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Quarter 2007 Financial Results
CAMBRIDGE, MA, October 30, 2007 Curis, Inc. (NASDAQ:CRIS), a drug development company focused
on seeking to develop novel targeted medicines primarily for cancer treatment, today reported its financial results for the third quarter ended September 30, 2007.
For the third quarter of 2007, we reported a net loss of $3,718,000 or ($0.06) per share, as compared to a net loss of $1,537,000 or ($0.03) per share for the same period in the prior year.
Net revenues for the third quarter of 2007 were $1,312,000 as compared to $4,270,000 for the third quarter of 2006, a decrease of $2,958,000, or 69%. The decrease in net
revenues was the result of a decrease in research and development contract revenue under collaborative arrangements which concluded in late 2006 and early 2007 and a decrease in license fee revenues, offset by a decrease in contra-revenues as
Operating expenses for the third quarter of 2007 were $5,435,000 as compared to $5,972,000 for the third quarter of 2006, a decrease of $537,000, or 9%. The primary changes in research and development and general and administrative expenses
For the nine month period ending September 30, 2007, we reported a net loss of $11,257,000 or ($0.22) per share, as compared to a net loss of $9,510,000 or ($0.19) per share for the same period in the prior year.
Net revenues for the nine months ended September 30, 2007 were $4,904,000 as compared to $8,868,000 for the same period in 2006, a decrease of $3,964,000, or 45%.
The decrease in net revenues was the result of a decrease in research and development contract and license fee revenues, offset by a decrease in contra-revenues.
Operating expenses were $17,088,000 and $19,172,000 for the nine-month periods ended September 30, 2007 and 2006, respectively, a decrease of $2,084,000, or 11%. Research and development expenses were $9,546,000 for the nine months
ended September 30, 2007 as compared to $10,994,000 for the same period in the prior year, a decrease of $1,448,000, or 13%. General and administrative expenses were $7,542,000 for the nine months ended September 30, 2007 as compared to
$8,150,000 for the same period in the prior year, a decrease of $608,000, or 7%.
As of September 30, 2007, our cash, cash equivalents and marketable
securities totaled $41,090,000 and there were 63,164,972 shares of common stock outstanding.
Third Quarter and Recent Highlights
In October 2007, our collaborator Genentech notified us that the initial objectives of a Phase I clinical trial of a systemically administered Hedgehog antagonist had been achieved and that Genentech had initiated an
expansion cohort in its ongoing Phase I clinical trial, which is expected to enroll additional patients for preliminary signs of clinical response as well as the continued accumulation of Phase I safety data. As a result of the achievement of this
clinical development milestone, we expect to receive a $3,000,000 cash payment from Genentech under our June 2003 collaboration agreement. Genentech determined that it was obligated to make the $3,000,000 cash payment because the Phase I clinical
trial expansion cohort satisfied the criteria for a Phase II clinical trial under the parties collaboration agreement. Also in October, Genentech announced that it expected to make a decision regarding whether to advance the Phase I molecule
into Phase II clinical testing during the fourth quarter of 2007.
In September 2007, we disclosed that our preclinical candidate CUDC-101 is being
designed to potentially inhibit HDAC, EGFR and Her2, three validated cancer targets. We believe that CUDC-101 is the first-in-class compound under development to simultaneously inhibit HDAC, EGFR and Her2. We also disclosed for the first time the
identity of HDAC as a core target in all of the multi-target inhibitor drug programs that we are developing under our Targeted Cancer Drug Development Platform.
In August 2007, we were notified by our collaborator Wyeth that preliminary data with a protein agonist of the Hedgehog signaling pathway showed promising results in an established, early preclinical cardiovascular animal model. These
positive results are consistent with previously published third-party data in which upregulation of the Hedgehog pathway were demonstrated to be efficacious. Research using Hedgehog protein agonists in various cardiovascular disease models is
ongoing at Wyeth under our February 2004 collaboration agreement.
In August 2007, we completed a private placement of 13,631,022 shares of newly issued
common stock at a purchase price of $1.06375 per share, to selected institutional and accredited investors. We intend to use the $14,400,000 in net proceeds primarily to support our clinical and research and development efforts, working capital and
other general corporate purposes. In addition, in connection with the private placement, we issued warrants to purchase 4,770,859 shares of common stock at an exercise price of $1.02 per share. The warrants expire on August 8, 2012 and we can
require the mandatory exercise of the warrants in the event that our stock closing price on NASDAQ exceeds $2.50 per share for a period of 30 consecutive days.
We have made significant progress on a number of programs in recent months, said Daniel Passeri, MSc., J.D., Curis President and Chief Executive Officer. We are pleased by Genentech s decision to initiate a
Phase I cohort expansion in October. We and Wyeth have also made strides on the preclinical development of a systemically administered Hedgehog protein drug candidate for cardiovascular applications and I look forward to further updates on both of
these programs in the future.
