Corvus Pharmaceuticals(US:CRVS)2025-08-07 20:02PART I — FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) The unaudited condensed consolidated financial statements for the quarter and six months ended June 30, 2025, are presented, highlighting key financial positions and performance Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $89.5 million, liabilities decreased to $9.2 million, and stockholders' equity grew to $80.2 million, primarily due to warrant exercises Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $14,691 | $8,740 | | Marketable securities | $59,716 | $43,224 | | Total current assets | $75,780 | $54,407 | | Total assets | $89,461 | $68,907 | | Liabilities & Stockholders' Equity | | | | Warrant liability | $0 | $28,910 | | Total liabilities | $9,233 | $36,339 | | Total stockholders' equity | $80,228 | $32,568 | | Total liabilities and stockholders' equity | $89,461 | $68,907 | Condensed Consolidated Statements of Operations and Comprehensive Loss For Q2 2025, a net loss of $8.0 million was reported, while the six months ended June 30, 2025, saw a net income of $7.2 million, driven by a non-cash gain from warrant liability revaluation Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $7,873 | $4,114 | $15,326 | $8,189 | | General and administrative | $2,387 | $1,821 | $4,856 | $3,999 | | Loss from operations | $(10,260) | $(5,935) | $(20,182) | $(12,188) | | Change in fair value of warrant liability | $2,012 | $1,816 | $27,141 | $1,816 | | Net income (loss) | $(7,998) | $(4,262) | $7,195 | $(9,963) | | Net income (loss) per share, basic | $(0.10) | $(0.07) | $0.10 | $(0.18) | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity significantly increased to $80.2 million by June 30, 2025, primarily due to proceeds from common stock and pre-funded warrant exercises - The exercise of common stock warrants during the first half of 2025 was a major driver of the increase in stockholders' equity, adding $23.1 million from common stock issuance and $14.5 million from pre-funded warrant issuance to additional paid-in capital18 Condensed Consolidated Statements of Cash Flows Net cash used in operations was $14.0 million, offset by $36.0 million from financing activities, primarily warrant exercises, leading to a $6.0 million net increase in cash for the six months ended June 30, 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,040) | $(10,638) | | Net cash used in investing activities | $(16,058) | $(17,511) | | Net cash provided by financing activities | $36,049 | $30,370 | | Net increase in cash and cash equivalents | $5,951 | $2,221 | Notes to Condensed Consolidated Financial Statements These notes detail accounting policies, liquidity, the impact of warrant exercises, and the company's equity method investment in Angel Pharmaceuticals - As of June 30, 2025, the company had cash, cash equivalents, and marketable securities of $74.4 million, which management believes is sufficient to fund planned operations for at least 12 months31 - All common warrants were exercised as of June 30, 2025, resulting in total proceeds of $54.3 million and eliminating the warrant liability. This led to a recognized gain of $27.1 million from the change in fair value for the six months ended June 30, 20252981 - The company holds an approximate 49.7% ownership interest in Angel Pharmaceuticals and recognized its share of loss from this equity method investment, amounting to $0.9 million for the six months ended June 30, 202565 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's clinical pipeline, financial performance, including increased R&D expenses and a net income driven by warrant revaluation, and its liquidity position Overview and Pipeline Development This section provides an overview of Corvus's clinical-stage pipeline, highlighting the lead candidate soquelitinib in Phase 3 for T cell lymphomas and Phase 1 for atopic dermatitis - Soquelitinib is in a registrational Phase 3 trial for relapsed/refractory peripheral T cell lymphoma (PTCL) after receiving FDA Fast Track designation108118119 - In the Phase 1 trial for atopic dermatitis, soquelitinib showed a mean EASI score reduction of 64.8% in the highest dose cohort (200 mg BID) at 28 days, compared to 34.4% for placebo. The trial protocol was amended to add an expansion cohort at this dose for an 8-week treatment period128137 - The company plans to initiate a Phase 2 clinical trial for soquelitinib in atopic dermatitis by the end of 2025, expecting to enroll approximately 200 patients140 Results of Operations Operating expenses, particularly R&D, increased significantly, but a $27.1 million non-cash gain from warrant liability revaluation resulted in a net income for the first half of 2025 Research and Development Expenses by Program (in thousands) | Program | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Soquelitinib | $8,842 | $2,841 | $6,001 | | Ciforadenant | $95 | $408 | $(313) | | Mupadolimab | $48 | $(55) | $103 | | Unallocated employee and overhead costs | $6,341 | $4,995 | $1,346 | | Total R&D Expenses | $15,326 | $8,189 | $7,137 | - The increase in soquelitinib costs for H1 2025 was primarily due to a $3.3 million increase in drug manufacturing and a $2.6 million increase in clinical trial expenses168 - The change in fair value of warrant liability resulted in a non-operating income of $27.1 million for the six months ended June 30, 2025, as all common warrants were exercised during the period177 Liquidity and Capital Resources The company held $74.4 million in cash and marketable securities as of June 30, 2025, deemed sufficient for 12 months, bolstered by warrant exercise proceeds and an available ATM program - The company's cash, cash equivalents, and marketable securities totaled $74.4 million as of June 30, 2025180 - Management believes existing cash is sufficient to fund planned operations for at least 12 months from the date of the financial statement issuance152 - During H1 2025, financing activities provided $36.0 million in cash, primarily from $35.7 million in proceeds from the exercise of common warrants192 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate changes on its $74.4 million cash and marketable securities portfolio, which is managed through low-risk, short-term investments - The company's main market risk is interest rate changes affecting its $74.4 million in cash and marketable securities196 - Due to the short-term and low-risk nature of its investments, the company does not expect a 10% change in interest rates to have a material effect on its portfolio's fair value196 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025198 - There were no material changes to the company's internal control over financial reporting during the second quarter of 2025199 PART II — OTHER INFORMATION Item 1. Legal Proceedings The company states that it is not currently involved in any material legal proceedings - As of the report date, Corvus Pharmaceuticals is not a party to any material litigation or legal proceedings201 Item 1A. Risk Factors This section details significant risks, including historical losses, the need for future financing, uncertainties in clinical development, reliance on third parties, and intellectual property challenges - The company has a history of significant operating losses ($389.8 million accumulated deficit as of June 30, 2025) and will require substantial additional financing to achieve its goals204206207 - Clinical drug development is lengthy, expensive, and uncertain. Product candidates may fail in later-stage trials despite promising early results, and any delays could increase costs and harm commercial prospects218223 - The company relies heavily on third parties, such as contract research organizations (CROs) and contract manufacturers, to conduct clinical trials and produce drug supplies. Poor performance by these third parties could delay or jeopardize development programs248253 - The business faces intense competition from larger, better-funded pharmaceutical companies, and its success depends on its ability to protect its intellectual property through patents and trade secrets, which may be challenged or circumvented308340 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates that there were no unregistered sales of equity securities during the reporting period - The company made no sales of unregistered securities during the quarter415 Item 5. Other Information The company reports that none of its directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - During the quarter ended June 30, 2025, no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan416 Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate documents, CEO/CFO certifications, and financial data in Inline XBRL format - The report includes required certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and financial data in Inline XBRL format (Exhibit 101 series)419