Curis, Inc.
May 9, 2016
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Curis Reports First Quarter 2016 Financial Results

Management to host conference call today at 8:30 a.m. EDT

LEXINGTON, Mass., May 09, 2016 (GLOBE NEWSWIRE) -- Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers, today reported its financial results for the first quarter ended March 31, 2016.

"We are pleased with the initiation of the Phase 2 study with CUDC-907 earlier this year in patients with relapsed/refractory Diffuse Large B Cell Lymphoma (DLBCL) that harbor MYC alterations," said Ali Fattaey, Ph.D., Curis's President and CEO. "At the recent AACR annual conference, we presented preclinical data, which provide further evidence for CUDC-907's effect on downregulating MYC and its anti-tumor activity in multiple lymphoma and solid tumor models with alterations in MYC oncogene."

Dr. Fattaey continued, "All IND enabling studies with CA-170 have been completed, and we remain on track to initiate a Phase 1 study in cancer patients in the first half of 2016 with CA-170 as our first oral immuno-oncology drug candidate. Additionally, preclinical development of small molecule leads that target PD-L1 and TIM3 in our second immuno-oncology program is progressing well and these candidates further underscore the potential of this discovery platform to generate multiple oral small molecule drug candidates that can modulate independent immune checkpoint targets."

First Quarter 2016 Financial Results

Curis reported a net loss of $9.4 million, or ($0.07) per share, on both a basic and diluted basis for the first quarter of 2016, as compared to a net loss of $31.8 million, or ($0.30) per share, on both a basic and diluted basis for the same period in 2015. The net loss for the prior year period includes a non-cash in-process research and development charge of $24.3 million related to Curis's license agreement with Aurigene.

Revenues were $1.7 million for each of the first quarters of 2016 and 2015. Revenues for both periods are comprised primarily of royalty revenues recorded on Genentech and Roche's net sales of Erivedge®.

Operating expenses were $10.5 million for the first quarter of 2016, as compared to $32.7 million for the same period in 2015, and comprised the following:

Costs of Royalty Revenues. Costs of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche's Erivedge net sales, were $89,000 for the first quarter of 2016, up from $84,000 during the first quarter of 2015.

In-Process Research and Development Expense. No in-process research and development expenses were recorded for the three months ended March 31, 2016 as compared to $24.3 million recorded during the first quarter of 2015 associated with the issuance of 17,120,131 shares of Curis common stock to Aurigene as partial consideration for the rights granted under the terms of our January 2015 collaboration agreement.

Research and Development Expenses. Research and development expenses were $6.8 million for the first quarter of 2016, as compared to $4.7 million for the same period in 2015. The increase was primarily due to increased direct spending related to clinical activities of CUDC-907 and programs under the Aurigene collaboration over the prior year period. Employee-related expenses increased over the prior year period primarily due to additional headcount to support the multiple programs. 

General and Administrative Expenses. General and administrative expenses remained unchanged at $3.5 million for first quarter of 2016 and $3.5 million for the same period in 2015.

Other expense was $635,000 for the first quarter of 2016, as compared to $827,000 for the same period in 2015. Other expense primarily consisted of $740,000 and $867,000 in interest expense for the quarters ended March 31, 2016 and 2015, respectively, related to the loan made by BioPharma-II (an investment fund managed by Pharmakon Advisors) to Curis Royalty (a wholly-owned subsidiary of Curis).

As of March 31, 2016, Curis's cash, cash equivalents, marketable securities and investments totaled $73.1 million and there were approximately 129.0 million shares of common stock outstanding. 

Recent Operational Highlights

Precision oncology (HDAC / PI3K inhibitor program):

Immuno-oncology (PD-L1 / VISTA antagonist program):

Immuno-oncology (PD-L1 / TIM-3 antagonist program):

Precision oncology (IRAK4 inhibitor program):

Erivedge:

Upcoming Activities

Curis expects that it will make presentations at the following scientific and investor conferences through June 2016:

Our partner, Roche/Genentech expect to present data on Erivedge at ASCO 2016 Annual Meeting in Chicago from June 3-7.

Conference Call Information

Curis management will host a conference call today, May 9, 2016, at 8:30 a.m. EDT, to discuss these financial results, as well as provide a corporate update.

To access the live conference call, please dial (877) 868-1829 from the United States or (253) 237-1135 from other locations, shortly before 8:30 a.m. EDT. The conference ID number is 89164069. The conference call can also be accessed on the Curis website at www.curis.com in the Investors section.

About Curis, Inc.

