Corvus surges 212% on positive eczema trial data, raises $201M
Biotech secures funding for Phase 2 study as soquelitinib shows 72% symptom reduction in atopic dermatitis patients
Corvus Pharmaceuticals shares more than tripled this week after the clinical-stage biotechnology company announced positive results from a Phase 1 trial of its eczema treatment, soquelitinib, and simultaneously closed an upsized public offering that raised $201.2 million.
The stock, which traded at around $8 earlier this month, surged to an intraday high of $26.22 on Friday before closing at $25.10, representing a gain of more than 212 percent since the trial data was released. The company now commands a market capitalization of approximately $1.6 billion, according to market data.
The Phase 1 placebo-controlled trial evaluated soquelitinib in patients with moderate to severe atopic dermatitis, a chronic inflammatory skin condition that affects millions worldwide. Data from cohort 4 showed that patients receiving the drug achieved a 72 percent mean reduction in the Eczema Area and Severity Index (EASI) score at day 56, compared with 40 percent for those on placebo.
Perhaps more significantly, 75 percent of soquelitinib patients achieved EASI-75, defined as a 75 percent improvement in their EASI score, versus only 20 percent in the placebo group. Additionally, 25 percent of treated patients reached EASI-90, while 33 percent achieved an Investigator Global Assessment score of clear or almost clear skin. No patients in the placebo arm reached either of these higher response thresholds.
"The data supports soquelitinib's proposed mechanism of action involving ITK inhibition, which regulates multiple T cell functional pathways and promotes immune rebalancing," Corvus stated in its press release.
The safety profile appeared favorable, with adverse events reported in 41.7 percent of soquelitinib patients compared with 50 percent of placebo patients. All adverse events were classified as Grade 1-2, and none led to dose modifications or interruptions.
Buoyed by the positive data, Corvus moved quickly to bolster its balance sheet. The company completed an upsized public offering of 9,085,778 shares of common stock at $22.15 per share, generating gross proceeds of approximately $201.2 million. Underwriters, led by Jefferies and Goldman Sachs, fully exercised their option to purchase an additional 1,185,101 shares.
Corvus intends to use the net proceeds to fund working capital and general corporate purposes, including research and development for its Phase 3 T-cell lymphoma program and the upcoming Phase 2 atopic dermatitis trial, which is scheduled to begin in the first quarter of 2026. The capital will also support clinical trials for hidradenitis suppurativa and asthma.
Analysts responded enthusiastically to the clinical readout. Jefferies analyst Roger Song upgraded Corvus to a Buy rating and raised his price target to $42 from $13, representing a 67 percent premium to Friday's closing price. Other firms followed suit, with Barclays increasing its target to $28 from $16, Oppenheimer to $32 from $15, and H.C. Wainwright to $27 from $11.
The atopic dermatitis market represents a significant commercial opportunity. Current treatments include injectable biologics such as dupilumab, marketed by Regeneron and Sanofi as Dupixent, which generated sales of $11.6 billion in 2024. However, Corvus noted that soquelitinib showed clinical activity in patients who had previously failed systemic therapies, including those resistant to dupilumab and JAK inhibitors, suggesting it could address an unmet need for treatment-refractory patients.
From a technical perspective, the stock's rapid ascent has pushed it into extremely overbought territory. The relative strength index (RSI) stands at 92.13, well above the 70 threshold that typically indicates overbought conditions. The shares are now trading at 8.4 times book value and have reached their highest level since going public, according to market data.
Investors will be watching closely for the initiation of the Phase 2 trial in the coming weeks, as well as potential updates from the company's T-cell lymphoma program. While the early data are promising, Phase 2 trials typically involve larger patient populations and may reveal different efficacy or safety profiles.
The successful capital raise provides Corvus with a substantial cash runway to advance its pipeline, but the dramatic stock surge sets a high bar for future clinical readouts. Any setbacks in the Phase 2 program could trigger a sharp reversal in shares that have become increasingly sensitive to binary clinical events.