On November 9, 2015 Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative drug candidates for the treatment of cancers, reported its financial results for the third quarter ended September 30, 2015 (Press release, Curis, NOV 9, 2015, View Source [SID:1234508131]).
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"We are excited to have recently exercised two options under our collaboration with Aurigene to obtain exclusive licenses to the PD-L1/VISTA and IRAK4 programs," said Ali Fattaey, Ph.D., Curis’ President and CEO. "Aurigene scientists presented compelling preclinical data for each program this weekend at the AACR (Free AACR Whitepaper)-NCI-EORTC International Conference, and our internal team is working diligently with Aurigene to advance both programs into clinical development. During the first half of 2016, we expect to file an IND and initiate Phase 1 clinical testing of the PD-L1/VISTA inhibitor, CA-170, and also expect to file an IND for development of the IRAK4 inhibitor."
Dr. Fattaey continued, "We have also been working to advance CUDC-907 into the next stage of clinical development. We expect to provide additional data from the ongoing Phase 1 trial, as well as details of the planned Phase 2 study at the ASH (Free ASH Whitepaper) annual meeting later this year."
Third Quarter and Nine Months ended September 30, 2015 Financial Results
Curis reported a net loss of $5.5 million, or ($0.04) per share on both a basic and fully diluted basis for the third quarter of 2015, as compared to a net loss of $5.6 million, or ($0.06) per share on both a basic and fully diluted basis for the third quarter of 2014. Curis reported a net loss of $45.5 million, or ($0.37) per share on both a basic and fully diluted basis for the nine months ended September 30, 2015, as compared to a net loss of $13.0 million, or ($0.15) per share on both a basic and fully diluted basis for the nine months ended September 30, 2014. The net loss for the first nine months of 2015 includes an in-process research and development charge of $24.3 million related to Curis’ collaboration agreement with Aurigene.
Revenues for the third quarter of 2015 were $2.0 million, as compared to $1.8 million for the same period in 2014. The increase in revenues was primarily due to an increase in royalty revenues recorded on Genentech/Roche’s net sales of Erivedge, which increased to $2.3 million during the third quarter of 2015, as compared to $1.8 million during the same period in 2014.
Revenues for the nine months ended September 30, 2015, were $5.8 million, as compared to $7.9 million for the same period in 2014. The decrease was primarily related to a $3.0 million milestone payment that Curis received in 2014 related to its Genentech collaboration. Curis did not receive any such payments from Genentech during the nine months ended September 30, 2015. Offsetting this decrease, royalty revenues recognized from Genentech and Roche’s net sales of Erivedge increased $1.1 million to $6.0 million during the nine months ended September 30, 2015 as compared to $4.9 million during the same period in 2014, a 23% increase over the prior year period.
Operating expenses for the third quarter of 2015 were $6.9 million, as compared to $6.5 million for the same period in 2014. Operating expenses for the nine months ended September 30, 2015 were $49.0 million, as compared to $18.9 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 $116,000 and $89,000 during the third quarters of 2015 and 2014, respectively. Costs of royalty revenues for the nine months ended September 30, 2015 were $303,000, as compared to $246,000 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 nine months ended September 30, 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 $4.0 million for the third quarter of 2015, as compared to $3.7 million for the same period in 2014. The increase in research and development expenses was primarily due to increased spending on CUDC-907 and preclinical programs under the Company’s collaboration with Aurigene. The Company incurred expenses of $2.8 million and $2.1 million on CUDC-907 for the quarters ended September 30, 2015 and 2014, respectively, related to its ongoing Phase 1 studies of this molecule. The Company recorded costs of $700,000 on the Company’s preclinical research programs under the Aurigene collaboration for the three months ended September 30, 2015. Offsetting these increases, spending on CUDC-427 and other programs decreased by $1 million during the three months ended September 30, 2015 as compared to the prior year period. Research and development expenses were $14.7 million for the nine months ended September 30, 2015 as compared to $10.2 million for the same period in 2014.
General and administrative expenses. General and administrative expenses were $2.8 million for the third quarter of 2015, as compared to $2.7 million for the same period in 2014. Increased spending on consulting and professional services and stock-based compensation were offset by decreases in legal spending. General and administrative expenses were $9.7 million for the nine months ended September 30, 2015 as compared to $8.5 million for the same period in 2014.
Other expense was $699,000 for the third quarter of 2015, as compared to $827,000 for the same period in 2014. Other expense primarily consisted of $827,000 and $934,000 in interest expense for the quarters ended September 30, 2015 and 2014, respectively, related to the loan made by BioPharma-II to Curis Royalty, a wholly-owned subsidiary of Curis. Other expense was $2.3 million and $2.0 million for the nine month periods ended September 30, 2015 and 2014, respectively.
As of September 30, 2015, Curis’ cash, cash equivalents, marketable securities and investments totaled $93.5 million, and there were approximately 128.4 million shares of common stock outstanding.
Recent Operational Highlights
Aurigene Collaboration:
In October 2015, Curis exercised its option to exclusively license a first-in-class oral, small molecule antagonist designated as CA-170 that targets PD-L1 and VISTA, two negative checkpoint regulators of immune activation. CA-170 was selected from the broad PD-L1 antagonist program that the companies have been engaged in since the collaboration was established in January 2015. Curis also exercised its option to exclusively license a program of orally available small molecule inhibitors of IRAK4 kinase, a serine/threonine kinase involved in innate immune responses as well as in certain hematologic cancers.
Curis selected another preclinical program within the immuno-oncology collaboration with Aurigene that is focused on evaluating small molecule antagonists with dual PD-L1 and T-cell immunoglobulin and mucin domain containing protein-3 (TIM-3) targeting properties.
In November, Curis presented data at the 2015 AACR (Free AACR Whitepaper)-NCI-EORTC Molecular Targets and Cancer Therapeutics Conference in Boston, Massachusetts for the PD-L1/VISTA and IRAK4 programs.
Erivedge:
In November, Roche disclosed its intent to initiate a clinical study to examine the effectiveness of Erivedge in combination with ruxolitinib in participants with intermediate- or high-risk myelofibrosis. Myelofibrosis is a serious bone marrow disorder that disrupts the body’s normal production of blood cells. The result is extensive scarring in bone marrow, leading to anemia, weakness, fatigue, and often, an enlarged spleen and liver.
A Phase 1b portion of the study will assess the safety of Erivedge plus ruxolitinib combined therapy. After getting confirmation about the safety and toxicity of this combination, a randomized, controlled portion of the study may begin. The primary endpoints relate to reduction in spleen volume and overall response rate. Details of the study have been posted on clinicaltrials.gov.
Upcoming Activities
Curis expects to present at the following conferences through February 2016:
American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in Orlando, Florida: December 5-8, 2015
Oppenheimer 26th Annual Healthcare Conference in New York City: December 8-9, 2015
BIO CEO Investor Conference 2016: February 8-9, 2016
2016 RBC Capital Markets’ Healthcare Conference in New York City: February 23-24, 2016