Curis second quarter net loss increases to $4.9 million

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 second quarter ended June 30, 2011.

“The second quarter was highlighted by our collaborator Genentech's presentation of results from its pivotal study of vismodegib (GDC-0449, RG3616) in advanced basal cell carcinoma patients”

"The second quarter was highlighted by our collaborator Genentech's presentation of results from its pivotal study of vismodegib (GDC-0449, RG3616) in advanced basal cell carcinoma patients," said Dan Passeri, Curis President and Chief Executive Officer. "We are highly encouraged by the quality and substance of the positive data generated in this clinical study, including the overall response rates observed, and we look forward to Genentech and Roche's planned regulatory submissions for vismodegib in this patient population."

Mr. Passeri continued, "With regard to our proprietary programs, in the second quarter we initiated our planned Phase I dose escalation trial of CUDC-101, our first-in-class EGFR, Her2 and HDAC inhibitor, in combination with cisplatin and radiation in advanced head and neck cancer patients, and we expect that we will treat the first patient in this study in the very near term. We continue to demonstrate clinical activity in the indications being surveyed in our ongoing Phase I expansion study with long-term stable disease observed in several cancer types. We also have advanced preclinical efforts on an oral formulation of CUDC-101 and expect that we will initiate a Phase I study of the oral formulation in late 2011 or early 2012. Additionally, we are advancing CUDC-907, a first-in-class PI3K and HDAC inhibitor, towards clinical testing and anticipate that we will file an IND for this candidate in early 2012."

For the second quarter of 2011, Curis reported a net loss of $4.9 million, or ($0.06) per share on both a basic and fully diluted shares outstanding basis, as compared to a net loss of $2.1 million or ($0.03) per share on both a basic and fully diluted shares outstanding basis for the same period in 2010.

Revenues for the second quarter of 2011 were $400,000, as compared to $100,000 for the same period in 2010. This increase is the result of a $300,000 license fee payment received by Curis during the second quarter of 2011.

Operating expenses for the second quarter of 2011 were $5.0 million, as compared to $4.0 million for the same period in 2010, an increase of $1.0 million, or 25%.

• Research and development spending was $3.1 million for the second quarter of 2011 as compared to $2.2 million for the same period in 2010, an increase of $900,000, or 41%. The increase in research and development expenses is primarily attributable to an additional $800,000 in costs associated with the continued development of CUDC-101, including the ongoing Phase I expansion trial, costs related to the initiation of a Phase I trial in advanced head and neck cancers and manufacturing costs related to an oral formulation of CUDC-101 under development.
• General and administrative spending was $1.9 million for the second quarter of 2011 as compared to $1.8 million for the same period in 2010, an increase of $100,000, or 6%. This increase was primarily due to increased legal costs, specifically patent costs and fees related to foreign patent filings.

Other expense was $300,000 for the second quarter of 2011 compared to other income of $1.8 million for the same period in 2010, a decrease of $2.1 million, or 117%. Other expense primarily represents the increase in the fair value of a warrant liability incurred in connection with Curis' January 2010 registered direct offering.

For the six-month period ending June 30, 2011, Curis reported a net loss of $11.7 million, or ($0.15) per both a basic and fully diluted shares outstanding basis, as compared to net income of $2.7 million or $0.04 per basic shares outstanding and $0.03 per fully diluted shares outstanding for the same period in 2010.

Revenues for the six months ended June 30, 2011, were $500,000 as compared to $12.7 million for the same period in 2010.

Operating expenses were $10.5 million for the six months ended June 30, 2011, as compared to $10.9 million for the same period in 2010. Research and development expenses were $6.2 million for the six months ended June 30, 2011, as compared to $4.7 million for the same period in 2010. General and administrative expenses were $4.3 million for the six months ended June 30, 2011, as compared to $6.2 million for the same period in 2010.

Other expense was $1.8 million for the six-month period ended June 30, 2011, as compared to other income of $900,000 for the same period in 2010.

As of June 30, 2011, Curis' cash, cash equivalents and marketable securities totaled $32.7 million, and there were 76.5 million shares of common stock outstanding.

Recent Developments

-- Genentech presented positive data of vismodegib pivotal clinical trial in advanced basal cell carcinoma (BCC)

In June, Curis' collaborator Genentech, a member of the Roche group, presented detailed results from its pivotal Phase II clinical trial of vismodegib (GDC-0449, RG3616) in advanced basal cell carcinoma patients at the Seventh European Association of Dermato-Oncology (EADO) Congress in Nantes, France.

The pivotal study (ERIVANCE BCC) is an international, single-arm, multicenter, two-cohort, open-label Phase II study that enrolled 104 patients with advanced BCC, including locally advanced BCC (71) and metastatic BCC (33). The overall response rate in the pivotal Phase II trial as assessed by an independent review facility showed that vismodegib substantially shrank tumors or healed visible lesions, with observed response rates of 43% of patients in the locally advanced BCC cohort and 30% of patients in the metastatic BCC cohort. In the pivotal Phase II trial, study investigators assessed the overall response rate to be 55%, with 60% in the locally advanced BCC cohort, and 46% in the metastatic BCC cohort. The clinical benefit rate (defined as patients who experienced response as well as those who experienced prolonged stable disease for more than 24 weeks) showed vismodegib shrank tumors or healed visible lesions, or prevented them from growing any further in 75% of patients with locally advanced BCC and 76% of patients with metastatic BCC, as assessed by independent review.

The median duration of progression-free survival (PFS) by independent review for both metastatic and locally advanced BCC patients was 9.5 months. The median duration of response by independent review was 7.6 months for both metastatic and locally advanced BCC patients. The median duration of response as assessed by study investigators was 12.9 and 7.6 months for metastatic and locally advanced BCC patients, respectively.

The most common adverse events observed in the study (observed in greater than 20% of patients) included muscle spasms, hair loss, altered taste sensation, weight loss, fatigue, nausea, decreased appetite and diarrhea. Serious adverse events (SAEs) were observed in 26 patients (25%). Four of these patients (4%) had SAEs that were considered to be related to vismodegib, including one case each of: blocked bile flow from the liver (cholestasis), dehydration with loss of consciousness (syncope), pneumonia accompanied by an inability of the heart to pump enough blood (cardiac failure) and a sudden arterial blockage in the lung (pulmonary embolism). Fatal events were reported in seven patients (7%); none were considered by investigators to be related to vismodegib. In all fatalities, pre-existing risk factors and comorbid conditions were present.

Based on the results of this study, Roche has indicated that it anticipates filing an NDA with the FDA in 2011 to seek approval to commercialize vismodegib in the U.S. The filing timeline for a European regulatory submission seeking to commercialize the drug in Europe is dependent on planned discussions with the European Medicines Agency (EMA). Curis is eligible to receive milestone payments for the U.S. and European territories, assuming that submissions are filed by Roche and accepted by the applicable regulatory agencies, and Curis is also eligible for milestone payments upon regulatory approval and royalties on any future sales of vismodegib.