cris-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 000-30347

CURIS, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						04-3505116
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

128 Spring Street, Building C - Suite 500, Lexington, Massachusetts 02421
(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 503-6500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, Par Value $0.01 per share

CRIS

Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of November 2, 2022, there were 96,398,360 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

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CURIS, INC. AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-Q

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		Page Number
PART I.	FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements	7

	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	7

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021	8

	Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2022 and 2021	9

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	11

	Notes to Condensed Consolidated Financial Statements	12

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION

Item 1A.	Risk Factors	37

Item 6.	Exhibits	39

Signatures		40

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Cautionary Note Regarding Forward-Looking Statements and Industry Data

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. All statements other than statements of historical fact contained in this report are statements that could be deemed forward-looking statements, including without limitation any statements with respect to the plans, strategies and objectives of management for future operations; statements concerning product research, development and commercialization plans, timelines and anticipated results; statements of expectation or belief; statements with respect to clinical trials and studies; statements with respect to royalties and milestones; statements with respect to the therapeutic potential of drug candidates; expectations of revenue, expenses, earnings or losses from operations, or other financial results; and statements of assumptions underlying any of the foregoing. Without limiting the foregoing, the words “anticipate(s)”, “believe(s)”, “focus(es)”, “could”, “estimate(s)”, “expect(s)”, “intend(s)”, “may”, “plan(s)”, “seek(s)”, “will”, “strategy”, “mission”, “potential”, “should”, “would" and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements may include, but are not limited to, statements about:

•the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs, including our lead asset emavusertib, previously CA-4948;

•our ability to successfully resolve the continuing partial clinical hold imposed by the U.S. Food and Drug Administration, or FDA, on our TakeAim Leukemia Phase 1/2 trial of emavusertib (CA-4948) with respect to the monotherapy expansion phase (Phase 2a) and the combination therapy phase (Phase 1b), and the likelihood that such partial clinical hold will be lifted;

•our estimates of the period in which we anticipate that existing cash and cash equivalents will enable us to fund our current and planned operations;

•our ability to establish and maintain collaborations or obtain additional funding;

•our plans to develop and commercialize our drug candidates;

•the timing or likelihood of regulatory filings and approvals;

•the implementation of our business model, strategic plans for our business, drug candidates and technology;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•developments and projections relating to our competitors and our industry;

•our commercialization, marketing and manufacturing capabilities and strategy;

•the rate and degree of market acceptance and clinical utility of our products;

•our competitive position;

•our intellectual property position;

•the potential of CI-8993; CA-170; fimepinostat; CA-327; and other drug candidates that we in-license, or may elect to in-license, or may acquire in the future;

•our collaborators’ plans to further develop and commercialize Erivedge;

•our ability to maintain our listing on the Nasdaq Global Market; and

•impacts resulting from the continuing COVID-19 pandemic and responsive actions relating thereto.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. We therefore caution you against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in these forward-looking statements include the factors discussed below under the heading “Risk Factor Summary" and the risk factors detailed further in Item 1A, "Risk Factors" of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021 and those included under Part II, Item 1A of this Quarterly Report on Form 10-Q.

This report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties as well as our own estimates. All of the market data used in this report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our

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estimates of the potential market opportunities for our drug candidates include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

The forward-looking statements included in this report represent our estimates as of the filing date of this report. We specifically disclaim any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing our estimates or views as of any date subsequent to the date of this report.

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Risk Factor Summary

Investment in our securities involves risk. You should carefully consider the following summary of what we believe to be the principal risks facing our business, in addition to the risks described more fully in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021 and those included under Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q and other information included in this report. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

If any of the following risks occurs, our business, financial condition, and results of operations and future growth prospects could be materially and adversely affected, and the actual outcomes of matters as to which forward-looking statements are made in this report could be materially different from those anticipated in such forward-looking statements.

•We have incurred substantial losses, expect to incur substantial losses for the foreseeable future and may never generate significant revenue or achieve or maintain profitability.

•We will require substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our drug development programs or commercialization efforts.

•We depend heavily on the success of our most advanced drug candidate emavusertib (CA-4948), for which we are conducting the TakeAim Leukemia and TakeAim Lymphoma clinical trials. The monotherapy expansion phase (Phase 2a) and the combination therapy phase (Phase 1b) of our TakeAim Leukemia Phase 1/2 trial continue to be subject to a partial clinical hold. If we are unable to initiate or complete the clinical development of, obtain marketing approval for or successfully commercialize our drug candidates, either alone or with a collaborator, or if we experience significant delays in doing so, our business will be materially harmed.

•The FDA placed partial clinical holds on our TakeAim Leukemia Phase 1/2 trial and our TakeAim Lymphoma Phase 1/2 trial after we reported a serious adverse event in the TakeAim Leukemia Phase 1/2 trial. The continuing partial clinical hold on the monotherapy expansion phase (Phase 2a) and the combination therapy phase (Phase 1b) of emavusertib (CA-4948) with azacitidine or venetoclax of the TakeAim Leukemia Phase 1/2 trial could take considerable time and expense to address and there can be no assurance that the FDA will remove the continuing partial clinical hold in a timely manner, or at all, in which case our business and prospects for development and approval of emavusertib (CA-4948) would be materially harmed.

•If clinical trials of any drug candidates that we, or any collaborators, may develop fail to satisfactorily demonstrate safety and efficacy to the FDA, and other regulators, we, or any collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these drug candidates.

•Adverse events or undesirable side effects caused by, or other unexpected properties of, drug candidates that we develop may be identified during development and could delay or prevent their marketing approval or limit their use.

