Curis, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. The filing is unaudited. Curis is a clinical-stage oncology biotechnology company; its principal reported revenue came from royalties on Erivedge, commercialized by Genentech and Roche.
Financial results and liquidity
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Net revenue | $2.4 million | $2.3 million | $4.5 million | $4.5 million |
| Research and development expense | $12.3 million | $8.8 million | $23.8 million | $15.5 million |
| General and administrative expense | $5.1 million | $4.1 million | $10.8 million | $8.2 million |
| Loss from operations | $15.1 million | $10.7 million | $30.2 million | $19.5 million |
| Net loss | $15.9 million | $10.8 million | $32.0 million | $20.8 million |
| Net loss per share | $0.17 | $0.12 | $0.35 | $0.23 |
- Q2 revenue rose 5% year over year; six-month revenue was essentially unchanged. Erivedge royalties were $2.5 million in Q2 and $4.5 million for the first half. Genentech accounted for all gross revenue in 2022.
- Operating costs substantially exceeded revenue. Six-month R&D expense increased 53%, primarily due to higher personnel, direct research activity and stock-based compensation; G&A increased 31%, mainly from personnel, stock compensation and insurance.
- Cash, cash equivalents and investments totaled $107.2 million at June 30 ($34.0 million cash and equivalents; $73.2 million short-term investments). Current assets were $113.4 million and current liabilities $12.2 million.
- Operating cash use was $28.9 million for the first half, versus $19.8 million in 2021. Investing activities provided $25.3 million, largely from net investment maturities and sales; financing activities used $2.4 million, primarily for payments under the royalty agreement.
- Total liabilities were $66.8 million, including a $51.2 million liability for sold future royalties and $4.5 million of operating lease liabilities. The filing reports no events of default under the royalty agreement. Curis had an accumulated deficit of $1.1 billion.
Material developments, outlook and risks
- In April 2022, the FDA placed partial clinical holds on both emavusertib (CA-4948) TakeAim trials after a patient death in the Leukemia trial. The FDA requested additional safety, efficacy and dosing information, including information related to rhabdomyolysis. While the holds remain, no new patients may enroll; existing participants benefiting from treatment may continue at doses of 300 mg twice daily or lower.
- Management said initial preliminary data from the emavusertib trials were presented in June. The filing does not provide clear numerical results in the supplied text. Curis expects to focus near-term resources on emavusertib, subject to resolving the holds, and CI-8993.
- Management estimated that available cash, equivalents and investments should fund planned operations into 2024, while cautioning that assumptions may prove wrong. The filing also states the funds should cover at least 12 months from filing. Curis expects continuing operating losses and says additional capital will be needed; it may need to delay, reduce or discontinue programs if financing is unavailable.
- There is no specific financial guidance for revenue or earnings. Management expects R&D spending to remain significant and potentially increase as programs advance. Profitability is not expected in the foreseeable future, if ever.
- Key risks include FDA hold resolution and clinical safety or efficacy, dependence on Erivedge royalties and collaborators, further financing needs and potential dilution, clinical enrollment and supply disruptions related to COVID-19, and the possibility that development candidates fail or are delayed. A portion of Erivedge royalty receipts is committed to Oberland under the royalty monetization agreement.
- Curis has an option to license CI-8993 from ImmuNext. Exercising it would require a $20.0 million option fee, with additional potential milestone and royalty obligations. The option period runs until the earlier of January 2024 or 90 days after database lock for the first Phase 1 trial meeting specified endpoints.
Most important facts for investors to verify
- FDA feedback, hold status, and subsequent safety and efficacy updates for both emavusertib trials.
- Actual cash burn, investment balances and runway assumptions, including any financing or share issuance.
- Erivedge sales and royalty receipts, and payments and terms under the Oberland agreement.
- CI-8993 clinical progress and whether Curis exercises its ImmuNext option and assumes the associated costs.
- Whether rising R&D and administrative costs can be supported by available capital and any future collaboration or milestone proceeds.