Mr. Passeri continued, Our CUDC-101 IND-enabling development efforts are progressing well and we continue
to expect that we will file an IND application for this drug candidate in the first quarter of 2008. In addition, we expect that our recent private placement will provide us with flexibility on development and partnering strategies related to
CUDC-101 and other programs under our Targeted Cancer Drug Development Platform. While we are still pursuing a potential collaboration for the further development of CUDC-101, we are also beginning discussions with
potential collaborators with respect to a separate collaboration on additional programs in our platform, most notably our Hsp90 inhibitor and our HDAC/Hsp90
multi-target inhibitor. A meaningful collaboration for a program other than CUDC-101 may provide Curis with the resources to continue proprietary development of CUDC-101 into at least early clinical testing, which may potentially provide our
shareholders with greater value in the future when compared to our entry into a collaboration at the preclinical development stage.
conference call today, October 30, 2007, at 10:00 A.M. EDT, to discuss our financial results, additional corporate activities and the progress of CUDC-101, the other multi-target inhibitors that we are developing under our Targeted Cancer Drug
Development Platform, and our product development programs under collaborations. Daniel Passeri will host the call.
To access the live conference call,
please call (800) 329-9097 from the United States or Canada or (617) 614-4929 from other locations, shortly before 10:00 A.M. EDT. The conference ID number is 30281225. The conference call can also be accessed on the Curis website at
www.curis.com in the Investors section. Replay will be available approximately two hours after the completion of the call and through 5:00 P.M. EDT, Tuesday, November 13, 2007. To access the replay, please call (888) 286-8010 from
the United States or Canada or (617) 801-6888 from other locations and reference the conference ID number 48805608.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Revenues: | ||||||||||||||||
| Gross revenues | $ | 1,312,202 | $ | 4,625,874 | $ | 4,903,712 | $ | 10,595,479 | ||||||||
| Contra-revenues from co-development with Genentech | (355,435 | ) | (1,727,727 | ) | ||||||||||||
| Net revenues | 1,312,202 | 4,270,439 | 4,903,712 | 8,867,752 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 3,203,388 | 3,669,368 | 9,545,827 | 10,994,327 | ||||||||||||
| General and administrative | 2,231,474 | 2,302,469 | 7,542,245 | 8,150,372 | ||||||||||||
| Amortization of intangible assets | 27,050 | |||||||||||||||
| Total operating expenses | 5,434,862 | 5,971,837 | 17,088,072 | 19,171,749 | ||||||||||||
| Net loss from operations | (4,122,660 | ) | (1,701,398 | ) | (12,184,360 | ) | (10,303,997 | ) | ||||||||
| Other income, net | 404,360 | 164,771 | 927,743 | 794,181 | ||||||||||||
| Net loss | $ | (3,718,300 | ) | $ | (1,536,627 | ) | $ | (11,256,617 | ) | $ | (9,509,816 | ) | ||||
| Basic and diluted net loss per common share | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.22 | ) | $ | (0.19 | ) | ||||
| Basic and diluted weighted average common shares outstanding | 57,534,767 | 49,146, 609 | 52,129,126 | 49,012,538 |
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2007 | December 31, 2006 | |||||
| ASSETS | ||||||
| Cash, cash equivalents and marketable securities | $ | 41,090,095 | $ | 36,656,007 | ||
| Long-term investments restricted | 210,007 | 201,844 | ||||
| Accounts receivable | 241,199 | 1,315,412 | ||||
| Property and equipment, net | 2,837,937 | 4,393,604 | ||||
| Intangible assets, net | 8,982,000 | 8,982,000 | ||||
| Other assets | 506,030 | 719,386 | ||||
| Total assets | $ | 53,867,268 | $ | 52,268,253 | ||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
| Accounts payable, accrued expenses and other liabilities | $ | 3,301,425 | $ | 3,504,659 | ||
| Debt obligations | 714,377 | 1,979,622 | ||||
| Deferred revenue | 8,151,163 | 10,886,833 | ||||
| Total liabilities | 12,166,965 | 16,371,114 | ||||
| Total stockholders equity | 41,700,303 | 35,897,139 | ||||
| Total liabilities and stockholders equity | $ | 53,867,268 | $ | 52,268,253 |
We are a drug development company that is committed to leveraging our innovative signaling pathway drug technologies to seek to create new medicines, primarily for cancer. In expanding our drug development efforts in the field of cancer
through our Targeted Cancer Drug Development Platform, we are building upon our previous experiences in targeting signaling pathways in the areas of cancer, neurological disease and cardiovascular disease. For more information, visit our website at
Cautionary Statement: This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including: our expectation that Genentech will make a decision on further Phase II clinical testing of the Phase I systemically administered Hedgehog antagonist during the fourth quarter of 2007, our
plan to file an IND application for CUDC-101 with the FDA in the first quarter of 2008, and our belief that our advancement of CUDC-101 into early stage clinical testing may create greater value to our shareholders than entering into a preclinical
collaboration. Forward-looking statements used in this press release may contain the words believes , expects , anticipates , plans , seeks , estimates , will ,
may or similar expressions. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that may cause our actual results to be materially different from those
indicated by such forward-looking statements including, among other things:
In addition, any forward-looking statements represent our views only as of today and should
not be relied upon as representing our views as of any subsequent date. We disclaim 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.