Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative drug candidates for the treatment of human cancers, today reported its financial results for the second quarter ended June 30, 2015.
“During the second quarter, we presented results of the Phase 1 trial of CUDC-907 at scientific conferences, where we reported clinical activity, including complete responses in heavily pre-treated patients with relapsed or refractory diffuse large B cell lymphoma (DLBCL),” said Ali Fattaey, Ph.D., Curis’ President and Chief Executive Officer. “CUDC-907 appears to be well tolerated with a manageable side effect profile at the recommended dose and schedule. Enrollment of patients with relapsed or refractory DLBCL in the expansion arms of the ongoing Phase 1 study is continuing, where we are administering CUDC-907 either as monotherapy or in combination with rituximab. We are in the process of finalizing the Phase 2 study design for CUDC-907, and we expect to initiate the study later this year.”
Dr. Fattaey continued, “Our partner Aurigene has made progress in advancing programs under our collaboration, and we remain on-track to file an IND application for the first immuno-oncology drug candidate later this year. We also expect to file an IND application for the lead IRAK4 inhibitor candidate and initiate its Phase 1 program during the first half of 2016.”
Second Quarter and First Half 2015 Financial Results
Curis reported a net loss of $8.1 million, or ($0.06) per share on both a basic and fully diluted basis for the second quarter of 2015, as compared to a net loss of $1.9 million or ($0.02) per share on both a basic and fully diluted basis for the same period in 2014. Curis reported a net loss of $40 million, or ($0.34) per share on both a basic and fully diluted basis for the six months ended June 30, 2015, as compared to a net loss of $7.5 million or ($0.09) per share on both a basic and fully diluted basis for the same period in 2014. The net loss for the first half of 2015 includes an in-process research and development charge of $24.3 million related to Curis’ license agreement with Aurigene.
Revenues for the second quarter of 2015 were $2.1 million, as compared to $4.8 million for the same period in 2014. The decrease in revenues was primarily due to a decrease in license fee revenues due to a $3 million milestone payment that Curis earned from Genentech/Roche upon achievement by Genentech/Roche of certain development objectives during the second quarter of 2014. Offsetting these decreases, royalty revenues recorded on Genentech/Roche’s net sales of Erivedge increased to $2.0 million in the second quarter of 2015 as compared to $1.8 million during the same period in 2014.
Revenues for the six months ended June 30, 2015 were $3.7 million, as compared to $6.1 million for the same period in 2014.
Operating expenses for the second quarter of 2015 were $9.5 million, as compared to $6.3 million for the same period in 2014. Operating expenses for the six months ended June 30, 2015 were $42.1 million, as compared to $12.4 million for the same period in 2014 and were comprised of the following:
Costs of royalty revenues. Costs of royalty revenues, which are comprised of amounts due to third-party university patent licensors in connection with Genentech/Roche’s Erivedge net sales, were $103,000 and $92,000 during the second quarters of 2015 and 2014, respectively. Costs of royalty revenues for the six months ended June 30, 2015 were $187,000, as compared to $157,000 for the same period in 2014.
In-process research and development expenses. The Company recorded a one-time charge for in-process research and development expense of $24.3 million during the first half 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 the parties’ January 2015 collaboration agreement.
Research and development expenses. Research and development expenses were $5.9 million for the second quarter of 2015 as compared to $3.3 million for the same period in 2014. The increase in research and development expense was primarily due to increased spending on CUDC-907 and preclinical programs under the Company’s collaboration with Aurigene. The Company incurred expenses of $2.7 million and $1.4 million on CUDC-907 for the quarters ended June 30, 2015 and 2014, respectively, related to its ongoing Phase 1 studies. Spending of $2.5 million on the Company’s preclinical research programs for the three months ended June 30, 2015 includes a $2 million milestone payment to Aurigene for selection of a third program under that collaboration and also includes costs to support planned development activities, primarily consisting of personnel costs, compared to costs of $81,000 in the prior year quarter. Offsetting these increases, spending on CUDC-427 decreased by $900,000 during the three months ended June 30, 2015 as compared to the prior year period. Research and development expenses were $10.7 million for the six months ended June 30, 2015 as compared to $6.5 million for the same period in 2014.
General and administrative expenses. General and administrative expenses were $3.4 million for the second quarter of 2015 as compared to $2.9 million for the second quarter of 2014. Increased legal costs and stock-based compensation were partially offset by decreased professional and consulting costs. General and administrative expenses were $6.9 million for the six months ended June 30, 2015 as compared to $5.8 million for the same period in 2014.
