an EPS of -$0.10, surpassing the forecast of -$0.13. This represents a positive earnings surprise of 23.08%. The company’s ability to exceed expectations, despite increased R&D spending, reflects its strategic focus on long-term growth.

Market Reaction

The stock of Corvus Pharmaceuticals experienced a slight decline in after-hours trading, falling by 0.96% to $4.13. This movement places the stock within its 52-week range, with a high of $10 and a low of $2.54. The market’s cautious response may be attributed to the company’s ongoing net losses and increased R&D expenditures.

Outlook & Guidance

Corvus Pharmaceuticals is poised for continued growth, with plans to initiate a Phase Two trial for socolitinib by the end of 2025. The company anticipates results from this trial in approximately 18 months. Additionally, data from the ALPS study is expected by late 2025 or early 2026, and a presentation of renal cell cancer data is scheduled for October at the ESMO conference.

Executive Commentary

CEO Richard Miller expressed optimism about the company’s progress, stating, "We feel we may be entering a new era of immunotherapy for autoimmune inflammatory diseases." He emphasized the distinct mechanism of action of Corvus’ therapies, which sets it apart from existing treatments. Miller also highlighted the company’s efficiency in maximizing product value.

Risks and Challenges

• Continued net losses may impact investor confidence.
• High R&D expenses could strain financial resources if new drugs face regulatory hurdles.
• Market competition in the autoimmune and inflammatory disease sector remains fierce.
• Potential delays in clinical trials could affect future growth projections.

Q&A

During the earnings call, analysts inquired about the rationale behind the Phase Two trial design for socolitinib, the potential for new indications, and the progress of ongoing trials. The company affirmed its commitment to expanding its therapeutic areas and maintaining flexibility in its clinical strategies.

Full transcript - Corvus Pharmaceuticals Inc (CRVS) Q2 2025:

Conference Operator: Good afternoon, everyone. Thank you for standing by, and welcome to the Corvus Pharmaceuticals Second Quarter twenty twenty five 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 Zach Kubo of Real Chemistry.

Please go ahead, sir.

Zach Kubo, Moderator/Communications, Real Chemistry: Thank you, operator, and good afternoon, everyone. Thanks for joining us for the Corvus Pharmaceuticals second quarter twenty twenty five business update and financial results conference call. On the call to discuss the results and business updates are Richard Miller, Chief Executive Officer Leif Li, Chief Financial Officer Jeff Arcara, Chief Business Officer and Ben Jones, Senior Vice President of Regulatory and Pharmaceutical Sciences. 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 Corvus’ quarterly report on Form 10 Q for the quarter ended 06/30/2025, 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 Lafayette. Lafayette?

Leif Li, Chief Financial Officer, Corvus Pharmaceuticals: Thank you, Zach. I will begin with a brief overview of our second quarter twenty twenty five financials and then turn the call over to Richard for a business update. Research and development expenses in the 2025 totaled $7,900,000 compared to $4,100,000 for the same period in 2024. The $3,800,000 increase was primarily due to higher clinical trial and manufacturing costs associated with the development of selcolitinib as well as an increase in personnel related costs. The net loss for the 2025 was $8,000,000 including a non cash loss of $400,000 related to Angel Pharmaceuticals, our partner in China.

In addition, we recorded a non cash gain of $2,000,000 from the change in fair value of Corvus’s warrant liability during the 2025. This compares to a net loss of $4,300,000 for the same period in 2024, which included a $1,800,000 non cash gain related to the change in fair value of Corvus’s warrant liability and a $600,000 non cash loss related to Angel Pharmaceuticals. Total stock compensation expense for the second quarter twenty twenty five was $1,300,000 compared to $800,000 in the same period in 2024. As of 06/30/2025, Corvus had cash, cash equivalents and marketable securities totaling $74,400,000 as compared to $52,000,000 at 12/31/2024. During the second quarter, all the remaining common stock warrants were exercised resulting in cash proceeds of approximately $35,700,000 which included $2,000,000 from warrants exercised by our CEO, Doctor.

