On November 3, 2016 Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers, reported its financial results for the third quarter ended September 30, 2016 (Press release, Curis, NOV 3, 2016, View Source [SID1234516211]).
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"We are pleased with our progress this quarter, and remain focused on patient enrollment within our two clinical programs. CA-170’s Phase 1 trial is progressing rapidly through the dose escalation stage with no limiting adverse safety effects," said Ali Fattaey, Ph.D., Curis’s CEO. "Additionally, we continue to enroll at multiple centers in the Phase 2 trial of CUDC-907 in patients with relapsed/refractory DLBCL. Our goal is to assess CUDC-907’s efficacy in patients with MYC-altered DLBCL and we expect to use this information for discussion with the FDA in 2017."
Dr. Fattaey continued, "Our collaboration with Aurigene continues to progress well. In September, we completed a $24.5M financing with Aurigene. In October, we licensed a second immuno-oncology program, designating CA-327 as an oral small molecule development candidate targeting PDL1 and TIM3. We expect to file an IND for CA-327 in 2017."
Third Quarter 2016 Financial Results
Curis reported a net loss of $28.3 million, or $(0.21) per share on both a basic and diluted basis for the third quarter of 2016, as compared to a net loss of $5.5 million, or $(0.04) per share on both a basic and diluted basis for the same period in 2015. Curis reported a net loss of $49.1 million or $(0.38) per share on both basic and diluted basis for the nine months ended September 30, 2016, as compared to a net loss of $45.5 million, or $(0.37) per share on both basic and diluted basis for the same period in 2015. The net loss for the three and nine months ended September 30, 2016 includes a non-cash in-process research and development charge of $18.0 million related to the amendment of Curis’s license agreement with Aurigene. The net loss for the nine months ended September 30, 2015 includes a non-cash in-process research and development charge of $24.3 million related to Curis’s license agreement with Aurigene.
Revenues for the third quarter of 2016 were $1.8 million, as compared to $2.0 million for the same period in 2015. Revenues for both periods comprise primarily royalty revenues recorded on Genentech and Roche’s net sales of Erivedge. Revenues for the nine months ended September 30, 2016 were $5.2 million, as compared to $5.8 million for the same period in 2015.
Operating expenses were $29.5 million for the third quarter of 2016, as compared to $6.9 million for the same period in 2015.
Operating expenses for the nine months ended September 30, 2016 were $52.4 million, as compared to $49.0 million for the same period in 2015, and comprised the following:
Costs of Royalty Revenues. Costs of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche’s Erivedge net sales, were $0.1 million for both the third quarter of 2016 and 2015. Cost of royalty revenues for the nine months ended September 30, 2016 and 2015 were $0.3 million for both periods.
In-Process Research and Development Expense. In-process research and development expense was $18.0 million for the third quarter of 2016, as compared to $24.3 million for the same period in 2015. These charges are associated with the stock issuances of 10,208,333 and 17,120,131 shares of Curis common stock to Aurigene, respectively. These shares were issued as consideration for the rights granted under the terms of the September 2016 amendment to the collaboration agreement and partial consideration for the rights granted under the terms of the January 2015 collaboration agreement, respectively.
Research and Development Expenses. Research and development expenses were $6.8 million for the third quarter of 2016, as compared to $4.0 million for the same period in 2015. The increase was primarily due to increased direct spending related to clinical activities of CUDC-907 and programs under the Aurigene collaboration over the prior year period. Employee-related expenses increased over the prior year period primarily due to additional headcount to support the multiple programs. Research and development expenses were $22.4 million for the nine months ended September 30, 2016 as compared to $14.7 million for the same period in 2015.
General and Administrative Expenses. General and administrative expenses were $4.7 million for the third quarter of 2016 as compared to $2.8 million for the same period in 2015. The increase in general and administrative expenses was driven primarily by higher personnel costs and stock-based compensation expense due to increased headcount and an increase in legal service costs. General and administrative expenses were $11.7 million for the nine months ended September 30, 2016, as compared to $9.7 million for the same period in prior 2015.
Other expense, net was $0.6 million for the third quarter of 2016, as compared to $0.7 million for the same period in 2015. Other expense, net primarily consisted of interest expense related to the loan made by BioPharma-II (an investment fund managed by Pharmakon Advisors) to Curis Royalty (a wholly owned subsidiary of Curis). Other expense, net was $1.8 million and $2.3 million for the nine months ended September 30, 2016 and 2015, respectively.
As of September 30, 2016, Curis’s cash, cash equivalents, marketable securities and investments totaled $53.4 million and there were approximately 140.0 million shares of common stock outstanding.
Recent Operational Highlights
Curis – Aurigene collaboration:
In October, 2016 Curis licensed the second oral small molecule immuno-oncology development candidate under the collaboration. This program is focused on the development of oral, small molecule antagonists that target two distinct checkpoint pathways: the programmed death-1 (PD1) and T-cell immunoglobulin and mucin domain containing protein-3 (TIM3) pathways. Curis has designated CA-327 that targets programmed death ligand-1 (PDL1) and TIM3 as the development candidate.
In September, 2016 Curis’s collaboration Aurigene Discovery Technologies Ltd. invested in Curis at a premium by acquiring 10.2 million shares of Curis’s common stock in lieu of receiving up to $24.5 million of milestone and other payments from Curis that may become due under the companies’ 2015 collaboration agreement.
Upcoming Activities
Curis expects that it will make presentations at the following conferences through December 2016:
Presentation of preclinical results from CA-170 and CA-327 at the SITC (Free SITC Whitepaper) conference
Presentation of preclinical results from combination of CUDC-907 with other treatments at the ASH (Free ASH Whitepaper) annual conference