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Financial Officer and Chief Operating Officer
Reports Fourth Quarter and Year-End 2007
CAMBRIDGE, MA, February 14, 2008 - Curis, Inc. (NASDAQ:CRIS), a drug development company focused on developing novel targeted medicines primarily for cancer treatment, today reported its financial
results for the fourth quarter and fiscal year ended December 31, 2007.
2007 has been a year of transformation for Curis, as we have made
substantial progress toward our goal of transitioning from a discovery-stage biology company to a development-stage targeted small molecule cancer company, commented Daniel Passeri, MSc., J.D., President and Chief Executive Officer of Curis.
We expect to continue to build on this momentum in 2008, as we seek to continue to grow and advance our portfolio of cancer drug candidates, with several key milestones expected throughout the year.
We were pleased with the recent announcement by our collaborator Genentech that regression has been observed in one patient with an established metastatic basal
cell tumor in its Phase I Hedgehog antagonist clinical trial. We believe that this early evidence of clinical activity is important and demonstrates possible proof of concept for this program. Additionally, we expect that Genentech will submit the
Phase I data for presentation at an upcoming scientific conference, continued Mr. Passeri.
For the fourth quarter of 2007, Curis reported net income of $4.3 million or $0.07 per share, as compared to net income of $700,000 or $0.01 per share for the same period
Net revenues for the fourth quarter of 2007 were $11.5 million as compared to $6.1 million for the fourth quarter of 2006. The reasons
for the increase in net revenues are detailed below:
Operating expenses for the fourth quarter of
2007 were $7.7 million as compared to $5.8 million for the same period in the prior year. The primary changes in research and development and general and administrative expenses are as follows:
The Company incurred expenses of $2.6 million during the fourth quarter of 2007 related to
development efforts for its lead preclinical drug candidate, CUDC-101, $1.5 million of which related to toxicology testing of the molecule in support of Curis planned IND application filing in 2008. The Company also incurred expenses of
approximately $1.1 million during the fourth quarter of 2007 to advance earlier stage candidates under the Company s targeted cancer platform. The Company incurred expenses of approximately $1.0 million on these efforts during the fourth
Offsetting the Company s increased expenses relating to its targeted cancer drug candidates was a decline in spending
on all other programs of $1.5 million as funded research under most of its collaborations concluded in late 2006 or early 2007. Spending under such programs was $600,000 for the fourth quarter of 2007 as compared to $2.1 million for the prior year
For the year ended December 31, 2007, the Company reported a net loss of $7.0 million or ($0.13) per share, as
compared to a net loss of $8.8 million or ($0.18) per share for the prior year.
Net revenues for the year ended December 31, 2007 were $16.4 million
as compared to $14.9 million for the prior year. The increase in net revenues was primarily the result of the recognition of $10.5 million in license revenue related to the June 2003 Hedgehog antagonist collaboration with Genentech, offset by
decreases in research and development contract revenues and substantive milestone revenues.
Operating expenses were $24.8 million for the year ended
December 31, 2007 as compared to $25.0 million for the prior year.
Research and development expenses were $14.8 million for the year ended
December 31, 2007 as compared to $14.6 million for the prior year. This is the result of several offsetting variances in research and development programs, primarily related to increased efforts on CUDC-101 and other targeted cancer drug
programs, offset by the reduced spending on other research programs, as funded research under most of the Company s collaborations concluded in late 2006 or early 2007. The Company spent $5.1 million during 2007 on development efforts related
to CUDC-101. The Company also spent approximately $4.9 million during 2007 to advance earlier stage candidates under its targeted cancer platform, as compared to $2.1 million during 2006. Spending under other programs was $3.8 million for 2007 as
compared to $11.2 million for the prior year.
General and administrative expenses were $10.0 million for the year ended December 31, 2007 as compared
to $10.4 million for the prior year. This decrease is attributable to decreases in occupancy costs, professional and consulting services and stock based compensation expenses offset by increased spending related to legal services for the
Company s patent portfolio.
As of December 31, 2007, the Company s cash, cash equivalents and marketable securities totaled $41.5 million
and there were 63.2 million shares of common stock outstanding.
In 2007, we strengthened our financial position through a $14.5 million private
placement, and looking forward, we are actively seeking collaborative opportunities for our developing pipeline, focusing especially on our proprietary targeted cancer drug candidates, commented Michael Gray, Chief Financial Officer and Chief
Operating Officer of Curis.
2008 Expected Milestones
The Company expects to end 2008 with cash, cash equivalents and marketable securities of $17-21 million, which excludes any potential payments from existing or new collaborators in 2008. The Company expects that
the existing cash, cash equivalents and marketable securities will be sufficient to support the current operating plans into the second half of 2009.