Miller. Based on our current plans, we expect our current cash to fund operations into the 2026. I now turn the call over to Richard who will discuss our clinical progress and elaborate on our strategy and plans.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Thank you, Leif, and good afternoon, everyone. Thank you for joining us today for our update call. Our main focus continues to be the development of socolitinib for atopic dermatitis, where we believe we are uniquely positioned with an oral medication featuring a novel mechanism of action that so far has shown favorable safety and efficacy profile. We are making significant progress on multiple fronts, including new data from our Phase one trial reported in June that increases our confidence in the long term potential for socolitinib in this indication and beyond. On today’s call, I will provide a high level recap of this data, review our go forward clinical plans, including our planned Phase two trial design, and briefly discuss our progress with our other clinical programs.

We view the data through Cohort three of the Phase one trial as very encouraging. All of the treatment cohorts demonstrated a favorable safety and efficacy profile compared to placebo and cohort three data is especially exciting, demonstrating earlier and deeper and more durable responses compared to cohorts one and two. Specifically, at just four weeks of treatment, cohort three showed a mean percent reduction of EASI score of 64.8% compared to 54.6% for the combined cohorts one and two and thirty four point four percent for placebo. No placebo patients achieved the clinically meaningful endpoints of EZ75, EZ90 or IGA0 or one. We compare this to the results seen for the socolitinib patients where many achieved these endpoints.

In cohort three, fifty percent of patients achieved EZ-seventy five, eight percent achieved 90, EASY ninety and twenty five percent achieved IGA zero or one. This compares to twenty nine percent, four percent and twenty one percent in the combined cohorts one and two that were treated respectively. In terms of the kinetics of response, cohort three showed earlier and deeper separation from placebo beginning at day eight with the EASI score improvement continuing through day fifteen and twenty eight and far beyond. For cohorts one and two, the separation from placebo began at day fifteen and showed continued separation at day twenty eight. For all three cohorts, this separation was maintained during the thirty day post treatment follow-up period.

In addition, for all three cohorts, the downward slope of the curves at day fifteen to day twenty eight suggests that longer treatment duration could potentially deepen responses further. We also have found a remarkable impact on PPNRS, a patient self reported assessment of itch. A number of Cohort three patients reported steep drops in the score beginning at day eight, which aligned with the reductions we see in serum cytokine levels of IL-thirty one and IL-thirty one, IL-thirty three. Both of these cytokines are known to be involved in the itch response. In addition, other biomarker data from the trial continues to support the ITK inhibition mechanism of action, including the potential induction of anti inflammatory T regulatory cells.

Regarding safety, there were no safety issues observed with socolitinib with no significant differences between treatment and placebo groups and no clinically significant laboratory abnormalities were seen. The total current treatment experience with socolitinib now involves over one hundred and fifty patients with T cell lymphoma or atopic dermatitis representing more than nine thousand patient treatment days. In our lymphoma trial, some patients have been on continuous daily therapy up to two years. Based on the results obtained to date, we are advancing the clinical development of socolitinib in two ways. First, we amended the Phase one trial protocol to replace the previously planned Cohort four with an extension Cohort four that will evaluate an additional 24 patients at the cohort three dose of two hundred milligrams twice per day, given for eight weeks with an additional thirty day follow-up without therapy.

The 24 patients will be randomized in a blinded fashion, one to one with placebo, 12 active and 12 placebo. The extension cohort four will give us data on a longer treatment duration of eight weeks versus four weeks seen with cohorts one and three. We have now enrolled more than half the patients and continue to anticipate that data from the extension cohort will be available in the fourth quarter. Second, we are finalizing the design of our plan. Phase two clinical trial of soclinip for atopic dermatitis.

And I am happy to share those plans with you. Now, the trial will be an international randomized placebo controlled and double blinded. The company will also be blinded. It will enroll approximately 200 patients with moderate to severe atopic dermatitis that have failed at least one prior topical or systemic therapy. Patients will be required to have a baseline EASI score that is greater than or equal to 16, IGA of three or four and body surface involvement that is greater than or equal to 10%.