•We rely in part on third parties to conduct clinical trials of our internally-developed and in-licensed product candidates and for the research, development and commercialization of certain programs, and those third parties may not perform satisfactorily, including by failing to meet deadlines for the completion of such trials, research or testing.

•We face substantial competition, and our competitors may discover, develop or commercialize drugs before or more successfully than we do.

•If we are unable to obtain and maintain sufficient patent protection for our technologies and drugs, or our licensors are not able to obtain and maintain sufficient patent protection for the technologies or drugs that we license from them, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize drugs similar or identical to ours, and our ability to successfully commercialize our drug candidates may be adversely affected.

•If we or our collaborators are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we or they will not be able to commercialize, or will be delayed in commercializing, our drug candidates, and our ability to generate revenue will be materially impaired.

•In the event of a default by us or Curis Royalty under the Oberland Purchase Agreement, we could, among other consequences, lose our retained rights to future royalty and royalty related payments on commercial sales of Erivedge, and our ability to enter into future arrangements may be inhibited, all of which could have a material adverse effect on our business, financial condition and stock price.

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•We rely on Genentech and Roche for the successful commercialization of Erivedge, and if they do not successfully commercialize Erivedge for advanced basal cell carcinoma, or BCC, our future prospects may be substantially harmed. Furthermore, the amount of royalty revenue we received from sales of Erivedge has been adversely affected by a competing drug, and may be further affected in the future.

•If we fail to meet the requirements for continued listing on the Nasdaq Global Market, our common stock could be delisted from trading, which would decrease the liquidity of our common stock and our ability to raise additional capital.

•We face risks related to the continuing COVID-19 pandemic, which has delayed and may continue to delay our ability to complete our ongoing clinical trials and the enrollment and initiation of future clinical trials, and may disrupt regulatory activities, cause substantial disruption in the financial markets and economy, or have other adverse effects on our business and operations.

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PART I—FINANCIAL INFORMATION

Item 1. UNAUDITED FINANCIAL STATEMENTS

CURIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	29,851	$	40,014

Short-term investments	68,838		75,870
Accounts receivable	2,886		3,224
Prepaid expenses and other current assets	4,142		3,267
Total current assets	105,717		122,375
Long-term investments	—		23,964
Property and equipment, net	780		505
Restricted cash, long-term	635		726
Operating lease right-of-use asset	4,718		5,749
Other assets	2,022		—
Goodwill	8,982		8,982

Total assets	$	122,854	$	162,301
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,756	$	6,417
Accrued liabilities	6,883		6,339
Current portion of operating lease liability	1,103		682

Total current liabilities	13,742		13,438
Long-term operating lease liability	3,098		4,358
Liability related to the sale of future royalties, net	50,269		53,798

Total liabilities	67,109		71,594
Stockholders’ equity:
Common stock, $0.01 par value—227,812,500 shares authorized; 96,398,360 shares issued and outstanding at September 30, 2022; 227,812,500 shares authorized; 91,645,369 shares issued and outstanding at December 31, 2021	964		916
Additional paid-in capital	1,192,927		1,182,225
Accumulated deficit	(1,137,667)		(1,092,325)
Accumulated other comprehensive loss	(479)		(109)
Total stockholders’ equity	55,745		90,707
Total liabilities and stockholders’ equity	$	122,854	$	162,301

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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CURIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues, net:
Royalties	$	2,843	$	3,058	$	7,377	$	7,593
Other revenue	—		—		—		1
Contra revenue, net	(18)		(19)		(102)		(80)
Total revenues, net	2,825		3,039		7,275		7,514
Costs and expenses:
Cost of royalty revenues	62		151		186		376
Research and development	10,813		8,602		34,571		24,112
General and administrative	4,556		4,334		15,318		12,524
Total costs and expenses	15,431		13,087		50,075		37,012
Loss from operations	(12,606)		(10,048)		(42,800)		(29,498)
Other expense:

Interest income	335		54		577		158
Imputed interest expense related to the sale of future royalties	(1,023)		(1,057)		(3,120)		(3,366)

Other income (expense), net	—		—		—		890
Total other expense	(688)		(1,003)		(2,543)		(2,318)
Net loss	$	(13,294)	$	(11,051)	$	(45,343)	$	(31,816)
Net loss per common share (basic and diluted)	$	(0.14)	$	(0.12)	$	(0.49)	$	(0.35)
Weighted average common shares (basic and diluted)	93,791,178		91,601,362		92,370,359		91,552,433

Net loss	$	(13,294)	$	(11,051)	$	(45,343)	$	(31,816)
Other comprehensive income:
Unrealized gain (loss) on marketable securities	76		—		(370)		—
Comprehensive loss	$	(13,218)	$	(11,051)	$	(45,713)	$	(31,816)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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CURIS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
December 31, 2021	91,645,369	$	916	$	1,182,225	$	(1,092,325)	$	(109)	$	90,707
Recognition of stock-based compensation	—	—		1,718		—		—		1,718


Unrealized gain (loss) on marketable securities	—	—		—		—		(342)		(342)
Net loss	—	—		—		(16,109)		—		(16,109)
March 31, 2022	91,645,369	$	916	$	1,183,943	$	(1,108,434)	$	(451)	$	75,974
Recognition of stock-based compensation	—	—		1,966		—		—		1,966
Issuance of stock under Employee Stock Purchase Plan	169,296	2		147		—		—

SEC Form 10-Q filed by Curis Inc.