Curis reports first quarter net loss of $6.8 million

Curis, Inc.Apr 28 2011

Curis, Inc. (NASDAQ:CRIS), a drug development company seeking to develop next generation targeted small molecule drug candidates for cancer treatment, today reported its financial results for the first quarter ended March 31, 2011.

“Design and synthesis of imidazopyridine derivatives as novel HSP90 inhibitors for the treatment of cancer”

"We anticipate 2011 will be a transitional and productive period for Curis. To date, we have achieved important advances in both our internal and partnered programs. Notably, in March our collaborator Genentech informed us that it had obtained positive results from the pivotal Phase II clinical trial of Hedgehog pathway inhibitor vismodegib (formerly designated GDC-0449) in advanced basal cell carcinoma patients. It is important to note that these patients currently have no therapeutic alternatives and the positive results potentially represent an important development for these patients. We are looking forward to the presentation of the full data from this trial at the 7^th Annual Congress of the European Association of Dermato-Oncology, in Nantes, France, June 20-23, 2011 and to an anticipated U.S. new drug application submission by Roche later this year, which, if approved would be transformative for Curis, as we believe the future milestone and royalty revenue associated with such approval could provide a material source of capital for Curis," said Daniel Passeri, Curis President and Chief Executive Officer.

Mr. Passeri continued, "Regarding our internal pipeline, we have continued enrolling patients in our ongoing CUDC-101 Phase I expansion study and are pleased with our results to-date, including observations of signs of clinical activity in advanced liver cancer patients. We expect to initiate a Phase I dose escalation study of CUDC-101 in combination with cisplatin and radiation in head and neck cancer patients during the first half of 2011 and are also exploring potential development strategies for CUDC-101 in advanced liver cancer. We also anticipate that we will begin Phase I testing of an oral formulation of CUDC-101 later this year. Furthermore, we continue to expand our proprietary pipeline of network-targeted inhibitors and have recently selected CUDC-907, a PI3K and HDAC inhibitor, as a development candidate and have been advancing this molecule towards an anticipated IND filing by the end of this year."

For the first quarter of 2011, Curis reported a net loss of $6.8 million, or ($0.09) per share on both a basic and fully diluted share outstanding basis, as compared to net income of $4.8 million or $0.07 per basic share outstanding and $0.06 per fully diluted share outstanding for the same period in 2010.

Revenues for the first quarter of 2011 were $100,000, as compared to $12.6 million for the same period in 2010. No license fee revenue was recorded under Curis' ongoing collaborations with Genentech and Debiopharm for the three months ended March 31, 2011. During the quarter ended March 31, 2010, Curis recorded license fee revenue of $8.3 million under its 2009 license agreement with Debiopharm and also received proceeds of $4.0 million pursuant to a settlement agreement that the Company entered into with a former collaborator in February 2010.

Operating expenses for the first quarter of 2011 were $5.5 million, as compared to $6.9 million for the same period in 2010, a decrease of $1.4 million, or 20%.

• Research and development spending was $3.1 million for the first quarter of 2011 as compared to $2.5 million for the same period in 2010, an increase of $0.6 million, or 24%. The increase in research and development expenses is primarily the result of an increase of $700,000 associated with the ongoing Phase I expansion trial of CUDC-101.
• General and administrative spending was $2.4 million for the first quarter of 2011 as compared to $4.4 million for the same period in 2010, a decrease of $2.0 million, or 45%. This decrease was primarily due to decreased spending for legal services. During the three months ended March 31, 2010, Curis incurred approximately $1.5 million in expenses related to an arbitration proceeding against a former collaborator. The arbitration was settled in February 2010 and no legal expenses were incurred by Curis beyond the first quarter of 2010. In addition, personnel costs decreased $300,000 for the first quarter of 2011 as compared to the prior year period primarily due to the payment of discretionary bonuses to Curis' executive officers upon receipt of a milestone payment from Debiopharm in March 2010.

Other expense, net, was $1.5 million for the first quarter of 2011 compared to $900,000 for the same period in 2010, an increase of $600,000, or 67%. Other expense, net, primarily represents the change in the fair value of a warrant liability established in connection with Curis' January 2010 registered direct offering.

As of March 31, 2011, Curis' cash, cash equivalents and marketable securities totaled $36.5 million, and there were 76.3 million shares of common stock outstanding.