The patients will be randomized equally into four cohorts. Fifty patients in each cohort receiving either two hundred mg socolitinib once per day, two hundred mg twice per day, four hundred milligrams once per day or placebo. Let me repeat those groups two hundred milligrams once per day, two hundred milligrams twice per day, four hundred milligrams once per day or placebo. The treatment period will be twelve weeks and patients will be followed for an additional thirty days without therapy. The primary endpoint will be the percent change in EASI score from baseline to week twelve.

Secondary endpoints will include the percent of patients achieving EASI 75 or IGA one at week twelve. The impact on itch will be measured by percent of patients achieving greater than or equal to four point decrease in the PPNRF scale at week twelve and of course safety as well. We anticipate including 30 to 40 clinical trial sites globally. We are currently finalizing the trial design with the investigators with strong interest from many leading centers and we are on track to initiate the trial before the end of the year. Outside of our clinical trials, our partner in China, Angel Pharmaceuticals, plans to initiate a Phase 1btwo trial of socolitinib for atopic dermatitis in China.

This study will enroll 48 patients and is anticipated to build on the data from our Phase one trial by studying a longer treatment period of twelve weeks and an additional dosing option of four hundred milligrams once daily in line with the direction we are headed with our phase two trial. Briefly on our other clinical programs, we have submitted an abstract to present the final results from our Phase one clinical trial of socolitinib for the treatment of relapsedrefractory T cell lymphomas at the American Society of Hematology meeting in December. We continue to enroll patients in our registrational Phase three trial of socolitinib in patients with relapsed PTCL driving towards interim data in late twenty twenty six. In addition, patient enrollment is ongoing in our Phase two trial of socolitinib in patients with ALPS, autoimmune lymphoproliferative syndrome. Depending on enrollment trends, it is possible we could see initial data from the Phase two ALPS study in late twenty twenty five or early twenty twenty six.

We have completed enrollment in our Phase two trial with ciforadenant in renal cell cancer. These data will be presented in an oral presentation in October at the ESMO meeting, European Society for Medical Oncology. In closing, the socolitinib results in atopic dermatitis and T cell lymphoma underscore the importance of ITK as a critical target for a range of diseases involving inflammation and cancer and the broad potential for so called it in many areas of medicine, such as dermatology, oncology, rheumatology, pulmonary medicine and other areas. We feel we may be entering a new era of immunotherapy for autoimmune inflammatory diseases that is based on drugs with novel mechanisms of action that modulate or rebalance immunity by keeping pro inflammatory or aberrant T cells in check. This potential has motivated us to complement the development of socolitinib with the discovery and development of next generation ITK inhibitors with unique properties.

In the near term, we look forward to continuing the clinical development of soclolitinib in atopic dermatitis and PTCL and look forward to providing updates on our programs in the coming quarters. I will now turn the call over to the operator for a questions and answer period. Operator.

Conference Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star key followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star key followed by the number two.

Your first question comes from Jeff Jones. Your line is now open.

Jeff Jones, Analyst: Good afternoon, guys, and thanks for taking the question and congrats on a hugely productive quarter. I guess, you’ve got a plethora of opportunities in front of you. As you think about CFO in autoimmune disease, in addition to accelerating as you are in the Phase two, how are you thinking about next indications and financially being able to support the many opportunities that CFO represents.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Okay, so Jeff, let me first correct. Yes, CFO is renal cell cancer and But socolitinib, obviously we’re pursuing aggressively atopic dermatitis, but we’ve already begun to think about follow-up indications. And the two indications that we’re thinking about, we’re thinking about two of them. One, of course, sort of want to maintain our presence in dermatology. We have experience there now.

We have a lot of information on, we think the behavior of the drug in these cutaneous diseases. So I think a likely target for us might be something like hidradenitis suppurativa. There’s totally unmet need there I would say. And then the other disease moving away from dermatology in the inflammation area would be a pulmonary disease. Asthma is probably scientifically the most justification for a disease is probably asthma.

We have three or four different animal models where we see excellent activity of our drug in asthma, both acute and chronic. Also the mechanism of action, specifically the inhibition of what are called innate lymphoid cells really leads us to believe that we might have a very important novel approach to asthma and perhaps other pulmonary diseases. But you’re quite right. It is difficult for us to pursue all these indications but we’ve shown that we’re very adept at an agile in terms of efficiently maximizing the value of, I’d say each of our products.