Curis is a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of cancers, including its lead development candidate, CUDC-907, that is being investigated in clinical studies in patients with lymphomas and solid tumors. Curis is also engaged in a broad collaboration with Aurigene in the areas of immuno-oncology and precision oncology. As part of this collaboration, Curis has exclusive licenses to oral small molecule antagonists of the PD-1 pathway/VISTA, including PD-L1/VISTA antagonist CA-170, as well as to oral small molecules designed to inhibit the IRAK4 kinase, including CA-4948. Curis is also party to a collaboration with Genentech, a member of the Roche Group, under which Genentech and Roche are commercializing Erivedge® for the treatment of advanced basal cell carcinoma, and are further developing Erivedge in other diseases including idiopathic pulmonary fibrosis and myelofibrosis. For more information, visit Curis's website at www.curis.com.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding: the Company's plan to initiate a Phase 1 study in the first half of 2016 for CA-170 and the Company's expectations regarding the potential of the Aurigene discovery platform to generate multiple oral small drug candidates. Forward-looking statements may contain the words "believes," "expects," "anticipates," "plans," "seeks," "estimates," "assumes," "will," "may," "could" or similar expressions. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other important factors that may cause actual results to be materially different from those indicated by such forward-looking statements. For example, there can be no guarantee that the collaboration agreement with Aurigene will continue for its full term, that Curis or Aurigene will each maintain the financial and other resources necessary to continue financing its portion of the research, development and commercialization costs, or that the parties will successfully discover, develop or commercialize drug candidates under the collaboration. Curis may experience adverse results, delays and/or failures in its drug development programs and may not be able to successfully advance the development of its drug candidates in the time frames it projects, if at all. Curis's drug candidates may cause unexpected toxicities, fail to demonstrate sufficient safety and efficacy in clinical studies and/or may never achieve the requisite regulatory approvals needed for commercialization. Regulatory authorities may determine to delay or restrict Genentech's and/or Roche's ability to continue to develop or commercialize Erivedge in BCC. Erivedge may not demonstrate sufficient or any activity to merit its further development in disease indications other than BCC. Competing drugs may be developed that are superior to Erivedge. Curis faces risks relating to its wholly-owned subsidiary's royalty-collateralized loan transaction, including the risk that it may not receive sufficient levels of royalty revenue from sales of Erivedge to satisfy the debt obligation or may otherwise lose its rights to royalties and royalty-related payments as a result of a foreclosure of the loan. Curis will require substantial additional capital to fund its business and such capital may not be available on reasonable terms, or at all. Curis faces substantial competition. Curis may not obtain or maintain necessary patent protection and could become involved in expensive and time consuming patent litigation and interference proceedings. Unstable market and economic conditions and unplanned expenses may adversely affect Curis's financial conditions and its ability to access the substantial additional capital needed to fund the growth of its business. Curis also faces other important risks relating to its business, operations, financial condition and future prospects that are discussed in its Annual Report on Form 10-K for the period ended December 31, 2015 and other filings that it periodically makes with the Securities and Exchange Commission.

In addition, any forward-looking statements represent the views of Curis only as of today and should not be relied upon as representing Curis's views as of any subsequent date. Curis disclaims any intention or obligation to update any of the forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as may be required by law.

CURIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

  Three months ended 
  March 31, 
   2016   2015  
Revenues:     
Royalties $  1,743,747  $  1,671,070  
Research and development, net    (17,759)    (12,738) 
Total revenues  1,725,988   1,658,332  
      
Operating expenses:     
Cost of royalty revenues  88,773   84,092  
In-process research and development     24,347,815  
Research and development  6,828,064   4,718,972  
General and administrative  3,616,085    3,529,002  
Total operating expenses  10,532,922   32,679,881  
      
Loss from operations     (8,806,934)    (31,021,549) 
Other expense, net     (634,563)    (826,674) 
Net loss  $   (9,441,497) $  (31,848,223) 
Basic and diluted net loss per common share $  (0.07) $   (0.30) 
Basic and diluted weighted average common shares outstanding  129,019,984   107,934,493  
          

CURIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

  March 31,
2016 
  December 31,
2015
ASSETS         
          
Cash, cash equivalents and investments $  73,123,116  $  82,191,012 
Investments — restricted  152,610   152,610 
Accounts receivable  1,746,515   2,106,031 
Property and equipment, net  383,578   277,714 
Goodwill  8,982,000   8,982,000 
Other assets  931,370   1,255,772 
Total assets $85,319,189  $94,965,139 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Accounts payable, accrued expenses and other liabilities  6,472,336   6,290,154 
Debt obligations, net  22,904,384   24,164,507 
Total liabilities  29,376,720   30,454,661 
Total stockholders' equity  55,942,469   64,510,478 
     
Total liabilities and stockholders' equity  $  85,319,189  $  94,965,139 
         


For More Information:
James E. Dentzer
Chief Financial Officer & Chief Administrative Officer
Curis, Inc.
617-503-6597
jdentzer@curis.com

Media Contact
David Schull
Russo Partners
(212) 845-4271
david.schull@russopartnersllc.com