Other expense was $759,000 for the second quarter of 2015, as compared to $351,000 for the same period in 2014. Other expense primarily consisted of $843,000 and $950,000 in interest expense for the quarters ended June 30, 2015 and 2014, respectively, related to the loan made by BioPharma-II to Curis Royalty, a wholly-owned subsidiary of Curis. The Company also recorded other income of $557,000 and $649,000 during the three and six month periods ended June 30 2014, respectively, associated with the change in fair value of a warrant liability. Other expense was $1.6 million and $1.2 million for the six month periods ended June 30, 2015 and 2014, respectively.
As of June 30, 2015, Curis’ cash, cash equivalents, marketable securities and investments totaled $99.2 million, and there were approximately 128.4 million shares of common stock outstanding.
2015 Financial Guidance
The Company has revised its 2015 financial guidance for research and development expenses for 2015. The Company currently expects that these expenses will be in the range of $30 to $35 million for 2015. The Company had previously estimated that these expenses would range from $37 to $42 million. As a result, the Company currently expects to end 2015 with cash, cash equivalents and investments of $72 to $77 million versus its previous estimate of $65 to $70 million.
The Company’s decrease in research and development expenses is primarily the result of a decrease in estimated expenses across its development programs, including a recent re-evaluation of its clinical development plans for CUDC-427, an orally-available, small molecule antagonist of IAP proteins, as well as for its HSP90 inhibitor CUDC-305. The Company’s management determined that it would preserve Curis’ current resources for the continued development of CUDC-907 and drug candidates under the Company’s collaboration with Aurigene.
Recent Operational Highlights
- In May 2015, Curis reported data from the dose escalation (completed) and expansion (ongoing) stages of the Phase 1 study of CUDC-907 at the Annual Meeting of American Society of Clinical Oncology (ASCO) that was held in Chicago, IL. CUDC-907 demonstrated evidence of clinical activity with objective responses reported in patients with relapsed/refractory DLBCL and Hodgkin’s lymphoma. Among 10 response evaluable patients with DLBCL across various cohorts, two complete responses and four partial responses were reported. One patient with Hodgkin’s lymphoma experienced partial response out of a total of 12 response evaluable patients with Hodgkin’s lymphoma. In addition, stable disease was observed in 25 of 44 response evaluable patients across various lymphomas and multiple myeloma.
- In June 2015, Curis presented data from the Phase 1 study of CUDC-907 at the 20th Congress of the European Hematology Association (EHA), in Vienna, Austria, and the 13th International Congress on Malignant Lymphoma (ICML) in Lugano, Switzerland.
- In April 2015, Aurigene presented a poster entitled “Novel IRAK4 inhibitors exhibit highly potent anti-proliferative activity in DLBCL cell lines with activating MYD88 L265P mutation” at the American Association for Cancer Research (AACR) 2015 Annual Meeting. This poster included data from multiple orally bioavailable molecules that showed potent inhibition of IRAK4 kinase activity in biochemical assays and proliferation in DLBCL cancer cell lines with MYD88 mutation. Some of these compounds were further tested in in vivo models and demonstrated significant anti-tumor activity in a DLBCL xenograft model with MYD88 mutation as well as disease reduction in a rat collagen-induced arthritis model, which is a model for inflammatory conditions.
Curis expects to present at the following investor conferences through October 2015:
- Robert W. Baird & Co. 2015 Health Care Conference, September 9-10, 2015 in New York City
- FBR 2nd Annual Healthcare Conference, September 9, 2015 in Boston, MA
- 14th Annual BIO Investor Forum, October 20-21, 2015 in San Francisco (Original Source)
Shares of Curis closed yesterday at $3.08. CRIS has a 1-year high of $3.75 and a 1-year low of $1.09. The stock’s 50-day moving average is $3.27 and its 200-day moving average is $2.93.
On the ratings front, Curis has been the subject of a number of recent research reports. In a report issued on July 23, Roth Capital analyst Joseph Pantginis reiterated a Buy rating on CRIS, with a price target of $6, which represents a potential upside of 94.8% from where the stock is currently trading. Separately, on June 1, Robert W. Baird’s Brian Skorney maintained a Buy rating on the stock and has a price target of $7.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Pantginis and Brian Skorney have a total average return of 3.7% and 20.6% respectively. Pantginis has a success rate of 42.5% and is ranked #896 out of 3727 analysts, while Skorney has a success rate of 69.1% and is ranked #129.
Curis Inc is abiotechnology company engaged in developing and commercializing drug candidates for the treatment of human cancers. Its products includeCUDC-907,phosphatidylinositol-3-kinase andsmall molecule inhibitor of histone deacetylase.