Company expects that 2008 research and development expenses will be $16-19 million and that general and administrative expenses will be $8-10 million. These expense projections include $500,000 to $700,000 and $1.2-1.4 million of
stock-based compensation expense for research and development and general and administrative expense, respectively. Actual 2008 stock-based compensation expense may be higher since the Company may issue additional awards as part of its planned
compensation programs, consistent with past practices.
Fourth Quarter and Recent Highlights
Curis management will hold a conference call today, February 14, 2008, at 9:00 A.M. EST, to discuss the progress of CUDC-101, the other targeted inhibitors that the Company is developing under the Targeted Cancer
Drug Development Platform, the product development programs under collaborations, the financial results and additional corporate activities. The Company s CEO, Daniel Passeri, will host the call.
To access the live conference call, please call (866) 356-3377 from the United States or Canada or (617) 597-5392 from other locations, shortly before 9:00
A.M. EST. The conference ID number is 14512747. The conference call also can be accessed on the Curis website at www.curis.com in the Investors section. A replay will be available approximately two hours after the completion of the call and
through 5:00 P.M. EST, Thursday, February 28, 2008. 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 38258302.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three months ended December 31, | Year ended December 31, | |||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||
| Revenues: | ||||||||||||||
| Gross revenues | $ | 11,484,842 | $ | 6,067,883 | $ | 16,388,554 | $ | 16,663,364 | ||||||
| Contra-revenues from co-development with Genentech | (1,727,727 | ) | ||||||||||||
| Net revenues | 11,484,842 | 6,067,883 | 16,388,554 | 14,935,637 | ||||||||||
| Operating expenses: | ||||||||||||||
| Research and development | 5,233,357 | 3,595,319 | 14,779,184 | 14,589,647 | ||||||||||
| General and administrative | 2,441,686 | 2,223,515 | 9,983,931 | 10,373,883 | ||||||||||
| Amortization of intangible assets | 27,050 | |||||||||||||
| Total operating expenses | 7,675,043 | 5,818,834 | 24,763,115 | 24,990,580 | ||||||||||
| Net income/(loss) from operations | 3,809,799 | 249,049 | (8,374,561 | ) | (10,054,943 | ) | ||||||||
| Other income, net | 482,575 | 431,445 | 1,410,318 | 1,225,621 | ||||||||||
| Net income/(loss) | $ | 4,292,374 | $ | 680,494 | $ | (6,964,243 | ) | $ | (8,829,322 | ) | ||||
| Basic and diluted net income/(loss) per common share | $ | 0.07 | $ | 0.01 | $ | (0.13 | ) | $ | (0.18 | ) | ||||
| Basic weighted average common shares outstanding | 63,180,451 | 49,240,712 | 54,914,666 | 49,066,680 | ||||||||||
| Diluted weighted average common shares outstanding | 63,206,837 | 49,422,874 | 54,914,666 | 49,066,680 |
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2007 | December 31, 2006 | |||||
| ASSETS | ||||||
| Cash, cash equivalents and marketable securities | $ | 41,459,176 | $ | 36,656,007 | ||
| Long-term investments restricted | 210,007 | 201,844 | ||||
| Accounts receivable | 230,467 | 1,315,412 | ||||
| Property and equipment, net | 2,577,602 | 4,393,604 | ||||
| Goodwill | 8,982,000 | 8,982,000 | ||||
| Other assets | 357,433 | 719,386 | ||||
| Total assets | $ | 53,816,685 | $ | 52,268,253 | ||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
| Accounts payable, accrued expenses and other liabilities | $ | 4,715,772 | $ | 3,504,659 | ||
| Debt obligations | 403,832 | 1,979,622 | ||||
| Deferred revenue | 1,852,518 | 10,886,833 | ||||
| Total liabilities | 6,972,122 | 16,371,114 | ||||
| Total stockholders equity | 46,844,563 | 35,897,139 | ||||
| Total liabilities and stockholders equity | $ | 53,816,685 | $ | 52,268,253 |
Curis is a drug development company that is committed to leveraging the innovative signaling pathway drug technologies to seek to create new medicines, primarily for cancer. In expanding the drug development efforts in the field of cancer
through the Targeted Cancer Drug Development Platform, the Company is building upon the previous experiences in targeting signaling pathways in the areas of cancer, neurological disease and cardiovascular disease. For more information, visit the
website at www.curis.com.
Cautionary Statement: This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including without limitation: the Company s expectation that it will advance additional preclinical development candidates in 2008; the Company s expectations regarding the potential
therapeutic benefits of its clinical-stage Hedgehog antagonist and its preclinical drug candidates, including CUDC-101; its plans to enter into one or more collaborations in 2008, and its financial guidance regarding working capital and operating
expenses for 2008. 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 the 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 the views only as of
today and should not be relied upon as representing the 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.