Recent Developments

-- Announced positive outcome from collaborator Genentech's Phase II clinical trial of vismodegib (GDC-0449, RG3616) in advanced basal cell carcinoma

In March 2011, Genentech informed Curis that the pivotal Phase II clinical trial of vismodegib in advanced basal cell carcinoma, or BCC, had met its primary endpoint of achieving a target overall response rate showing that vismodegib shrank advanced BCC tumors in a pre-defined percentage of people in the study. A preliminary safety assessment showed the most common adverse events were consistent with previous experience with vismodegib and included muscle spasms, hair loss, altered taste sensation, weight loss, fatigue, nausea, decreased appetite and diarrhea. Serious adverse events were observed, including fatal events. The deaths are being further evaluated, but do not appear to be related to vismodegib. Importantly, Genentech has indicated that it anticipates submitting a new drug application (NDA) to the U.S. Food and Drug Administration (FDA) in 2011 to seek approval to commercialize vismodegib. Roche has indicated that the timing of a European regulatory submission is subject to planned discussions with the European Medicines Agency (EMA).

-- Announced promising interim results from investigator-initiated Phase II study of vismodegib; data shows effect in prevention and treatment of BCC in Basal Cell Nevus Syndrome patients

Interim Phase II clinical data on vismodegib was presented at the 2011 Annual Meeting of the American Association for Cancer Research (AACR) in patients with Basal Cell Nevus Syndrome, or BCNS, which is also commonly referred to as Gorlin syndrome. Vismodegib reduced the rate of new BCCs from an average of 1.74 BCCs per month in the placebo group to 0.07 in the vismodegib group>

Observations related to vismodegib's safety were similar to what has been reported in previous clinical studies; compared to placebo, grade 1-2 taste loss, muscle cramps, hair loss and weight loss were common. There were two grade 3-4 adverse events observed, including one grade 3 muscle cramps and one grade 4 depression. Overall, 28% of patients taking vismodegib discontinued participation due to adverse events.

-- Selected CUDC-907 as development candidate

In January 2011, Curis selected CUDC-907, an orally available, synthetic small molecule inhibitor of phosphatidylinositol-3-kinase (PI3K) and histone deacetylase (HDAC) as a development candidate from its network-targeted cancer programs. Curis scientists believe that CUDC-907's synergistic inhibition of HDAC and PI3K may enhance anti-tumor activity and overcome issues of primary or acquired resistance through durable blockade of cancer networks as opposed to single-target inhibition. The Company expects to initiate IND-enabling studies in the near term, and assuming a favorable outcome, anticipates filing an IND application in late 2011.

-- Highlighted breadth of targeted cancer platform with data presentations at AACR

Curis scientists delivered three poster presentations at the 2011 AACR Annual Meeting in April. The Company believes that these presentations highlight the breadth of its targeted cancer portfolio. The presentations are summarized as follows:

• "Potential advantages of CUDC-101, a multi-targeted HDAC, EGFR and Her2 inhibitor, on preventing drug resistance and tumor metastasis," was presented by Jing Wang, Ph.D., Curis' Staff Scientist, Molecular and Cellular Biology. This presentation highlighted data indicating that Erlotinib-resistant cancer cells and cancer cells harboring MET amplification are sensitive to treatment with CUDC-101 in preclinical testing, which also may have the potential to simultaneously suppress tumor growth and metastasis and overcome drug resistance.
• "Anti-tumor activity of a dual PI3K and HDAC inhibitor (CUDC-907) in hematologic cancer models," presented by Rudi Bao, M.D., Ph.D., Curis' Senior Director of Oncology, highlighted data showing that CUDC-907 is more potent than reference compounds in proliferation assays of hematologic cancer cell lines and inhibits survival pathways commonly upregulated upon PI3K inhibition. It also showed CUDC-907's ability to suppress multiple nodes of survival pathways and its high exposure, long half-life in tumor tissue and oral bioavailability in preclinical models.
• "Design and synthesis of imidazopyridine derivatives as novel HSP90 inhibitors for the treatment of cancer," presented by Xiong Cai, Ph.D., Curis' Vice President, Medicinal Chemistry, highlighted the discovery of Debio 0932 (formerly CUDC-305), which is licensed to Debiopharm Group.