Jeff Jones, Analyst: Appreciate that. And then the follow-up question is actually on CFO. In terms of the renal update coming at ESMO, how are you thinking about next steps for the program? Assuming within a world that there’s going to be a positive update here on the program.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Okay, so just to remind everyone, ciforadenant is an A2A antagonist oral medication. We did a Phase two study in first line renal cell cancer patients who are receiving ipinivo. So we added the A2A antagonist and the idea of there, of course, is to look at response rate, but also very importantly to look at since they stay on the A2A antagonist every day for a long time, they get the ipinivo for a short time. I think one of the things that we’ll be looking for in addition to, of course, objective responses is the durability of responses and or PFS in other words. So let’s see what that data is.

This is a study that was conducted by the Kidney Cancer Consortium, several centers MD Anderson, Vanderbilt and several others. They ran that study. We of course provided the drug and some financial support. So let’s see what’s presented in an oral presentation at ESMO and then we’ll go from there based on the data that comes out of that. We’ll make our decisions about how to follow-up on that.

Okay, but it is quite a unique study. I mean, it’s first line disease, it’s renal cell cancer. We know that’s immuno responsive. I’m emphasising this because I know today some other company came out with some A2A stuff and I think it was metastatic colon cancer and they had chemotherapy and a number of various treatments there. And one of the things that we’ve always done well is to carefully study our agents initially as a monotherapy and then move into combinations where we have a good understanding of the efficacy and safety and mechanism.

So that’s helped us a lot. That answer your It

Jeff Jones, Analyst: does. Thank you, Richard. I’ll hop back into the queue.

Conference Operator: Our next question comes from Craig Suvanevej. Please go ahead.

Jeff Jones, Analyst: Hi. This is Sam on for Craig. Thanks for taking the question and congrats on the progress. Maybe just a quick one on soclipinib and PTCL. Just curious how the enrollment is going and if the previous guidance for data in late twenty twenty six is still there.

Thank you.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Our guidance is still intact. We’re enrolling according to plan. We have probably about 20 centers open now. These are the best of the best centers in The United States and Canada. So everything there is going according to plan.

And we’re hoping that our presentation on the Phase one will really start to focus attention on this drug.

Jeff Jones, Analyst: Got it. Thanks for the update.

Conference Operator: Your next call comes from Aden Hussainov. Please go ahead.

Aden Hussainov, Analyst: Hi, everyone. Thank you for taking questions and congrats with the quarter. Couple of questions from us. So could you walk us through the decision process, thinking process regarding the Phase two trial design for atopic dermatitis? So I appreciate giving us color about, you know, four different cohorts, two hundred QD, two hundred BID, four hundred QD and placebo.

Just, you know, so far we see atopic dermatitis, the most productive cohort is cohort three. So, was curious to better understand, was it more like an FDA suggestion to give a little bit weaker dose, a little bit harder, a little bit stronger dose? Just walk us through the process if you could.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Okay, thank you for that question. So, of all, there’s a lot of precedence now for phase two trials in atopic dermatitis. We’re not the first company to do that. And a 200 patient trial with roughly 50 per arm is, I would say pretty standard. And you’re correct, Aiden.

Usually, there is, you know, the FDA wants to see some dosing, different doses studied so that you can determine what’s the lowest dose that’s possibly effective and what’s a higher dose that becomes maybe not more effective than another dose. So, we selected these doses because the two hundred once a day we think is active. We don’t think it’s going to be and we’ve already You’ve seen that data in Cohort two. I think that will be an active dose.

It’s a single it’s a daily dose. Some people, of course, preferred a single dose once a day dosing for atopic dermatitis. But the two hundred BID, we saw better response. That’s a doubling of the dose in our Cohort three. And that’s what we’re studying in our extension now.

So that’s the second cohort two hundred once a day, two hundred twice a day. And then of course, we want to do four hundred once a day, same total dose as the two hundred BID, but given once a day. I think we can do once a day dosing. So this will give us an opportunity to confirm that. And then of course, placebo.

I can’t emphasize enough how important it is to have placebos in phase one and phase two trials. I am seeing companies now do these studies with no placebos and it’s actually astounding to me. But in any event, so fifty patients in each arm, 200 total, placebo controlled, totally blinded, companies blinded. The endpoints are pretty standard. The mean percent change in EASI is the usual primary endpoint for a Phase two study, secondary endpoints being EASI75 and IGA01s.

So that’s all really pretty standard. Yeah, and we’re moving to twelve weeks of therapy. We’ll have experience with eight weeks of therapy, which we already have right now. And we think that should give us a pretty good result. In terms of the statistics, if we have even a 20% improvement in any of the groups, you can just, we can just look at any one group versus the placebo.

If we’re 20%, 22% better, we want it, we expect to be better than that. But even if that’s the lower end of our information, we have an 80% power to see that a P value of 0.05 on that. And in the phase two trial, that’ll be fine. So the size is statistically makes sense. The dosing makes sense based on what we know, what we also know about occupancy and the receptor.

And we think this is a very manageable trial for us. There’s a lot of experience in doing these international phase 2s. 200 patients would be very manageable for a company like Corvus. I hope that answered your

Aden Hussainov, Analyst: question. I appreciate it. Absolutely. Yeah, it does. Just wanted to couple of follow-up questions on this trial.

So I know this could be a little bit early, but would you be able to provide the timeline? When do you think we can see the results? I mean, understand this is randomized blinded trial but if you could give us some heads in terms of when it could be ready. Okay,

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: no happy to give that. We’ve of course been thinking about that. I think you’re looking at enrolment twelve to fifteen months. Maybe you have results in eighteen months and we’ll start the trial in December. And we have a couple of things I think going for us.

Obviously, it’s oral, that should help enrolment. I think the second thing, novel mechanism of action, I think that will also facilitate enrollment. We’re not requiring biopsies, although we’re going to have some centers where we’re going to try to motivate people to do some biopsies. But of course, that should also improve enrollment. But the biggest thing that’s going to facilitate enrollment is that we are allowing patients who have failed systemic therapies.

So that really opens up the potential patient population. So many of these studies, they won’t take you if you’ve already failed a systemic therapy, a JAK inhibitor, let’s say, or a dupi or something like that, or anti IL-thirteen. But we’re allowing those patients. And the reason we’re allowing those patients is because our mechanism of action is completely distinct from those. Number one and number two, we’ve had patients like that on our studies so far and it hasn’t mattered.

They’ve done just as well.

Aden Hussainov, Analyst: So, assumption is that you’ll probably be stratifying based on which exactly therapy they failed, or systemic, yes.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Oh, absolutely. I mean, there is a few things you might stratify on. Obviously EASI score. I mean, if your baseline EASI score, that will be a stratification factor and whether or not you failed the systemic therapy. Yes, we haven’t gotten into that degree of detail yet, but they’ll probably be two or three different stratification factors.

You can’t get too many in a study with only 200 patients.

Aden Hussainov, Analyst: Right, right. Yeah, and my question I have was about the next generation ITK inhibitor. As we move forward with that, could you give us some thoughts on how it will be different from socolitinib and which indications you’d be planning to target if it’s not too early?

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Okay, so first of all, for certain intellectual property reasons, I’d rather not go into the details of how they’re different because there are a lot of people who are now working on on INTK inhibitors and I’d rather not go into the details. But suffice it to say, let me answer your question this way. ITK plays many roles in a cell. T cell receptor signaling, everything from T cell receptor signaling to control of Th2 cytokine production to apoptosis. And we think we have compounds that might work better for some of those indications than others or some of those mechanisms.

So let me answer it that way.

Aden Hussainov, Analyst: Okay, alright. Thank you. Thanks so much, children. Congrats for the quarter again.

Conference Operator: There are no further questions at this time. I will now turn the call over to Richard Miller. Please continue.

Richard Miller, Chief Executive Officer, Corvus Pharmaceuticals: Thank you, operator. First of let me thank everyone for participating in today’s call. Look forward to updating you again in the next quarter and updating you on the progress with all our clinical trials. Thank you very much.

Conference Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.

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